Vital Signs Diminishing for Obamacare Is Life Support Imminent?

Moody's: Uncertain healthcare landscape leads to negative outlook 

for US health insurers

Global Credit Research - 23 Jan 2014

Insurance companies, long held in high ESTEEM in the finance world, because of their wide base of investment and astute leadership are beginning to feel the effects of ObamaCare even before they begin paying reimbursements to providers, hospitals, and enrolled providers.

Moody's Corporation is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets.

Moody's changed the outlook for US health insurers to negative from stable, as implementation of the Affordable Care Act (ACA)continues to create uncertainty for the industry, says Moody's Investors Service in its new industry outlook "US Healthcare Insurers: Outlook Changed to Negative from Stable."

The ACA—signed into law in March 2010—seeks to increase affordability of health insurance and expand both public and private insurance coverage through a number of mechanisms including exchanges, mandates and subsidies.Uncertainty over the demographics of those enrolling in individual products through the exchanges is a key factor in Moody's outlook change, says the rating agency. Enrollment statistics show that only 24% of enrollees so far are aged 18-34, a critical group in ensuring that lower claim costs subsidize the higher claim costs of less healthy, older individuals. This is well short of the original 40% target based on the proportion of eligible people in this cohort, says Moody's.

Looking forward, Moody's expects reduced net earnings margins of approximately 2% in 2014, compared to an average of 3% the previous year and smaller overall membership growth of approximately 1%, down from 3% in 2013, with company strategies continuing to focus on revenue and income diversification.

Still, these changing dynamics will have an uneven effect on insurers, as the impact of these factors will vary by market segment and geography. Moody's view continues to be that the larger and more diversified insurers will be better positioned, both financially and strategically, to meet the challenges facing the sector.

Earlier this week, the conservative American Action Forum released a report which found"that after accounting for subsidies and cost-sharing, 6 out of 7 uninsured, young adult households will find it financially advantageous to forego health coverage, and instead pay the mandate penalty and cover their own health care costs.

*A reader points out that there's a difference between a negative outlook and a formal downgrade, which is what I originally implied. A credit downgrade is likely, but has not yet occurred.

Nevrtheless the Perverse Incentives of the Obama Care Act (Affordable  Care Act) come into play to increase the shortfall of funding health insurance for all, with no limitations..

The American Action Forum prints a readable and understandable explanation of how ObamCare is supposed to work.

This short infographic illustrates the reverse logic for young people

Ideologues and Unrealistic Expectations

Comments from Gary Levin MD are underlined and italicized:

Today I am amazed at an enthusiastic article about the Affordable Care Act by Eugene Robinson from Tallahassee.com.

His unbridled enthusiasm in the face of many difficulties that have nothing to do with health care exemplifies those who designed this law and passed it without reading it.

Here are some of his unsubtantiated claims and perhaps 'wishful thinking'

Eugene Robinson:  Washington Post

"Now that the fight over Obamacare is history, perhaps everyone can finally focus on making the program work the way it was designed. Or, preferably, better.

The fight is history, you realize. Done. Finito. Yesterday’s news.

Any existential threat to the Affordable Care Act ended with the popping of champagne corks as the new year arrived. That was when an estimated 6 million uninsured Americans received coverage through expanded Medicaid eligibility or the federal and state health insurance exchanges. Obamacare is now a fait accompli; nobody is going to take this coverage away."

1. The fight is not history, we are barely through round one and all the points go to the opponents of the ACA.

2. Six million Americans have not received coverage from the ACA. Registering is only the first step. It took me over ten hours of fumbling on the web site, and on hold via telephone. How many will be able to pay premiums by deadlines, or negotiate the difficult process of acquiring a provider. 

"There may be more huffing, puffing and symbolic attempts at repeal by Republicans in Congress. There may be continued resistance and sabotage by Republican governors and GOP-controlled state legislatures. But the whole context has changed."

The upside of the ACA is that all previously uninsurable patients now are enrolled no matter what pre-existing condition they have A+++++.

Can the ACA be improved?  Most definitely. The argument should not be Republican against Democrat.  Political party does not immunize one against illness.

I wholly agree with Mr. Robinson's analysis regarding the eventual goal of a uniform health system.  To call it universal care is a misnomer.

"The real problem with the ACA, and let’s be honest, is that it doesn’t go far enough. The decision to work within the existing framework of private, for-profit insurance companies meant building a tremendously complicated new system that still doesn’t quite get the job done: Even if all the states were fully participating, only about 30 million of the 48 million uninsured would be covered.

Yes Obamacare does not go far enough, however that is not the principle flaw. There is no one principle flaw, if there are any that is the poor analysis  and proposed implementation of a major expenditure that will effect most businesses,  all patients, and our national budget, and come up short.  If we are intent, committed and dedicated to these goals then let's get it right (or mostly right the first time)

Obamacare does establish the principle that health care is a right, not a privilege — and that this is true not just for children, the elderly and the poor but for all Americans.

Throughout the nation’s history, it has taken long, hard work to win universal recognition of what we consider our basic rights

This is a political and philosophical statement, not about health care. We need to keep these issues separate.  I agree with him about the tenet that all people should have health care financing.

Our first step should be to put on hold further mandates while the act is re-evaluated. Repeal is not an option, however amendment is a reality and not an 'existential' argument.

Mr Robinson's  article is not objective, nor unbiased. He totally neglects the weaknesses of the law which will require amendments.  Placing the issue in terms of a 'battle' between political parties does disservice to dedicated professionals who have  been in the system,  and who were neglected during the planning process.

To ignored the flaws would be a fatal mistake, health care costs will soar and there will still be large gaps in the insured population

Contact Eugene Robinson ateugenerobinson@washpost.com.

Contact Gary Levin MD at gmlevinmd@digitalhealthspace.com

Looking Back at 2013

This report is somewhat late due to last minute projects at the end of 2013 and the confusion about the individual mandate, the botched launching of health benefit exchanges and some other unexpected tasks

We reviewed the 'best"  Health Train Express posts of 2013 as measured by the number of comments and our analytics.

IRS VIOLATES HIPAA FACES LAWSUIT BY A "J Holiday Message for Health and Wellness WHY AREN'T DOCTORS INVOLVED IN HEALT Does Obama really want the Affordable Care Act Covered California What They Said Before the Train Wreck: The To Sebelius will be a no-show at Obamacare hearing The Beginning or The End to the Affordable Care Act There were many more 'favorites".  The highest number of page views was in the category of the Affordable Care Act. This was to be expected, given the high ranking of the ACA for search engines. Visit the sites on Health Train Express for many more interesting topics. Health Train Express has archived our posts dating back to 2005.  The focus of posts has changed over the  years, and reveals the dynamism of health care and reform.

Health Benefit Exchange

Has health care improved since the ACO went into effect??  We have been told that already the ACA has saved millions and perhaps billions of dollars. How is that so?  Where are the details?

I have an open mind and I am willing to consider the facts....so just show me the numbers. How is it that the government has infused billions of dollars into health IT and providers must now support it operationally ? Given the lifetime of IT hardware and software obsolescence in five years at the most it will all have to be upgraded and/or replaced with a second generation of sofware that has real meaningful usability, not the garbage that HHS is insisting we use to accomodate the "quants" at HHS who massage the information spewing out of their machines.

Health care now supports an industry of high tech that has nothing to do with patient care. Vendors of hardware, software, consultants, IT consultants, a stream of auditors, review firms, outcome studies. What idiots think we are saving money?  The money in health care no longer is going to patient care......it is going to many parasitic organizations.  The only good thing about it is that unemployment would be much worse than it is already.

How long will  health benefit exchanges  be useful after the initial period of signing up the uninsured. Surely it will cost a great deal to fix it, and maintain it.

If the affordable care act continues to roll out the next five years will be a financial and health disaster.

For all the details on Health Benefit Exchanges and which insurance companies have signed up here is the list. It does not mean your doctor will accept these plans since the reimbursement rates in the Affordable Care Act will be very low compared to the current rates.

Stay tuned.

Freedom of Information Act Request filed by Health Train Express

Doctors Complain They Will Be Paid Less by Exchange Plans.  Many will opt out of private plans. News reports indicate that 70% of California MDs will not participate in the Health Exchange and the Private plans Some have complained to medical associations, including those in New York, California, Connecticut, Texas and Georgia, saying the discounted rates could lead to a two-tiered system in which fewer doctors participate, potentially making it harder for consumers to get the care they need.

Insurance officials acknowledge they have reduced rates in some plans, saying they are under enormous pressure to keep premiums affordable. They say physicians will make up for the lower pay by seeing more patients, since the plans tend to have smaller networks of doctors.

If you’re a physician and you’ve negotiated a rate from insurance, shouldn’t it be the same on or off the exchange?” said Matthew Katz, executive vice president of the Connecticut State Medical Society. “You’re providing the same service.”

The benchmark for physician fees is the rate the federal government sets for services provided to older Americans through Medicare. In many markets, commercial plans may pay slightly above the Medicare rates, while doctors say that many of the new exchange plans are offering rates below that.

Physicians are uncomfortable discussing their rates because of antitrust laws, and insurers say the information is proprietary. But information cobbled together from interviews suggests that if the Medicare pays $90 for an office visit of a complex nature, and a commercial plan pays $100 or more, some exchange plans are offering $60 to $70. Doctors say the insurers have not always clearly spelled out the proposed rate reductions.

Health Train Express has filed a FOIA request from CMS (Freedom of Information Act which will require full disclosure to the providers and public  (ie, transparency that Obama claims to encourage)  Watch for the published link in about one month

Poll: Americans better understand, still don’t love, health-care reform

Lake forming behind an Ice Dam

The recent melt-down of the Affordable Care Act's opening of the Health.gov website served to cast a spotlight on the entire law.  More than 60% of the public pretend to know what it is about. That is about the same as Congress knew when they voted to enact the bill into law.

Despite and perhaps because of it's sudden visibility and the topic of all news media most know of it's shortcomings and how it was passed with major deceptions on the part of the Democrats, HHS, and President Obama's administration.

According to the Seattle Times, "A poll released today by Harris Interactive dug more deeply into the opinions of the uninsured, who face penalties if they don’t get insurance by March of next year. The survey found that more than one-third of uninsured Americans say they are prepared to make health-insurance choices — but 31 percent said they didn’t know about the health insurance exchanges set up to sell the coverage.

On top of that, 61 percent of the uninsured say they have done “nothing” in the past year to get ready for the Affordable Care Act. More than half say they don’t know what they’re going to do about the requirement that they get insurance."

As you may recall, it’s been rough going since the Oct. 1 launch of online insurance markets created to enroll people in individual insurance plans. The federal site, which serves 36 states, essentially wasn’t working for weeks and only really kicked into gear over the last week or so. Washington state’s site had some hiccups, then got itself sorted out, but in the past few days has been down again for software fixes.

Added to those technical glitches like a bee sting on a raging sunburn was the outcry by folks who learned their individual and family insurance plans were being canceled at the end of the year. People felt betrayed by President Obama’s promise that if you liked your health care plan, you could keep it.

A survey conducted and released last week by Gallup found that only 37 percent of Americans approve of the Affordable Care Act or would like to see it expanded while 52 percent want it revised or repealed (the rest are undecided).

The crazy thing — given all of the recent attention to the problems with the roll out of the health-insurance exchanges — is that public opinion hasn’t changed a whole bunch from the same Gallup survey nearly three years ago. In January 2011, 37 percent of those surveyed approved of the ACA while 57 percent did not.

So it begs the question: How and Why was the ACA passed into law?

Many think this was a major move toward consolidating control of healthcare costs, and giving government a major role in 1/6th of the American Economy. It effectively destroys a major freedom of choice of what Americans buy in a market place.

How could public opinion remain so constant despite the tumult in recent news? It could come down to politics.

The Seattle Times teamed up with the Elway Poll in September to take the ACA pulse of Washington residents. It turned out that public opinion on health-care reform largely hewed with political leanings.

In that survey, 80 percent of Democrats approved of the Affordable Care Act, while 80 percent of Republicans did not.

This may reflect more upon the discordance between Democrats and Republicans overall, including budget difficulties which are also severe given the expanding national debt.  Republicans are vehement about corraling the national debit, which will again take canter stage in March 2014.

CMS AND ONC ACT TO SLOW DOWN THE HEALTH TRAIN EXPRESS

The Center for Medicare Services and the Office of the National Coordinator are responding to the intense "push back' from providers, insurance companies, health consultants and others. Realizing the debacle of  Healthcare.gov may be a tremor of impending catastrophic health reform failure they have chosen to 'back off' and delay several major milestones for HIT.

Numerous mandates for the Affordable Care Act have been delayed due to what seems to be a systemic overload of HHS and other regulatory agencies that go beyond the Affordable Care Act.

1. Individual Mandate
2. Last date of enrollment on Healthcare.gov pushed back to December 23rd for a January 1 2014 enrollment. (Is this another pipe dream?  7 days from enrollment to eligibility with authentication of finances?..Another example of fantasy planning by Obama and his administration..

These delays are only the tip of an iceberg upon which the Titanic Obamacare ship founders.

Early on in 2010 shortly after the Affordable Care Act became law, the DOJ warned about employer sponsored health plans.  Rather than the Health Benefit Exchange impacting on only five percent of the population, the actual numbers willl be much greater perhaps as great as 80% excluding public programs.