Category: Health plans

Thanks Humana!

published date
March 8th, 2007 by

I’d already heard through the grapevine about a recent Sierra Health Services conference call –where Sierra admitted they were getting hammered on their SierraRx Plus plan, which offers full coverage through the Part D donut hole. But I hadn’t realized that a competitor may have been the source of some of the trouble.

Sounds like Humana may have sent unattractive candidates over to Sierra after (wisely) discontinuing its own doughnut hole coverage. From Kaiser’s Daily Health Policy Report:

CMS officials are investigating whether Humana inappropriately advised the highest-cost beneficiaries in its Medicare prescription drug benefit plans to switch to plans provided by Sierra Health Services… “We believed our level of adverse selection was in part due to certain high-utilizing members being referred to us by another PDP provider. We did not agree to these referrals.”

Sierra complained to CMS, which took up the investigation.

Humana doesn’t really deny sending members over to Sierra. And it seems to me like Sierra just screwed up and offered too good of a deal.

Naysayers on MA health reform will have to wait a little longer to celebrate

published date
March 6th, 2007 by

Free-market ideologues like Sally Pipes from the Pacific Research Institute salivate over the opportunity to point out failures of government intervention in the market place, especially in liberal bastions like MA and CA with turncoat Republican governors! They’re so hot and bothered about MA’s health reform law that they are jumping the gun. This is from Pipe’s op-ed piece in last week’s Wall Street Journal (Intensive Care for RomneyCare)

When then-Gov. Mitt Romney, a Republican, introduced a universal health-insurance plan in the Bay State early last year, it was widely acclaimed. But less than a year after passage, RomneyCare is in the intensive care unit, soon to be wheeled into hospice.

Reality fully hit in late January of this year, when private insurers submitted bids to the bureaucracy that would administer the new program. The average premium for the unsubsidized plans was not $200 per month — as Mr. Romney promised from the stump — but rather $380. That’s more than 15% of the target audiences’ income — and for a plan with a $2,000 deductible and a total cost sharing of $5,000. People were stunned, outraged. Naturally, “greedy” private insurers were blamed. Politicians called for price controls.

As John McDonough from Health Care for All (HCFA) points out, the $380 wasn’t a real average anyway. It included high bids from plans that weren’t interested in playing. And new Governor Deval Patrick has since jumped in and jawboned the plans into offering premiums that actually get pretty close to the $200 and in some cases go below. (If you want to understand this whole topic in serious detail, you must check out HCFA’s A Healthy Blog.)

I’m a strong free market guy myself, but let’s not fool ourselves that the answer to the social and economic problems of the US health care system can be divined from strict ideological principles.

The MA health reform bill–and it’s really not RomneyCare– is an excellent idea for MA. It can work here because we already have low levels of uninsured and extra money devoted to uncompensated care. It’s not going to work like that on a national level.

So as much as I think the whole edifice of employer-sponsored health care is likely to fall apart over the next decade, it still makes sense to promulgate the MA, employer-based mandate. The way I see it, once (almost) everyone is insured –and it could happen in the next year or so–  the focus will turn to how to improve efficiency and quality in health care delivery. With luck we’ll shift away from what the Boston Globe calls the “arcane demographic data and risk assumptions” of actuarial science that goes into the calculation of premiums and into the very tangible and sometimes personal aspects of how health care is delivered.

It’s no bad thing that the deductibles for the new plans are going to be relatively high –something like $2000 for an individual or $4000 for a family. It will help create a cost and service oriented market in routine services. MinuteClinic start your engines!

And Governor Patrick did exactly the right thing by twisting the plans arms to alter their assumptions and bring the price down. The plans are going to have to suck it up, or spread costs to other customers in the name of getting everyone on the books in the near term. Though Pipes may wince, the Governor is part of the market, too.

Farewell to Fatso?

published date
February 16th, 2007 by

Two recent Boston Globe headlines on Tufts Health Plan may be related

The layoff is to reduce administrative costs as Tufts tries hard to compete with Blue Cross, Harvard Pilgrim and Fallon. The restriction on obesity surgery is a cost reduction exercise, too. The Globe article and other commentators have focused on the effect on individual patients…

Doctors condemned the new policy, which takes effect March 6, saying Tufts is ignoring a growing body of clinical evidence that shows that such operations help those who have exhausted other methods to lose weight. Delaying surgery worsens conditions such as diabetes and heart disease that are often complications of pronounced weight gain, they said.

“This is Draconian,” said Dr. Philip Schauer , president of the American Society for Bariatric Surgery and director of bariatric surgery at the Cleveland Clinic. “This flies in the face of the medical evidence. These policies sentence a patient to a life of dealing with obesity without the possibility of parole.”

…but it seems plausible to me that Tufts is looking for ways to dump obese patients out of its plans and onto its competitors. Beyond the considerable money saved from not covering bariatric surgery, Tufts may benefit from a healthier, lower cost patient mix. Not only will obese people quit Tufts, but some non-obese people may actually select Tufts for taking a hard line against members they think may be driving up their own insurance costs.

Then again, it’s certainly possible that Tufts is doing what it says it is: making a decision that saves costs and improves patients’ health.

Question: What do gay marriage, abortion rights and health care reform have in common?

published date
February 7th, 2007 by

Answer: They are all topics where former Massachusetts Governor Mitt Romney has changed his tune in his run for the Presidency. As Health Care for All’s John McDonough blogs:

Had to happen, only a question of when and how much…[F]ormer Gov. and Republican Pres. candidate Mitt Romney is distancing himself from the April 2006 health reform law he signed and has bragged about all over the nation.

Last year’s development of the Massachusetts health care reform law was a real bipartisan effort. Governor Romney pulled a bit of a slimy move at the time by vetoing the provision that required larger employers to pay $295 per employee per year if they didn’t offer health insurance. He was sanctimonious about it at the time, knowing full well that the Democrat-dominated legislature would override the veto and improve the viability of the plan. Democrats took that move in stride, understanding why Romney wanted to position himself that way.

Romney also touted the prospect of $200 per month health care coverage for individuals, citing prototype plans he’d asked the state’s health insurers to create. When the actual bids came in around $380 per month, now ex-Governor Romney was quick to cast aspersions on the Democrats for screwing things up.

Blue Cross Blue Shield of MA, perhaps fearing it will be the next one on the receiving end of Romney’s bad-mouthing, said this week in the Boston Globe that the $200 per month plan was for real, though of course based on different assumptions than the $380 plan. BCBS MA’s CFO Allen Maltz was quoted extensively in the article. (I’ve met Mr. Maltz, and he is not the type to throw around numbers loosely!)

The state’s largest health insurer, Blue Cross Blue Shield, said that with more flexibility from the state, it could offer slimmer coverage for an average of $210 a month — near the price originally suggested by former governor Mitt Romney.

“If it’s buy or die, they could buy at $210 or $220,” said Allen Maltz, chief financial officer for Blue Cross. “It would be a comprehensive plan, covering hospital, office visits, prescription drugs. It wouldn’t eliminate categories of coverage.”

That plan, however, would not satisfy requirements proposed by the state board overseeing the law’s implementation because of the plan’s high deductible and out-of-pocket limits

Romney has positioned himself to take credit for the law if it works well, and to blame Democrats if it doesn’t.

Will the people buy it? As McDonough writes:

Romney is now irrelevant to the real work of implementing health reform. Thank goodness. And his comments should be understood as the dance presidential candidates need to perform to survive the primary process. But if he think he can completely separate himself from the reform structure he signed, he’s mistaken.

If Romney wins the Republican nomination I predict he’ll have something in common with Al Gore: a loss in his “home” state.

The answer is no

published date
January 25th, 2007 by

In October I asked Is there a $200/month health insurance solution? At the time, then Governor Mitt Romney asserted that such a premium level was attainable for individuals under the newly mandated health insurance requirements.

Last week the actual bids came back: $200 per month became $380. The problem is that the law requires affordable, comprehensive coverage. Unfortunately, reasonably comprehensive coverage –as specified by the Connector– costs more than $200 per month in Massachusetts.

Something has to give. It’s impossible to have affordable, comprehensive, universal coverage in Massachusetts without large subsidies.  The health care reform  bill does almost nothing to restructure the health care industry in the state.

Once the public. the Governor, the legislature and the Connector face up to the fact that something has to give, maybe the focus will turn to reform of the health care delivery system, not just the insurance market.