ERRP . . . Obamacare Indigestion

PCIP. Great idea. Complete flop when it closed early due to lack of funds. 

How can that be? DC printing presses on strike?

Now we find out that ERRP (Early Retiree Reinsurance Program) ran out of gas too.

PPACA drafters created the ERRP system, to encourage employers to keep health plans for retirees ages 55 to 64 in place. Congress provided $5 billion in funding for early retiree health plan subsidies. ERRP managers were supposed to use $300 million of the allocation for administrative expenses and $4.7 billion for employer plan reimbursement claims.

Congress also provided $5 billion in funding for PCIP (pronounced "P-sip").

PCIP was supposed to provide health coverage for uninsured people with serious health problems who could not qualify to buy private health coverage. PCIP enrollees are supposed to pay premiums comparable to what healthy people in their states pay for individual commercial coverage.

Life Health Pro

Operative word here is SUPPOSED.

Although ERRP funding was supposed to last until the end of 2013, program managers at CCIIO had to suspend enrollment in the program by May 2011 because expenses were running so high, Czerwinski said.

ERRP managers ran out of the $4.7 billion in funding for ERRP claims in September 2012, and, at that time, they had 5,699 open claims for reimbursement.

The employers that submitted the reimbursement claims have asked for a total of $2.5 billion in payments, Czerwinski said.

Employers left holding the bag.

Wonder why CBS isn't reporting this?

Before PCIP started up, Medicare actuaries predicted that the program would have 375,000 enrollees by the end of 2010.

Actual enrollment was only about 49,000 at the end of 2011, and it increased to about 103,000 at the end of December 2012, Czerwinski said.

Good thing they never hit their projections.

I don't know about you, but this doesn't give me warm fuzzzies about Obamacare 2014.

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Free Health Insurance Numbers Grow

Record numbers of individuals on Medicaid as the count grows past 72 million. With over 48 million on Medicare and 320 million living in the US that translates into almost 40% of the population is not paying for health insurance (or is paying very little).

The 72,600,000 enrolled in Medicaid in the United States in 2012 was more than the 65,630,692 people who lived in France last year, according to data published by the Census Bureau, or the 63,047,162 people who lived in the United Kingdom.

In fact, if Medicaid was a country rather than a U.S. government program it would be the twentieth most populous nation in the world, ranking just ahead of Thailand, which had 67,091,089 people in 2012, and just behind the Congo, which had 73,599,190 people in 2012.

CNS News

The country of Medicaid.

Am I the only one that finds this depressing?

In fiscal 2008, the last full year before President Barack Obama took office, there were 58,794,000 Medicaid enrollees. Since then, Medicaid enrollment has expanded by more than 23 percent.

Wonder if the president has read about this in the news? Seems that is the only way he learns what is going on in this country and especially within the government.

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ObamaTax: Another Nail

As we've long documented, one of the (intended?) effects of the ObamaTax is a looming physician shortage. But perhaps some clarification is needed: the shortage is most likely to hit the insured and/or less wealthy demographic first.

Why is that, you ask?

Well:

"Dr. Michael Ciampi [has] ... stopped accepting all forms of health insurance. In early 2013, Ciampi sent a letter to his patients informing them that he would no longer accept any kind of health coverage, both private and government-sponsored"

And to make sure his patients know exactly how that would impact them, he's also taken the full-transparency route (for which we also applaud him) by posting all his prices on-line.

Regular readers may recall our (exclusive) interview with Dr Rob Lamberts last fall, when he explained how his new practice model - Direct Primary Care (DPC) - works:

"The DPC model is one in which the patient pays the doctor directly for their care, usually in the form of a monthly "subscription," plus or minus a fee for visits."

That's different from how Dr Ciampi has evolved his practice; he "collects payment at the end of the visit, freeing him of the time and costs associated with sending bills."

It also frees him to charge whatever he likes (well, whatever the market will bear, anyway) without having to answer to insurance or government bureaucracies. It also means that he can spend more time with patients. Nothing wrong with that.

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California's Sneaky Little Trick

There has been much discussion about affordability in the insurance exchanges. From huge potential rate increases to lower than current rates being proposed under Covered California, the range of costs vary significantly.

So it came as a surprise last week when news broke that California's program was showing lower than projected premiums. Ezra Klein called it "Very Good News for Obamacare." Major news networks cited the release telling viewers that premiums were going down.

Then came the rest of the story. Indeed Covered California was going to see a rate reduction for individual insurance. BUT, these plans were compared to the average small group plans. For perspective, the average premium for individual plans sold through EHealthInsurance in California last year was $177 a month. Covered California said the average premium for the three lowest Silver plans statewide was $321 a month, albeit for more comprehensive benefits.

So, why compare 2014 individual rates to today's small group rates? Well, Covered California provided this little gem for you:

"It is difficult to make a direct comparison of low rates to existing premiums in the commercial individual market because in 2014 there will be new benefits and today’s coverage on an actuarial basis is all over the map. The best frame of reference is by looking at current rates available in the small group market in California. Each market is a competitive market with guaranteed issue. Comparing rates to comparable products in the small employer market, rates ranged from two percent above the 2013 average premium to 29 percent below the rates in California’s most populous markets. This is impressive since the 2014 products include doctor visits, prescriptions, hospital stays and more essential benefits."

What's really going to be impressive is if these "preliminary" rates will actually hold.

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Cavalcade of Risk #184: Post-Memorial Day Risk-a-thon

Jeff Rose hosts this week's small - but powerful! - roundup of risk-related posts. From fast-food to k-rations, you'll run little risk of being disappointed.

Thanks, Jeff!

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MVNHS© Back in the News

Thanks to alert IB reader Peter K, we have two new items to add to our Much Vaunted National Health System© database. Last month, we noted that "[MVNHS©] doctors are prematurely ending the lives of thousands of elderly hospital patients because they are difficult to manage or to free up beds;" this was one side of the coin. It only gets worse, though, when one considers the other side of it:

"Patients undergoing planned operations on the NHS are far more likely to die if they have their operations towards the end of the week ... those who had surgery on a Friday were 44 per cent more likely to die following the procedure than those who had the same operations on a Monday." Of course, when you have an overworked and largely unaccountable group of people providing "care," that TGIF mantra becomes somewhat problematic, no?

It gets worse, though. One of the early criticisms of the ObamaTax is that you'd have care providers with the compassion of the DMV. This is already the case under the MVNHS©, and it's the direction we're headed:

"Almost 3,000 people may have died unnecessarily in just one year at the 14 NHS trusts whose excessive mortality rates were reviewed in the wake of the Mid Staffordshire scandal"

Regular readers may recall that we covered that particular shanda over 4 years ago (and it's still making news):

"Appalling standards of care that may have contributed to the deaths of at least 400 patients at a hospital trust were missed repeatedly by managers and regulators ... at Mid Staffordshire NHS Foundation Trust"

At least they've learned their lesson, though, right?

Um, not so much:

"The worst figures were recorded at Blackpool Teaching Hospitals where, in the year to October 2012, the number of deaths anticipated was 1,947 but actually there were 2,357, a difference of 410." [emphasis added]

This is extraordinary, on several levels. First, whatever are they teaching at this hospital? Advanced courses in euthenasia? Second, that "difference of 410" doesn't seem like so much, until one looks at the fact that they were off by almost 30%.

That's not "margin of error," that's Margin of Kevorkian.

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Tuesday Afternoon LinkFest

■ First up, via email, United Healthcare lets us know that its "Early Warning Report forecasts the states, legal entities and group sizes ... that are currently eligible to be issued MLR premium rebates by [UHC] associated with the 2012 calendar year. Any owed rebates will be paid in July ... There are 21 states and two territories in which UnitedHealthcare does not currently anticipate paying any rebates associated with group business"

Don't spend it all in one place.

■ The Council for Disability Awareness has just released its 2013 Research Report, focusing on the differences between how employees perceive disability benefits versus how HR folks understand them. As one might imagine, it's a rather wide gap:

♦ Most HR professionals (84 percent) believe the ability to earn an income is their employees’ most valuable financial resource, yet only 26% thought their employees were adequately prepared to withstand a disability

♦ HR professionals believe their employees are financially vulnerable to a loss of income

♦ Both HR professionals and their employees severely underestimate the odds of becoming disabled

There's more, including the odds of becoming disabled and for how long. Recommended, and available here.

 ■ Some good news and bad news on the ObamaTax front. First, the bad news (from its proponents' POV): voters favor repeal by a 22-point margin. One supposes that will only increase as we head into Fall, and the (scheduled) Exchange roll-out.

 ■ And now the good news (for ObamaTax opponents): businesses are beginning to "get" just how bad this train-wreck is going to be, and more of them are looking to hop on the self-funded wagon:

"[H]ealth insurers are stepping up. Among their latest offerings: allowing ever-smaller companies to switch to a riskier form of coverage traditionally favored by big employers."

I'm sure Nate would disagree (as do I) with the "riskier" characterization, but the point is, going this route is likely to save some big dollars for employers.

There's a bit of irony here: way back in 2006, we had an exclusive interview with the folks at (now-defunct) ACMG, which was just then rolling out a self-funded program for smaller businesses. Kind of a shame that they were so far ahead of their time, but the post is a good introduction to how these plans work, and why they really aren't all that "risky."

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