One of the more interesting television commercials I see is an ad sponsored by Cancer Treatment Centers of America. The message: if you have cancer, we want you.
Welcome to a small glimpse of how the market for health care might be different.
If we had a genuinely free market for health care, ads like this would not be rare and unusual. There would be centers of excellence for heart disease and diabetes and dozens of other afflictions. Through television, radio, the Internet and other means, these centers would be seeking out people with problems and offering to solve them – just like in other markets.
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A second major health-insurer has decided to quit selling individual policies in Iowa, raising fears that tens of thousands of Iowans will have no options for coverage next year.
Aetna informed Iowa regulators Thursday that it had decided to stop selling such policies, which cover people who lack access to employer-provided coverage or government plans. The move would affect 36,205 customers, the company told regulators.
Aetna’s move takes effect in January. It came three days after Iowa’s dominant health-insurer, Wellmark Blue Cross & Blue Shield, announced that it would no longer sell individual health-insurance policies in Iowa.
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The Affordable Care Act (ACA) has substantially increased the number of Americans with public and private health insurance coverage. The Assistant Secretary for Planning and Evaluation (ASPE) at the US Department of Health and Human Services estimates that the ACA has resulted in 20 million additional nonelderly adults gaining coverage between the law’s enactment and February 2016. This estimate is likely overstated. Government surveys’ estimates of the number of people who gained coverage between December 2013 and December 2015 vary by 20 percent. Moreover, while the ASPE estimates that the ACA increased the number of young adult dependents with insurance coverage between 2010 and 2013 by 2.3 million, data from government surveys indicate that 1.2 million fewer dependent children had private coverage in 2013 than in 2010, offsetting half the gain in coverage among older dependents. Coverage gains have nonetheless been significant, with most of the increase coming from enrollment surges in Medicaid and the Children’s Health Insurance programs. But a substantial proportion of those who have enrolled in these public programs since 2014 met eligibility standards that predated the ACA. This increase in public coverage may have crowded out private coverage, although further study is needed to determine the existence and magnitude of this effect.
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As Congress and the Trump administration move forward with plans to repeal and replace the Affordable Care Act (ACA), they are looking for proven state-led reforms that maintain access for those with pre-existing conditions in the current exchange market while also lowering premiums for everyone buying insurance in the individual market.
Maine faced similar challenges in 2011 as it sought to unwind failed experiments that pushed its market into a long-term death spiral. But by creating an invisible high-risk pool and relaxing its premium rating bands, Maine policymakers were able to cut premiums in half while still guaranteeing those with pre-existing conditions access to plans.
As a result of these changes, individuals in their early 20s were able to see premium savings of nearly $5,000 per year, while individuals in their 60s saw savings of more than $7,000.
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As Republicans in Congress look to repeal and replace the ACA, they’re considering a return to high-risk pools like one in Wisconsin, which some considered a national model. The “Health Insurance Risk-Sharing Plan” — which ran from 1979 to 2014, when the federal health law’s exchanges started — was funded through premiums, insurance company assessments and reduced payments to providers. “Pooling the high-risk individuals together and managing their needs separately was a huge factor in the state’s success in offering a competitive insurance market,” J.P. Wieske, the state’s deputy insurance commissioner, told the House Energy and Commerce Committee this month.
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The new administration should issue two new rules for the 2018 enrollment season:
- It should let online brokers complete enrollments for people who qualify for subsidies. No need to redirect these applicants to HealthCare.gov.
- It should stop imposing user fees to prop up its unnecessary website and finance ad campaigns.
These two changes would set loose an army of insurance carriers, traditional brokers and private online exchanges, all competing to enroll people in subsidized coverage.
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While Republicans continue to grapple with plans to repeal and replace Obamacare and stabilize health insurance rates, Humana is the first major insurer to say it is dropping out of the individual market for 2018.
“Based on our initial analysis of data associated with the company’s health-care exchange membership following the 2017 open enrollment period, we continue to see further signs of an unbalanced risk pool,” said Humana CEO Bruce Broussard, on a conference call with analysts Tuesday. “Therefore, the company has decided that it cannot continue to offer this coverage for 2018.”
In the wake of the news, President Donald Trump tweeted that the insurer’s decision was another example of the failure of the Affordable Care Act, and he reiterated his plan to “repeal, replace & save healthcare for ALL Americans.”
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The conceit that the five major commercial health insurers will consolidate to three seems to be dissolving, as four of those insurers called off a pair of mega-mergers on Tuesday. After 18 months of courtship among the Big Five starting in 2015, the outgoing Obama Justice Department’s antitrust division sued to block the $34 billion Aetna- Humana tie-up as well as Anthem’s $48 billion acquisition of Cigna. Federal judges blocked both transactions earlier this year. Anthem had planned to appeal but on Tuesday Cigna pulled the plug after Aetna and Humana did the same.
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In his first post, Conover argued that drawing inferences from observational studies about whether covering the uninsured will save lives is a fool’s errand . Quasi-experimental studies hypothetically provide a better tool for figuring out whether insurance coverage reduces mortality risks. Unfortunately, the two studies we have available are very unreliable instruments for figuring this out.
That said, based on the two studies reviewed, Conover cannot rule out the possibility of “excess deaths” in the event some people lost coverage as a result of repeal-and-replace efforts. Ironically, because the lion’s share of coverage gains under Obamacare has been through Medicaid, the New York study arguably is the most appropriate one to use to determine the effects of repeal. However, it is less credible than the Massachusetts study in terms of how much confidence anyone should have in its results.
In short, beware of anyone who claims we will lose 1 life for every 435 newly uninsured. 1 life for every 830 people is more believable, but even that is exaggerated and is far more likely to apply to those gaining private coverage than those enrolling in Medicaid. Unfortunately, the current state of science does not provide a very solid basis for guessing how much this estimate is inflated.
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Obamacare proponents have been increasingly shameless in trotting out scare statistics to convince people that the GOP wants to “make America sick again:”
Two Harvard professors–who, not uncoincidently, are diehard single payer advocates–are lamenting that “repealing the Affordable Care Act will kill more than 43,000 people annually”
False claims about the adverse effects of repealing Obamacare on mortality that are grounded in observational studies result from:
- Grossly exaggerating the number of people who would actually lose coverage. This exaggeration of lost coverage occurs even in the worst-case scenario that Obamacare is not replaced.
- “Excess” mortality estimates related to lack of coverage that are both upward-biased and unreliable by nature due to the inability of researchers to account for unmeasured influences.
- Inappropriate extrapolation of results to populations (e.g., Medicaid) not included in the original study.
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