Preparing for the obamacare Exchanges

Posted on February 9, 2012 by RalphWeber

Some states are very anxious to install an obamacare exchange. I think it has to do with addiction to government money. Legislators don’t always understand that the government doesn’t actually make any money (other than running printing presses). It is the citizens and residents who make money. The government simply takes it from us, and borrows it from China. So when you hear the term “federal monies”, these are your dollars and mine.

http://thehealthcareblog.com/blog/2011/09/22/preparing-for-exchanges/

By JOHN GRAHAM

What is the biggest waste of effort in American health care today?

I’d suggest it is the hustle and bustle to establish PPACA’s Health Benefits Exchanges.  The health insurers’ trade association, AHIP, has an entire educational series on “preparing for exchanges.”  The likelihood of exchanges being up and running by January 2014 is vanishingly close to zero.  Indeed, they may not exist at all except in very few states – whether or not President Obama wins re-election.

Last January, I wrote in The Health Care Blog that states should not collaborate with the federal government in establishing exchanges.  Almost all states have taken this course.  Recent days have brought forward new evidence that exchanges are facing even bigger problems than previously understood.  The New York Times reports that Republican state senators are blocking a bill that would allow the state to establish an exchange and claim federal handouts to get it up and running. (A few weeks previously, Kansas governor Brownback actually sent a $31.5 million federal PPACA grant back to D.C.).

If they can’t get a PPACA exchange up and running in New York, of all places, where the heck will they? Only 13 states have passed pro-exchange legislation (and some of these bills don’t do much more than establish study groups).

Republican state politicians are clearly hardening their stance against exchanges. It appears that they are no longer fooled by the argument that if they do no collaborate to establish state-based exchanges, the federal government will enter their state and do it for them. Recent close reading of the law has debunked this notion. As written, the Patient Protection and Affordable Care Act (PPACA) has (at least) two clauses that will prevent this from happening – even if the Obama Administration had the operational capacity to establish federal exchanges (which it does not.  That’s why it desperately pitched “Partnership Options” to states the other day.)

First, courtesy of Investors’ Business Daily’s David Hogberg and the Cato Institute’s Michael Cannon, we learn that federal exchanges will not be able to funnel the gusher of refundable tax credits to individuals who enroll in them.  The gist of the argument is that the law only allows state-established exchanges to funnel the tax credits. If a state fails to establish an exchange, and the federal government steps in, that exchange is not eligible for the tax credits.  Neither Hogberg nor Cannon cite it, but it appears that they are referring to section 1401 of PPACA (on page 110 of this version), which clearly refers to section 1311 (state-based exchanges) as eligible for the tax credits, and does not mention section 1321 (federal exchanges).

Please read the section yourself. I hate to play barrack-room lawyer, but I’m 80% to 90% sure that Hogberg and Cannon are right.  Writing in The Health Care Blog, Professor Timothy Stoltzfus Jost makes an argument that no court would accept this interpretation – even though it’s what the law states!  (The reconciliation act, which Professor Jost cites, does not amend this constraint.  It merely demands that federal exchanges report any tax credits, not provide them.)  As for “standing,” Hogberg notes that any business (in a state with a federal exchange) which is fined for not providing health benefits, should have strong claim to standing.

Maybe it is ridiculous to think that a court would actually adjudicate what the law states, rather than what its proponents wish it to state.  But courts do interesting things.  When I first heard that some attorneys general were planning to challenge PPACA’s constitutionality, I thought they were in fantasyland.  Today, the law hangs by a judicial threat, and will eventually be adjudicated by the U.S. Supreme Court.

Second, as I noted in a recent article, states can also stop federal exchanges by threatening to pull the licenses of health insurers which intend to participate in them (p. 58 of this version). The law defines a “qualified health plan” as one that is “licensed and in good standing in each State…”, and only qualified health plans can participate in exchanges.

So, federal exchanges have a double whammy against them. States have learned not to fear that the federal government will step in and operate exchanges for them. Health IT vendors and other businesses that are investing in winning business from exchanges would be well advised to cut their losses, and reinvest in more fruitful business development.

John R. Graham is Director of Health Care Studies at the Pacific Research Institute, & Senior Fellow at the National Center for Policy Analysis.

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Seven Reasons to Vote NO on Health Care Exchange

Posted on February 8, 2012 by RalphWeber

http://www.cchfreedom.org/files/files/Seven-Reasons-to-Oppose-Exchange%20May%202011.pdf

Seven Reasons to Vote NO on Health Care Exchange

Citizens’ Council for Health Freedom   www.cchfreedom.org      651-646-8935

1. There is Only ONE Exchange. The Obamacare Exchange. There is no “state” exchange. There is only the federal Exchange. Obamacare requires States to establish a government-run federally-controlled American Health Benefit Exchange, which must comply with Obamacare and coming federal rules. As Grace-Marie Turner at Galen Institute said about Exchanges in Reason,“States will not be able to do it their way. They’ll have to do it Washington’s way.”

2. “State Flexibility” is a Ruse. Obama is hoping a veneer of “flexibility” will convince state legislatures to establish the federal government-run Exchange in each state. As Michael Cannon at the CATO Institute writes in National Review:

“…federal control is not just the exchanges’ default setting — it’s the only setting. In a February 24 letter to the nation’s governors, Sebelius extolled the four types of flexibility that Obamacare allows states in shaping their exchanges: 1) States can restrict insurers from participating; 2) states can add even more benefit mandates than Obamacare requires; 3) come 2017, states can opt out of Obamacare by creating a single-payer health-care system; and 4) states can adopt their own “governance structure” and “operational philosophy.” In sum, states can impose harsher regulations than Obamacare requires and can choose who sits on their exchange’s board. That’s it. The only additional latitude the Obama administration has offered came when President Obama told the National Governors Association that he is open to letting them launch single-payer systems in 2014 rather than 2017. [emphasis ours]

3. Exchange is NOT a “Marketplace” and “Sunset” is Trojan Horse. RomneyCare’s Connector (Exchange) first offered 24 choices of health plans, now only seven. The Wall Street Journal reported 5/13/11: “Mr. Romney’s political appointees converted the architecture of the “connector” [Exchange] that was supposed to support individual and small-business insurance choice into a regulatory body dedicated to stamping it out.” People without employer sponsored coverage will be forced to buy insurance through the government-run Exchange. Government does not establish markets; its impedes them. And “Sunsets” allow objectionable language to become law — usually permanently.

4. Costly to Taxpayers & Implements Obamaʼs “Single Payer” Agenda. A representative from Deloitte testified to the “adverse selection” problems from costs of the sicker population. He testified that some states with Exchanges today are considering the elimination of all health plans outside their Exchange. (all are grandfathered into Obamacare) The Feds only cover cost of adverse selection from 2014 – 2016. Also, annual operating cost of Exchange is likely $30-$50M.

5. Exchange Nationalizes Health Care. Tom Christina, former Deputy Asst. Attorney General during Reagan Administration told attendees at American Enterprise Institute forum in Washington, D.C. (12/6/10): the Exchange is “antimarket,” “enforcement without federal fingerprints” and “nationalization-in-fact.”

6. GOP will Share Blame with Obama. As with RomneyCare, GOP lawmakers will be blamed for joining Obama to nationalize health care and to undercut the lawsuits against Obamacare by complying with it before the U.S. Supreme Court has ruled (Judge Vinson discussed undercutting in the multi-state Florida lawsuit).

7.  12 States Say “NO”: AK, AZ, AR, FL, GA, IA, IN, LA, MS, MO, MT, NM

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What should I know about seeking medical care?

Posted on February 7, 2012 by RalphWeber

Many Canadians on a surgical waiting list are faced with leaving the country to get timely medical care.

However, they need to exercise caution. Many medical tourism brokers work only with overseas facilities. Many of these facilities are first rate hospitals, and worth looking at when considering your options. Some American hospitals also provide affordable medical care, with inexpensive knee replacements starting at $7,000 overseas, and $10,000 in the US. MediBid has saved patients over one million dollars in medical costs. Look here for a small sample of prices..

Something that’s VERY important is choice. If you are working with a broker who will not allow you to look at medical profiles of multiple facilities, you might want to look somewhere else.

Canadians know that if they wish to get around the waiting lists of a single-payer system, they can come to America to get timely and affordable medical care.  Many of these “medical tourists” use MediBid to assist them in finding physicians who will take care of them.

http://www.theglobeandmail.com/life/health/ask-a-health-expert/the-patient-navigator/what-should-i-know-about-seeking-us-medical-care/article2325641/

What should I know about seeking U.S. medical care?

lisa priest    From Monday’s Globe and Mail      Published

| Thinkstock

The Answer: A wait, as you know, doesn’t necessarily spell a worse medical outcome – many patients can safely queue for certain tests, procedures and operations – so your question is largely about wanting timely medical treatment or at least having a Plan B should you seek a diagnosis in a pinch.

In the U.S., patients with cash are king: Many hospitals there have the opposite problem of Canada – they have excess capacity. So for those institutions, having a patient in a hospital bed at a lower rate is better than an empty bed.

Another thing you should know: No one pays the rack rate; expect about a 30-per-cent price cut if paying cash for a procedure. Given the downturn in the economy, I would negotiate hard for an even bigger discount. Don’t feel you necessarily have to be in big medical centres of New York and Boston; hospitals in Oklahoma and Montana may pleasantly surprise you with equally impressive outcomes for routine procedures.

There is a tendency to overtreat patients in the U.S. Back surgery is heavily marketed and it can be seductive if you are a Canadian patient facing a one-year wait to see a spine surgeon. But what they don’t know is that as many as 90 per cent queuing for that first consult with the surgeon later learn they are not surgical candidates in the first place.

Be cautious of experimental treatments; you want care that is based on the best medical evidence. The only exception is if you have a relatively rare condition – where you will need to find a world-class physician who specializes in that area.

A lot of care can be found online. One website operates a medical-bidding service, allowing Canadian and American patients to post the medical procedure they seek, such as second opinions, diagnostic procedures, knee-replacement surgery or even a new cancer treatment. U.S. doctors come back with custom quotes and their credentials; patients take their pick.

Others patients hire medical brokers, some of whom have good connections and special provider rates with certain U.S. hospitals. But beware: A recent five-year study of medical-tourism companies that operated in Canada found that about half – 25 businesses – had ceased operations by March, 2011.

“Quite a number arrived on the scene then disappeared from view,” said Leigh Turner, associate professor of the University of Minnesota’s Center for Bioethics, School of Public Health and College of Pharmacy. “If someone goes through a medical tourism company, they may get a better deal and they may not.”

If you choose a medical broker, make sure it is an established one that has been around for years. And don’t be afraid to shop around; there are huge deals to be had.

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Health Benefit Exchanges: Regulations Versus Reality

Posted on February 7, 2012 by RalphWeber

States need to really understand what the implementation of an obamacare exchange means. It does NOT give the state more control, it is always going to be an obamacare exchange, it’s just that if the state does it, they have their fingerprints on it.

http://www.pacificresearch.org/docLib/20110718_HPP72011_r2.pdf

Health Insurance Exchanges: What If They Issued 347 Pages of Regulations and Nobody Cared?

By John R. Graham

A few days ago, the U.S. Department of Health and Human Services released the first raft of regulations purporting to govern Health Benefits Exchanges and Small-Business Health Options (SHOP) Exchanges established in the March 2010 Patient Protection and Affordable Care Act (PPACA). These exchanges are the means whereby the government will force millions of Americans to acquire health insurance chosen by state functionaries, starting in 2014, as discussed in an earlier issue.1 PPACA delegates to states the authority to establish exchanges.2

The regulations total 347 pages, with one set of 244 pages for the organization and policing of the exchanges, and another 103 pages for the so-called “risk regulation.”3  The latter is necessary because Health Benefits Exchanges will not be allowed to charge actuarially accurate premiums to enrollees, even though the enrollees will be signing up as individuals. Therefore, there will be an incentive for people to wait until they become sick or injured to apply for coverage. The regulations seek to minimize this risk in various ways, including taking money from insurers which experience below-average costs and transferring it to those which experience above-average costs.

The regulations are light on precisely defined mandates or prohibitions, and heavy on feel-good finger-wagging. For example, exchanges will have the power to “implement selection criteria” for insurers such as “past performance of the health insurance issuer” and “enhancements of provider networks including the availability of network providers to new patients.”

This kind of wooly language is unfortunate because it confirms the arbitrary power that state functionaries will have to restrict competition and choice by preventing a variety of health plans from participating in any exchange. Thus, it looks like California’s Health Benefits Exchange, which grants unlimited power to the board to contract selectively with as few health plans as it wishes, will be in compliance with the emerging regulations.4  Perhaps this should not trouble us because it is becoming increasingly clear that Health Benefits Exchanges exist primarily in the imaginations of public servants, not actually in the real world.

The critical date for exchanges is not January 1, 2014, but exactly one year earlier. By New Year’s Day, 2013, the U.S. Department of Health and Human Services must decide which states will have exchanges that are ready to operate in 2014. In reality, that means Secretary Sebelius will have to make her decisions about certifying states’ exchanges in the second half of 2012 – during the heat of President Obama’s re-election campaign.

Analysts at the Commonwealth Fund, a cheerleader for PPACA, reviewed states’ actions to establish exchanges as of July.5  Only 10 states have signed legislation enabling the creation of exchanges: California, Colorado, Connecticut, Hawaii, Maryland, Nevada, Oregon, Vermont, Washington, and West Virginia. That’s only about one-fifth of the U.S population. Illinois, New York, and North Carolina have had exchange bills pass only one legislative chamber. Let’s anticipate that these three get their bills signed. That gets us to about one-third of the U.S. population living in states that might be covered by Health Benefits Exchanges. And let’s not forget Massachusetts and Utah, which deployed exchanges before PPACA became law.

If those exchanges become certified, that would mean that about 38 percent of the U.S. population will be in states that might have Health Benefits Exchanges. I would not be so certain, however, that Utah will even apply to be approved by Secretary Sebelius, so deep is the revulsion in that state to PPACA. Indeed, Utah’s incumbent exchange continues to underwhelm. Although open to individuals and families since August 2009, and small groups since September 2010, only about 3,500 beneficiaries were enrolled in June 2011. Even worse, three-quarters of the employers participating in the exchange had dropped traditional small-group insurance, suggesting that the net increase in insured individuals is likely less than one thousand.6

Virginia, North Dakota, Wyoming and Mississippi have passed legislation to dip their toes in the water by appropriating funds to investigate whether they should have exchanges. Governors in Alabama, Arkansas, Georgia, Indiana, Montana, and Rhode Island are using their executive powers to “study” or otherwise move the ball sideways after their legislatures rejected exchanges. I do not view these as serious efforts to establish exchanges, but primarily ways to increase federal grant money made available via PPACA.

Most other states are vocally hostile to collaborating with PPACA. Concerned citizens note that if states refuse to establish exchanges, the U.S. Secretary of Health and Human Services has the power to establish federal exchanges in those states. But this is hardly likely. Health care is local. For the federal government to establish competing health-insurance regimes in huge states like Florida or Texas in the next year and a half would stretch the skills of the most heroic entrepreneurial talent – and nobody has accused Secretary Sebelius’ team of possessing such skills.

Even if she did have the capacity to establish federal exchanges, states are discovering that they have a “nuclear option” to prevent it. PPACA states that health insurers operating in exchanges – whether state or federal – must be licensed to do business in the state where the exchange functions. Thus, a state facing a credible threat of a federally imposed exchange can simply pass a law revoking the license of any health insurer that participates in it.

Furthermore, as professor Timothy Jost, one of the law’s most vocal supporters, has cheerfully warned us, “This is only the first set of regulations; more will follow.”7 Indeed, this month’s draft defers the most difficult decisions, including how to determining individuals’ eligibility for tax credits to acquire health insurance in an exchange. Recall that these tax credits depend on household income. This is a monumentally challenging task because employers will be fined if they don’t offer qualifying health insurance to their employees. But employers do not know their employees’ household income.

The IRS can figure this out – with a significant time lag. By 2013, most employers will have to report the value of their health benefits on employees’ W-2s. Somehow, the IRS will have to collate this information and communicate household income and employers’ non-compliance with their mandate to the appropriate exchanges. But the IRS has not issued any guidance as to how it intends to do this.

As professor Jost notes, the approval process for exchanges looks a lot like the approval process for Medicaid or State Children’s Health Insurance Programs (SCHIP). The federal government granted significant Medicaid waivers to California and Rhode Island, both of which took five months to approve. And these were based on regulations that have existed for years.

Health Benefits Exchanges will not exist in time to channel the millions of dollars of subsidies for which they are designed. The tax hikes will still be levied – but they will have nowhere to flow. The Administration has to decide how to respond to this failure. It might keep quiet, not wanting to remind voters how broad and deep the opposition is. Or, it might panic, certifying exchanges thrown up at the last minute in order to demonstrate that PPACA is “working” when it isn’t.

This all sounds complicated but the central message is simple and upbeat. The failure of Health Benefits Exchanges is a significant step in the defeat of Obamacare.

John R. Graham
Director of Health Studies, Pacific Research Institute
San Francisco, CA
E-mail: jgraham@pacificresearch.org
Twitter: johnrgraham
Facebook: www.facebook.com/pages/JFreeAmericanHealthCare
Blog: http://free-american-healthcare.blogspot.com

Endnotes

1 John R. Graham, “Should Your State Establish an Obamacare Health Insurance Exchange?” Health Policy Prescriptions, vol. 8, no. 10 (October 2010).

2 This article does not grapple with the issue of whether PPACA itself is a usurpation of state authority and individual rights, as a number of lawsuits contend.

3 45 CFR parts 155 and 156 (July 11, 2011). Available at http://www.ofr.gov/OFRUpload/OFRData/2011-17610_PI.pdf. 45 CFR part 153 (July 11, 2011). Available at http://www.ofr.gov/OFRUpload/OFRData/2011-17609_PI.pdf.

4 John R. Graham, “Governor Schwarzenegger: Don’t Build This Wall,” Capital Ideas, vol. 16, no. 34 (September 22, 2010).

5 Sara R. Collins and Tracy Garber, “State Health Insurance Legislation: A Progress Report,” The Commonwealth Fund Blog  (July 11, 2011). Available at http://tinyurl.com/65qr4y4.

6 June Dashboard  (Salt Lake City, UT: Utah Health Exchange, June 9, 2011). Available at http://www.exchange.utah.gov/images/stories/UHEJuneDashbrd.pdf.

7 Timothy Jost, “Implementing Health Reform: Health Insurance Exchanges,” Health Affairs Blog (July 12, 2011). Available at http://tinyurl.com/66rzb5x.

 

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Federal Obamacare Exchanges Are A “Phantom Menace”

Posted on February 6, 2012 by RalphWeber

Too many states are allowing their citizens and legislators to be intimidated by the fed. Put the brakes on, because if you set up an obamacare exchange, you are endorsing and validating obamacare.

http://www.fayobserver.com/articles/2011/04/06/1082818?sac=Opin

Op-ed: Don’t rush ObamaCare exchange

By Joseph Coletti

RALEIGH – Fresh from their vote against ObamaCare’s individual mandate, state legislators began work to implement an ObamaCare health insurance exchange. Legislators who took a principled stand against one form of federal overreach are now complicit in another. Why?

Republicans, Democrats, health insurers, care providers and employers of all sizes contend the federal government will swoop in and run a health insurance exchange if North Carolina has not made progress to establish one by January 2013. I believed this myself until recently. Now I know this is a phantom menace.

Under ObamaCare, states or the federal government must create “exchanges,” the only place where families earning less than $88,000 per year could use federal subsidies to buy health insurance. Policies sold through an exchange would have to meet currently undefined federal rules to become “qualified health plans.” Whatever form the rules take, they will make insurance more expensive, as you and your employer may have noticed with changes already linked to ObamaCare.

Federal control

Despite fears about federal control, in the end it will not matter who establishes an exchange. The federal government will ultimately control everything the exchange does. Federal Health and Human Services Secretary Kathleen Sebelius has specified four areas of flexibility available to states: They can bar insurers from participating, require more benefits, opt out of the exchange to create a single-payer system, and define who sits on the board of the exchange and its “operational philosophy.” This is not real flexibility. There is no room to opt out of mandates and regulations that pre-empt competition and innovation.

North Carolina has taken a $1 million federal grant to develop and start operating the state’s exchange. This money serves as the carrot to the stick of a federally run exchange, but it dries up by January 2015, if not sooner. The exchange must be self-sustaining by that point, which could mean big costs for taxpayers.

Rep. Jerry Dockham, who sponsored the leading House bill, has said the state can create an exchange “faster and at lower cost” than the federal government. This suggests that if the state does not meet federal deadlines, it will still take longer for the federal government to have an exchange up and running in North Carolina. In other words, the state faces no pressure to pass an exchange bill this year.

Clarification needed

Exchanges are complex, costly and confusing. With no time constraint, it makes sense to delay creating one until constitutional questions and federal rules are settled. A study committee would help clarify what an exchange must do and how it should do it. At the very least, legislators need to understand how much it will cost taxpayers to make an exchange self-sustaining.

The two governors with the most knowledge of health care, Rick Scott in Florida and Bobby Jindal in Louisiana, have both rejected similar grants for their states. Grass-roots opposition in Georgia, Montana and South Carolina has sidelined exchange bills in those states. Opposition continues to grow nationwide.

If legislators are still concerned about a federal takeover of a federally mandated, federally defined exchange, they could pass a simple piece of legislation that would take less than a page instead of the pages of rules needed to create another bureaucracy.

Something as simple as compelling the insurance commissioner to revoke or suspend the license of any insurance company that tries to sell health insurance in North Carolina through a federal exchange. It would still provide the opportunity for the state to create an exchange if one makes sense, while removing the federal threat.

Haste is the enemy of good public policy. Former Democratic U.S. House Speaker Nancy Pelosi said Congress had to pass ObamaCare to see what was in it. Republican leadership in the North Carolina General Assembly should apply a higher standard to such a critical piece of ObamaCare implementation.

Wait. Study. See what the Supreme Court says. If ObamaCare really is constitutional, there will still be time to act. If it’s unconstitutional, we would have saved a lot of time, money and effort on an unnecessary bureaucracy.

Joseph Coletti is director of health and fiscal policy studies for the John Locke Foundation.

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Debate Over Health Exchange In Virginia May Hit Roadblock

Posted on February 4, 2012 by RalphWeber

Exchanges? We don’t need no stinkin’ exchanges.

Employers will be best served in doing what is fiscally responsible. Health exchanges, or obamacare, exchanges are NOT what is fiscally responsible. Some legislators want to establish obamacare exchanges, because it means “federal monies” for them.

Let’s bring this back into focus. Healthcare is about Medical care, and Medical care needs to be between patient and doctor, not between insurance companies and government. Patients who want a direct doctor patient relationship can register at MediBid and use our innobid technology to engage directly with a doctor.

http://insurancenewsnet.com/article.aspx?id=327408&isrc=fen

Debate Over Health Exchange In Va. May Hit Roadblock

January 26, 2012
By Michael Martz, Richmond Times-Dispatch, Va.
McClatchy-Tribune Information Services

Jan. 26–The public debate is under way in the Senate over how to create a health benefits exchange inVirginia, but any legislation appears headed to a dead-end in theHouse of Delegates.

House Speaker William J. Howell, R-Stafford, said Wednesday that he would discourage approval of legislation in the current General Assembly session to create an exchange.

“I only have one vote, but I can discourage it,” Howell said in an interview. “It’s an unnecessary expense at this point.”

The speaker’s position mirrors that of Gov.Bob McDonnell, who doesn’t want the state to take action to establish an exchange until after theU.S. Supreme Courtrules on the constitutionality of the federal health care reform law that would require its creation.

But key Republican legislators in theSenatesay they do not believe Virginia can wait for a ruling on the Patient Protection and Affordable Care Act and meet looming federal deadlines if the law were upheld.

Sen. Jeff McWaters, R-Virginia Beach, said “it would be problematic” for the legislature to wait until 2013 to make decisions on an exchange that must be prepared to enroll participants by that fall and begin operating on Jan. 1, 2014.

“I strongly believe that that’s impossible,” said McWaters, chairman of a Senate Commerce and Labor subcommittee that on Wednesday began reviewing four legislative proposals to create a state exchange.

Commerce and Labor ChairmanJohn C. Watkins, R-Powhatan, sponsor of Senate Bill 496, warned that Virginia risks having a federal exchange imposed if the state fails to submit a plan for an exchange later this year that the U.S. Department of Health and Human Servicescertifies byJan. 1.

“Some will say (federal officials are) going to push the dates back — that’s speculative,” Watkins told the subcommittee. “I am concerned that if we defer to that speculation, we will not have a plan in place and we may by default end up in a federal exchange.”

That fear is shared by the health insurance industry, which wants the General Assemblyto make decisions now on where the exchange would be housed and how it would be governed, as well as the benefits that competing health plans would have to provide.

“We’re very concerned about meeting deadlines for being fully operational by fall of ’13,” said Megan P. Padden, vice president of government programs and compliance at OptimaHealth, based in Virginia Beach.

Three other proposals to create a health benefits exchange are pending in a subcommittee of the House Commerce and Labor Committee for review next week, but none appears likely to reach the House floor over Howell’s objection.

The speaker said he does not want Virginia to waste time and money on a requirement that could be overturned by the Supreme Courtor repealed by a future Congress, especially if President Barack Obama is not re-elected this fall.

“It’s an expense and an effort we don’t need to go through at this time,” said Howell, who did not rule out a special legislative session being called to take up the issue after the court’s ruling, expected by the end of June.

All seven bills to create an exchange provide that the law would expire if the health care act were overturned or repealed.

Americans for Prosperity, a conservative political organization, issued a statement on Wednesday opposing approval of a health benefits exchange in Virginia until the court rules.

“These exchanges are a simple means for the federal government to expand bureaucratic control,” said Audrey Jackson, the organization’s state director.

Watkins and other senators contend an exchange would benefit Virginians and that the state should act now to set the rules for it.

“There seems to be wide agreement that it would be advantageous forVirginiato take a leadership role and move forward,” said Sen.Barbara A. Favola, D-Arlington, who introduced the seventh bill (SB 615) on Friday with Sen.Ralph S. Northam, D-Norfolk.

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Why Health Exchanges Don’t Work

Posted on February 3, 2012 by RalphWeber

This is the first article I will post on obamacare exchanges.

I will post one every day. In the ACA, they want the states to set up their own obamacare exchanges, and they threaten to do it if the states don’t. The worst thing a state could do is to implement an exchange. If a state implements an exchange, it is not a marketplace, it is an obamacare exchange controlled and regulated by the federal government.

The supreme court will rule on the constitutionality of the entire ACA in June, so doing anything before them would be very foolish. Even if the ACA is upheld, states should not hasten to set up an obamacare exchange into their state. If a state wants to experiment with different models, implementation of an obamacare exchange will make that more difficult.

http://www.pacificresearch.org/docLib/20110823_HPP8.2011_F.pdf

Why Health Exchanges Don’t Work

By John R. Graham

In a recent article, I reported and discussed the lackluster—basically non-existent—results of the Utah Health Exchange.1 As a critic has pointed out, I used to be much more accomodating of the Utah exchange.2  However, Utah’s experience demonstrates why unsubsidized exchanges are unlikely to attract significant numbers of beneficiaries from the small-group market.

The failure of the Utah Health Exchange is not idiosyncratic. It is the destiny of any unsubsidized and voluntary exchange. The reason is pretty straightforward: The administrative costs of operating an exchange plus  the administrative costs to a small business of migrating to the exchange are almost certainly greater than the administrative costs of participating in the traditional small-group market (or taking a chance on other “work arounds” promoted by some insurance producers, as described below). Therefore, unless an exchange is subsidized from non-exchange sources (as per Obamacare), it will not attract many participants.

While straightforward, this conclusion is not necessarily intuitive. Indeed, the primary goal of an exchange is to free small businesses and their employees from the Internal Revenue Code’s perverse provisions that exclude employer-based benefits from taxable income, but not individually owned health insurance bought by an employee. Because Congress has never made any serious attempt to correct this malformation of the tax code, certain states have considered arguments to create exchanges or “connectors” to wriggle around the provision.Imagine if a state could create an exchange whereby an individual working a number of part-time jobs, none of which offered health benefits, could get each of his employers to contribute some pre-tax income to the exchange, allowing him to buy his own health insurance from a large “menu” of choices. Or even an exchange whereby people with full-time jobs could move from one employer to another within the same state without disrupting their coverage. That would be a great achievement.

Consider a counter-example: Suppose the Internal Revenue Code did not grant people a mortgage-interest tax deduction, but instead defined employer-based housing as a non-taxable benefit. Most employed people would live in homes arranged and paid for by their employers. The situation would clearly be overly bureaucratized and ineffective at satisfying people’s residential needs, but we would suffer it nevertheless, because of the tax benefit. If a well governed state established a housing exchange, into which employers made fixed contributions, that allowed employees to choose their own homes, surely employers would stampede into the exchange.

Or would they?

First, the exchange would threaten the livelihoods of the realtors and other intermediaries who profit from employer-based housing. Why would they want people living in their own homes for years, maybe decades, instead of relying on housing chosen by their employers via arrangements negotiated annually with high friction costs? Therefore, to minimize political resistance, the state would have to satisfy the income needs of the intermediaries, by ensuring that the exchange pays their commissions and other fees.

Second, the federal law would not be as simple as described above. Thousands of pages of regulations would be emitted by the U.S. Department of Labor, the U.S. Department of Housing and Urban Development, the Internal Revenue Service, et cetera, and the state’s exchange would not be able to indemnify employers from these regulations—which are in constant flux. So, employers would still have to pay some species of consultant (either directly or indirectly) to ensure compliance with federal laws and regulations.

These two conditions appear to prevail in the Utah Health Exchange. Reading (between the lines) the memoir of the exchange’s first leader, one can only conclude that the exchange increased complexity, and protected (or, at least, did not challenge) the turf of those who profit from the status quo.3

In summary, the Utah Exchange almost certainly adds administrative costs to small businesses’ decisions to offer health benefits, without subtracting administrative costs from the old way of doing business.

Outside exchanges, there may be ways for employers to make legal contributions to Flexible Savings Arrangements (FSAs) or Health Reimbursement Arrangements (HSAs) without providing group health benefits.4 This frees up employees’ own income to buy individual health insurance. This appears to be the business model of Bloom Health or the Independent Association of Businesses (which refer to themselves as “private exchanges,” but I view that as simply a promotional term in sync with the times), LyfeBank, and certain individual brokers and advisers.5

However, some industry experts of my acquaintance suggest that these folks are not quite “coloring within the lines” and might face regulatory retaliation. Furthermore, this platform appears not to have achieved significant market share.

Eliminating employer-monopoly health benefits in favor of individually owned health plans is a critical goal of health reform. The evidence strongly suggests that this can only be done through federal tax reform. Unfortunately, those brave souls who attempt it through non-Obamacare, state-based exchanges are engaged in a fruitless quest.

Endnotes

1 John R. Graham, “Why the Utah Health Exchange is No Model for Health Reform,” Capital Ideas  (San Francisco, CA: Pacific Research Institute, July 27, 2011).

2 Norman K. Thurston, “Why Utah’s Exchange is a Free-Market Model, Forbes.com: The Apothecary  (August 3, 2011).

3 Norman K. Thurston, The Utah Health Exchange: A Look in The Rearview Mirror, working draft white paper (Salt Lake City, Utah: Utah Health Exchange, February 15, 2011). Available at http://www.exchange.utah.gov/images/stories/Rearview_Mirror_on_the_Utah_Health_Exchange__4_.pdf.

4 Health Savings Accounts and Other Tax-Favored Health Plans , Publication 969 (Washington, DC: Internal Revenue Service, January 14, 2011).

5 Sarah Kliff, Private Exchanges Offer Alternative,” Politico Pro  (July 11, 2011); http://www.lyfebank.com/home/, ;”IAB Builds a National Small Business Healthcare Exchange,” press release (Washington, DC: Independent Association of Businesses, August 17, 2011).

 

 

 

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Prediction: Canadians flock to private health care

Posted on February 3, 2012 by RalphWeber

http://www.canadianbusiness.com/article/66237–prediction-canadians-flock-to-private-health-care

Canada sees the mounting cost of covering an aging population and admits they cannot afford projected expenses.  They are allowing citizens to buy private insurance to cover the crippled government system.  Canadians already come to the U.S. to get timely and affordable medical care to avoid the waiting lists and rationing of the single payer system.  Many of them contact MediBid to assist them with finding physicians and specialists to fulfill their medical needs.

Prediction: Canadians flock to private health care

January 17, 2012

CB_Vacation
(Photo: Philip and Karen Smith)

As we enter 2012, Canada’s health care system continues to find itself in a demographic vise grip. The country is aging rapidly—fertility is down, life expectancy is up— and technological advancements can’t offset the cost of doctors’ swelling salaries and the rise in the number of procedures.

Finance Minister Jim Flaherty left little room for negotiation in December when he announced a 12-year funding plan for health care that made clear the federal government won’t write a blank cheque to cover mounting costs. He promised provincial health transfers will continue at 6% for the next five years, with the percentage being tied to GDP growth thereafter. With some provinces whining that the funding is inadequate, private, often for-profit, health-care options will increasingly become a necessity for the country rather than a political choice.

According to David Dodge, former Bank of Canada governor and deputy minister of health, now is the time to discuss implementation of private health-care options, particularly when it comes to tending to an aging population. “Our acute public care system is used to dealing with problems that could be paid for with more private programs,” he said in a recent talk. In fact, private home-care health services have already pretty much doubled in the past decade, swelling to $6.8 billion in 2011.

That trend isn’t just a resource necessity—boomers may actually be willing and able to spend more on care as they become wealthier. “Health care is a classic ‘luxury’ good to which individuals and society wish to allocate a larger share of their rising income,” economist Don Drummond said in a recent lecture. And that spending isn’t limited to nursing-home care. New technologies arrive on the market annually and some, like genetic testing, aren’t reimbursed by medicare yet.

For-profit diagnostics in particular will surge as patients jump the queue by using private clinics to perform tests such as MRIs. While some patients might feel contrite about professing a love for the Canadian public system and then paying for care, when it comes to their health, that’s a guilt many patients are willing to bear.

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AMA to House Speaker Boehner: Stop ICD-10

Posted on February 2, 2012 by RalphWeber

http://www.healthimaging.com/index.php?option=com_articles&view=article&id=31492:ama-to-house-speaker-boehner-stop-icd-10

The AMA currently earns $72 million per year on CPT codes, and that goes away if ICD 10 is implemented.  Although I agree that going from 14,193 CPT codes to 140,000 would be a burden, I wonder.
To avoid the burden of dealing with all these codes and insurance headaches altogether, use MediBid to find affordable and timely medical care. 

AMA to House Speaker Boehner: Stop ICD-10

American Medical Association CEO James L. Madara, MD, wrote to House Speaker John Boehner (R-Ohio) to urge him to take action against the implementation of ICD-10, informing him that the transition to ICD-10 as mandated by HIPAA would place a heavy burden on physicians without offering a direct benefit to individual patient care.

Implementing ICD-10 will be costly to physicians and disruptive to their other health IT efforts, Madara declared, adding that federal health IT initiatives should be better synchronized.

“This is a massive administrative and financial undertaking for physicians, requiring education, software, coder training and testing with payors,” Madara wrote. “As HIPAA-covered entities, physicians are responsible for complying with this ICD-10 mandate, and therefore must bear the entire cost of such a transition, without any financial aid from the government. Depending on the size of the practice, the total cost of implementing ICD-10 ranges from $83,290 to more than $2.7 million.”

Madara added that the Oct. 1, 2013, deadline for ICD-10 implementation is asking too much of physicians who are currently implementing EHRs and e-prescribing systems to avoid financial penalties for failing to participate in meaningful use incentive programs. He asked Boehner to consider the timelines for the Centers for Medicare & Medicaid Services’ e-prescribing, meaningful use and physician quality reporting programs, saying that physicians don’t deserve to be penalized for choosing to participate in and prioritize one incentive program over others.

“Stopping the implementation of ICD-10, and calling on appropriate stakeholders including physicians, hospitals, payors, national and state medical and informatics associations, to assess an appropriate replacement for ICD-9 will help keep adoption of EHRs and physician participation in quality and health IT programs on track and reduce costly burdens on physician practices,” Madara concluded.

Read Madara’s letter to Speaker Boehner here.

 

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Quebec Man Dies After He Forgets Health Card

Posted on February 1, 2012 by RalphWeber

As insensitive as the treatment of the Canadian skier was, and as imperfect as both the US and the Canadian systems are, refusing to see a patient who goes to the emergency room simply because he does not have a piece of plastic is unfathomable.

In the US anyone who goes to the Emergency Room, will be seen, regardless of whether they have a health card, insurance, or money. It’s a federal law. In Canada, they do unfortunately deny care to uninsured Canadians, or those who cannot prove that they are covered… even in the ER.

Patients, many Canadian, come to MediBid to assist them in finding various types of care which they cannot get in a timely manner in Canada.

NOTE: I believe this event occurred in 2004

http://forum.canadianparents.com/ubbthreads/ubbthreads.php?ubb=showflat&Number=114660

Quebec Man Dies After He Forgets Health Card

MONTREAL (CP) – A 21-year-old man died of appendicitis after he was refused treatment at an emergency clinic because he didn’t have his provincial health card with him.

Gerald Augustin complained of stomach pains on Thursday but the receptionist at the St-Andre medical centre told him he had to return home to get his health card. He didn’t make it back to the clinic in Montreal’s east end.

About four hours later, a friend alerted police and called an ambulance for the man, who had a fatal attack of appendicitis in his apartment. He was pronounced dead in hospital.

Rouslene Augustin, administrator at the St-Andre clinic, said the man didn’t appear to have any urgent symptoms when he came to the clinic.

“If this guy was an emergency case, we would accept him if he had his card or not,” she said.

“I don’t see what we did wrong. I’m not defending the clinic, we just followed the rules.”

Health Department spokesman Dr. Marc Giroux said clinics are obligated to provide service for emergencies even if no medicare card is produced.

“In the case of an emergency, the medicare card is not necessary,” he said.

In non-emergency situations, patients must provide payment upfront and are later reimbursed by the provincial health insurance board.

Esther Noel said she wonders if her brother was aware he could have paid for medical attention.

“Maybe they did not say to him you have to pay,” she said.

Quebec Health Minister Philippe Couillard said it’s too soon to say if anyone is to blame for the man’s death.

“Was the person or was the person not presenting obvious symptoms of emergency, when he presented himself at the clinic?” he asked.

“This has to be known and it will be known after the inquiry.”

The provincial coroner’s office has called an inquiry. The coroner has asked police to determine if Augustin had been injured in a criminal act in the past few days.

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