Physician Patient

Archive for March, 2017

2017 Legislature: Offloading Expensive (High Risk) Individual Coverage Cases to Minnesota Taxpayers

Saturday, March 18th, 2017

Health Care Insurance “Reform” Passes House

The Minnesota Premium Security Plan (HF5): https://www.revisor.mn.gov/bills/bill.php?f=HF5&y=2017&ssn=0&b=house) may be a security plan for Minnesota insurance companies. It creates a state-based reinsurance program. This bill passed the House on a bipartisan vote of 78-53. The goal is to stabilize and reduce premiums to consumers by mitigating the financial impact of high-risk individuals (those who are often the most sick) on MN insurance companies which provide individual health insurance. According to Minnesota Management and Budget (MOMB), the proposal will potentially reduce premiums by as much as 18 percent.

This legislation is designed to help to stabilize the Minnesota individual health care insurance market which has been devastated by Obamacare and MNsure. The bill will allow insurance companies to offload high risk individuals in their risk pools to MN taxpayers. The individual market risk pool includes about 5% of Minnesotans with health care insurance. These are people not on employer-based coverage, Medicaid, Minnesota Care, or Medicare. In 2017 the individual health care insurance pool is a third the size and contains twice the percentage of medically needy (expensive) enrollees than before the implementation of the Obamacare ACA law in 2010.

One of the realities facing any health care insurer is how the company apportions “risk” among its pool of enrollees. People who suffer extensive (expensive) illness (unless they die quickly without expensive medical interventions) often require expensive treatments and/or ongoing medical care which of course costs the “health care system” a lot of money. We know that 10% of an insurance plan’s enrollees generate 90% of its heath care expenses. That people are sick is usually not their fault, and clearly those with expensive conditions need health care insurance protections. However, unless costs for expensive enrollees can be covered by the insurers, they will withdraw from offering policies, as they have in Minnesota’s individual insurance market and MNsure insurance exchange.

Our legislators with HF 5 have offered a deal to the insurance companies with taxpayer money bribes to “stay in.” But to pass it taxpayers need assurances that legislation will actually result in lower health care insurance premiums and greater market choices for Minnesotans. I’m not convinced this legislation will do that.

This plan creates an internal reinsurance system using the legal framework of the Minnesota Comprehensive Insurance Association which was discontinued in 2013.

Health insurers would be partially compensated for taking on high cost customers so that MN health care insurance companies will not drop their individual policy offerings as they have in recent years. Customers dependent on individual insurance will have coverage options in a Minnesota individual policy market. This reinsurance will occur invisibly to patients. It will be administered by the Minnesota Comprehensive Health Association which since 1976 until 2013 ran our (successful) Minnesota high risk pool.

This legislation is projected to reduce premium costs, stabilize the market, and ensure that the sickest Minnesotans continue to have access to health care insurance.

Next, Minnesota and federal politicians need to propose and support reforms that will result in actual decreases in costs to consumers for health care services and health care insurance protections. This will mean price transparency, expanded choices of care “providers” and insurance products, and putting money under the control of patients and families as health care consumers.

By Definition, Obamacare Fails as Health Care Insurance

Wednesday, March 1st, 2017

As we move into ACA “Repeal and Replace” discussions and action, consider Obamacare’s fundamental philosophical and economic paradoxes.

On one hand the ACA law is a boon to establishing government-insurance company cartels taking federal and state government money to “cover” US citizens who are not enrolled in Medicare, Medicaid, and the VA. Also, of course, the large ACA Medicaid expansion in Minnesota is administered through HMOs in cartel-TPA arrangements with our state government.

But what is the fundamental definition of Heath Care Insurance? The ACA flatly negates the principles of individual patient insurance risk underwriting by requiring “guaranteed issue” and removing all “pre-existing conditions” as coverage exclusions. So now, health care insurance companies must enroll all applicants based not on the likelihood of them incurring projected health care expenses but rather by the criteria of their economic status as defined by government-income classifications and thresholds. Therefore, it’s no surprise that insurance companies have dropped out of Mnsure and the MN individual insurance market. We’ll need to continue to pay off the insurance companies unless there is a proper definitions of health care insurance which is distinct from social health care entitlements.

2017? This year the Minnesota legislature decided to subsidize insurance companies who cover Minnesotans faced with huge increases in their health care premiums. There are current proposals to re-establish a Minnesota high risk pool to be administered internally within Minnesota insurance companies. This will allow them to unload expensive cases to taxpayers.

I’m thinking we should bring back a patient-centered high risk health care insurance pool in Minnesota modeled after the 1976 Minnesota Comprehensive Health Association plan http://mchamn.com/ which was phased out in 2013 because the ACA was supposed to be a refuge and safety net for patients and families with expensive medical conditions.