Covered CA projects large hike in 2017 health premiums

As reported by the Sacramento Bee:

Covered California announced projected average rate increases of 13.2 percent for health insurance bought next year through the state-run system, as consumers were urged to “shop around” to avoid large premium hikes.

Covered California executive director Peter Lee said there are multiple reasons for the increase: hikes in specialty drug costs, an expected loss of federal aid to insurance companies and “sicker people” enrolling in two of the state’s biggest providers during the off-season special enrollment period.

Lee said the premium hikes are not due to health insurer profits. “We kicked the tires hard. … This isn’t about health plans making big buckets of money. It’s about rising costs of health care.”

Rate hikes for Covered California policies in the last two years came to about 4 percent, putting the three-year average at 7 percent. Lee noted that 90 percent of Californians will still be eligible for federal subsidies to help cover their Covered California premium costs.

Lee noted that the average increase varies widely by …

Covered California Is No Model for Obamacare Reform

covered caWith the recent announcement of UnitedHealth Care’s abandoning Covered California and most other Obamacare exchanges around the country, its beneficiaries will have fewer plans to choose from in 2017. We can expect this shrinking number of health plans to take advantage of market power to increase premiums. Obamacare’s supporters believe the solution is to give state-based exchanges the power to act as “active purchasers” limiting consumers’ choices like Covered California does today.

Under Obamacare, consolidation is widespread. Hospital mergers increased 44 percent from 2010 to 2014. As for physicians, Marcus Welby, MD is an artifact of history. In 2014, 39 percent of physicians worked in practices with at least eleven physicians, versus fewer than one quarter three decades ago. The five largest national health insurers are merging into three, assuming the federal Department of Justice approves the consolidations.

Admitting Obamacare is leading to shrinking choices, its supporters now argue less competition among health plans is just fine, as long as the exchanges are granted even more power over the plans insurers offer.

California is one of only four states where the Obamacare exchange, called Covered California, has the statutory authority to act as an “active purchaser.” Covered California defines just one benefit design in each “metal” tier. It dictates, for example, a primary-care visit has a $45 co-pay for those with Silver plans; or that a family deductible is $4,500. According to Peter Lee, Executive Director of Covered California, consumers do not really value being able to choose plans with different deductibles or copays. “What’s the difference between them? Tweaks on co-insurance and insurance babble that most consumers don’t understand.”

In order to cut out this “babble”, Covered California only accepted 12 of 32 insurers which initially showed interest in participating in 2014. Some rating regions have more insurers competing than others. Obamacare’s supporters were relieved when Professor Richard Scheffler of the University of California, Berkeley, and colleagues published research concluding rating regions with fewer insurers (such as Santa Clara County) had lower premium hikes in 2015 than those (such as San Francisco) with more. The authors credited Covered California’s active purchasing power for this counter-intuitive result.

Examining Silver plans, the researchers concluded the average statewide premium for a 40-year old increased 3.3 percent in 2015; and a 10 percent decrease in insurer competition in a rating region was associated with a reduction in the premium hike to 3.0 percent. In New York, where the exchange is not an active purchaser, the relationship went in the direction one would expect in a normal market.

The average statewide premium increased 2.1 percent; and a 10 percent decrease in competition in a rating region was associated with an increase in the expected growth rate to 3.0 percent.

Explaining California’s counter-intuitive result, Professor Scheffler and colleagues suggest health plans in rating regions where there are fewer competitors can negotiate excessively profitable contracts with hospitals and doctors; and this gives them more room to yield when negotiating rate hikes with Covered California. Another way to put it might be that uncompetitive insurance markets allow insurers to gouge providers, then Covered California gouges back from insurers.

A policy to give that power to other states’ exchanges ignores the bigger picture. Comparing two states’ Obamacare exchanges is like comparing the taste of two rotten lemons. Health plans in exchanges in both California and New York are “highly concentrated” as defined by the Department of Justice and Federal Trade Commission. In other words, they would be closely investigated for antitrust violations if they operated in a normal market.

Nevertheless, the average premium hike in California in 2015 was 3.3 percent and in New York it was only 2.1 percent.  By 2015, we already had one full year of Obamacare behind us. Everything turned upside down a year earlier. According to the Manhattan Institute, a 40-year old man’s premium went up by 33 percent in California in 2014, versus declining 45 percent in New York.

And there is the problem of network adequacy. Professor Simon F. Haeder of the University of Wisconsin – Madison, and colleagues, found hospital networks were smaller in insurers’ Covered California plans than in their commercial plans in two-thirds of cases. Networks in their Covered California plans were 17 percent smaller (measured by hospital beds) than in commercial plans. Insurers are not limiting premium hikes by yielding excess profits to Covered California, but by reducing access to hospitals and doctors.

Rather than giving other state exchanges Covered California’s power to limit consumers’ choice of health plans with narrow networks, other states should be demanding more freedom from Obamacare’s federal regulations and passing that freedom on to consumers.

enior fellow at the Pacific Research Institute and a Senior Fellow at the National Center for Policy Analysis.

This piece was originally published by Fox and Hounds Daily

Bill Would Allow Illegal Immigrants Access to Obamacare in CA

covered caState Democrats forged ahead with legislation designed to fill out Covered California’s enrollment ranks with unlawful and undocumented immigrants.

Following the state Senate, the Assembly has “passed a measure that would remove a critical barrier to Covered California and allow all Californians to access the state health insurance marketplace, regardless of immigration status,” as State of Reform noted. The legislation, introduced as Senate Bill 10 by state Sen. Ricardo Lara, D-Bell Gardens, “would authorize the state to apply for a federal waiver that would allow undocumented immigrants to buy unsubsidized health coverage through Covered California.”

“Currently, undocumented immigrants are barred from using the state marketplace under the Affordable Care Act even when using their own money and instead must go directly to a broker or health plan to purchase health insurance. During its April board meeting, a Covered California staff report gave the green light to pursue this waiver from the federal government, and is now awaiting direction from the Legislature and governor.”

Republican rollover

Despite massive Republican resistance to the implementation of Obamacare, with a “repeal and replace” approach adopted by elected officials at the state and federal level, California’s GOP quietly folded in the face of the expansion plan. SB10 sailed through both houses of the Legislature with bipartisan support, as the San Jose Mercury News recalled.

Prior to the vote, key Republicans tried to keep a low profile. Leaders “in both legislative chambers declined to comment on whether the bill has enough support to pass,” according to CALmatters. “But a Republican strategist said the California GOP might be more likely to support the measure than its national counterpart, to avoid ceding the state’s Latino vote to the Democrats.”

The ins and outs of the complex Affordable Care Act have lent some circumstantial evidence to the notion that, despite President Obama’s claims to the contrary, at least some enrollment by the undocumented was envisioned or prepared for. An ACA provision “called the ‘innovation waiver’ allows states like California to change portions of the law as long as the state makes coverage available to more people and as long as the federal government doesn’t get stuck footing the bill,” reported Fox News. And though the impact of that population on Covered California has not been fully estimated, it would be significant: Lara suggested nearly 400,000 unlawful immigrants “would be eligible to receive health insurance,” according to the channel.

Federal hurdles

But the political landscape has become uncertain enough at the federal level to create an extra layer of difficulty — and urgency — for Lara and his allies. “The proposal needs federal approval, an involved bureaucratic process that could be thwarted under a new presidency. So California advocates are acting swiftly to get their application to President Obama before he leaves office, and to do so must win support from at least a few California Republican lawmakers,” Capital Public Radio noted. “Lara put an urgency clause on the bill, which requires a two-thirds majority vote to pass the Legislature. At least one Republican state senator has indicated his support” — Andy Vidak, R-Hanford — “a cherry grower in the Central Valley’s Kings County, which has a 53 percent Latino population.”

Even with adequate Republican support for urgency, however, SB10 could be stymied inside the Beltway. Public comment review requirements left some analysts skeptical that the new rules could be approved before a change in administrations, CALmatters reported. “And even if the proposal works its way through that maze and is reviewed by the Obama administration, he said, it may not be approved because of current federal guidelines. The U.S. Department of Health and Human Services has strict rules for modifying the Affordable Care Act marketplaces. They might have been put in place to avoid creating a precedent that opens the door to future changes the current administration would deem” problematic.

This piece was originally published by

CA nears letting undocumented immigrants buy health care

As reported by the Sacramento Bee:

Immigrants living in the country illegally would be allowed to buy health coverage on California’s insurance exchange under a bill that passed the state Assembly on Tuesday.

Already at the forefront of enacting immigrant-friendly policies, California could become the first state permitting immigrants to use the insurance exchanges created by the new federal healthcare law. Senate Bill 10 would have California petition the federal government for the right to do so. Undocumented immigrants using the exchange would not be eligible for the public subsidies that extend to other lower-income shoppers.

The measure passed 54-19, with two Republicans locked in tough re-election campaigns joining every Democrat in voting in favor. The measure now heads to the Senate for a final vote, before advancing to Gov. Jerry Brown.

Earlier in May, California began extending full benefits to undocumented children enrolled in Medi-Cal, the state’s low-income insurance program. …

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CA Food Stamp Recipients On The Rise

Daniellle BrownNot only is the number of Californians participating in the state’s federally funded food stamp program increasing, but the number of eligible recipients is decreasing, according to state and federal data.

California for years has lagged behind the rest of the country in terms of participation. Tied for 48th in 2013, only 66 percent of those eligible participated in the Supplemental Nutrition Assistance Program, called CalFresh in California.

The pool of Californians who are eligible for the program is shrinking. While the pool has increased from 6.36 million in 2010 to 6.98 million in 2014, it has decreased from a peak of 7.17 million in 2013, according to CalFresh estimates based on Census data.

“The good news in California is we’re going in the right direction on both lines,” said Kim McCoy Wade, chief of the CalFresh branch of the California Department of Social Services.


For years, outreach methods, internal procedures and state policy kept the rate low, said Wade, adding the nature of California played a role too.

“We’re a very big, diverse, complicated state, so sometimes we move forward in one county and then have to take longer to move forward in another,” Wade said. “We’re not in Idaho, where you can change your call center process and all of the sudden the whole state is dramatically better.”

Wade said the state is studying whether a language/information barrier and a distrust of government among ethnic groups played a role in the low participation rates.

“We really think it’s time for a fresh look to see if immigrant communities are connecting to CalFresh, and if not, why not,” Wade said.

ACA impact

In recent years, the implementation of the Affordable Care Act hindered the process as well, in that the tsunami of new people entering the system took time to process, with so much of the state’s efforts aimed at sorting it all out. But as a result of the flood of people entering the system, CalFresh had better access to families to let them know their options.

“The Affordable Care Act was both the best thing that ever happened to low-income families in California and a real challenge,” Wade said.

Increased participation

In 2015, there was approximately 4.4 million people in the CalFresh program, receiving more than $7 billion in benefits annually. That’s compared to 2005, when there were about 2 million Californians receiving more than $2 billion in annual benefits.

Eligibility is for those less than 130 percent of the federal poverty line, which is an annual income of $24,300 for a family of four.

The average benefit is $142 per person per month, according to federal data.

Additional data can be found in a Public Policy Institute of California study published this month.

Originally published by

41 States — Including CA — Saw Their Deductibles Go Up Under Obamacare In 2016

The Affordable Care Act hasn’t just caused premiums to skyrocket across the country, out-of-pocket costs are also on the rise.

According to Freedom Partners, an Arlington, Va.-based conservative non-profit, 41 states are facing higher deductibles in 2016 – 17 of which saw a double-digit hike.


Source: Freedom Partners’ 2016 Obamacare Deductible Increase Tracker

The states that saw the biggest spikes were Mississippi (39 percent), Washington (31 percent), South Carolina (26 percent), Louisiana (24 percent), Florida (23 percent), Minnesota and Vermont (22 percent), Arizona (21 percent), and North Carolina (20 percent).

The organization used weighted-averages of ACA plan deductibles across the country in to conduct their analysis and created a tool – the 2016 Obamacare Deductible Increase Tracker, which is set to unveiled Thursday morning – allowing users to see how their state measures up.

The findings show, on average, deductibles for Bronze, Silver and Gold plans bought through Obamacare exchanges increased by $265 –  an 8.4 percent rise.

“Higher Obamacare deductibles increase, by hundreds of dollars, what families must pay out of pocket to access their health insurance,” Freedom Partners Senior Policy Adviser Nathan Nascimento said in a statement. “Instead of reducing costs, Obamacare regulations and mandates continue to drive up these costs and make quality care less accessible for hardworking families.”

Just five states –Oklahoma, Texas, New Mexico, Illinois and Oregon – and the District of Columbia saw their average deductible go down, but even those regions all saw a rise in costs for Bronze plans.

Freedom Partners released a similar tracker for Obamacare premiums in January, which found all but one state saw an uptick in costs.

Originally published by the Daily Caller News Foundation

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Tax Hike on Health Plans Causing Major Angst in Sacramento

MedizinCurrently on the front burner in the state Capitol is the extremely contentious (and complicated) issue of taxing “managed care organizations.” Because of federal requirements under Obamacare, California must alter the manner in which it taxes healthcare plans or risk losing billions in federal money. But the question everyone is asking is whether the proposed legislation constitutes a tax increase. That question is not merely academic because its answer has significant policy and political ramifications.

While the determination of whether a legislative act imposes a tax may not be that important in other states, it certainly is in California. A requirement imposed by Proposition 13 is that “tax increases” be approved by a two-thirds vote of each house. Thus, although the majority Democrats have almost a two-thirds majority, they lack the power to raise taxes without at least some Republican support. And because most Republicans run for office as fiscal conservatives, they are loath to vote for anything that raises the tax burden on citizens or businesses.

But the question of whether a legislative act is a tax hike isn’t always that simple. Take for example the unpopular “fire tax” imposed on hundreds of thousands of California property owners in rural areas. This unpopular tax – imposed when California’s budget was deeply in the red – was designed to force property owners residing in “State Responsibility Areas” under the jurisdiction of CalFire to pay for various fire protection programs whether they benefited or not. The legality of that tax is currently subject to a class action lawsuit because it never received a two-thirds vote of the legislature.

And then there is the issue of “revenue neutrality.” Is something that raises taxes on one group only to be offset by tax reductions to another a “tax hike?” It certainly is for the person or business whose taxes are raised. Fortunately, this issues was resolved in large part by the passage of Prop. 26 which requires a two-thirds vote if anyone’s taxes are raised.

Being familiar with state taxes for the last 35 years, the Howard Jarvis Taxpayers Association takes a keen interest in many of the more arcane issues of tax policy: What bills require a two-thirds vote? What is revenue neutrality? Should the elimination of a tax credit that no longer serves a legitimate public purpose be opposed even though it technically qualifies as a tax increase? To what extent will a tax hike on businesses ultimately be borne by others?

Although HJTA’s tax expertise is usually respected by friend and foe alike on a broad array of tax and economic issues, some forget that our analysis of any policy is driven by one fundamental question: What is the impact on citizen taxpayers? And by citizen taxpayers we simply mean the millions of ordinary men, women and their families – either working or retired – who are not part of any special interest group.

Because we have been asked by dozens of legislators and those in the media to comment on the MCO tax, we have spent a fair amount of time analyzing the proposal. And, as noted above, our sole focus is on the law’s impact on citizen taxpayers and consumers. What we understand at this point is that the proposal has been crafted so as not to impact ordinary folks. We hope that is true and borne out by our final analysis.

Should HJTA adopt a position of neutrality on the MCO tax proposal, in no way should this be interpreted as some official “taxpayers’ imprimatur” on all healthcare laws either at the state and federal level. Indeed, we believe that the state of healthcare services in America and California is a disaster in need of radical reformation based on free market principles and consumer choice. As for Obamacare itself, the late – and very great – Justice Scalia, accurately labeled it an illegal tax hike.

Moreover, a pass on the MCO tax may very well reflect the fact that California taxpayers have much bigger fish to fry.  Specifically, proposals to substantially increase a variety of transportation taxes are bound to be a non-starter for a majority of Californians who have seen their high gas taxes squandered on low priority projects and wasted to a degree that would make even the most profligate politician blush. On some issues, taxpayers know how to draw a hard line.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published by the Howard Jarvis Taxpayers Association

CA Newspaper Once Backed Obamacare; Now Warns of Failure

MedizinA prominent California newspaper that backed Obamacare is now sounding the alarm about doctor shortages.

The Contra Costa Times, which backed the Affordable Care Act in 2010, saying it “prefer[red] the current legislation over nothing,” warned in a Christmas Day editorial: “The Affordable Care Act is seen as a huge success in California because it has cut the state’s uninsured rate in half. But it will become a farce if physicians continue refusing to accept the abysmally low rates the state pays to treat the quarter of Medi-Cal patients who are not in managed care plans.”

The editorial is a response to a recently-filed civil rights complaint with the U.S. Department of Health and Human Services that alleges the Medi-Cal, the California version of Medicaid, is discriminating against Latinos. “Medi-Cal’s inadequate, extremely low reimbursement rates—in both the fee for service and managed care settings—and its failure to adequately monitor access to medical care, effectively deny the full benefits of the Medi-Cal program to the more than seven million Latino enrollees who rely on Medi-Cal for their healthcare,” the complaint alleges.

The doctor shortage was one of the consequences critics of Obamacare had predicted.

In May 2009, an op-ed in the Wall Street Journal by former Centers for Medicare and Medicaid Services (CMS) official Dr. Scott Gottlieb warned: “Expect longer waits for appointments as physicians get pinched on reimbursements.”

A CMS study released in November 2009 warned: “The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage. ”

After the law’s passage, experts continued to warn of a worsening doctor shortage as reimbursement rates fell to keep costs down–and as fewer doctors entered primary care specialties, or stopped taking Medi-Cal patients.

In 2013, seven out of ten doctors refused…

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Flexible Savings Accounts Threatened by Obamacare Cadillac Tax

Healthcare costsFlexible Spending Accounts could soon be a thing of the past due to the Affordable Care Act’s high-cost plan tax (HCPT), also known as the Cadillac tax.

Employers across the country are reassessing their current benefit plans due to a 40 percent nondeductible excise tax, set to take effect in 2018, on insurance premiums set above $10,200 for single-employee plans and $27,000 for family coverage.

Millions of people who use FSAs, which allow users to save money tax-free for medical expenses, will likely face paying more out-of-pocket for their health care expenses not covered by insurance.

According to the Kaiser Family Foundation, one in four employers will be affected by the looming tax increase since insurance premiums are expected to rise quicker than inflation.

“They’ll [FSAs] be one of the first things to go,” said Rich Stover, a health care actuary and principal at Buck Consultants, told Politico. “It’s a death knell for them. If the Cadillac tax doesn’t change, FSAs will go away very quickly.”

The tax was intended to generate $87 billion over the course of 10 years to expand government healthcare.

“In addition to raising revenue to fund the cost of coverage expansion under the ACA, the HCPT was intended to discourage employers from offering overly-generous benefit plans and help to contain health care spending,” Kaiser said in the report.

The Washington Examiner reports labor unions, once strong supporters of Obamacare, have teamed up with insurance companies and other employers, creating the “Alliance to Fight the 40,” in an attempt to push Congress to repeal the tax.

On Monday, the group sent members of the House a letter urging lawmakers to change the legislation to avoid employers potentially dropping or lowering coverage.

“The stated goal of health reform was to build upon employer-based coverage and lower costs. This tax will do neither,” they said. “Instead, it will erode an important source of quality coverage and compel a shift of costs to workers – something neither employers, nor employees want to see happen.”

Follow Juliegrace Brufke on Twitter

Originally published by the Daily Caller News Foundation

March of the Medical Interlopers Threatening Patient Care

Interlopers are government personnel who impose regulations that take me away from my work in order to check boxes, collect meaningless data, or fill out forms that address “nothing” about “something.”  Interlopers are vendors, insurers or bureaucrats who have something to gain in dollars and power at the expense of the health of America’s patients.

I am a physician and my job was to manage the health and medical care of my patients. That was the basis of my very extensive training and the focus of my life until the invasion of the interlopers. The schizoid attempt by the interlopers to confound me and other physician professionals is driving the health industry into an expensive civil war.

According to the Physicians Foundation there are already 2,167 quality metrics demanding a physicians’ time and attention. The individual private practice is overwhelmed by the increasingly irrelevant paper work while larger groups find it easier to purchase staff to assist.

Further, productivity has decreased by an estimated 30 percent with the implementation of the electronic medical record. The utility of the EMR should be the opportunity to provide patient data at the point of service. That has not been accomplished because the 2 major EMR vendors (Epic and Cerner) don’t integrate with each other or doctors’ offices. Every EMR is a silo of data: data collected so that doctors or hospitals might collect a bonus from the payer (government or insurer). This data is administrative, not clinical, data nor is it an accurate representation of a physician’s work. It is, however, readily available to hackers.

Ms. Faulkner, the multibillionaire CEO of Epic also sits on the government panel that recommends IT standards. Typical of an interloper, Epic has found a way to create a need for itself while supervising his or her own work.

ICD is an administrative coding system attempting to translate a patient’s clinical condition into a code. ICD 10 is the 10th iteration of this code set and increases the codes available to 87,000 from the 14,000 codes in the ICD 9 code set. While this is the coding set used by the World Health Association as a means of documenting diagnosis, in the U.S., these codes are used as a means of validating payment. In either case, the data is useless as a means of legitimately documenting a patient visit or ongoing care. Our patients’ medical history doesn’t fit into a box created by a bureaucrat.

Physicians throughout the country have attempted to explain to our legislators what this latest interloper will do to our ability to manage our patients’ health and well-being. In an attempt to explain to Congress why this billion-dollar opportunity for third party vendors will only suck more energy out of the exam room and force many in private practice out of business we have met a wall of pushback.

The American Medical Association estimates that small practices could spend between $56,639 and $226,205 to implement the coding system: money that is just not available to most small businesses particularly when the return on investment is negative.

When a patient seeks help in an Emergency Room, the American Hospital Association (AHA) reports that for every hour of patient care there is a full hour of questionably productive paperwork. And yet, the AHA has endorsed the evolution of yet more regulation in its support of the implementation of the ICD-10 code set. Why would hospitals oppose the doctors who work with them?

As private practitioners face bankruptcy, the hospitals are there to buy us out. It would seem to be the easy answer but there is an inherent conflict of interest when a doctor works for the hospital. As reported by Scott Gottlieb in Forbes, this can predictably decrease physician productivity as salaried employees and increase health care costs.

To quote Gottlieb, “The doctors will get squeezed but the real misfortunate will befall patients. We will increasingly be getting our medical care out of busy, hospital-run clinics. Our doctors will be salaried employees, more beholden to the rules that hospitals erect to manage their activities than the medical practices that they once owned.”

The interlopers can come from anywhere even from within the health care industry. They are endorsed by Congress and financed by big business. Physicians will need to engage our patients as our partners in order to fight this war. It is time for patients to demand as much from us, their trusted physician, or suffer the inevitable long lines in emergency rooms, even longer wait times and increasing costs only to fill the back pockets of the interlopers.