History Can Be Fun

Shortly after ACA was enacted into law in 2010, Senate Finance Chairman Max Baucus, whose Committee wrote most of it, "tried to calm an angry Montana voter by saying this: “Mark my words, several years from now, you’re going to look back and say, “Well that wasn't so bad after all”. 

Senator, we did mark your words.
 
It’s now been several years. 

It's pretty clear the average person today would NOT say: “Well, that wasn’t so bad after all”.  

In fact, a great many Americans are still looking for a good reason to calm down about Obamacare.

I think perspectives like these help explain why history can be fun.

Now in fairness to Senator Baucus, he had begun to change his opinion of Obamacare, in fact had become a critic, within a couple years of its passage.  Not necessarily because he disagreed with Obamacare's goals; more likely because the Administration's fumbling, bumbling, and rumbling threatened to prevent the law from accomplishing its goals.

The Washington Post reported Senator Baucus' changing opinion during 2013.   Early that year,  the Senator told HHS Secretary Kathleen Sebelius, “I just see huge train wreck coming down. You and I have discussed this many times and I don't see any results yet.” Later that year, the Post reported Senator Baucus commented (about the health-care exchanges and the government enrollment Web site) "Let's just see how much of this can be put together, how much Humpty Dumpty can be fixed, in the next month."

Well, hmmm.  Mmmaybe it WAS so bad, after all?  Even my Magic 8-Ball replied "It is decidedly so".  

I suspect Senator Baucus' deteriorating confidence in the success of Obamacare may have been a factor in his decision to retire from the Senate at the end of his term in 2014.  I also wonder if Senator Baucus' public criticism of Obamacare, especially his use of the descriptions "train wreck" and "Humpty-Dumpty," was a factor in prompting Mr. Obama to name him an Ambassador in 2014 and get him out of the country.  China, to be exact.

I think questions like these also help explain why history can be fun.

EpiPen: The EpiLogue

The other day, I linked to David Williams' insightful post countering the conventional EpiPen narrative. Turns out there's even more fallout:

"Mylan, said that the generic EpiPen would be available in several weeks and be identical to the existing product, which is used to treat severe allergic reactions. But it would have a wholesale list price of $300 for a pack of two, compared with just above $600 for the existing product."

As a friend noted today on Twitter, it's unclear on how they're going to compete with themselves and still come out ahead.

Not my monkeys, not my circus.

[Hat Tip: Co-Blogger Bob V]

Healthcare is Different. Real Different.

Modern Healthcare has released its list of the top 100 most influential people in healthcare.  It's an annual list.

It's worth your time to scan the whole list.  As you do, don't overlook the fact that not one of the top 25 is a physician.

Not one.

Plenty of politicians, lawyers, MBA's, and accountants. Couple of nurses. A phys Ed. Major. Not one physician.

President Obama is #1. (Modern  Healthcare doesn't really say whether it distinguished between positive or negative "influence" assembling their list.). You'll also notice Loretta Lynch, Paul Ryan, John Roberts, even Bernie Sanders.  But not one physician.

Can anyone imagine the automotive industry's 25 most influential people not including even one senior mechanical engineer?  Or the 25 most influential construction executives not including even one experienced building contractor?  Or the 25 most influential American military figures not including even one general or flag rank officer?

But it's all good, because, you know, "Healthcare is different".

Bad News for Obamacare in Ohio

Ohio’s individual health insurance market is failing. In less than 12 months we have seen HealthSpan, InHealth, United Health Care, and Aetna exit the Obamacare Marketplace. Another insurer local to Northwest Ohio, Paramount, is reducing its footprint for their HMO products. Now comes official word that Medical Mutual will be eliminating all PPO products and will no longer participate in 65% of the state.

For people living in 19 counties choice is no longer an option. Anthem will be the sole insurer they can purchase a plan from. In 28 counties there will only be two insurance carriers to choose from – Anthem and one other. These 47 counties make up more than half the state of Ohio. This is a far cry from 2016 when Ohio boasted of having at least four insurers in every county.

MMO’s PPO plan elimination is even more important for those it will still serve. Their largest number of insured members were enrolled in a PPO product. The PPO network was very robust and allowed members to utilize several hospital systems and specialists. That choice is gone. Going in to 2017 the remaining insurers all utilize narrow networks. For consumers in some counties this means that they cannot have services from the local community hospital that serves them. For others it means that they will have to find new cardiologists or oncologists. This will be especially problematic for outlying communities.

The bad news doesn’t stop there. In addition to less choice, rate increases are estimated to rise nearly 13%. As the only statewide insurer, Anthem is seeking a 9.9% average increase for their plans. Overall this is less than the average but it is relevant to point out that they already had some of the highest rates in the state. Other insurers such as Medicaid managed care providers Caresource and Premier are seeking increases of 13.5% and 39% respectively. Now they will be taking on the additional risk coming from insurers who are losing their shorts in the Obamacare marketplace.

Higher rates, less insurers, and fewer providers. Exactly the opposite of what Obamacare promised.

Breaking Tar Heel State BX News [Updated]

As if North Carolina Blue Cross hasn't put itself in enough hot water, FoIB Jeff M tips us that the carrier has decided it doesn't really need (want?) a lot of new business:

Effective for the 2017 plan year (Open Enrollment '16), NC BX is paying $0 commission on new business coming from other carriers, $0 commission on BX re-writes, and a whopping 1% for newly insured folks.

More on this as it develops.

Oh! David Williams has an excellent counterpoint to conventional wisdom on the current EpiPen kerfluffle.

STOLI: Lagniappe

We first blogged on "Dead Peasant" life insurance over 10 years ago:

"Stranger Owned Life Insurance (SOLI) is part of the “premium financing” phenomenon."

The concept certainly had its drawbacks: for one thing, it created (or could potentially create) a "moral hazard," tempting impatient beneficiaries with no familial or other personal connection to the insured.

But it had its uses, too: it enabled businesses to recover financially from the loss of key (or other) personnel. And there was this:

"Florida Atlantic University ... pays the premiums on life insurance policies for select boosters, who then name the university as beneficiary. The booster eventually shuffles off this mortal coil, leaving behind an endowed chair"

So, win-win.

But eventually the tide changed, and STOLI plans were outlawed. Which would have been the end of it, except for a nagging question: if all these plans are forced to go away through no fault of those who bought them, who gets all those premium dollars? On the one hand, the carrier assumed the risk in good faith, and (presumably) paid out one or more claims over the years. On the other, the folks who bought them certainly believed that the plans would eventually pay out, and didn't cancel them along the way.

On the gripping hand, "[t]wo federal appellate courts have affirmed, on different grounds, the cancellation of large life insurance policies ... permitting the issuing insurers to retain the premium paid for the policies."

Which is good news for the carriers, which had the use of the money for years, and now get to keep it completely risk free.

One wonders if there are any tax consequences to this.

Contrary to popular myth: The EpiPen story

Over at The Grey lady, Aaron Carroll (professor of pediatrics at Indiana University School of Medicine) has a helpful explication of how the current EpiPen kerfluffle came about. He outlines the history of how the EpiPen came into being, and its subsequent history. He notes that, although the active ingrecdient is relatively inexpensive, it's also "inherently unstable. Research shows that it degrades pretty quickly over time, and it’s recommended that EpiPens be replaced every year."

Which makes sense, and I'm generally in favor of keeping med's up-to-date, and of market forces to keep the price of said med's within reach. But as we saw with the Daraprim controversy, sometimes bad actors cause market distortions, and heartache.

We'll come back to that.

But first, it's important to note that Prof Carroll goes to great pains to lay out the timeline, and regulatory issues, which have ultimately lead to a relatively inexpensive - but indispensable - treatment fast becoming out of reach for everyday folks. It's a tale of government recalcitrance and provider avarice, but mostly government recalcitrance:

"[I]n 2010, federal guidelines changed to recommend that two EpiPens be sold in a package instead of one ... In 2013, the government went further. It passed a law that gave funding preferences for asthma treatment grants to states that maintained an emergency supply of EpiPens. As the near sole supplier of the devices, Mylan stood to make even more money."

Which is fine, but then the good Professor concludes:

"EpiPens are a perfect example of a health care nightmare. They’re also just a typical example of the dysfunction of the American health care system."

No, sir, it is most decidedly not that.

And how does your humble correspondent know this?

Well, when one digs a bit deeper, which Prof Carroll apparently did not do, one finds this little gem:

"If lawmakers follow the usual script, Bresch could get called up to Capitol Hill next month to explain her company’s justification for raising the price on the life-saving allergy shot. But that could be awkward, since she’s the daughter of Democratic Senator Joe Manchin of West Virginia."

So what Prof Carroll characterizes as an indictment of the (admittedly dysfunctional) health care system is really just a very simple, sordid example of rent-seeking, enabled by the powerful relative of the manufacturer's CEO.

Case closed.