Monday, September 29, 2014


It  is not commonly realized by participants in health care plans sponsored by health insurance exchanges derived from the Affordable Care Act (ACA) that these plans are subject to changes allowed under the law.  The meaning is that a plan purchased this year may have been compliant with the ACA (Obamacare) at the time of purchase but may not remain compliant with changes that the ACA allows these plans to make (including the annual premium which may be raised annually if that's what the executives of these plans want). 

We understand that the ACA and the exchanges have dealt death blows to many longterm relationships between patients and their doctors.  It is not uncommon to see posters in clinics that state that the clinic and its doctors do not accept Covered California subscribers. 

Take a look at what it means to buy into a Bronze, Silver, Gold, or Platinum Plan. These plans reflect "actuarial values" which means the percentage of the covered benefits that each of the plans is expected to pay, e.g., Bronze Plan subscribers pay the least in annual premiums while paying the highest co-pays. Conversely, Platinum Plan subscribers pay the most for their annual premiums and in return pay the lowest co-pays. 

Currently, the Bronze Plan covers about 60% of health care costs. The Silver Plan covers about 70%. The Gold Plan covers about 80%. The Platinum Plan covers about 90%. The unpaid gap is the subscriber's co-pay, highest for patients who are strapped for cash and are obliged to purchase the lowest price plan, lowest for patients who can afford the Platinum Plan. That means that doctors, clinics, and hospitals who have a high percentage of Bronze Plan participants are most likely the ones who'll be stiffed on required co-pays. 

Here's the rub: each of the plans has a range that it's supposed to cover, e.g., at the time of this writing the Bronze Plan is reported to cover from 58 to 62 percent. It is expected that as time marches on there will be changes, even favorable changes in these plans. Because of how the ACA is written and because of how the exchanges function, a Bronze Plan that now covers 60 percent may at some time in the future cover 65%. The rub is that the next step up in the ACA division is the Silver Plan which starts coverage at 68 percent which means that your Bronze Plan no longer qualifies as a Bronze Plan but also doesn't qualify as a Silver Plan. So your plan is no longer valid under the ACA. 

What may be even harder to understand is that the Platinum Plan also has limits. It cannot cover more than 92 percent. So doing is not legal under the ACA.

So where does Proposition 45 which is on the November ballot in California fit in? Proponents of the ACA or Obamacare fear that passage of Proposition 45 could prove harmful to the ACA since the Covered California exchange recently negotiated a rate increase for its over one million plus enrollees. 

The ACA makes purchase of healthcare insurance mandatory but does not regulate premium prices. Covered California, like other insurers, does not want to have rate increases it can currently negotiate subject to being rescinded by an insurance commissioner. Proposition 45 would  empower the insurance commissioner to do just that. The Insurance Department in California is reported to have found that rate increases from 2013 to 2014 are from 22 to 88 percent (the Covered California board has not voted a position one way or the other on Propostion 45 as of the date of this article).  

References for this piece: 

1) THE HILL Newspaper,  Washington, D.C., "What Obama should've said about healthcare reform," 9/16/09, by Robert L. Weinmann, MD;
2) POLITICO, "GOP govs could gum up Obamacare," 2/10/10 ("I will ensure that no government bureaucrat gets between you and the care you need"), by Robert Weinmann, MD; 
3) John C. Goodman ( Goodman, 9/23/14 ("if you like your insurance you can keep it");
4) SAN JOSE MERCURY NEWS, "Measure creates odd alliances," Tracy Seipel, 9/26/14;
5) Editorial, Robyn G. Young, MD, President, CALIFORNIA NEUROLOGY SOCIETY, 9/17/2014 ( these three points are emphasized:
  a) Prop 45 will require public disclosure of hearings re health inssurance rates;
  b) Prop 45 will require approval of changes in health insurance rates by the California Insurance Commissioner;
  c)  Prop 45 will require sworn statements about the accuracy of information submitted to the insurance commissioner to justify proposed rate changes.

  Comment: Prop 45 proposes transparency that the ACA (Obamacare) has consistently denied, e.g., Pelosi's laughable comment that the ACA had to be passed so we could see what's in it and then an Independent Payment Advisory Board (IPAB) that by law need not include even a single physician. The Covered California board likes the murky mists of non-transparent legislation. THAT is what Prop 45 seeks to change. THAT scares insider deal-moguls to the very core of their existence.  

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