CA health insurance exchange gets $674-million federal grant

[eridani]

http://www.latimes.com/business/la-fi-health-insurance-grant-20130118,0,5154422.story

Federal officials awarded California's new health insurance exchange a $674-million grant, providing money for a crucial marketing campaign aimed at millions of uninsured consumers.

The state-run insurance exchange, Covered California, is seeking to fundamentally reshape the health insurance market by negotiating with insurers for the best rates and helping consumers choose a plan.

In addition to 'top down' advertising, Lee said, the exchange will be giving grants to religious groups and other community organizations for education at the grass-roots level.

The exchange also has the task of helping millions of Californians determine whether they qualify for an expansion of Medi-Cal, the state's Medicaid program for the poor, or federally subsidized private coverage.

In addition to marketing, Covered California will use the federal grant money to help fund operations through January 2015, when the online marketplace will rely on fees assessed on health policies sold through the exchange.

Separately Thursday, the California Endowment said it would spend $225 million over the next four years to help implement the federal healthcare law in the state.

Comment by Don McCanne of PNUP: The administrative waste in our health care system far exceeds that of any other nation. During the political process of crafting the Affordable Care Act, we warned that this model would greatly add to this administrative waste. We are now beginning to see the extent of that expanded waste.

On just California's insurance exchange alone, taxpayers are having to foot additional costs of two-thirds of a billion dollars just for administration and marketing of the exchange plans. In the future, these additional administrative costs will be downloaded to us through new fees assessed on the health policies sold through the exchange. Just think of all of the other administrative expenses for the multitude of other features of the Affordable Care Act, not just in California but throughout the nation. And not one cent of this additional administrative spending goes to health care. Sick!

Although taxpayers have already invested way too much in this wasteful program, we can still cut our losses and move on with an administratively efficient single payer system - an improved Medicare for all.

[madville]

1. Just think how little 674 million is in relation to healthcare

That 674 million would probably pay one month of premiums for one million families, and that would be a mediocre policy. Where are the other 11 months of premiums going to come from, everybody is broke.

My health insurance for my son and I is $1000 a month, employer pays $800 and I pay $200. I'm waiting to see how big a cluster fuck these exchanges turn into with each state running them differently. It may lead to a single payer plan in ten years or so though after all the mayhem

[eridani]

2. The committees organizing the exchanges will have the expertise--

--to use in setting up single payer. At least that's what I hope.

[Chathamization]

21. State-based single-payer is the way forward

Vermont's already on track; others need to follow.

[flamingdem]

3. The subsidies seem pretty good - that is if you don't make too much in salary

Check the California group here on DU where there are links and discussions on this.

[eridani]

4. The subsidies are for the insurance companies, not for health care

They remain free to deny claims.

[CreekDog]

5. but they can't keep more than 15-20% of premiums

as profit.

[eridani]

7. That will not stop them from denying claims

Back in in 1993, when people thought we also had a health care crisis, they were keeping only 5% or so of premiums. Medicare spends 3% on overhead.

[CreekDog]

6. Wrong, it's not PNUP

second, you lack a link.

[eridani]

8. Link

http://www.pnhp.org/

Also see the LA Times link

[CreekDog]

9. i don't know why you misnamed the organization and left out the link

considering you quoted a bunch of their material.

you could have done that. should have.

[pnwmom]

10. I'm glad they're spending serious money on a marketing campaign, because

the success of the first year will be critical to the success of the whole program.

If large numbers of people don't enroll simply because they're not aware of their options, or of how the insurance plans will work, then the ACA is doomed to fail. And the next step wouldn't be Medicare for all, the Dems pipe dream. We'd just be going back to the old status quo, with the insurance companies free to price gauge and deny coverage to anyone they want.

But marketing isn't all they're going to be doing with that money. From the link at the OP:

"At an exchange board meeting in Los Angeles on Thursday, consumer advocates and community activists urged officials to offer information in multiple languages and to make online enrollment as simple as possible.

SNIP

"The exchange also has the task of helping millions of Californians determine whether they qualify for an expansion of Medi-Cal, the state's Medicaid program for the poor, or federally
subsidized private coverage. Families earning up to $93,000 annually may qualify for premium subsidies.

"Next week, health insurers and other companies must submit their initial bids to sell coverage in the exchange. Bidders will provide proposed rates by the end of March, and the exchange expects to select health plans in June.

"In addition to marketing, Covered California will use the federal grant money
to help fund operations through January 2015, when the online marketplace will rely on fees assessed on health policies sold through the exchange."

SNIP

[flamingdem]

11. thanks for the info pnwmom! n/t

[eridani]

12. I'd rather they spent serious money on actual heatlh care

Insurance companies remain free to gounge premiums and deny claims regardless.

[pnwmom]

13. No, for the first time they must limit administrative costs,

and they are not free to deny claims of their choosing.

[eridani]

14. They are absolutely free to deny claims

And they are buggering around with the definition of medical services to include administrative bullshit.

[pnwmom]

15. They tried, but failed, to stretch the definition of medical services

to include administrative costs.

Do you have any links for your concerns about denying legitimate claims under the ACA? Are you aware that there is an appeal process, including an outside review?

http://www.healthcare.gov/law/features/rights/appealing-decisions/index.html

What This Means for You
When an insurance plan denies payment for a treatment or service, you can request an appeal. When your plan receives your request it is required to review its own decision. For plan years or policy years beginning on or after July 1, 2011, when your plan denies a claim, it is required to notify you of:
The reason your claim was denied.
Your right to file an internal appeal.
Your right to request an external review if your internal appeal was unsuccessful.
The availability of a Consumer Assistance Program (when your state has one).
If you don’t speak English, you may be entitled to receive appeals information in your native language upon request. This right applies to plan years or policy years beginning on or after January 1, 2012.
When you request an internal appeal, your plan must give you its decision within:
72 hours after receiving your request when you’re appealing the denial of a claim for urgent care. (If your appeal concerns urgent care, you may be able to have the internal appeal and external review take place at the same time.)
30 days for denials of non-urgent care you have not yet received.
60 days for denials of services you have already received.
If after internal appeal the plan still denies your request for payment or services, you can ask for an independent external review. For plan years or policy years that begin on or after July 1, 2011, your plan must include information on your denial notice about how to request this review. If your state has a Consumer Assistance Program, that program can help you with this request.
If the external reviewer overturns your insurer’s denial, your insurer must give you the payments or services you requested in your claim.

[eridani]

16. They are busy redefining "administrative costs" right now

There is an appeals process for claims denial, which means that claims denial is legal. In actual civilized countries that have private insurers, the insurers MUST pay every claim, although they can appeal to the government if they think it is unjustifiable. IMO, that's how it should be--the insurance company, not the patient, should be stuck with doing the appeals work.

http://www.bcbsm.com/content/microsites/health-care-reform/en/reform-alerts/appeals-process-standardized-under-health-reform-law.html

For adverse benefit determinations, enrollees have the option of appealing the decision first through their health plan or health carrier’s internal process, and then externally through an independent party if their internal appeal is denied

[pnwmom]

17. Claims denial may be legal, but if it isn't upheld it won't serve any purpose

for them, except alienating the customer who will now -- because of the ACA -- be able to switch to another company without worrying about preexisting conditions.

[eridani]

18. The insurers do not have to give a shit what customers think of them, as they are de facto

--monopolies. Many states have only one or two companies. Even if that were not the case, it isn't much help to change companies after you are bankrupted by claims denial.

In MA, 4 years after reform, medical bankruptcies are 50% of all bankruptcies.

[pnwmom]

19. Did you forget that people will also have access to at least two federal options?

[eridani]

20. After they have been bankrupted? Not useful n/t

[pnwmom]

22. The first appeal must take place within 72 hours. Why are you so certain

any outside appeal would take so long that a bankruptcy would be inevitable?

[eridani]

23. That is a huge joke. Google Nataline Sarkisian

I am certian that bankruptcy is inevitable because that is what is continuing to happen in MA 4 years after reform.

[pnwmom]

24. A major difference in Obamacare vs. Romneycare is that Obamacare

bans annual and lifetime benefit caps and Romneycare does not. Romneycare allows limited benefit plans, and the ACA Act will ban them beginning on 1/1/14.

Plans with annual and lifetime limits, and Limited Benefit or Mini-Med plans are bound to result in more bankruptcies.

http://www.boston.com/lifestyle/health/health_stew/2012/08/romneycare_vs_obamacare_which.html

"2. OC bans lifetime and annual benefit caps and RC does not.

4. OC requires health insurance companies to spend at least 80-85 cents of every premium dollar on medical costs as opposed to profits, marketing and overhead. RC includes no such provisions.

5. OC allows young adults to stay on their parents' health insurance policies until they reach age 26. RC allows young adults to stay on their parents' plan for up to two years after they are no longer dependent, and no older than age 25.

6. OC requires that all health insurance policies cover preventive care services (ie: contraception) with no co-pays or other cost sharing. RC has no such protections.

https://docs.google.com/viewer?a=v&q=cache:gXpAPWsN9uEJ:www.multiplan.com/payers/resourcecenter/salescenter/pdfs/MKT5094_MP_Limited_Benefit.pdf+%22limited+benefit+plan%22+massachusetts&hl=en&gl=us&pid=bl&srcid=ADGEESgFbYhpOAA1uO0KFl4QVVfWnr2yfFXu9hukI9-XzfuGou7sj931cCDIz7Eyw9c2zHOB2O2dtgPVUDMeRR8H6VJS_fTjjE4lhKXBM1KSRzPBboBVSdoujyD929LbPVrCiTGVDv3Z&sig=AHIEtbQ2Q2ljEvk1PruS0y2xbZIeNNKwIA

[eridani]

25. True, but neither piece of legislation addresses claims denial

The whole point is to have expensive patients die while they are on appeal. Even when the insurers lose here, they win, because any sanctions are vastly cheaper than expensive sick people.

[pnwmom]

26. You say, "true," but act as if that isn't even a significant point.

It goes a long way to explaining why MA continues to have a high rate of bankruptcies, and why Obamacare will be better.

You also have put forth no evidence that, under Obamacare, patients will die while they're on appeal. There is a 72 hour requirement for internal appeal. In the case of a critically ill patient, why would an EXTERNAL panel delay hearing an appeal? What would its motivation be?

[eridani]

27. Their motivation would be that they have to deal with a huge backlog of cases

It is absolutely unconscionable to put the burden of appeal onto patients--in civilized countries, the insurance companies MUST pay, and if they have a problem with the claim, THEY must appeal to the government.

[pnwmom]

28. You're just speculating. There is no huge backlog of cases because

the external appeals board won't be in place till 2014. Why not hold your complaints till we can see how the system is working?

[eridani]

29. No speculation at all. The behavior of insurance companies w respect to paying claims is well known

There would be no reason for them to change after ACA.


http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/30/BUSR1GJ01V.DTL

State regulators Monday fined seven of California's largest health insurers nearly $5 million for systematically failing to pay doctors and hospitals fairly and on time.

The California Department of Managed Health Care issued the fines following an 18-month audit in which investigators looked at a small but statistically significant sample of claims. The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent.

<snip>

Another finding that is buried in this report is that physicians received no payment at all from commercial health insurers on nearly 23 percent of claims they submitted. Think of the amount of administrative hassle involved here that is producing... nothing! The supposedly legitimate reasons for nonpayment include failure to meet the deductible, insurance policy has been cancelled, employer changed health plans, failure to use a network physician, services are not an included benefit, etc.

[pnwmom]

30. Their past behavior is not predictive in this case, because until now

they haven't had a deadline (now they must hold an appeal within 72 hours.) If the appeal is upheld, the governmental appeals board will have no incentive to delay hearing its appeal.

So I think we should wait to see how Obamacare works before we get up in arms about it.

[eridani]

31. I find your faith in insurance companies.....disturbing

They are having far more influence over the fiddly implementation parts of ACA than the general public is.