Posted on 05/08/2014 7:00:35 AM PDT by SeekAndFind
Who didn’t see this coming? According to Kaiser Health News, employers are increasingly looking at the benefits of getting out of the health-insurance delivery process. Fueling this interest are ObamaCare-related spikes in health-insurance premiums, plus the opportunity to fix costs and reduce vulnerabilities presented by employees who develop serious health issues:
Can corporations shift workers with high medical costs from the company health plan into online insurance exchanges created by the Affordable Care Act? Some employers are considering it, say benefits consultants.
“It’s all over the marketplace,” said Todd Yates, a managing partner at Hill, Chesson & Woody, a North Carolina benefits consulting firm. “Employers are inquiring about it and brokers and consultants are advocating for it.”
Patients with preexisting medical conditions like diabetes drive health spending. But those who undergo expensive procedures such as organ transplants are a burden to the company as well. Since most big corporations are self-insured, shifting even one high-cost member out of the company plan could save the employer hundreds of thousands of dollars a year—while increasing the cost of claims absorbed by the marketplace policy by a similar amount.
And the health law might not prohibit it, opening a door to potential erosion of employer-based coverage.
“Such an employer-dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large,” wrote two University of Minnesota law professors in a 2011 paper that basically predicted the present interest.
One did not have to be UM law professors to see this coming. We have pointed out these perverse incentives in the employer mandate since before Democrats put the ACA up for a vote. Barack Obama and his supporters insisted that “if you like your plan, you can keep your plan,” based in large part on the assumption that businesses would simply eat the exploding costs of mandate health insurance.
That, however, ignores the efficiency process and cost-benefit analysis that any business with a survival instinct uses. If it’s cheaper to pay the fine and dump the coverage, the only incentive that employers have to do otherwise is strictly competitive. And that will only last as long as the competition doesn’t make the same move. Once the first few employers looking to gain a tactical advantage on costs make the decision to get rid of that overhead, everyone else will follow to negate that advantage — and to push those costs off onto the federal government. That will make a hash of the carefully managed cost analyses offered by ObamaCare supporters, and subsidy payments will explode far past the ability of revenues within the ACA to keep pace.
By the way, we should start seeing this phenomenon in just a few months. Even though the White House pushed the open-enrollment date for 2015 to mid-November to avoid having an ObamaCare shock just before the election, these businesses have to decide on whether to keep coverage as part of their budgeting process for the next year — and that will take place long before November 15th. Employees will start noticing that their employers aren’t holding their usual private-sector open enrollments on October 1st, even if employers wait to give them the bad news until November. That will not motivate voters to rush out and support Democrats, to say the least.
This report comes at an opportune moment. Sylvia Burwell will testify this morning at 9:30 at a Senate Health, Education, Labor and Pensions (HELP) Committee hearing to discuss her nomination to replace Kathleen Sebelius as HHS Secretary, and to answer some questions about ObamaCare:
Before the Senate confirms Sylvia Mathews Burwell to take the helm of the Health and Human Services (HHS) Department, lawmakers are sure to have tough questions for her.
On Thursday, when she appears before the Senate Health, Education, Labor and Pensions (HELP) Committee, Burwell will find out whether those questions will focus on the partisan controversies surrounding Obamacare or more substantive policy matters. She’s likely to get a taste of both. …
The failure of Oregon’s Obamacare marketplace – which cost the federal government more than $300 million — has piqued the interest of not just lawmakers but also nonpartisan investigators, including reportedly the FBI. Other states such as Massachusetts are also struggling to run their own marketplaces.
While lawmakers Thursday are sure to bring up Obamacare’s existing flaws, there are plenty of other questions for Burwell about the law’s continued implementation.
For one thing, lawmakers may ask if she’s prepared to oversee the ongoing construction of HealthCare.gov. Insurers on Capitol Hill this week reminded Congress that the back end of the website has yet to be finished.
In February, White House spokesman Jay Carney told reporters it would take “several months” to finish the back end portion of the website, which will automate the transfer of federal subsidies from the government to insurers.
The HELP committee doesn’t actually get a vote on Burwell’s confirmation. Her official confirmation hearing will take place with the Senate Finance Committee, and the new filibuster rules makes it all but certain that Burwell will win confirmation in the end. Republicans will get two public hearings in which to press for answers on ObamaCare failures and the dishonesty of administration claims and promises — and probably should demand some answers on the real impact of the employer mandate, too.
Kaiser Permanante gets a lot of squawk, probably because of what/how they were in the 70’s (an era we in the SF Bay Area never left) but I was a member before being dumped, and in my opinion, they do medicine pretty darn right. 0care could have copied their model for free and smoked the crap soup ACA ended up being.
That would of course be assuming that ACA was intended to be a healthcare plan instead of a Marxist power grab.
They’ll just try to force the businesses to hide their intention to dump until after the election, the way they did with those defense contractors back when this abomination was pushed into law.
On the other hand, this would seem to indicate that “employer health coverage” may shift back to its original form, that of a benefit offered to those few highly-valuable employees that a company particularly wants to woo, or hang on to.
Thanks, Barack!
If my employer dumps us off their plans,
I’m going Christian healthsharing. Never will I participate in the socialist healthcare system.
RE: I’m going Christian healthsharing.
Is that LEGAL if it doesn’t include payment for abortion or birth control?
God provided an exemption for His people.
I’m sure the lefties didn’t like that that got included “somehow”,
and they would remove it if they thought they could get away with it and not drop the veil on their anti-Christian agenda,
but for now, they know they can’t.
Kaiser supported Obamacare.
I pray that Kaiser Permanente doesn’t get dumped. I have received excellent care from broken arm, breathing problems, heart issues, and many other things. (Usually here in my home town.)
“Kaiser Permanante gets a lot of squawk, probably because of what/how they were in the 70’s (an era we in the SF Bay Area never left) but I was a member before being dumped, and in my opinion, they do medicine pretty darn right. 0care could have copied their model for free and smoked the crap soup ACA ended up being.”
I’ve never been a Kaiser subscriber, but I do no that back in the 70’s here in Northern CA they were considered substandard socialized care. I was just forced by Obamacare to replace my Medicare Advantage Plan. In looking at the Medicare “offerings,” the Gov’t. website listed Kaiser as the only gov’t-approved insurance plan that they called “five star.” So as I see it, Kaiser is still socialized medicine and therefore the government puts it at the top of their heap. One thing is certain, you either like Kaiser, or you hate it. I guess it depends on whether you are a Socialist or not. BTW, I got very a very good Medigap Policy through AMAC. They were very professional and the insurance both my wife and I got has been exceptionally good for very little more money than we were paying prior to the ACA causing our policies to be cancelled. But just think, now as a 73 year old male, I can get an abortion, and drug abuse help!
rut roh
My family is covered under KP
After the initial payment to an insurance company they can't drop you even if you miss the next 3 payments. Since Kaiser is both an insurer and a provider they get nicked both ways.
I see why you might call Kaiser a “socialized” thing as it is is/was gov’t approved. Other than that, I would propose that you using that term is a negative, and if I used that term, it would be negative for me. Understandable, but respectfully, not helpful.
As I said, there a lot of greasy stories around here (No. Cal) left over from the 70’s but you know and I know, people (not just libs-and I am here in intense lib-land) like to gripe about things.
I believe (among a dozen or so things about medicine and not trying to convince you or anyone else of anything in particular) that a great deal of it can indeed be performed on a slam-dunk, like cattle, if you will, basis. I believe that nurse practitioners could do 60% of anything you go see an MD for.
I think Kaiser really does it quite right. They are in the business of running a profitable operation. They are huge. They have that image. But inside, you get pretty close attention, in my experience, which I acknowledge, can vary from person to person. If you jangle the doc you have inside the thing, they pay attention to you. If you don’t they sit on their butts & collect their premium every month.
My experience with them has been very good, as has my brother’s. I had a fairly expensive plan and had to pay $50 every visit. Many would not like such a thing. One size absolutely does not fit all. I can gripe about the costs, but I have never been unhappy with the quality of care. I am an infrequent user, but the time or two I really needed them, I thought they were as attentive as any individual MD would be, perhaps slightly better because of the email contact and electronic records. I always felt they were on top of their game. Yes, they charged for it. IMO that’s what you want w/medicine.
“I believe that nurse practitioners could do 60% of anything you go see an MD for.”
Good point! My wife and I are seeing a lot more of Physican’s Assistants as well. Her Cardiologist told us on Monday that the PA’s are really making a difference in their ability to deliver care quickly, since as you point out, these kinds of medical personnel can and do shoulder a big chunk of what doctors alone used to have to do, They are a step closer to being MD’s as opposed to NP’s so you get better care.
Glad you find Kaiser a good place to go. I was simply pointing out that from my vantage point, they operate as “socialized medicine.” And I imagine that done properly, socialized medicine works ( just so long as the government doesn’t get to set “care guidelines”). I guess that you have to adjust to the less personal aspects of it like not seeing the same doctor each visit.
But I >>did<< see the same doc each visit, probably over a period of 6+ years. Did the same gal take my blood for tests every time? No. X-rays? No. But those results DID go to the same “gen prac” type doc every time. I can’t see caring about routine things too much.
That’s part of what I am saying. Some parts of medicine *can* be done assembly-line style and I don’t have a spiritual objection to that.
For example...if the goal of ACA was to give everyone healthcare (and that’s questionable, as I said) then for the amount of money spent, small neighborhood clinics could have been established, dozens or hundreds of them per state (obviously depending on size) much like in Mexico.
Such things might have 2-3-4 Nurse pracs on staff and a local MD comes around 2-3 hours a day, supervises, directs, etc.
Rent: $50K/year. Nurses (x3) $350K/year all-in. Visiting doc: $200K/year. Supplies: $100K/year. Startup: $150K. For well under a $million a year (including startup which is one-time), call it $800K, such a clinic, repeated 100 times * 50 states = 5000 instances = $4 billion annual operating costs with $150K slop in subsequent years because startup goes away.
$20 cost per patient per visit. Goal: Keep you out of an emergency room.
50 patients a day, each location makes $1K a day income in the jar on the receptionist’s desk. Times 5000 locations = $5 million a day = $1.8 billion a year.
Taxes paid on rental properties back to US Tsy, figure 15% of 5000 locations times $50K = $37.5 million, taxes paid by nurses and docs maybe four times that.
Net cost of the whole stinking thing would be $2 billion a year.
Nothing, in the general scheme of things.
we’ve got tricare as a backup for me, and solely for my husband....I’ll go to the Christian healthsharing before I join the antiChrist’s....
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