Humana contemplating pullout of some markets next year

[ivinsfan]

Even though he makes too much for ACA subsidies, since his insurance is unaffordable (more than 8.15% of his income) he would qualify to buy ACA catastrophic coverage through his exchange. In most cases, particularly at his age, catastrophic coverage is reasonably affordable and if he is in good health, a good fit for someone his age.

Even his high deductible HSA BCBS plan is affordable and offer him good coverage. However BCBS is pulling out of the exchange and individual plans in our state, so he will be shopping for new insurance once again.

 

[NW-Bound]

Without cost control, how can this not happen? Private insurers do not work for free.

In a single-payer system, do government workers and bureaucrats work for free? In fact, if they do not take a profit and there's no competition, what is the incentive for them to control the costs?

There has to be cost control measures. Money supply is not unlimited, even for a government.

 

[explanade]

Insurance is not the problem. They take in a small percentage of all health care spending.

Doctors, hospitals and big pharmaceutical companies take in much bigger slices of the pie.

Drugs which cost over $100k are becoming more and more common and they're not all fancy biopharmaceuticals.

 

[pb4uski]

Wendall Potter previously work for Cigna and has a blog that is sometimes reprinted in Huffington Post. He provides some data about insurance company profits, and describes some possible consequences of Anthem wanting to buy Cigna, and Aetna wanting to buy Humana.


It's Way Past Time For Us To Stop Deluding Ourselves About Private Health Insurers?.....

Well to begin with, Wendell Potter is a journalist by background. While he touts himself as an insurance industry executive, he was a corporate communications executive.... in my experience in industry not people who really understand the business. It would be like a journalist who becomes White House Press Secretary claiming credibility on complex foreign policy issues.

From the article:

Here’s the bottom line: Aetna made significantly more money between April 1 and June 30 of this year than it made during the same period last year—far more than even those Wall Street analysts had expected (in other words, the profit “exceeded their expectations”). But Aetna executives said that because some of the people enrolled in the Obamacare exchanges were sicker than they had anticipated, consequently making it necessary for them to pay more in medical claims than they had wanted to pay—it was thinking about pulling out of a lot—maybe even most—of the Obamacare markets next year.

Second, he seems to believe that Aetna should retain a losing product because it is making money elsewhere. That is stupid and no company, health insurance or otherwise, would continue to offer an unprofitable or less profitable product.... they will smartly allocate their capital that is provided by shareholders and for which shareholders expect a return.. to more profitable products and business opportunities regardless of the public good. Be it right or wrong, Aetna's responsibility is to its shareholders... not to continue to write ACA plans that are unprofitable or even if profitable, less profitable than other business alternatives available to it.

Finally, he seems to think that Aetna is hugely profitable. While the numbers are big because it is a big company and moron journalist focus on numbers because they can command more attention... the numbers need to be assessed in relative terms. Aetna's ROE is in the mid-to-high teens over the last few years... solid but not outrageous... and declined to 14.7% for the most current quarter... again solid but not outrageous and in line with ROEs for their health insurance peers.

 

[NW-Bound]

Insurance is not the problem. They take in a small percentage of all health care spending.

Doctors, hospitals and big pharmaceutical companies take in much bigger slices of the pie.

Drugs which cost over $100k are becoming more and more common and they're not all fancy biopharmaceuticals.

The patients are also a big part of the blame. They clamor for drugs that cost $100K's just to prolong people's life for a month or two, and not without hideous side effects. They want a chance to live forever, costs be damned.

If an insurance balks at paying for some experimental drugs, the public decries it and says the insurer is heartless and all for profits. If a government refuses to allow the drug, it is called a "death panel".

Doctors know that the drugs are not that great, but how can they say no to pleading desperate patients? Some doctors at Sloan-Kettering did, but I guess the patients just went elsewhere.

 

[explanade]

I really doubt those expensive drugs only prolong for a month or two.

The most expensive drugs are for Hepatitis C, which is an infectious disease. It's curable and preventable, though in many cases, patients don't know they have it:

This week my patient died from a curable, preventable disease.

I met John, a 61-year-old man when came to me for hepatitis C treatment. John had been shocked to find he had hepatitis C during a routine screening test which is recommended for all Baby Boomers , regardless of risk factors. Unfortunately, like John, at least half of the more than 3 million Americans with hepatitis C don’t know they are infected. By the time of diagnosis, John already had severe liver scarring, known as cirrhosis, meaning hepatitis C had been silently at work for many years.

As an infectious diseases physician, I love treating hepatitis C because unlike many chronic diseases, I can actually cure most patients. John was delighted to hear that his disease should be curable and that his liver damage could even improve after treatment. Despite the high price of hep C treatment, I reassured John that medications would be available through insurance because of his cirrhosis. Unfortunately treatment is still not available for many patients with less advanced disease, even though we know all hepatitis C patients can benefit from being cured.

I sent John for a scan to look for liver cancer, which can be caused by cirrhosis. We were both devastated to find that he had a large liver cancer which was not curable. Despite aggressive care, he died of complications from his liver cancer.

Hepatitis C is Curable | Perspectives | Perspectives | KQED

It sounds like the author of the article is saying insurance won't pay for the expensive drugs until the Hepatitis C advances to a certain stage. But if you don't treat it, then the patient is vulnerable to liver cancer.

Gilead owns the rights to Solvadi but it didn't develop it. Instead it acquired the company which had developed it. Pharmasset, the original developer, intended to charge less than half of what Gilead charges now:

The U.S. Senate Finance Committee launched an investigation into Sovaldi and Harvoni that concluded in late 2015, finding that “Gilead’s own documents and correspondence show its pricing strategy was focused on maximizing revenue — even as the company’s analysis showed a lower price would allow more patients to be treated.”

“Review of company documents reveals that the return on investment for acquiring Pharmasset and additional research and development were not key considerations in determining the pricing of these drugs,” the report said, though it noted that Gilead spent billions of dollars acquiring the drug’s developer and hundreds of millions in the clinical trial and FDA approval process.

Gilead said in a statement that the prices of its two list-topping drugs “reflect the innovation of the medicines,” because by curing hepatitis C, they realize “significant savings to the health-care system over the long-term.”

This is the most expensive drug in America - MarketWatch

 

[Free bird]

"Money supply isn't unlimited even for government" I don't think they got the memo

 

[Silver]

Well to begin with, Wendell Potter is a journalist by background. While he touts himself as an insurance industry executive, he was a corporate communications executive.... in my experience in industry not people who really understand the business. It would be like a journalist who becomes White House Press Secretary claiming credibility on complex foreign policy issues.

From the article:


Second, he seems to believe that Aetna should retain a losing product because it is making money elsewhere. That is stupid and no company, health insurance or otherwise, would continue to offer an unprofitable or less profitable product.... they will smartly allocate their capital that is provided by shareholders and for which shareholders expect a return.. to more profitable products and business opportunities regardless of the public good. Be it right or wrong, Aetna's responsibility is to its shareholders... not to continue to write ACA plans that are unprofitable or even if profitable, less profitable than other business alternatives available to it.

Finally, he seems to think that Aetna is hugely profitable. While the numbers are big because it is a big company and moron journalist focus on numbers because they can command more attention... the numbers need to be assessed in relative terms. Aetna's ROE is in the mid-to-high teens over the last few years... solid but not outrageous... and declined to 14.7% for the most current quarter... again solid but not outrageous and in line with ROEs for their health insurance peers.

I take no issue with what you say, but I found his primary focus to be something different.

From the article:

"The country’s private health insurers have been doing a lousy job of controlling medical expenses for many years. It is the big failure of our multi-payer system that insurance company executives hope we will never catch on to.

The truth: Because we have many private insurers, none of them—not even the big ones like Aetna—have enough leverage with drug companies and huge hospital systems to strike a decent bargain on behalf of their customers. Yet we continue to be deceived by industry propagandists like I used to be and hold as a tenet of faith that competition among our many insurers will somehow magically control costs. (What insurers actually do is try to predict how much they think medical costs will rise in the future and jack up their premiums a few percentage points above that to ensure a profit.) "


My take is that his finger is pointed more at the greed of drug companies and larger hospital systems than insurance companies, and that with our current system, there is little to no negotiation with them related to cost containment.


We all talk about needing to control the cost of health care. HMO's were suppose to help with that when they started in the 1980's, but costs have continued to climb. So...how should costs be contained?

 

[EastWest Gal]

Wendall Potter previously work for Cigna and has a blog that is sometimes reprinted in Huffington Post. He provides some data about insurance company profits, and describes some possible consequences of Anthem wanting to buy Cigna, and Aetna wanting to buy Humana.


It's Way Past Time For Us To Stop Deluding Ourselves About Private Health Insurers?


Having worked in health care for over 30 years I am very jaded about our health care system. Providers and researchers want to help people. They are most definitely at odds with pharmacy companies, insurance companies, and hospital systems who just want to make money. As a VP of a hospital, I worked in the no-man's land between providers and hospital administration for many years....it was no fun.

The CEO of our hospital/health system told a pediatric group in the system that they had too many Medicaid patients and that it was a "quality of care" issue. So now the "quality of care" problem was transferred to newborns whose parents couldn't find any pediatricians who take the insurance.

My aunt's estate had to pay back her Medicaid. My cousin had me review her itemized bill from Medicaid. The most outrageous charges were the hospital room charges ($3000) for a pre-op room, and some drugs. BTW, OxyContin was $400+ a month. The doctor charges were predictable, at least.


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[NW-Bound]

I really doubt those expensive drugs only prolong for a month or two.

The most expensive drugs are for Hepatitis C, which is an infectious disease. It's curable and preventable, though in many cases, patients don't know they have it...

Gilead and its Hepatitis C drug have been mentioned several times on this forum, but on the stock threads. Yes, the drug is expensive, but saves life and is much cheaper and surer than the alternative which is a liver transplant.

The ineffective expensive drugs that I talked about and that doctors of Sloan-Kettering Cancer Center refused to use are several last-ditch cancer drugs. I understand that many cancer patients take more than one drug.

Below is a chart prepared by Peter Bach, a doctor at Sloan-Kettering on that subject. Sloan-Kettering's Web site has the following statement about Dr. Bach.

In 2012, he and other physicians at MSK drew attention to the high price of a newly approved cancer drug and announced the hospital’s unprecedented move not to offer it to patients because of its high price tag with no notable improved clinical outcomes.​

Note the "no notable improved clinical outcomes".

 

[NW-Bound]

​

Reading "Cancer: The Emperor of All Maladies" by Siddhartha Mukherjee, I learned of a watershed lawsuit brought by a cancer patient's estate against her insurer, who denied an experimental treatment. The patient won the lawsuit causing all insurers to allow this treatment, and an overnight burgeoning business in clinics offering this treatment. This experimental treatment was later found to be harmful, and quickly abandoned.

This is what Wikipedia has on this lawsuit.

...California woman diagnosed with advanced breast cancer. She requested her HMO to pay for High-Dose Chemotherapy and Bone Marrow Transplant (HDC/BMT) to treat her cancer. Her health maintenance organization, Health Net, declined her request, stating this therapy was an unproven, experimental therapy. She ultimately received her BMT after raising $212,000, but died eight months later, aged 40.

Her estate sued and received $5 million due to the denial. Subsequent research proved that HDC/BMT was a harmful treatment for breast cancer patients, and it is no longer used.

By September 1994, the Federal Employees Health Benefits Program, which covers employees of the United States' federal government, began requiring all of its health plans to pay for HDC/BMT for advanced breast cancer. The State of California subsequently passed a law requiring health insurance to pay for HDC/BMT.

Subsequent research reportedly shows that HDC/BMT for advanced breast cancer does not extend life, worsens quality of life, increases the number of days hospitalized, and costs an additional $55,000.​

 

[Mulligan]

Without cost control, how can this not happen? Private insurers do not work for free.

In a single-payer system, do government workers and bureaucrats work for free? In fact, if they do not take a profit and there's no competition, what is the incentive for them to control the costs?

There has to be cost control measures. Money supply is not unlimited, even for a government.

Long term there needs to be a solution...What I am about to say does not accomplish it, but does address the recent ACA spikes...1) People are not signing up in the numbers assumed..And I will take a wild guess it is the healthy ones that are not which hurts in the "cost sharing". 2) Also I have read (which makes sense) from insurance companies a very noticeable amount of "cheap bastards" are buying the insurance, getting their medical needs taken care of then dropping the coverage. A new found way to "cost shift". If you cant beat them, join them may have to be may mantra if situation deteriorates badly.


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[MichaelB]

Long term there needs to be a solution...What I am about to say does not accomplish it, but does address the recent ACA spikes...1) People are not signing up in the numbers assumed..And I will take a wild guess it is the healthy ones that are not which hurts in the "cost sharing". 2) Also I have read (which makes sense) from insurance companies a very noticeable amount of "cheap bastards" are buying the insurance, getting their medical needs taken care of then dropping the coverage. A new found way to "cost shift". If you cant beat them, join them may have to be may mantra if situation deteriorates badly.

This "gaming the system" is now commonly reported - so much so that I have doubts just how big an impact it has. People with chronic illness require ongoing care and can't jump in and out that easily. I haven't seen any reports that Medicaid has experienced a dramatic rise in costs due to a sudden influx of new sick patients. While I don't doubt that some people are gaming the system, there probably are other factors as well.

The fact that none of these claims by any insurance company have been publicly scrutinized or independently verified makes me believe there are other factors. I continue to believe the path to more functional health care insurance involves fewer, larger groups, and insurers must take all comers in a region, not cherry pick as they do today.

 

[Mulligan]

I think your over thinking it... The eligible population enrolled is less than expected and sicker than expected...That has been reported pretty regularly....Toss out the risk corridors and this is why the rates are spiking now...Am I suggesting this is the cause for medical costs unsustainably high? Heck, no... Even if all healthy eligible people signed up and paid 12 months it would not solve the problem, or really even put a meaningful dent into the problem.
But my premiums have skyrocketed 300% in 19 months and this is not including next year which is sounding worse. Total US healthcare costs have not increased 300% in 19 months...Im just caught on the butt end of the cost shifting game.


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[Texas Proud]

This "gaming the system" is now commonly reported - so much so that I have doubts just how big an impact it has. People with chronic illness require ongoing care and can't jump in and out that easily. I haven't seen any reports that Medicaid has experienced a dramatic rise in costs due to a sudden influx of new sick patients. While I don't doubt that some people are gaming the system, there probably are other factors as well.

The fact that none of these claims by any insurance company have been publicly scrutinized or independently verified makes me believe there are other factors. I continue to believe the path to more functional health care insurance involves fewer, larger groups, and insurers must take all comers in a region, not cherry pick as they do today.

I am kinda with you on this... from the reports that we used to get the people with no insurance would go into the emergency room and get treated and not pay... now they are saying that they are signing up for insurance and that is why our costs are going up.... REALLY? Is there a dramatic drop in the number of people that show up at emergency rooms? I do not know, but if not.... something else is going on...


BTW, my crappy BCBSTX plan does not seem to pay for the blood tests etc. that I had at my doc... I am still working to see if this can change, but from what I am hearing from the docs office they put the codes down how BCBS says and it is not covered on my normal doc visit.... I am paying much more in routine costs than I used to pay when I was insured at work... and except for the gvmt reimbursement my premiums are higher... and since BCBSTX does not get the gvmt payment they are getting the full amount for the insurance...

 

[ShokWaveRider]

I think in some cases the Insurance companies themselves are "gaming" the system. The insurance lobby is aggressively lobbying to go back to private healthcare for all, thus costing us (in my case) $4500 per month for my wife and me, as opposed to $1200 what we pay now before subsidies. Anyone that opposes healthcare for all and no pre-existing conditions needs their head examined. (Figure of Speech)

 

[pb4uski]

....BTW, my crappy BCBSTX plan does not seem to pay for the blood tests etc. that I had at my doc... I am still working to see if this can change, but from what I am hearing from the docs office they put the codes down how BCBS says and it is not covered on my normal doc visit.... I am paying much more in routine costs than I used to pay when I was insured at work... and except for the gvmt reimbursement my premiums are higher... and since BCBSTX does not get the gvmt payment they are getting the full amount for the insurance...

I've had the opposite problem. My annual preventive exam is supposed to cover certain routine blood work. However, my doctor's office habitually miscodes the bloodwork so I end up getting a bill from the hospital because the insurer says it is not covered based on the doc office coding... I call the hospital and they blame the doc so I have to get the doc office to recode and resubmit to the insurer. This has happened twice in the last 18 months. I'm thinking of changing docs as a result of the hassles that I go through.

It should be covered... keep chasing it. Sometimes I think they intentionally miscode it to get revenue from consumers that they don't deserve since so few people will complain and even fewer will chase the problem down.

 

[Mulligan]

I've had the opposite problem. My annual preventive exam is supposed to cover certain routine blood work. However, my doctor's office habitually miscodes the bloodwork so I end up getting a bill from the hospital because the insurer says it is not covered based on the doc office coding... I call the hospital and they blame the doc so I have to get the doc office to recode and resubmit to the insurer. This has happened twice in the last 18 months. I'm thinking of changing docs as a result of the hassles that I go through.

It should be covered... keep chasing it. Sometimes I think they intentionally miscode it to get revenue from consumers that they don't deserve since so few people will complain and even fewer will chase the problem down.

In my case a few years ago it was the opposite. It was the hospital that was the thieves... I got a bill from my insurance carrier several months later and it showed payment considerably less than what I paid up front (yearly blood work). I called the hospital and they admitted they had no intention of ever notifying me or crediting the money back. They said if I ever used their services again, they would credit the balance off of my bill. Uhm no, that isn't how its done, Hoss....So I made them cut me a check. If it wasnt for insurance company I would have never known I was getting ripped off.


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[pb4uski]

I take no issue with what you say, but I found his primary focus to be something different.

From the article:

"The country’s private health insurers have been doing a lousy job of controlling medical expenses for many years. It is the big failure of our multi-payer system that insurance company executives hope we will never catch on to.

The truth: Because we have many private insurers, none of them—not even the big ones like Aetna—have enough leverage with drug companies and huge hospital systems to strike a decent bargain on behalf of their customers. Yet we continue to be deceived by industry propagandists like I used to be and hold as a tenet of faith that competition among our many insurers will somehow magically control costs. (What insurers actually do is try to predict how much they think medical costs will rise in the future and jack up their premiums a few percentage points above that to ensure a profit.) "


My take is that his finger is pointed more at the greed of drug companies and larger hospital systems than insurance companies, and that with our current system, there is little to no negotiation with them related to cost containment.


We all talk about needing to control the cost of health care. HMO's were suppose to help with that when they started in the 1980's, but costs have continued to climb. So...how should costs be contained?

I guess we could quibble whether Potter's primary focus was his "bottom line" or his "the truth".

However, if he really believes that the private insurers are not big enough to strike a decent bargain with the drug companies and huge hospital systems then he should be very much in favor of the two proposed large health insurer mergers as the merged companies would have more leverage with providers. BTW, I think his belief that the large insurers don't have enough leverage to swing us a good deal is wrong, but whatever.

 

[Mulligan]

The bottom line is 20% of the population consume about 80% of the total healthcare costs and a huge chunk of that is at the beginning and end of life. It costs a lot of money to save a life and keep one from dying. Personally, I would prefer a single payer with a VAT slapped on everything so even the booze drinking bum on the street contributes something. Though this does not address cost containment much. Though I am willing to have a single payer system it doesn't mean I think the insurance companies are the root of the mass problem. Seems a bit too simplistic for me, but that is just my opinion.


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[NW-Bound]

Most countries with universal healthcare still allow private supplemental insurance. Obviously, the governments cannot give people everything that they want.

We need to keep that in mind.

 

[Texas Proud]

I've had the opposite problem. My annual preventive exam is supposed to cover certain routine blood work. However, my doctor's office habitually miscodes the bloodwork so I end up getting a bill from the hospital because the insurer says it is not covered based on the doc office coding... I call the hospital and they blame the doc so I have to get the doc office to recode and resubmit to the insurer. This has happened twice in the last 18 months. I'm thinking of changing docs as a result of the hassles that I go through.

It should be covered... keep chasing it. Sometimes I think they intentionally miscode it to get revenue from consumers that they don't deserve since so few people will complain and even fewer will chase the problem down.

Yes, the coding is the thing that creates this problem.... and they always blame the other person.... insurance says it is the doc, doc says it is the requirements of insurance...


It was fun when woman care was change to be 'free'.... doc changed something on DW and coded it... it was coded wrong... we tried many times to get it coded correctly.... finally had to get the insurance company and the docs office on the phone at the same time and the insurance company told them the CORRECT codes to use... bill went away....

When I had my colonoscopy and they said that if so and so happens I might have to pay the whole thing I said "Nope, if you code it correct I will not. I will NOT pay any bill if you code it wrong".... she looked at me like I was an alien, called someone over to 'talk to me' and I told them the same thing... seems they got the coding right!!!


The problem is that it can take over a year to get it right... it took 18 months to get my moms coding correct... the doc said they sent the correct insurance info to the lab and the lab said it was not... the lab would not let me give them the correct info and the doc office refused to send.... I just said they were never getting paid so they MIGHT want to get it straight so the insurance will pay them....

 

[Texas Proud]

In my case a few years ago it was the opposite. It was the hospital that was the thieves... I got a bill from my insurance carrier several months later and it showed payment considerably less than what I paid up front (yearly blood work). I called the hospital and they admitted they had no intention of ever notifying me or crediting the money back. They said if I ever used their services again, they would credit the balance off of my bill. Uhm no, that isn't how its done, Hoss....So I made them cut me a check. If it wasnt for insurance company I would have never known I was getting ripped off.


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LOL... that happened to me with my wife's foot... we paid $900 to much... when I finally got the EOB and called the hospital they said the person was out on maternity leave!!! Nope, we cannot do anything about it... I did get the check about 3 months later at least....

 

[pb4uski]

I never pay anything before I get an EOB.... around here no medical providers demand it IME.... if a medical provider demanded that then I would walk out the door and go elsewhere.

 

[Mulligan]

LOL... that happened to me with my wife's foot... we paid $900 to much... when I finally got the EOB and called the hospital they said the person was out on maternity leave!!! Nope, we cannot do anything about it... I did get the check about 3 months later at least....

Isn't it ironic that they don't seem to have the same cavalier attitude towards payment when its them who is owed the money?


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