BCBS NC ACA Rate Increases

Quick Thoughts–BCBS NC invited me to listen in on a media call this morning and I did so. I will circle back with links later.

Blue Cross/Blue Shield of North Carolina announced their rate increases for ACA plans today, and they are relatively high as compared to those in many some states. Average premium increases for N.C. ACA plans are 13.5% (13.4% in grandfathered plans and 19.2% for transitional plans). In Maryland and Washington DC, for example, they ranged from a 1% premium decline for Bronze plans to a 7% increase in gold plans. Premium increases (and initial premiums are higher in N.C. than in many states; see below for some discussion of why). The rate increases quoted are across all metal levels (Bronze, Silver, Gold, Platinum) and are not shown for each of the metal levels.

On the phone call with BCBS NC today, they stated that as of end of September, 2014, BCBS has ~258,000 signed up in ACA plans, 239,000 persons who are in grandfathered and transitional plans, and 57,000 who bought ACA compliant plans off exchange. Also notable, BCBS NC net gained around 25,000 persons from May, 2014 to September, 2014…so more people added during special enrollment due to things like lost job, new baby, etc. than ‘dropped out’ due to non payment of premiums.

Several points on all this.

  • The premiums noted are pre-subsidy, not what individuals will pay. In year 1, 91% of the people buying ACA plans got premium subsidies, so this announcement focuses on the full premium and not what consumers will pay.
  • The ACA story will increasingly be a state-level story. In N.C. we didn’t expand Medicaid. And when the President allowed grandfathered plans (those in place prior to the laws passage that have not changed) and transitional plans (those sold after the laws passage) to be extended last year, North Carolina decided to allow this to happen and BCBS NC decided to do this as well. This likely kept some healthier people out of the exchanges. However, the premium increases for BCBS NC were similarly high in these other groups (more below). There are a series of public and private choices that occurred in North Carolina that didn’t occur in other states.
  • BCBS NC has only shown premium increase by bucket (ACA, grandfathered, transitional) and not the exact size of the pool, or number covered (they said on the call 239,000 persons in grandfathered + transitional plans, but did’t break these down). The grandfathered plans can only shrink in members and will only get smaller. This will make those pools more unstable over time, and this pool will eventually blow up (and people will go to the exchange plans).
  • The most notable thing about North Carolina’s ACA exchange in year 1 was its decided lack of competition. BCBS NC was the only insurer to sell plans in all 100 counties (they will continue that this year), and Coventry sold plans in around 35 counties. Nationally, states with less insurance competition had higher year 1 premiums, and higher rates of increase. North Carolina has low competition, and relatively high premiums.
  • There is a third insurer entering North Carolina’s ACA exchange this year (United, who plans to sell in around 85 counties I think). More competition should lead to lower premiums. The experience over the next few years will tell the tale, and it would be good if more insurers continue to come to N.C.
  • Most interesting thing to me is that grandfathered plans have a 13.4% premium increase. These are plans written prior to the ACA passage in March, 2010. These plans almost certainly have less generous benefits than ACA plans, however, historically individual purchase pools don’t last longer than several years (most people didn’t remain in such plans for more than a year or so). Most buying such care tended historically to move to other sources of coverage, and so they only people left are sicker than average. New people cannot be added to this pool, so it will continue to get worse over time. This helps to demonstrate one of the problems with the pre-ACA individual purchase market.
  • The Medicaid expansion is likely to move ahead in some form in 2015, and when this coverage expansions comes about it will help reduce premiums (unclear by how much).
  • This is the second year of the ACA coming up, but the first year of re-enrollment. Big picture keys
    • how many will sign up year 2?
    • will more competition yield lower premiums over time?
    • will even more companies come into the ACA exchanges over time?
  • Biggest thing we still don’t know (or at least I don’t): what is the distribution by county of where these covered lives are in the ACA exchange plans, not only for BCBS NC, but generally?

Advice: you should check the exchange in your county across different plans and across companies to see what premium you will pay for given plans.

Last Football Game

I am a volunteer coach for my son’s middle school football team. Our last regular season game is today (if we win, we may be in the championship game, we are 6-1). Below are the 8th graders on the team, who were honored at school this morning. A fun group. This is the 5th year I have coached 5 of these boys/young men.

Githens8thgradefootballers

Avik Roy-Transcending Obamacare

Avik Roy will be addressing my Intro to US Health Care System course on Tuesday, Oct 21, and presenting his plan Transcending Obamacare. This link will livestream, and later a tape of the event will be at the same link (8:30am-9:45am, EST).

PCRC semi-annual meeting

I am in Chicago for the semi-annual Palliative Care Research Cooperative (PCRC) annual meeting. This is a great meeting–one of the most intellectually stimulating meetings that I attend.

The National Institute of Nursing Research (NINR) has funded the PCRC, which is at its heart a cooperative group for research projects (think Cancer cooperative group except that the RCTs are of palliative interventions as opposed to investigational drugs). A big focus on this weeks meeting is around caregiver research. We at Duke submitted an RO1 last week to expand the study reported here nationally, using the patient recruitment sites in the PCRC.

The impact of caregiving is easily the most important public policy question of our time that receives very little public discussion. Papers like this one and the work of the PCRC will hopefully change this.

Duke updates Ebola/Travel Policy

In August, Duke issued warnings about travel to certain West African countries due to Ebola. Duke has updated its policy to include a full ban on Duke-sanctioned travel to Liberia, Guinea, Nigeria and Sierra Leone for undergraduates. Graduate students, faculty and staff are being “discouraged” from travelling to these countries. There are many nations (or parts of countries) with current travel restrictions for Duke students and/or faculty and staff.

Full email below.

*****

Ever since Ebola began spreading in West Africa, Duke officials have been monitoring the situation closely with infectious disease experts in Duke Medicine. As a reminder, Ebola is not an airborne virus and cannot be spread through casual contact. It can be contracted only through direct contact with bodily fluids, such as the blood or vomit of an infected patient.

While the risk of infection in the United States remains extremely low, Duke Medicine has been preparing for contingencies, no matter how unlikely they may seem, should a possible Ebola patient present in one of its hospitals or clinics. Planning has been done in conjunction with the Centers for Disease Control and Prevention and the N.C. State Department of Health and Human Services, as well as leaders from Duke’s Division of Infectious Diseases and Emergency Preparedness.

Medical protocols have been established and are in effect across Duke Medicine to screen all patients entering the system for possible risk of exposure to Ebola. Any patient thought to be at risk as a result of screening questions will be interviewed by infectious disease experts to determine any next steps. Specific plans are in place to ensure the utmost safety and care for patients and health care providers, including the use of personal protective equipment for all emergency departments and clinics.

Duke Medicine is also coordinating closely with Duke’s Student Health Center to ensure the safety of our students. Duke has imposed full country travel restrictions on Liberia, Guinea, Nigeria and Sierra Leone for undergraduate students, and all graduate students, faculty and staff members are discouraged from traveling to these countries. But at any given time, Duke has students, faculty and staff in locations around the world, and conditions related to Ebola could change quickly based on potential cases that may arise in other countries. It is critical that Duke be able to identify the location of individuals traveling internationally and provide support as conditions warrant. So all students, faculty and staff traveling abroad are strongly encouraged to use the International Travel Registry (https://travel.duke.edu/).

Duke has also established a process by which any student, faculty or staff member who has traveled to West Africa recently must contact Employee Occupational Health & Wellness or the Student Health Center to consult with medical staff prior to returning to campus.

Duke’s emergency management team continues to monitor the situation closely and will provide updates as new information becomes available. For more information about Ebola, visit the special website created by the Duke Global Health Institute: http://globalhealth.duke.edu/ebola

_____________________

Managing@Duke is an electronic memo distributed to university managers to inform, support and enable them to fulfill their supervisory roles at Duke.  For more information, visit:https://www.hr.duke.edu/managers/memos/index.php

Conservatives rediscover their dislike of ESI

Mark Warshawsky and Andrew Biggs have a fairly standard conservative take on employer sponsored health insurance, combined with a new twist–noting that stagnant wages and faster rising premiums from 1999 onward have increased inequality, because higher paid workers get more tax free income via employer sponsored health insurance than do low paid ones.

I totally agree with this, and they make what used to be the standard conservative arguments about the desirability of altering the tax treatment of employer sponsored insurance, morphed into a way to talk about it viz the language of inequality. However, this produces a political problem for conservatives, because the ACA actually does something about the tax treatment of ESI for the first time, via the so-called Cadillac Tax that is a de facto capping of a heretofore unlimited tax subsidy that disproportionately benefits high wage workers (as Warshawsky and Biggs note).

The most surprising aspect of my debate with Jim Capretta on the ACA a few weeks back was him seeming to forget that Conservatives have long talked about altering the tax treatment of ESI (he didn’t really forget, he just hasn’t shifted gears yet as the WSJ piece has, but he will). The Dems actually did something about the tax treatment of the ESI (some of them didn’t realize they did or have) an aspect that conservatives should have cheered if they were thinking in policy terms (if you take seriously what they said for the 30 years prior to the passage of the ACA).

The piece by Warshawsky and Biggs is part of conservatives preparing to re-embrace actual health policy positions after the 2014 election, and not merely whatever attack maximizes chances for the next election. That is good news.

If you listen carefully….

Obamacare and the 2014 election

I will be joining Jim Capretta (a Duke Grad) and AEI fellow from 4-5pm today discussing the role of Obamacare and the election for an online debate/discussion….last week was the first in the series on the issues that will shape the 2014 election. As I think about the topic (how will Obamacare impact the 2014 election?) I think my first answer is that I am unsure. Better think of something else to say. Will work in bar b que and football if need be.

And I realize I have not been blogging much. I have an RO1 due October 5, and a U19 proposal due October 5 on top of the normal chaos of life.

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