Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.

All of these actions were taken with the expectation that the company’s Individual Commercial business would stabilize to the point where the company could continue to participate in the program. However, based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided that it cannot continue to offer this coverage for 2018. [emphasis mine]

What does Humana’s decision mean for Missouri? Well for starters, in 2018, Jasper, Greene, and Newton counties will likely have only one insurance provider on the exchange, assuming Anthem doesn’t leave (as they’ve hinted they might do) and make that number zero. Options in Jackson and Clay counties in the Kansas City area will also be reduced, from three insurers to only two. To be clear, Humana wasn’t the largest provider of exchange plans by a long shot, but its departure suggests its suboptimal risk pool will migrate to the remaining plans in the state’s exchange, threatening those business models, as well. If, as Humana suggests, the company’s risk pool was too sick to be sustainable as a business model in 2017, it’s reasonable to believe that the remaining exchange providers will see their pools become sicker in 2018, and thus their business models less profitable. In other words, it’s an insurance death spiral.

Below is the insurer count map that I published earlier this year. The difference in 2018? The southwest corner of the state has only one inurer, and in the Kansas City area, all the 3 insurer counties become 2 insurer counties.

Assuming the accuracy of Humana’s release, the plans listed below will not exist on the Missouri insurance exchange next year. 

The failure of the exchanges only serves to reaffirm that the misnamed Affordable Care Act needs to be repealed and replaced with a plan that empowers people and leverages the market to make care more affordable and accessible. We have a few ideas about how to make that happen. It’s time to finally make progress for patients.

The post Humana Announces 2018 Departure from Exchanges appeared first on Show-Me Institute.

Well, it's not even 2017 yet, and one of the BCBS companies is giving Missouri health insurance customers something to dread in 2018.

In other words, Missouri insurance customers are already at risk today… and may be at even greater risk in the very near future, especially if Anthem exits as it's contemplating.

There are ways to make health care in this country more affordable and accessible, but unfortunately, Obamacare isn't that solution. It's time to try something different.

The post And Now Anthem Floats Possibility of Leaving the Exchanges appeared first on Show-Me Institute.

On Thursday the President more or less confirmed this, albeit unintentionally. Many of our readers are aware that tech giant Samsung has recalled its Galaxy Note 7 cellular phone because it's, well, exploding. In response, the company has told Note 7 owners to stop using the device immediately. Even the FAA has banned taking such phones aboard airplanes because of the risk associated with the phone catching fire. Rather than try to upgrade the product to avert their catastrophic failures, Samsung is now… replacing all of the devices.

I had not previously thought to compare Obamacare to a device with an unadvertised tendency to explode, but luckily President Obama just painted that picture for us.

Obama compared problems in the law to a bug in new technology. He said, for example, that a company will fix a problem with a smartphone.

"They upgrade it, unless it catches fire and then they just pull it off the market," Obama joked, in a reference to the recalled Samsung Galaxy Note 7 smartphone. "But you don't go back to using a rotary phone. You don't say, we're repealing smartphones."

Along with the joke being a tad tone deaf given the pain the law has put families through, President Obama's analogy is imperfect because by repealing the PPACA we wouldn't be repealing "health care"—just an indisputably broken part of it. As Samsung is swapping one failed product for another that won't set your hair on fire, so should policymakers fundamentally reassess and replace what was and is an ill-conceived health care law that doubled-down on the status quo rather than reforming it.

As the President suggests, sometimes trying to "upgrade" an inferior product can be downright dangerous. After 6 years of poor Obamacare results, it's time for policymakers to move on to something better.

The post Like an Exploding Cell Phone, Obamacare Should Be Replaced appeared first on Show-Me Institute.

The post Think Fewer Insurers is Bad? Wait Until We Have Just One. appeared first on Show-Me Institute.

But even in an aspiring liberal utopia like Columbia, the consequences of overbearing government are still very real. Enter the IRS, two weeks ago.

Graduate students employed by the University of Missouri will have a harder time paying for health insurance after the university told students Friday it is taking away subsidies that help with premium costs.

Associate Vice Chancellor for Graduate Studies Leona Rubin said the change is the result of a recent IRS interpretation of a section of the Affordable Care Act. The law, which requires adults to have health insurance or face tax penalties, “prohibits businesses from providing employees subsidies specifically for the purpose of purchasing health insurance from individual market plans,” the university said in a letter sent to students Friday.

The IRS, Rubin said, considers the university’s student health insurance plan from Aetna to be an “individual market plan.” Because of the IRS classification, the university cannot give graduate students with assistantships a subsidy to help with health insurance costs, Rubin said.

According to Rubin, the University “could be fined $36,500 per student per year” if it continues its health insurance subsidy program…which makes it even more strange that the University apparently restored the subsidies in question last week.

It remains to be seen whether the threatened fine noted by the associate vice chancellor was a paper tiger meant to provide cover for cost cutting on Mizzou’s part or if that enormous fine is still actually on the horizon. The University of Missouri–St. Louis (UMSL), which took similar action in stopping insurance subsidies of its own, is sticking by its original decision to end its program. And it’s part of a national trend, thanks to Obamacare and the IRS. Keep in mind: while Mizzou has reversed its decision, the IRS certainly hasn’t changed its interpretation.

There’s a sad irony involved here, of course, when a university community generally supportive of big government is itself undermined by big government. And there’s lots to criticize: the credibility gap facing Mizzou’s administration, the timing of the announcement, the threatened walk-out by the graduate students, and so on.

But one of the most disturbing elements of this story is how disruptive Obamacare has been to a health care practice that, by most accounts, was working just fine, and the swift manner in which unaccountable federal bureaucrats were able to upend it nationwide. That a law passed 5 years ago is still changing without legislation is great cause for concern—not only for our health care, but for our democracy, as well. This is a teachable moment, but there’s no telling whether Missouri’s universities will learn from it.

The post IRS Obamacare Ruling Buffets Some Missouri Graduate Students appeared first on Show-Me Institute.

While many restaurants don’t offer health coverage, McDonald’s provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.

Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.

McDonald’s and trade groups say the percentage, called a medical loss ratio, is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims.

Brian Hook of Missouri Watchdog points out that McDonald’s is among the top 20 employers in the Saint Louis metro area, with between 5,000 and 9,999 employees. Furthermore, this problem is hardly limited to McDonald’s employees:

Insurers say dozens of other employers could find themselves in the same situation as McDonald’s. Aetna Inc., one of the largest sellers of mini-med plans, provides the plans to Home Depot Inc., Disney Worldwide Services, CVS Caremark Corp., Staples Inc. and Blockbuster Inc., among others, according to an Aetna client list obtained by the Journal. Aetna also covers AmeriCorps teaching-program sponsors, who are required by law to make health coverage available.

Aetna declined to comment; it has previously indicated that the requirement could hurt its limited benefit plans.

Granted, these plans are far from perfect, but for many of the people who use them, it is likely the best they can afford. If the plans are outlawed, these people will either seek taxpayer-subsidized coverage or opt for no coverage at all. Mini-med plans are evidence that the market can insure the overwhelming majority of people, but not when it is so frequently hobbled by government restrictions.

The post Law to Expand Health Coverage Limits Health Coverage appeared first on Show-Me Institute.

According to the American Medical Association’s National Health Insurer Report Card for 2008, the government’s health plan, Medicare, denied medical claims at nearly double the average for private insurers: Medicare denied 6.85% of claims. The highest private insurance denier was Aetna @ 6.8%, followed by Anthem Blue Cross @ 3.44, with an average denial rate of medical claims by private insurers of 3.88%

In its 2009 National Health Insurer Report Card, the AMA reports that Medicare denied only 4% of claims—a big improvement, but outpaced better still by the private insurers. The prior year’s high private denier, Aetna, reduced denials to 1.81%—an astounding 75% improvement—with similar declines by all other private insurers, to average only 2.79%.

Maybe there’s something to be said for the need to keep your customers satisfied in order to make that profit after all.

And not only is Medicare more likely to deny claims, it is also driving up health care costs for everyone. Our August policy study on health insurance reform shows that Medicare and other government health care expenditures drive a wedge between consumers and producers that fuels price inflation.

Government interference in health care markets only gives Missourians higher costs while leading to coverage of fewer claims. Effective health care reform must go in the direction of markets, but now that the Senate seems set to vote for cloture on the health care bill, that seems very unlikely in the near future.

The post Denied! appeared first on Show-Me Institute.