Stanley Feld M.D.,FACP,MACE
The temporary reinsurance portion of the 3R’s is about to expire. It was meant to support the healthcare insurance industry as enrollment in Health Insurance Exchanges grew.
Patient enrollment figures in State and Federal Exchanges have not grown significantly in the last two years. Enrollment ii exchanges has been from high risk and elderly patients.
High risk and comprehensive coverage has meant decreasing profit for the healthcare industry.
The numbers the Obama administration publishes are confusing and mostly false. State exchanges are failing. The State Health Insurance Exchanges are causing (in states that have State Health Insurance Exchanges) greater budget deficits.
The reinsurance program is not covering the healthcare industry’s expected profit because of the redistribution of wealth component in the 3R’s.
The significance of the redistribution of profit and wealth component of the 3R’s was not fully appreciated by the healthcare insurance industry as was the reinsurance subsidy was.
The industry’s first step to combat this barrier to profit was to increase next year’s insurance premiums by 20-30 percent in both the private sector and the State and Federal Health Insurance Exchanges.
This has created inflationary pressure on the private sector and unaffordable healthcare in both the private and public sectors for consumers and companies that provide healthcare coverage to their employees.
Its effect is the opposite of what President Obama promised. He promised to make healthcare insurance coverage affordable to all.
It is also forcing corporations to switch their healthcare coverage plans from defined benefit plans to defined contribution plans. The net effect is to increase employee out of pocket expenses.
We do not know how many more people have lost healthcare insurance because of Obamacare’s rules and regulations.
The public is also unaware of the exact number of people who have gained healthcare insurance through the Health Insurance Exchanges.
The real figures are not easily available.
The next step by the healthcare insurers is to merge. A series of merger negotiations are occurring. In the last three weeks two merger negotiations have been completed.
“Anthem Inc. agreed to buy Cigna Corp. for $48 billion, capping months of merger frenzy among top U.S. health insurers that is set to reshape the industry.”
“The merged company is projected to have around $115 billion in annual revenue and cover about 53.2 million people.
The deal, which needs regulatory approval, would help reshape health insurance industry.”
Three weeks ago Aetna agreed to buy Humana for $34 billion. The two deals accelerated the rapid-fire reconfiguration of the U.S. health-insurance industries. The two deals would decrease the industry from five major companies to only three.
The traditional media has not discussed the reasons the healthcare insurance industry is merging or the details of the mergers.
I will try to connect the dots.
The healthcare insurance industry realizes that the Obama administration is trying to play one insurance company against another. The redistribution of profit from insurance companies that profit to those that make less profit must be irritating to the healthcare insurance industry.
Perhaps they did not appreciate the intricacies of the 3 Rs. Maybe there was a small window where the temporary reinsurance was profitable.
I would guess that the healthcare insurance industry would try to stop the redistribution of profit. These mergers will increase their individual profits.
The companies will be in a position to force the government to discontinue the redistribution of profit or lose a company that is an administrative service provider.
The losers will be taxpayers and non-subsidized insurance consumers. The increases in premiums to consumers that are subsidized will be passed on to taxpayers. Non-subsidized taxpayers will also be paying increased healthcare premiums.
This will create non-affordable insurance premiums for all as a result of the Affordable Healthcare Act (Obamacare).
The healthcare system will collapse. The government will move in with a single party payer system and a bloated and wasteful government bureaucracy.
Remember Senator Kerry and Representative Barney Frank saying the ACA would not work without a Public Option? Remember President Obama saying we don’t need a Public Option?
President Obama is backing healthcare insurers into a Public Option corner and a single party payer system.
The government will be forced to limit access to care and ration care. Americans will not have freedom of choice.
The problem is the government will still have to hire one of the three healthcare insurance carriers for its administrative services instead of one of five major carriers. The price to the taxpayer will probably be high along with all of the government’s bureaucratic inefficiencies.
Remember the VA? The VA scandal is continuing without any apparent improvement in VA services or in reforming the dysfunctional VA system.
Congress is simply giving the VA more money to continue its dysfunctional ways.
The latest step in the healthcare insurance industry’s attempt to protect itself is the hiring of Marilyn Tavenner as CEO of America's Health Insurance Plans (AHIP) the lobbying group for the healthcare insurance industry.
Marilyn Tavenner is the former head and CEO of CMS overseeing Medicare, Medicaid and ACA (Obamacare) implementation.
Marilyn Tavenner oversaw the botched rollout of the federal insurance exchange and the ACA-mandated cuts in payment rates to Medicare Advantage in additional to a myriad of new Obamacare generated Medicare and Medicaid regulations.
Some of these regulations are unconstitutional according to lawmakers. However, the legislators have done nothing about these unconstitutional regulations.
They have not even attempted to make Americans aware of them.
Health Insurance Exchange plans and Medicare Advantage plans are two areas of tremendous profit and significant growth for private insurers. The Obama administration knows this and has tried to limit or eliminate this growth. AHIP hopes Marilyn Travenner can help the industry continue this growth by pointing out the bureaucracy’s weaknesses to healthcare insurance company’s executives.
“The healthcare industry (AHIP) hired her for her political connections inside the administration, inside the CMS bureaucracy and inside the congressional committees that regulate them,” said Tim LaPira, political science professor at James Madison University.”
The mainstream media parroting the AHIP’s press release said, “that the insurance industry has accepted Obamacare (the Affordable Care Act) as the new business environment. AHIP wants a CMS insider to help during the next phase of its market development.
According to the AHIP press release, “her government experience will be invaluable to AHIP given how rapidly the public sector is dominating the financial, market and regulatory facets of health plans”
It is obvious to me that AHIP did not hired Ms. Travenner in order to understand the new business environment better for an instant.
I believe AHIP hired her as CEO for her connections in,
2. The Obama administration,
3. The administration’s bureaucracy.
Along with her impressions of CMS’s weaknesses.
Weaknesses the AHIP can exploit.
Neither the Obama administration nor AHIP are working for the benefit of the American consumer of healthcare.
This behavior must be stopped somehow.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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