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Curmudgeon's Corner

cur-mud-geon: anyone who hates hypocrisy and pretense and has the temerity to say so; anyone with the habit of pointing out unpleasant facts in an engaging and humorous manner

ACA Versus Medicare Advantage?

U.S., Quality of Life, Politics, Healthcare

Politicians appear to, some days, have no concept of the limitations of public financing coffers.  There is a limit whether achieved by tax policy or by the money of taxpayers available for confiscation through those tax policies.  The uses to which tax dollars are put are particularly strained these days given the advent and growth of the Affordable Care Act (ACA).  The ACA is sucking money away from many programs, not the least of which is another health care program known as Medicare Advantage.

Congress has further consideration of funding cuts to Medicare Advantage (MA) plans on its docket for the coming week.  This at the same time that these plans, available to oldsters, have proved they are helping the general health quality experienced by seniors.  And not just helping, but helping in significant percentages.  MA plans feature health screenings coupled with lesser out-of-pocket costs designed to get at the issues each senior might have whether or not those people are aware of their potential issues; thus identifying emerging issues sooner and treating those before they become catastrophic cash guzzlers with undesirable outcomes.

This situation is juxtaposed against the continuing saga of the ACA enrollment period now supposedly ending at midnight tonight.  We know, of course, that this “deadline” had already been extended by a full sixty days.  This has been one of the most non-deadline deadlines I’ve ever seen.  Now, anyone who says they tried to enroll is able to enroll.  They can make that claim whether or not it is true because the Feds have already said they won’t even try to verify the truth of each of those statements.  Could it be that enrollments aren’t where it was predicted they’d be because of some shortcoming in the ACA plan offerings?

We have been treated like mushrooms in the context of information about where ACA enrollments stand.  Mushrooms are often kept in the dark and fed manure, if you had any questions about the first sentence in this paragraph.  We don’t know how many people have or haven’t enrolled.  We don’t know where the enrollees are located geographically.  We don’t know the age mix.  We don’t know what ‘metal’ plans are being sought and which of the current four is most popular.  I would predict that the Silver Plan  is the likely winner.

The current ‘metal’ plans are Platinum (90% actuarial value), Gold (80% actuarial value), Silver (70% actuarial value) and Bronze (60% actuarial value).  The actuarial value approach is typically defined based on the covered person having a certain amount of health care costs; if you had the Bronze plan and experienced $10,000 of health care expenses, you’d have some $6,000 covered.  This of course misses the fact that the Bronze plan gets to that price point by having a much greater out-of-pocket cost for the covered person before benefits are paid so that $10,000 number is basically invalid for comparative purposes.  If that person had $100,000 of costs, then he or she would have a better chance of having 60% covered by the plan.

We can see, through the extensions, that enrollment numbers have suffered and that the lower plans have probably attracted the greatest numbers of enrollees.  We can deduce this given the extensions of time to enroll and the fact there is now talk of adding a Copper plan to this mix.  If the actuarial value scheme held true, then the Copper plan might have an actuarial equivalent value of 50%.  All of these shenanigans are driven by the sticker shock that many have experienced when they look at enrolling in the ACA.  There are already predictions that we will experience double digit increases in the respective ACA plan premiums come 2015.  The insurers have come to understand they were played by this Administration, so I don’t think they’ll be rolled as easily this time at the plate.  These extensions in order to save face, in the insurer’s minds, simply amount to a prospective worsening of the health in the pool of covered people.

People have already experienced the premium cost sticker shock, and as they make use of the new ACA plans they decided on buying they are beginning to experience the new form of shock: out-of-pocket cost shock.  There is a decided ‘double-whammy’ if not a ‘triple-whammy’ when employers have to re-think their contributions to health savings accounts (HSAs) and to health reimbursement accounts (HRAs).

So it seems that the Obama Administration solution is able to be summed up quite simply:  let’s continue to reduce the amount we spend to keep the oldsters on MA plans healthy and shift that money over to even greater funding of premium subsidies for the younger population.

Let’s see what Congress decides is appropriate.  At least we get another shot at sending those people home.  We blew that with the decision to open the floodgates for the current President for another four year term.

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