Dental Insurance

@Avram in MD

Reb Avram-

“We’re over a decade into the ACA, are we still on a trajectory to fail? What does the failure look like?”

Depends what you call failure. Based on what it was supposed to do and what it’s doing now I consider that a failure.

“Try us. I want to know what you saw, and can handle some complexity and ask follow-up questions if I don’t understand. I don’t find the appeal to authority argument to be convincing.”

I don’t have the time or capacity to discuss it in too much detail and for the back-and-forth questions that you and others will have but I’ll describe an additional disaster at the end of this post.

Risk Corridor was supposed to exist for three years I think (possibly 2014 – 2016 but don’t quote me on this). The fact that despite CMS promising to cover the payments at 100% and only funded the first year at 12.6% was catastrophic in that it put many smaller companies out of business and the larger ones have less competition. It may have been close to 10 years ago but the industry hasn’t recovered yet (and since then even more companies went under which means even less competition).

“Do you see Medicare as a big pile of waste?” I have nothing to do with Medicare but I’d be surprised if there weren’t billions of Dollars of waste going on. (E.g. doctors ordering unnecessary test, prescribing unnecessary medication, patients not following doctors directions…)

“What’s the going rate for a teacher?”

Depends on many factors (e.g. years of experience, training, certifications, location…). But if you take a public school teacher from a class where not a single student can pass a proficiency test – yet that teacher is making $100,000 and you take a teacher from a nearby Yeshiva with the same years of experience, training and certification who’s pulling in $50,000 a year- I’d say that the public school teacher is making a huge salary while the Yeshiva teacher is making a meager salary.

25% of all claims being preventable amounts to hundreds of billions of Dollars. That’s huge. I see that number sky rocketing if all health care becomes free- people will take more risks knowing that it won’t financially cost them anything. A study I saw somewhere claimed that the invention of airbags didn’t reduce the number of car accident related deaths as people figured they could take more risks while driving and assuming the airbag will save them.

Finally- as promised- here’s another feature of the ACA that helped cause its catastrophic failure.

Risk Adjustment

Risk Adjustment takes money from companies that have a healthier population and gives it to companies with a less healthy population.

The point of Risk Adjustment was to discourage companies from not providing coverage to those with chronic illnesses and encourage those companies to issue policies to them.

So, what went wrong?

First Issue – The formula for calculating payments was seriously flawed. At first CMS vehemently denied this but then admitted it and said that they would fix it but it would take some time (possibly a few years- I have nothing to do with it now so I have no idea what ended up happening and I have no interest in looking it up.)

Second of all- Take a small startup company that’s trying to build up its network of providers but still has a small network. Patients that have a chronic illness are not going to get insurance through that company and will go to a more established company with a larger network of providers.
At the end of the year the small company will have a healthier population, lower claims and will not be permitted to raise their rates too much for the next year while still having to make a large Risk Adjustment payment to the larger, more established company. (This may sound petty but it was rather significant. There were instances where after paying out the 80% to 85% percent of premiums towards claims as required by the MLR the company still had to pay an additional 20+% to a much larger company and put the smaller company out of business while the payment to the larger company was less than .1% of their total premium collected.)

Third Issue – Take two identical patients with Stage 2 Diabetes for example. Patient A gets insurance from Company A while Patient B gets insurance from Company B.

Company A encourages Patient A to see his doctor on a regular basis by dropping all copayments associated with his illness and having a nurse on staff call him and ensure that he goes to his appointments and takes his medications. At the end of the year, after spending thousands and thousands of Dollars on Patient A he’s somewhat healthier and moved up to Stage 1. Company B refuses to waive the copayments, doesn’t do anything to ensure he goes to his appointments and at the end of the year, aside from medication (which isn’t part of the Risk Adjustment formula) spent nothing on the patient who is now suffering from Stage 3 Diabetes. After all that Company A spent to make Patient A healthier- they’re still going to have to make a substantial payment to Company B for having a healthier population.

Fourth Issue – This whole Risk Adjustment is in reality just a numbers game where companies are trying to game the flawed formula – companies spent millions of Dollars hiring claims specialists to review hundreds of thousands of claims to see if they could get a doctor to issue a more severe diagnosis than what was originally on the claim. These millions of Dollars could have been better spent trying to make their patients healthier.

Fifth Issue – (possibly part of the fourth) It encouraged doctors to put inaccurate diagnoses on patients claims. In my situation I went for my annual physical and before doing any bloodwork the doctor diagnosed me with an illness I never had and put it on my medical record, after he got the results of the bloodwork which showed that there was no sign that I had the illness (or that the illness was ever present) he wrote that there is no sign of the illness but didn’t remove it from my record. I asked him to remove it from my record but he refused. The same exact thing happened at my next two annual physicals and I switched doctors after that. This may not sound like a big deal to you but think about a situation where a patient is found unconscious and rushed to the hospital where the ER doctors see the false diagnosis on the patients charts. Also, it’s on my record and will probably affect my life insurance premium rates if I try getting another policy.

Dr. Pepper,

Thanks for those details. I didn’t understand previously how parts of the ACA were favoring large companies at the expense of smaller, and I concur with AAQ’s take as well.

“25% of all claims being preventable amounts to hundreds of billions of Dollars. That’s huge. I see that number sky rocketing if all health care becomes free- people will take more risks knowing that it won’t financially cost them anything”

I do think the study cast too wide of a net when defining “preventable”, but yes human behavior does add to the cost. Projects meant for humans should take human behavior into account. If someone built a stairway that had constant bottlenecks, and they complained and said “if only the crowds did this this and that things would move swiftly!” I’m going to blame the stairway builder for poor design before I blame the people for being people.

“yet that teacher is making $100,000 and you take a teacher from a nearby Yeshiva with the same years of experience, training and certification who’s pulling in $50,000 a year”

In my state (one of the most politically “blue” in the US), the median income of a public school teacher is around $58,000 a year. The 90th percentile (meaning only 10% of teachers make this amount or more) is around $82,000 a year.

“This may not sound like a big deal to you”

Actually, it does.

Another recent propublica story relevant to this thread

“How Cigna Saves Millions by Having Its Doctors Reject Claims Without Reading Them” which details exactly what headline suggests . Thousands upon thousands of claims rejected without actually being reviewed.

Again I get that cigna has to do this to be profitable. But that is exactly the problem

@Avram in MD

Reb Avram-

Yes, I really would support that idea. I currently get health insurance through my employer and my employer is selfiinsured. Being able to get up every morning and report to work makes people a cheaper risk to insure. I don’t know the exact percentage for my employer but I’d say the vast majority of the employees here have a college education (or are working on it) which shows some amount of responsibility and again- a cheaper pool to insure. Additionally- given the background and criminal checks that financial institutions have to perform on prospective employees the irresponsible behavior gets filtered down even more. I can’t think of a way to get a less risky pool of insureds than to hypothetically remove every single irresponsible individual as @ubiquitin hypothesized. Obviously in a situation like that there would be no smokers for the pharmaceutical industry to medicate and by default everyone would be doing, at minimum, the amount of exercise necessary to stay healthy. It would also be unrealistic to ensure everyone does the correct amount of exercise…

Having a single payer system would have the government collect a premium from every person and pay the provider for the claims incurred. This would put me in a much more expensive risk pool and my expenses would shoot up- probably in the same range as by the ACA.

I agreed with the idea (as hypothetical as it may be) to show @ubiquitin that I’m not against the government being the single payer per se- I just don’t think they would know what they’re doing or that it’s possible for them to take over without my expenses going up significantly again.