Survey: Doctors May Not Participate in Obamacare Exchange Plans

A recent survey covering more than 1,000 physician practices confirms what many experts had feared—many doctors will not participate in Obamacare’s exchanges.

The survey was conducted by the Medical Group Management Association (MGMA), a trade group representing multi-physician medical practices. The results are in, and they’re unambiguous:

  • A majority (55.5 percent) of practices believe the exchanges will have an unfavorable, or very unfavorable, impact on their practice.
  • Fewer than three in 10 practices (29.2 percent) definitely plan to “participate with any new health insurance product(s) sold” on an exchange, with a majority (56.4 percent) still uncertain.
  • Of those not participating in the exchanges, the top concern, listed by 64 percent of practices, was “concerns about the administrative and regulatory burdens related to these products.”
  • More than two in three practices said that reimbursement rates for exchange plans are somewhat lower (36.2 percent) or much lower (33.2 percent) than “average payment rates from all commercial payers in your area”—and these lower reimbursement rates likely explain the lack of robust commitment by physician practices in participating in exchange plans.

The study’s results are even more surprising given the source of the study. MGMA represents many integrated physician practices, including famous practices like the Mayo Clinic. The Obama Administration has held out these types of integrated practices as the prototype for the accountable care organization (ACO) model created in Obamacare. Yet these practices, which the Administration views as part of the future of health care, along with many other doctors and hospitals, may decide not to participate in Obamacare exchange plans.

Giving millions of Americans an insurance card that does not provide access to care represents an empty promise, not health “reform.” It’s one more reason why Congress needs to stop this unworkable law and focus on better reforms that can actually help patients.

This post was originally published at The Daily Signal.

The Broken Promise Underlying Obamacare’s Exchange Debacle

The public recriminations continue surrounding Obamacare’s terrible, horrible, no good, very bad week and the myriad problems plaguing health insurance exchanges. But the concerns about flawed websites and consumer privacy are also symptoms of trying to mask the massive premium increases due to Obamacare.

The Associated Press (AP) explains that many of the flaws on the federally run exchange stem from the fact that consumers cannot “window shop” for health plans without first establishing an account. IT consultants called the exchanges’ lack of anonymous shopping capabilities a “major design flaw,” because it creates potential bottlenecks in the system as soon as the customer enters the site and needs to register. It’s one of many reasons why companies like Amazon and Orbitz let their customers browse anonymously before creating an account. But the Administration took a completely different approach when designing the federally run exchange, and the AP explains why:

Health and Human Services spokeswoman Joanne Peters said Tuesday the government omitted a window-shopping function because officials first wanted consumers to know the amount of the subsidy they might be eligible for. Those income-based tax credits can dramatically reduce premiums for people with modest incomes, and personal financial information is needed to calculate the subsidies.

“Our process allows us to show consumers plans with prices that reflect what they will pay with the tax credit they may be eligible for,” Peters said. “Window shopping would not allow for this.”

One obvious reason why the Administration wants to highlight the cost of health insurance after the application of premium subsidies is because the law’s new mandates and requirements dramatically raise the cost of insurance before those subsidies are applied. But compiling and processing all the subsidy information for consumers has overwhelmed the exchange website—the warnings that “the federal exchange was not ready to launch” were not heeded, and the results have been obvious.

While running for President in 2008, then-Senator Obama promised his health plan would lower health insurance premiums by $2,500 per family. As many Americans are realizing, Obamacare is raising, not lowering, the cost of health insurance. Unfortunately, it appears that the Administration’s unwillingness to acknowledge this broken promise may have been at the root of the ongoing technological debacles with Obamacare’s exchanges.

This post was originally published at The Daily Signal.

The Daily Show: Sebelius Swings and Misses

Last night, Secretary of Health and Human Services (HHS) Kathleen Sebelius appeared on The Daily Show to talk about Obamacare (you can watch Part 1 and Part 2 of the extended interview). She attempted to defend the Administration’s botched opening of the law’s exchanges, but like the rollout itself, most of what she said in the law’s defense ended up falling flat:

“We have a terrific market.” Thus far, the facts speak otherwise. Even Sebelius was forced to concede the exchanges’ flaws, when she admitted to host Jon Stewart that she didn’t know how many people have “fully enrolled” in exchange plans. Sebelius claimed that “this is like a Kayak site, where you might check out what plane you want to get on.” However, I’m guessing that Kayak knows exactly how many customers have purchased plane tickets from its site.

“For about 85 percent of us, we don’t have to sign up for anything, because we have insurance that works…I think the President did not want to dismantle the health care that 85 percent of the country had and start all over again.” That may not have been intent of Obamacare—but it has been one of the law’s effects. Companies are already dropping health insurance for part-time workers and for spouses, causing individuals to lose their employer-provided coverage and raising the cost of federal insurance subsidies.

“We know about 6 out of 10 people will get a policy for under $100 a month—never happened before.” We also know that most of those individuals will be dumped into the Medicaid program—a form of coverage that its own members don’t even call “real insurance,” because low reimbursement rates prevent Medicaid patients from seeing actual doctors.

“Nothing that helps an individual get health insurance has been delayed at all.” That’s simply not accurate. The insurance subsidies may not have been delayed, but many elements of the insurance shopping experience—from a choice of insurance companies for those working for small businesses, to the basic health plan, to caps on out-of-pocket spending—have been delayed. All these Obamacare features were thrown overboard in an attempt to make the core elements of the exchanges work—which they haven’t.

The sharpest part of the interview came when Stewart pressed Sebelius on the delay in the law’s employer mandate, and the disparity in treatment between big business and the rest of America: “Geez, it looks like because I don’t have a lobbying group…I would feel like you are favoring big business because they lobbied you to delay it because they didn’t want to do it this year but you are not allowing individuals that same courtesy.” That is of course consistent with the attitude the Administration has taken towards the law from the start—reward “squeaky wheels” who hire lobbyists and make political noise by exempting them from some of Obamacare’s most harmful effects.

Stewart’s opening comment summed up the exchanges’ flaws: “I’m going to try and download every movie ever made and you’re going to try and sign up for Obamacare and we’ll see which happens first.” Sebelius may have played the part of a loyal trooper, but the facts speak for themselves.

This post was originally published at The Federalist.

Insurers Now “Scared to Death” of Obamacare

Bloomberg has a must-read story this morning highlighting yet more faults with Obamacare’s exchanges. Specifically, the faults in the exchanges’ computer software aren’t just hitting consumers trying to shop for plans—they’re hitting insurers as well:

Insurers are getting faulty and incomplete data from the new U.S.-run health exchange, which may mean some Americans won’t be covered even after they sign up for an insurance plan.…The companies are receiving electronic files that can’t open or have so much missing information on new enrollees they’re unusable, the consultants said.

Some insurers have been forced to fix entries by hand, said Bob Laszewski, an insurance-industry consultant based in Arlington, Virginia.

“If we don’t see substantial improvement by the end of this week, then I would throw up the yellow flag,” said Dan Schuyler, a consultant advising states and insurers on the exchanges. “If we don’t see it in the next two to three weeks, it’s time for red flags. The concern is some people could get to Jan. 1, and not have coverage.”

Last week, the Administration claimed that heavy volume was the prime cause of the exchanges’ delays. But today’s Bloomberg report, as with other news reports over the weekend, all suggest bigger issues with the federal data hub and other elements of the IT infrastructure needed to support enrollment.

The Congressional Budget Office (CBO) has estimated that 7 million individuals would enroll in exchanges for 2014. If even one in 10 applications has to be adjusted manually because insurance carriers receive inaccurate data from the exchanges, that would mean 700,000 applications would have to be processed by hand between now and the end of open enrollment in March—a staggering possibility, and a feat few insurers will be able to achieve.

Little wonder that the Bloomberg story ends with one consultant saying that “the insurance industry is scared to death” of the problems the exchange glitches may cause them. What started off sounding like a dream—millions of new customers, and more than $1 trillion in insurance subsidies—may turn out to be a horrible nightmare for the insurance industry. It’s a fitting metaphor for the law’s effects on the American people as a whole.

This post was originally published at The Daily Signal.

Obamacare’s Terrible, Horrible, No Good, Very Bad Week

It’s now been seven days since Obamacare’s exchanges officially launched. In reality, however, the “launch” has more closely resembled a blooper reel of rocket failures than a smooth takeoff. Here is but a sampling of the problems, failures, and glitches that have turned the exchanges into a comedy of errors:

TUESDAY

  • Some state exchanges delay their opening to address technical problems; Maryland’s exchange postpones its launch by four hours.
  • When the federally run exchanges in 36 states open, they are immediately overwhelmed by massive volume and technical errors. One MSNBC reporter spends more than half an hour trying in vain to establish an account and compare insurance options.
  • Reuters reports that in total, 47 state exchange websites “turned up frequent error messages.”

WEDNESDAY

  • The Los Angeles Times reports that California’s state exchange vastly overstated its first-day web traffic. Instead of receiving 5 million hits, the exchange actually received 645,000 visitors.
  • The Washington Examiner notes that new co-operative health insurance programs funded by billions of Obamacare dollars featured “sites [that] were difficult to navigate and provided little understandable insurance information on topics like eligibility, costs, and benefits.”

THURSDAY

  • The Washington Post’s Sarah Kliff writes a story, illustrated with a picture of a unicorn, asking whether anyone has actually purchased health insurance on from the federally run exchange—or whether these individuals are just “mythical creature[s].”
  • An Arizona television station profiles a leukemia survivor who “just got a letter from his insurance carrier saying as of January 1, he would be dropped from coverage because of new regulations under Obamacare. His doctor at the Mayo Clinic may be gone as well.”

FRIDAY

  • Liberal blogger Ezra Klein admits that the Administration “did a terrible disservice by building a website that, four days into launch, is still unusable for most Americans.”
  • CNBC reports that “as few as 1 in 100 applications on the federal exchange contains enough information to enroll the applicant in a plan.”
  • One of the few individuals claiming to have enrolled in a federally run insurance exchange admits that “he has not in fact enrolled in a health-care plan.”
  • The Department of Health and Human Services (HHS) announces it will take major portions of its website offline over the weekend for repairs and major upgrades.

SATURDAY

  • Reuters interviews IT experts who believe the exchange contains major design flaws: “so much traffic was going back and forth between [exchange] users’ computers and the server hosting the government website, it was as if the system was attacking itself.”
  • The San Jose Mercury News profiles people suffering premium increases due to Obamacare—including one whose premiums may increase by nearly $10,000 for his family of four.

SUNDAY

  • Treasury Secretary Jack Lew refuses to tell Fox News’s Chris Wallace how many people have, or have not, enrolled in coverage.
  • The Charlotte Observer profiles one Charlotte family, whose premiums could rise from $228 per month to $1,208 per month—a 430 percent increase—because their current health insurance does not meet Obamacare’s standards.
  • The Wall Street Journal quotes technology consultants as saying that the federal exchange site “appeared to be built on a sloppy software foundation,” and that “basic Web-efficiency techniques weren’t used…clog[ging] the website’s plumbing.”

MONDAY

  • Politico finds many individuals are resorting to paper applications for coverage, due to the continued problems with online exchanges.
  • The New York Post reports that navigators were entirely unprepared for the launch of Obamacare’s exchanges last week; many staffers working for purported navigators seemed unaware the program existed.
  • HHS announces it is taking the exchange website offline again for more repairs.

Given this track record, some may find the words of Saturday’s Reuters piece prescient: “Five outside technology experts interviewed by Reuters…say they believe flaws in system architecture, not traffic alone, contributed to the problems” with the exchanges.

That quote is an apt metaphor for the entire law itself. Just as the exchanges’ problems stem from fundamental “flaws in system architecture,” so do these “glitches” prove that the entire law is unworkable—not just parts of the measure. It’s why Congress should act now to save America from this unpopular, unfair, and unworkable law.

This post was originally published at The Daily Signal.

Who’s Responsible for the Shutdown?

All around the country, Americans are asking one question: Who’s responsible for the shutdown? And no, we’re not talking about the government slowdown—we’re talking about the Obamacare shutdown.

All claims to the contrary, Obamacare has been effectively shut down—people are running into roadblocks and error messages when trying to enroll in plans. And the New York Times this morning explains that one of the major problems in getting exchanges to work has been a database created by the federal government:

One bottleneck identified by state officials on Wednesday seemed to be occurring when state-run exchanges communicate with the federal data “hub” to verify a person’s citizenship, identity and income through agencies like the Internal Revenue Service and the Department of Homeland Security.

About 18,000 people had created accounts on Nevada’s exchange by midafternoon Wednesday, said C. J. Bawden, a spokesman. But he said processing was slowed by trouble communicating with the federal system to establish their identity and eligibility, one of the last steps in the process. Minnesota officials also reported problems with the identity checking process. “We have it corrected as of now, but it was a federal-side problem,” Mr. Bawden said.

In other words, both state-based and federally run exchanges can’t function properly, because the federal government dropped the ball in creating a technically competent database.

The data hub brings with it other concerns, over and above the current inability for applicants to enroll in plans. Because the hub links to many government databases containing Social Security, tax, and other sensitive personal data, a breach of the hub could lead to identity theft and other frauds.

Given the rushed implementation process, and the federal government’s poor track record when it comes to cybersecurity, many Americans should be worried that the data hub’s initial problems may represent the tip of the iceberg.

Despite the fact that Obamacare seems to be doing a good job of collapsing under its own weight, Congress should still act to prevent any more federal taxpayer dollars from being used to implement this inherently unworkable law—and to keep taxpayers’ information safe.

This post was originally published at The Daily Signal.

Report Reveals Obamacare’s Side Effects: Higher Costs, Fewer Jobs

What will Obamacare mean for American businesses? Higher costs, according to a report released yesterday from consultants at Mercer.

Here are the preliminary results from Mercer’s annual survey of large employers about the impact of Obamacare:

Costs Continue to Rise: Despite the moderating effects of the recession in dampening consumer demand, “employers expect health benefit cost per employee will rise by 4.8 percent on average in 2014.” Recall that then-Senator Obama promised in 2008 that his health plan would lower health costs by an average of $2,500 per family.

Obamacare’s Mandates Hitting Many Businesses: “About a third of all large employer health plan sponsors (those with 500 or more employees) do not currently offer coverage to all employees working 30 or more hours per week, as will be required under the [law] beginning in 2015. Industries that rely heavily on part-time workers will be the hardest hit by this rule. About half of respondents in retail and hospitality currently do not offer coverage to all employees working 30 or more hours per week.”

Obamacare Will Raise Costs by at Least 2 Percent for Majority of Firms: “When asked to consider the impact of higher enrollment and new [Obamacare] fees…about half of the employers surveyed say they will spend at least 2% more on health benefits in 2014 – over and above the normal increase in cost. Another third are unable to predict. Only about a fifth of employers are confident that [Obamacare] will have little or no impact on spending in 2014.” The Mercer consultants also pointed out that Obamacare could impose additional costs on businesses once the delayed employer mandate takes effect in 2015.

More Workers Will See Their Hours Cut: “Some employers will minimize the number of newly eligible employees by cutting back on hours for at least a portion of their workforce – 11% of all large employers say they will do so.”

The impact of Obamacare on the American economy is well-documented, and growing. It’s why Congress needs to stop Obamacare now.

This post was originally published at The Daily Signal.

Day One of Obamacare’s Exchanges, By the Numbers

Obamacare’s exchanges have now been “open” (such as it is) for more than 24 hours. The results are in, and they’re not promising:

0—Enrollment navigators certified in Wisconsin in time for the start of enrollment.

0—Individuals one North Carolina insurer was able to sign up for subsidized insurance.

3—Months President Obama warned Americans could face glitches when trying to sign up.

4—Hours Maryland’s exchange opening was delayed.

7—Miles one Indiana resident drove to obtain enrollment assistance; after receiving little information and a four-page paper application, the potential applicant called the trip “a waste of time.”

22—Actual enrollees in Connecticut’s exchange out of more than 10,000 individuals who visited the website by mid-afternoon, a conversion rate of 0.22 percent.

34—Minutes one Politico reporter listened to “smooth jazz” before reaching an actual call-center representative.

35­—Minutes one MSNBC reporter spent attempting to enroll online, before finally giving up.

47—States whose exchange websites “turned up frequent error messages.”

1,289—Days between the signing of Obamacare and yesterday’s launch, a gap which prompted one insurance broker to comment, “You would just think that with all this time they’ve had to get it set up and ready to go there would have been a better premiere.”

2,400—Individuals who had their Social Security numbers and other personal data disclosed even before the exchanges opened for business.

Not only were the American people faced with major glitches surrounding the exchanges, but they also faced a wall of silence from bureaucrats when looking for explanations for the delays.

The latest in a long line of Obamacare implementation glitches and failures demonstrates how the law is inherently unworkable. It’s why Congress needs to stop Obamacare now.

This post was originally published at The Daily Signal.

Obamacare Exchanges Launch: What You Need to Know

Today’s launch of Obamacare’s exchanges represents the start of sign-ups for the law’s two new entitlement programs. To guide individuals seeking to understand the process, we’ve compiled answers to some basic questions about the exchanges.

What are exchanges?

In theory, exchanges are just a fancy term for insurance marketplaces, where consumers can shop for the plan that best meets their needs. In practice, however, Obamacare’s exchanges have taken on many regulatory functions that will restrict the choice of plans offered.

Who may use the exchanges?

Any American citizen or legal resident can purchase an exchange policy. However, exchange insurance subsidies are generally restricted to those individuals who 1) do not have access to “affordable” coverage provided by an employer, 2) are not eligible for benefits under Medicare or Medicaid, and 3) earn income under 400 percent of the federal poverty level (about $94,000 for a family of four). Individuals who meet these criteria may qualify for federal insurance subsidies provided on the exchanges.

What kinds of plans are being offered?

Under Obamacare, plans will offer a package of government-mandated “minimum essential benefits” in four tiers—bronze, silver, gold, and platinum. The “richer” the metal level, the lower the enrollee cost sharing—and the higher the premiums. A study in the prestigious journal Health Affairs last year concluded that all of Obamacare’s exchange plans will likely have richer benefits, and potentially higher premiums, than a majority of pre-Obamacare plans sold on the private market.

Will the plans be affordable?

The Congressional Budget Office concluded that premiums on the exchanges could be $2,100 per family higher due to Obamacare. While a recent report by the Administration claimed that premiums will be “lower than projected,” it did not say that premiums will be lower than in the current market. Moreover, many of the people receiving coverage under the law will be enrolled in Medicaid—a government program not accepted by many physicians, where patients often have poor health outcomes.

Will I be able to see my current doctor?

That depends—but in many cases, physician access on exchange plans may be limited. Recent articles in The New York Times and Los Angeles Times have emphasized that, to keep down premium increases, many insurance companies have restricted the number of “in-network” doctors or hospitals. Patients may face a choice of traveling longer distances to visit in-network hospitals, or paying higher co-payments to see an out-of-network physician.

What happens if I don’t purchase coverage?

Individuals who do not have insurance through an employer or a government program like Medicare or Medicaid, and who do not buy coverage, may be subject to tax penalties beginning next year for violating Obamacare’s individual mandate. However, because the penalty for violating the mandate starts at $95 in 2014, some may find it preferable to pay a small annual penalty rather than higher monthly premiums.

This post was originally published at The Daily Signal.

The Obamacare Shutdown

In the debate surrounding the partial US government shutdown, rhetoric and scare-mongering often seem to be overwhelming the facts. Lest they be lost, here are some highly pertinent facts about the shutdown fight, and about Obamacare.

First, fiscal conservatives in Congress want to fund the government – all of it – except for Obamacare. The House of Representatives, which takes the lead on budget and tax bills, has passed – several times now – legislation that would defund or eliminate portions of the widely unpopular health-care law, while fully funding all other federal operations.

The Senate, controlled by Majority Leader Harry Reid (D) of Nevada and the Democrats, has so far rejected the lower chamber’s attempts to keep money flowing to government operations. In case the Senate continues to rebuff these attempts, the House has taken the precaution of passing legislation (which the Senate approved and President Obama signed into law last night) that would ensure that our military personnel around the world will continue to receive their hard-earned pay during the shutdown.

Second, the Obama administration’s stated position for months amounts to agreeing to the shutdown of the government. The president’s advisers have publicly threatened to veto multiple House-passed spending bills. Those threats came because the president and his allies want to replace spending cuts already agreed to under the Budget Control Act with more tax increases. In other words, if Mr. Obama and Sen. Reid didn’t shut down the government to insist on funding Obamacare, they likely would have shut down the government to essentially insist on spending more.

Third, while a “government shutdown” is an inconvenience to many Americans, the federal government never fully shuts down. The majority of the nation’s 2 million federal workers will likely not be furloughed. The military will continue to protect our shores, Social Security and Medicare checks will be processed as usual – and the Postal Service will remain open for business to deliver them. In many respects, the term “shutdown” is a misnomer; the current situation is more like a slowdown of government services than a complete shutdown.

If that conflicts with the dire predictions you’ve heard about the “disastrous” consequences of a shutdown, consider this. Since 1976, the federal government has “shut down” 17 times. And still the republic survives!

As for Obamacare itself, many of its effects will be more harmful, and more long-lasting, than a temporary government slowdown. First, premiums continue to go up. Even a recent report released by the Obama administration admitted that. When the report says that premiums have come in “lower than projected,” that doesn’t mean “lower.” That means “slightly less high.” As for the $2,500 per family premium reduction that candidate Obama promised his plan would deliver when campaigning in 2008, forget about it.

Second, Obamacare is undermining America’s health-care system. Many individuals have already found out they’re losing the health insurance they have and like. Others have learned that they may not be able to maintain access to their current doctor. One “dirty little secret” about Obamacare is that the law is built around an expansion of Medicaid – and Medicaid-like insurance plans offered in exchanges – even though Medicaid patients often have worse health outcomes than the uninsured.

Third, Obamacare is harming our economy. Firms are dropping health coverage, or cutting back hours, in response to the law’s new mandates and penalties. Bureaucrats have already turned out more than 20,000 pages of regulations implementing Obamacare. All of these regulations will have costs, many of which will be borne by the small businesses that traditionally serve as the nation’s job generator and the backbone of the economy.

Defunding the law represents the best way for Congress to combat the looming threat Obamacare poses. Defunding Obamacare would prevent the law’s costly new entitlements from taking effect, and would prevent the enforcement of its 18 new tax increases. Just as important, defunding Obamacare would ensure that bureaucrats in Washington would not be able to add to the 20,000 page “Red Tape Tower” any more regulations strangling the economy.

Obamacare was, has been, and remains unpopular; support even among Democrats has dwindled in recent months. The law is unfair: Witness the waivers and exemptions granted to unions, to big businesses, and most recently to members of Congress and their staff. As it stands now, the law has proven to be inherently unwieldy: More than a dozen elements of the law have been delayed, modified, or repealed.