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Covered California News & Commentary

Topics of interest to both consumers and agents related to Covered California and the ACA biased in favor of the successful implementation of the Exchange and deliberately apolitical.

March 2013 Archives

It seemed that the ACA was saying that insurance companies would be allowed to decline to offer coverage to small employers for failure to satisfy minimum contribution or group participation requirements under state law or the SHOP standards.

In a final rule published 3.27.13, the HHS clarified, saying: ” Upon further consideration of this issue, we have determined that small employers (less than 100 employees) cannot be denied guaranteed availability of coverage for failure to satisfy minimum participation or contribution requirements.”

The carriers will continue set minimum contribution or group participation requirements beyond 1.1.14., but HHS says, “…in the case of a small employer that fails 
to meet contribution or minimum participation requirements, an issuer may limit its offering of coverage to an annual open enrollment period, which we set forth in this final rule as the period beginning November 15 and extending through December 15 of each year.

Generally, the group market will have continuous open enrollment, except for small employers that fail to meet contribution or minimum participation requirements, for which the enrollment period may be limited to the annual enrollment period described above, from November 15 through December 15. This approach addresses concerns about adverse selection.


The Affordable Care Act (ACA) does little to answer questions like: “Why are we paying so much? Why do we spend nearly 20% of our gross domestic product on health care? Why do we spend more than the next 10 countries combined and not get better results than them.

The February 20th, 2013 issue of Time magazine was entirely devoted to one story - Bitter Pill: Why Medical Bills are Killing Us by Steve Brill. The 24,000 word article “follows the money” to reveal how hospitals, the drug companies and some doctors game the system for huge profits. Download article -> Biter Pill

One answer is that health care is a seller’s market and we’re all buyers - buyers with little knowledge and no ability to negotiate. It’s not a free market. Hospitals and providers charge prices that bear little relationship to costs. They charge what they want to and we have to pay.

We like our villains, our scape goats, someone or something to blame it all on. Usually we pick on the insurance companies, easy targets, but they are buyers like we are, albeit with some negotiating position. If Brill’s piece has a villain, it’s something I never heard of - the Chargemaster, a mysterious internal price list for all products and services that every hospital in the US keeps. Charge master is responsible for indecipherable hospital bills with highly inflated prices, like an Alcohol Prep Pad for $7 each. This is the little square of cotton used to apply alcohol before an injection. A box of 200 can be purchased online for $1.91.

If there is a hero, it’s Medicare. It turns out that Medicare does more than Obamcare to bend the medical cost curve. That’s because the government program, by law, can only pay hospitals and providers the approximate cost of care. Hospitals say they lose money on Medicare, but they don’t.

The ACA does contribute to lower healthcare costs over the longer term by providing more transparency and competition on the payor side. On the provider side, the ACA supports Affordable Care Organizations (ACOs), new models that integrate hospital and physician services to achieve greater accountability and coordination of health care. California’s health care policy wonks are working to track the development of integrated approaches to the delivery of care and financing to determine how ACOs would work in the public sector (community clinics and public hospitals) as well as the private health care marketplace.

The following are excerpts from a recent article by David Lazarus, LA Times.

Republican lawmakers are stll determined to roll back Obamacare, deny coverage to millions, limit treatment for the poor and essentially hand Medicare over to private insurers.

Obamacare is not perfect. It will not cover everyone and it doesn’t do enough to reduce medical costs. But here’s what it’s accomplished so far.

  • Created a system to extend coverage to about 30 million of the roughly 50 million people in this country now without insurance.
  • Provided coverage to about 2.5 million young people who are able to remain on their parents’ insurance policies until age 26.
  • Laid the groundwork for preventing insurers from denying coverage to people with preexisting medical conditions or from canceling people’s policies after they get sick.
  • Set in motion an overhaul of insurance reimbursements to reward doctors for keeping people healthy rather than profiting only when people require costly tests or hospitalization.

Not only would the Republican budget plan take away all these advances, but it would also drastically cut spending for Medicaid, the insurance program for low-income people. The Urban Institute estimated last year that the GOP’s approach could reduce Medicaid enrollment by half.

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