09 Jun 2014 Health Care Odds & Ends: Exchange Edition (aka Bad News Edition)
Although little of the news about the ObamaCare exchanges is good, let’s see if we still can’t find some humor in it.
1. Two Million Discrepancies. Of the 5.4 million people who signed up on the federal exchanges, about 2.1 million (or 39 percent) have information in their applications that does not match up with what the government has on record. Of those, 1.2 million are related to income reported by the enrollees which could result in an insurance subsidy that was either too larger or too small. The other 966,000 have a discrepancy with their immigration or citizenship status.
But not to worry. The Dept. of Health and Human Services “believes that most of the errors are small and will be quickly resolved.”
People taking speciality drugs amounted to a small number of voters, too small to have much impact on elections. Further, since they are sick, “they probably aren’t organizing get-out-the-vote drives, protests, lobbying efforts, etc.”
A new report from Avalere reveals that the politics of it shows up in the cost-sharing part of the exchanges. Exchange enrollees who make less that 250 percent of the federal poverty level and choose a silver plan are supposed to receive help with the plan’s cost-sharing. However, the subsidy to help with the cost-sharing goes to the insurance companies. John Graham explains that the Avalere report shows that few insurance companies use the subsidy to cover the cost-sharing of specialty drugs:
…the plans apply more of the subsidy to the deductible, somewhat less likely to apply it to specialist charges, and much less likely to apply it to the most expensive tier 4 drugs on the formulary. What this means is that generally healthy patients who go to see their primary-care physician occasionally, but need no specialist care or specialty prescriptions, are most likely to benefit from the cost-sharing reductions. Those who need specialist care and, especially, tier 4 drugs will be less likely to benefit.
This blog has written frequently about how ObamaCare motivates health plans to seek out healthy enrollees and shun sick ones. Avalere’s latest report demonstrates how this is magnified for low-income enrollees.
Why are insurers able to get away with this? For starters, lower-income people don’t vote at rates as high as middle-class or upper-income folks. Lower-income sick people probably vote at even lower rates. Since such people won’t be putting much if any pressure on their elected officials, they will be exposed to large out-of-pocket costs for their health care needs.
Full Avalere report here.