If the road was bumpy for Obamacare insurers this year, it will be full of potholes in 2019.
More rate hikes are looming large in May and June as insurers face even more potential losses under a Republican administration.
The CEO of CareFirst Blue Cross Blue Shield, one of the insurers gearing up to release prices for next year’s plans sold on the Affordable Care Act marketplaces, has in the past has warned the marketplaces are in a “death spiral." Now Chet Burrell fears things are “materially worse.”
“You can’t run a business in the face of uncontrollable losses you can’t stem,” Burrell, who is retiring later this year, told me in an interview yesterday.
CareFirst wants to keep participating in the marketplaces, Burrell stressed, but said the company's board faces “an interesting decision” if it must keep covering an ever-sicker mix of enrollees.
“Continuing actions on the part of the administration to systematically undermine the market and make it almost impossible to carry out the mission,” Burrell said. “If continued efforts at the federal level undermine the marketplaces, I would think the board would have to examine what they would want — that’s very much on their mind.”
That’s a striking statement from the head of the largest insurer in the Mid-Atlantic region, which covers about 215,000 people without employer-sponsored plans in the Maryland, Virginia and D.C. marketplaces and is among the insurers most loyal to the exchanges.
CareFirst belongs to the family of Blue Cross plans, which have maintained a strong and steady presence there even as other insurers have dropped out over the past few years. Because these plans have traditionally served low-income and underserved populations, they see themselves as playing a vital role in the marketplaces, even though it has meant heavy losses.
Burrell said CareFirst has lost about $600 million on the marketplaces since they launched in 2014, which makes up about 6 percent of the company’s business.
There’s no expectation of making money on covering this population, Burrell said. He just hopes to break even – but says Congress and the White House are making that possibility remoter than ever.
First, Congress repealed the penalty for lacking health-care coverage. And now the Trump administration is moving full steam ahead on new regulations allowing the expansion of more bare-boned health plans. Insurers warn those actions will draw more healthy people who want either cheap coverage or none at all out of the marketplaces, leaving an increasingly sick and expensive population behind.
This means more market segregation all around, where plans get cheaper for the healthy and more expensive for the not-as-healthy. Insurers have been warning of this situation, but it’s about to get more real as 2019 rates are released in the coming weeks.
How would it play out for CareFirst customers? Burrell said to expect steeply rising premiums for PPO (Preferred Provider Organization) plans giving many doctor and hospital options. Patients with cancer or serious chronic conditions tend to prefer these plans with more extensive networks, since they must often visit specialists or get extra tests.
“What we’re seeing is the risk pool, particularly for the PPO, is shrinking as healthier people depart and either take their chances or look for some other coverage,” Burrell said. “The PPO experience is as bad as we thought it was going to be.”
Meanwhile, rate hikes won’t be as bad for plans with fewer provider options known as HMOs, or Health Maintenance Organizations, Burrell said. That’s because they’ll continue attracting the lower-cost customers.
Interestingly, not all the actions the Trump administration has taken toward the Obamacare marketplaces are so detrimental. For example, CareFirst and other insurers were more than able to make up for the loss of extra subsidies for cost-sharing discounts by getting bigger subsidy payments for monthly premiums (through a phenomenon known as “silver-loading,” which The Health 202 has explained here).
And Burrell mostly shrugged his shoulders when I asked him about a massive marketplace regulation the Centers for Medicare and Medicaid Services released last month, which gives insurers more flexibility in designing plan benefits.
“There are some changes, but they’re relatively marginal,” Burrell said of the rule, which was widely panned by Democrats and pro-ACA activists. “So it’s not a major blow to Obamacare, nor a major help.”
There’s help coming from some alternative corners. The state of Maryland, where the most CareFirst customers live, is lending a hand to marketplace insurers. Gov. Larry Hogan (R) signed a bipartisan bill in early April creating a program where insurers with the heaviest losses can get compensated, paid for with $380 million worth of taxes.
Without the program, Maryland officials had predicted a 50 percent hike in marketplace premiums; now, Burrell predicts it will allow CareFirst to lower premiums 20 to 30 percent compared to where they would otherwise be set for 2019.
But that doesn’t erase the indignation Burrell expresses toward those leaders in the White House and Congress, who seem intent on trying the patience of the insurers still willing to undergo heavy financial losses to cover the customers Obamacare was designed to reach.
“Did Obamacare work?” he said. “Did the people who needed the coverage get it? Hell, yes.”
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AHH: The Pentagon will determine whether White House physician Ronny Jackson will face a formal investigation for allegations that he mistreated White House medical staffers and improperly dispensed medications, The Post's Seung Min Kim and Dan Lamothe report. A Defense Department spokesman said yesterday that the Pentagon’s inspector general has received the allegations and is looking into the issue further to see if a formal probe is necessary.
Jackson, who has served as White House physician under three administrations, has vehemently denied wrongdoing. A White House official said Sunday that he would remain with the medical unit there but that he would not return to his role as Trump’s physician -- but a White House spokesman later seemed to walk that back.
“Rear Admiral Ronny Jackson is currently on active duty, assigned to the White House as deputy assistant to the president,” White House principal deputy press secretary Raj Shah said yesterday. “Despite published reports, there are no personnel announcements at this time.”
OOF: New CDC director Robert Redfield has asked his boss for less pay — and Health and Human Services Secretary Alex Azar has consented, The Washington Post's Lena H. Sun reports. Last week, top Democratic Sen. Patty Murray (Wash.) and others raised questions about Redfield's $375,000 salary, which is almost twice what his predecessor earned and more than past directors. Redfield told Azar that he didn't want his compensation to become a distraction for his work at the CDC, per an HHS representative, who provided no details on his new salary.
Redfield was hired under a special salary program, designed by Congress to attract health scientists with rare and critical skills to government work, Lena explains. It grants federal agencies authority to offer salary and benefit packages that are competitive with those offered in the private sector and academia.
In response, Murray said the public still deserves answers to her questions about “why Dr. Redfield — who has limited public health experience to begin with — was hired under a special hiring authority intended for candidates with rare scientific, technical, or clinical skills, and at a higher salary than many Cabinet secretaries.”
OUCH: Medicaid supporters in Maine have filed a lawsuit against Gov. Paul LePage, charging that the Republican ignored a ballot initiative that ordered the state to expand the program to childless adult earners above the poverty level, Politico reports. Six months after 59 percent of the voters approved the initiative, LePage has not yet expanded Medicaid and says he doesn't want to move forward until state lawmakers come to a funding agreement for the expansion.
“The governor has continued to drag his feet," Robyn Merrill of Maine Equal Justice Partners, one of the groups behind the lawsuit, said outside Maine’s state courthouse on Monday. “We don’t know what’s going to happen with the legislature. They still have the opportunity to act on Medicaid expansion, but that hasn’t happened yet. And so with the goal of getting health care to people as soon as possible, we decided we couldn’t wait any longer.”
— Photos of a VA clinic in Salt Lake City went viral last week for the untidy conditions they revealed: an overflowing trash can, medical instruments strewn about and a dirty sink. The photos posted by veteran Christopher Wilson’s father have sparked an investigation and an apology from the hospital system’s chief of staff, The Post's Alex Horton reports.
My son is a Veteran of the United States Army. He went to the #VA in Salt Lake City yesterday. This was the condition of the room he was seen in. Very unprofessional, unsanitary and disrespectful. Please retweet. Maybe @realDonaldTrump will see it. pic.twitter.com/P4CMQeE74t— Stephen Wilson (@GR8_2B_alive) April 27, 2018
“I figured that they would say, ‘Oh, this room is not clean,’ and take me somewhere else, but they just kind of blew past it, didn’t acknowledge it,” Wilson told CBS affiliate KVFS,
Karen Gribbin, the chief of staff of VA’s Salt Lake health-care system, later told KVFS she was “taken aback by the condition of the room," adding that "the patient, Mr. Wilson, should not have been placed in the room in that condition.” “I do not want another veteran to experience this,” she said, calling it a “rare event.”
“The fallout comes amid a cascade of problems and controversies at VA. Trump has vowed to strengthen the agency, but it has been beset by numerous leadership vacancies, including VA secretary and a permanent undersecretary for health who are tasked with overseeing VA’s sprawling network of 1,243 medical facilities,” Alex writes. "VA care has consistently been rated as good or better in comparison with private health care. But scandals within the agency have often been related to how long veterans wait to get access and how they are received by staff."
— Stem cell research is one of science’s most promising fields. Scientists believe stem cells may someday be used to repair or replace tissues and organs lost to age or disease, though they say effective therapies are still years away. As hundreds of clinics offering expensive stem cell treatments pop up across the country, The Post’s William Wan and Laurie McGinley break down what you need to know:
What are stem cells? Stem cells are a “class of unspecialized cells with the ability to develop into different types of cells, such as brain, blood and muscle cells,” they write, noting “all stem cells aren’t created equal.” Embryonic stem cells can become any of the more than 200 cell types in the body, while adult stem cells’ adaptation is much more restricted.
What are stem cells’ uses? Stem cell treatments using placental or umbilical cord blood are the “only stem cell therapies approved so far by the FDA,” Laurie and William report. Transplants using stem cells from blood or bone marrow have been used for years to treat things like leukemia, lymphoma or multiple myeloma. Researchers are looking at ways to use stem cells to treat heart failure, brain cancer, or neurogenerative disease like ALS.
What risks do stem cell clinics pose to patients? “Many scientists are leery of any treatment — like stem cell treatments — for which safety and efficacy have not been rigorously tested in human trials. But some stem cell procedures pose a greater chance for harm than others,” Laurie and William write.
Who is supposed to regulate the stem cell treatment industry? The FDA issued guidelines last year to specify which stem cell treatments need agency approval. But critics argue “state medical boards, state legislatures and state attorneys general should also be helping rein in the runaway growth of unproven stem cell treatments.”
— A few more good reads from The Post and beyond:
- The FDA’s antimicrobial drug advisory committee holds a meeting.
- The 15th Annual World Health Care Congress this continues through Wednesday.
- The Partnership for a Healthier America summit begins Wednesday.
- Politico hosts an event on the prescription drug supply chain on Thursday.
Stephen Colbert on Stormy Daniels' latest suit against the president:
Trevor Noah weighs in on Michelle Wolf's performance at the White House Correspondents' Dinner: