No, Virginia, ACA administrators do not need to "retain" the prior 8 million signups in 2015

Tis the season for preview articles spotlighting the challenges of signing up more uninsured and retaining the newly insured in Year 2 of the Affordable Care Act. The New York Times' Reed Abelson, in an otherwise excellent overview, repeats a common fallacy:

the Obama administration is expected to try to persuade about five million more people to sign up while also trying to ensure that eight million people who now have coverage renew for another year.

No one can or will try to ensure eight million renewals, because a very large proportion of 2014's enrollees -- perhaps half or more -- will not need to renew their coverage. They will be covered by new employers, or new spouses, or newly employed old spouses, or they will lose income and become eligible for Medicaid, or they will go on disability, or die, or, or, or...

The Blackwaters of universal healthcare?

A BusinessWeek cover story claims that the health insurance industry has "already won" the healthcare reform battle. That is, by 1) neutering public plan proposals and 2) reducing mandatory minimum coverage guidelines, the industry has (pardon the expression) ensured that any emerging reform bill, with its coverage mandates and subsidies, will actually boost industry profits.

In a prior post I buried the lede, so excuse a retweet. One subtext of the BizWeek article is a kind of backhanded tribute to the healthcare giants' strength in diversification, through subsidiaries that provide plan administration, data crunching, software, etc. In a way, the article undercuts its central premise -- that the insurance industry will gut "universal" coverage -- by suggesting that giants like UnitedHealth are equipped to survive in almost any payment system. One unspoken possibility the article points toward is that the health insurance industry might complete an already partial transformation from insurer to administrator. Terhune and Epstein note the role in public healthcare of one UnitedHealth subsidiary:

United's AmeriChoice unit is the largest government contractor administering state Medicaid programs for the poor and federally sponsored plans for children. AmeriChoice's revenue rose 34% last year, to $6 billion, and it has 2.7 million people enrolled. Those numbers should continue rising under reform since congressional Democrats are proposing an expansion of Medicaid to help achieve universal coverage. More of the working poor would qualify for Medicaid, and AmeriChoice can sell itself to states as the leading service provider.

The authors might further have noted that more than half of Americans who get their health plans from their employers are in self-funded plans. These plans are for the most part run by so-called third party adminstrators (TPAs), some of which are owned by the largest health insurers; UnitedHealth owns the third-largest, UMR. I suppose -- and need to read further -- that Medicare Advantage plans amount to another form of plan administration without financial risk. Add in the revenues that conglomerates like United get from data processing subsidiaries -- noted by BizWeek -- and health reform of any kind could ultimately prove to be win-win for the "insurers." Even under a single payer system, American style, they might be lucratively employed as the Blackwaters of healthcare delivery.

Related posts:
MedPAC: Obama's rudder for the healthcare battleship
The Times points another arrow at fee-for-service
Did Obama read Atul Gawande? cont.

Will health insurance giants administer single payer?

According to a BusinessWeek cover story by Chad Terhune and Keith Epstein, health insurers have "already won" -- that is, ensured that healthcare reform will boost, not crimp, their profits:

The industry has already accomplished its main goal of at least curbing, and maybe blocking altogether, any new publicly administered insurance program that could grab market share from the corporations that dominate the business. UnitedHealth has distinguished itself by more deftly and aggressively feeding sophisticated pricing and actuarial data to information-starved congressional staff members. With its rivals, the carrier has also achieved a secondary aim of constraining the new benefits that will become available to tens of millions of people who are currently uninsured. That will make the new customers more lucrative to the industry.

The massive lobbying efforts the article documents are not particularly surprising. Would anyone have expected the industry not to have bombarded Congress with cash and data? The apparent effects, too, are not a surprise to those who have been following the course of House and Senate negotiations. Nonetheless, the summations are sobering:

A fundamental question about the health overhaul is what minimum standards will apply to the coverage all Americans will be required to have. UnitedHealth has been exchanging a high volume of information on the topic with members of the Senate Finance Committee and their staff. Stevens, the former British health aide, regularly scans PowerPoint presentations generated by the committee staff that attempt to calculate the actuarial value of proposed benefit packages. Senators stung by the projected $1 trillion price tag are winnowing down the required coverage levels to cut costs.

This is good news for UnitedHealth, which benefits when patients pick up more of the tab. In late spring, the Finance Committee was assuming a 76% reimbursement rate on average, meaning consumers would be responsible for paying the remaining 24% of their medical bills, in addition to their insurance premiums. Stevens and his UnitedHealth colleagues urged a more industry-friendly ratio. Subsequently the committee reduced the reimbursement figure to 65%, suggesting a 35% contribution by consumers—more in line with what the big insurer wants. The final figures are still being debated.

One unspoken possibility the article points toward is that the health insurance industry might complete an already partial transformation from insurer to administrator. (On the plus side, the health giants' already substantial diversification may be sparing us a death struggle to kill reform altogether.) BizWeek does note the role in public healthcare of one UnitedHealth subsidiary:

United's AmeriChoice unit is the largest government contractor administering state Medicaid programs for the poor and federally sponsored plans for children. AmeriChoice's revenue rose 34% last year, to $6 billion, and it has 2.7 million people enrolled. Those numbers should continue rising under reform since congressional Democrats are proposing an expansion of Medicaid to help achieve universal coverage. More of the working poor would qualify for Medicaid, and AmeriChoice can sell itself to states as the leading service provider.

The authors might further have noted that more than half of Americans who get their health plans from their employers are in self-funded plans. These plans are for the most part administered by so-called third party adminstrators (TPAs), some of which are owned by the largest health insurers; UnitedHealth owns the third-largest, UMR. Add in the revenues that conglomerates like United get from data processing subsidiaries -- noted by BizWeek -- and health reform of any kind could ultimately prove to be win-win for the "insurers." Even under a single payer system, American style, they might be lucratively employed as the Blackwaters of healthcare delivery.

Related posts:
MedPAC: Obama's rudder for the healthcare battleship
The Times points another arrow at fee-for-service
Did Obama read Atul Gawande? cont.