FINANCE

III. REDUCTION OF FEDERAL REGULATION

One of the biggest causes of the huge difference in cost between the Commercial Individual Insurance Markets (CIIM) and ACA is federal regulation. Everyone is under the misapprehension that before ACA, health insurance companies did not offer adequate non-group health insurance for sale to the general public. This is NOT true. The CIIM values recorded in the Cost Comparison Table above are generally for comprehensive Non-QHP health insurance contracts that provided more than adequate protection against the financial risk of unexpected personal illness and injury. For instance, after the ACA required Minimum Loss Ratios, studies found that over seventy percent (70%) of the Individual Health Insurance policies were voluntarily in compliance with the new MLR regulations, meaning that the majority of health insurance companies were returning value to their customers consistent with ACA requirements before the federal regulations were introduced.

One size does not fit All. Federal regulations increase the cost for everyone. For instance, the average inpatient hospital stay is six (6) days. Yet the most prevalent QHP inpatient benefit provides for 365 days. Consequently, even though few people will ever exceed the average length of stay, all the ACA carriers charge a premium consistent with the risk that the participants may have above average lengths of stay. Prior to the ACA, a woman could generally add maternity coverage to her health plan within 60 days of becoming pregnant. After the ACA, maternity coverage was required in all QHP's. Comprehensive health insurance contracts were standard before the ACA invented the required “Essential Health Benefits”. Milliman studies reveal that essential health benefits increase premiums by an average of 3 percent to 17 percent depending upon the state. The ACA also requires a “Minimum Actuarial Value” of 60% on all plans, which Milliman believe increases premiums by 8.5%. There is a “Prohibition of Age/Sex Rating” imposing rules that artificially increase premiums for younger adults, making it harder to attract those who are more likely to be uninsured and would be most helpful to the risk pool. ACA also requires insurance companies to put enrollees suffering from pre-existing conditions into the same risk pool as other health risks, thereby ensuring adverse selection and unnecessarily driving up the cost of everybody’s health insurance. Milliman predicts that what they term “Risk Pool Composition Changes/Adverse Selection” caused individual premiums to increase 20 percent to 45 percent in 2014. In addition, ACA Regulations increase premiums by encouraging high-risk enrollment, including early shifts from COBRAs continuation of coverage, early retirement shifts and other so-called gaming techniques with SEPs, etc. There are a cluster of other regulations prohibiting medical underwriting, requiring the issuance of coverage, and banning pre-existing condition exclusions under any circumstances. Collectively these have had the largest effect on arbitrary increases in health insurance premiums.

All this regulation makes health insurance less affordable by requiring health insurance carriers in the public/private partnership to do things that are not in the best interests of their customers. And, this prevents them from designing contracts on which they are willing to accept the risk of loss. The result is an abrogation of the normal insurance underwriting and risk-taking processes, potentially resulting in ever higher rates, the requirement for more government subsidization and an inability for insurance carriers to compete with one another to improve their individual insurance market shares. This stifles innovation, restricts free trade and further drives up the cost of health insurance and ultimately may lead to a complete government take-over of our Truly American healthcare system. This is what is happening today with the ACA. Medical socialism has failed in countries as diverse as socialist Great Britain and communist Russia. No one is electing to travel to either of these countries to avail themselves of quality health care. Free enterprise is the only system that will successfully survive a changing environment because it is the only system that enhances our basic human nature to survive, improve our performance and achieve greater success. Socialized medicine will extinguish the benefits of our flourishing free enterprise health care system that produces the many medical miracles that are now well known all over the globe.

This is not to say that our Medicare Advantage (MA) is in any way shape or form un-regulated by the federal government. On the contrary, it is one of the most regulated insurance plans sponsored by our federal government. However, there is a big difference between the CMS’s Medicare Advantage regulation and that of the punitive HHS’s ACA regulations.

The mission of HHS is the promotion of the general welfare and it is taken most seriously when it comes to the protection of our most vulnerable retired, elderly and disabled population. The purpose of our Medicare program is to provide financial security to the aging. CMS’s MA regulations support this vital interest by making sure the carriers correctly deliver an equivalent level of Medicare benefits and that beneficiaries are protected from any coercion and manipulation. No enterprise in any business can be completely unfettered without regulation and expected to do the right thing all the time. Checks and Balances are required. We learned that with our government and we see the need for it in our businesses as well. But, there is constructive regulation and destructive regulation. CMS’s Medicare Advantage regulation is, for the most part, a sterling example of the former, just as ACA regulations are a disastrous example of the later in action.

No one should be too surprised that, in the absence of government subsidies, the ACA programs are NOT generally affordable. ACA enrollment has declined in each of the last four years. The Congressional leaders are frustrated with the high cost of out-of-pocket expenses and skyrocketing premiums, and the many other “serious problems” that they mistakenly believe are part and parcel with a health care system dependent on private health insurance plans. On the contrary, their Federal Regulations are largely to blame.

 

THE AFFORDABLE CARE ACT (IS NOT AFFORDABLE)

The Cost Comparison Table below displays figures from the work done by the best health care actuaries in the country. You will appreciate that isolating the budgetary effects of the ACA (or of any such complex legislation) is difficult because they are often embedded in the spending for existing programs and broad categories of federal tax revenues. Our Cost Comparison study incorporated data from a myriad of isolated sources, including specific reports from HHS, CMS, IRS, CCIIO “MLR” Data, “MLR” insurance company filings, NAIC State Supplemental Health Care Exhibit forms, insurance company filings and the Annual Medicare Trust Fund Actuarial Reports to Congress. Much of our findings are sourced from a Landmark study entitled, “Commercial Health Insurance: Overview of Financial Results” produced by Milliman (March 2017). The sources for most of the data are referenced in the Table Foot Notes. If we have NOT nailed these final figures exactly, we are embarrassingly too close for comfort and whatever minor discrepancies are immaterial to the basic calculations (in the Billions of Dollars) and the general assumptions that we are clearly able to make from this comparison. The shocking reality of this comparison should bring everybody up short! How can we let this kind of thing happen in the twentieth century, with all or technology, experience and all of our skills and talents. We pass a bill that is supposed to do something and promise it will do it in a successful and cost-effective manner. These were lies. ACA fails miserably, especially in comparison with other programs. And, we can't agree on its failure and we can't agree on how to fix it. A travesty is not too strong a term.

 

 

Notes: Arthur Jackson Wheeler - May 25, 2018
1.ACA Aggregate Market Earned Premium - Milliman (March 2017) 2015 Commercial Health Insurance: an overview of financial results. Medicare Advantage Annual Market Earned Premium - 31% and 33% of Part A - AMEP per Medicare Actuary Trust Fund Reports to Congress.
2.ACA Advanced Premium Tax Credit Subsidy values from CMS and IRS data and publicly available Reports, Milliman methodology (March 2017).
Medicare Advantage Aggregate Market Earned Premium - 31% and 33% of Part B - AMEP per Medicare Actuary Trust Fund Reports to Congress.
3. The 2015 Effectuated federal Marketplace enrollment from HHS and 2016 CMS Enrollment Report, 2016 March 31.
Medicare Advantage enrollment from CMS Medicare Advantage Monthly Summary Contract Reports, December 2015 and 2016.
4. Total Claims Paid for Commercial Individual Insurance Market - Part 1, Line 5, NAIC Supplemental Health Care Exhibit forms,  Per Member/Per Month x 12 x Total Enrollment. Medicare Fee-For-Service Total Claims Expenditures - Table 11.B1, 2016 and 2017 per Medicare Actuary Trust Fund Reports to Congress.
5. Commercial Individual Insurance Market average covered life years monthly enrollment per Milliman (March 2017).
Medicare Fee-For-Service Total Enrollment - Table 11.B1, 2016 and 2017 per Medicare Actuary Trust Reports to Congress.
6.Commercial Individual Insurance Market Annual Benefit Per Member from Part 1 of NAIC Supplemental Health Care Exhibits, Per Member/Per Month x 12. Medicare Fee-For-Service Average Annual Benefit Per Member - Table 11.B1, 2016 and 2017 per Medicare Actuary Trust Reports to Congress.
7.Feldscher K. Reinsurance Program Critical to Shoring up the ACA. Harvard T.H. Chan School of Public Health. 2017 Aug 14.
8. General: Isolating budget effects of the ACA (as with any complex legislation) is difficult because expenses are often embedded in another program spending as with the CSR payments, 3R programs, Medicare and other broad categories of federal spending.

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IV. HEALTH RISK MANAGEMENT

A. CAPITATION REIMBURSEMENT

The Republican Graham-Cassidy health reform bill attempted to use capitation reimbursement to limit the federal cost of Medicaid. CMS uses it to cap the cost of Medicare Advantage Plans. Capitation Reimbursement is one of the most effective health risk management tools. Capitation is the main reason Medicare Advantage (MA) plans costs less than the Medicare fee-for-service (MFFS) program and Obamacare (ACA) program costs. Federal Capitation Reimbursement acts exactly as it sounds. It caps the amount of money the federal governement has to spend on a program. A capitation is a pre-set amount of money paid by the federal governement for each participant in an MA or Medicaid program.

The Centers for Medicare and Medicaid (CMS) have an extensive data base of U.S. health costs by jurisdictional county. CMS uses this data base to set the capitation rates for the MA carriers each year. The health plans use the capitation amounts to determine what benefits they can provide and what amount, if anything, they need to charge prospective beneficiaries. Unlike MFFS and the ACA, CMS caps the full amount that federal governement is willing to pay the MA carriers and therefore places the risk for any excess loss onto the health plans. Consequently, the federal governement does not have to carry any future lability on it's books and MA plans do not add anything to the Trillion Dollar federal debt level.

Capitation reimbursement simultaneously eliminates the need for the ACA's “3R” program costs and all of the other bizarre reimbursement, market stabilization and risk adjustment schemes mandated by the Affordable Care Act. At Medicare-Advantage-For-All.Com we believe the federal governement should be able to get the Health plans to re-design MA contracts for under age 65 participants and use properly targeted capitation reimbursement rates that will dramatically lower the federal cost of health insurance and maximize the possibility of enrolling up to 27.3 Million insured and uninsured Americans, 17.2 Million of which already have coverage and 5.3 Million uninsured American that are eligible for ACA Plan subsidies. Please see New Member Enrollment below for details. A complete explanation of capitation for Medicare Advantage Plans starts on page 38 of, "The Best Bi-Partisan Answer to Repeal And Replace Obamacare", a Key Document in our library.

B. HEALTH PLAN COMPETITION

In 1999, CBO Director Dan Crippen observed in the National Bipartisan Commission report on the future of Medicare," We believe that introducing competition into the Medicare program could help reduce costs in both the short and the long run." Medicare Advantage (MA) is the ONLY federally sponsored health plan, besides the Federal Employee Health Plan, that creates a functioning health insurance market with incentives for the insurance companies to compete with one another. The average Medicare Advantage Plan beneficiary has 21 Medicare Advantage plans to choose from. The health plans get paid on capitation and actually assume the health insurance risks. Therefore it is in their self interest to reduce the cost of their programs for all of their participants and they do so in a regulatory environment that supports competition and encourages innovation.

MA carriers in a competitive market can make more money by getting more customers and since Medicare Advantage For All  carriers would be required provide all of their benefits within the prescribed capitation reimbursement amount, they would naturally find ways to reduce the cost of health care, without having to charge their customers any additional premium. Medicare Advantage enrollment has increased by 2.5 Million in the last three years. Medicare Advantage is the fastest growing government-sponsored health insurance program in the United States.

The Affordable Care Act (ACA) is the exact opposite. ACA enrollment has dropped by over 4 Million participants in the last three years. ACA regulations have left Millions of Americans stranded with just One (1) health insurance carrier (and, in some cases none) in over 50% of the jurisdictional counties in the U.S. With many health insurance carriers dropping out of the program, the remaining health plans have almost exclusive possession of ACA products in their markets with no remarkable competition, which is the text book definition of monopolistic restraint of trade.

The American people created Anti-Trust Laws and the Federal Trade Commission to protect the general public from industries that posses exclusive possession of a service, because businesses without any competition tend to become usurious. For a majority of jurisdictional counties, this is what has happened with the ACA. The structure and delivery of the ACA are flawed. Businesses in a competitive market realize they can make more money by getting more customers. They naturally lower their rates or find other ways to reduce the cost of health care. With the ACA, the incentive to do this is limited:

1. Monopolistic conditions exists in over 50% of the ACA markets, so there is NO market incentive to lower premiums.
2. If you need to increase salaries and grow your companies administrative expenses (with MLR's at 80%- 85%) you simply raise the base rates.
3. Their is also no incentive to charge lower rates because governement marketing regulations limit their ability to attract new customers.
4. The easiest way to make more money is simply to get the governement and consumers to pay more money.
5. To get more money you raise your rates and lobby HHS to approve them.
6. Since your administrative expenses are fixed, in order to raise the rates, it helps to pay the health care providers more money.
   And, without capitation, so it goes …. higher health care expenses, higher reimbursements, higher administrative expenses and higher rates.

Since the health plans get paid by federal subsidies and participant premiums, and eighty-five percent (85%) of the ACA participants get a tax payer paid premium subsidy (based on the Silver plan benchmark premium), the higher the Silver plan premiums, the more the governement and the participants must pay to the ACA carrier. Since, there is no competition in most instances, and little opportunity for gaining new customers; a lower the Silver plan premium is just going to reduce the amount being paid to the ACA carrier. Therefore there is no incentive for the health plans to reduce their rates. In fact, the only way the ACA carrier can make more money is by raising the rates. The incentive to lower their cost is purely altruistic because they are required to pay out at least 80%- 85% of every dollar they collect in premium.

On the other hand, Medicare Advantage has demonstrated success delivering high-quality health insurance to all the participants. The health insurance carriers can save their customers more money than it costs them to administer their benefit programs. A PBS Documentary on Medicare Advantage  Plans uncovered the fact that some Medicare Part C carriers could almost save more money through favorable provider contracts than they had to charge for their administration.

The challenge for the government is to share the risk with the insurance carriers as much as possible, pay the lowest and most reasonable capitation fees possible, but pay them enough money to enable them to make a profit. And, if they get creative, find a way to motivate the carriers to factor their profit back into the cost that they charge the government for administration. The non-profit BlueCross BlueShield health insurance system did this voluntarily for years before the federal governement taxed them (forty years ago) as a profit making commercial insurers. HHS invented a very successful STAR rating system which may be adaptable to maximize the governements return on investment.

C. NEW MEMBER ENROLLMENT

Competitive health insurance carriers naturally seek to attract new member enrollment. The more people they can enroll, the more successful their business will be. This drive to succeed creates the incentive to innovate, find ways to improve efficiencies and lower their rates, so that they can be in a better market position than their competition, to attract more members. When the Obama Administration was negotiating with Karen Ignagni, CEO of the American Health Insurance Plans (AHIP), she was excited by the prospect of her industry gaining access to a large uninsured population with the help of the federal governement. In 2009, with her skillful use of the AHIP partnership, Karen advanced the best interests of the industry. In return, her health plans gave up the ability to seek new members directly.

Instead of the traditional business marketing model used for most other health plans, the ACA was allowed to create state non-profit health insurance Marketplace exchanges, 51 of which still exist. These Marketplaces have cost the federal governement in excess of 5 Billion Dollars and had at best, a checkered performance, marked by disfunction and insolvency. The most famous failure was the federal governments own Marketplace Exchange, which Bloomberg claims cost the tax payers 2.5 Billion to fix. Some major ACA carriers have so completely abandoned the individual health insurance market that all the telephone calls to their offices to inquire about their ACA health insurance products are immediately referred to the federal governement's Marketplace directly. This is a Zero interest in the market or even any real effort to maintain their existing market share. Imagine a company producing a product and they do not even have anybody on  their staff that can explain it or have any interest in selling it themselves. I didn't think that even cash cows were that stupid.

Consequently, we believe the federal governement removed a major incentive for ACA health plans to be competitive and hold rates down. In this environment, the ACA becomes a cash cow giving the health plans very little incentive to invest any money or effort to add new members, improve their products or lower their rates. The Commercial Individual Health Insurance Market (CIIM) has never been regarded by the insurance industry, as anything to write home about. Many of the larger carriers felt like they had to be in that business to provide some security for people leaving the employ of their group customs. The market was considered by many to be more trouble than it was worth. BlueCross BlueShield was into it because it was a public service. The products were often highly regulated with rate filings and insurance commission involvement, requiring high administrative expenses and generally higher levels of risk. It was an important service for people who were in transition, between jobs, the loss of a bread winner or people working for an employer that did not offer health insurance. When the Obama Administration approached the AHIP offering to subsidize premiums and protect the plans from losses in a market with which the health plans had very little experience, they were very interested.

The ACA is built upon the pervasive assumption that if you get enough people to sign up for the program, it will support itself. This is what they originally thought would be the case with the National Flood insurance Program (NFIP). The guiding principle was to insure as many people as possible and eventually earned premiums and fee income would cover the claims and program expenses. Over the last decade, the NFIP is Billions of Dollars in Debt because the level of risk assumed by the program can NOT be adequately covered by affordable premiums.

The problems with the NFIP are similar to those of the ACA. And, Congress would do well to learn from the NFIP experience. The NFIP partnered with Property & Casualty insurance companies to administer the program and share the risk. To make the program successful, they made a concerted effort to get as many people as possible to enroll in the program. This National Flood Insurance program solution is essentially what Medicare-Advantage-For-All.Com is proposing for health care. Share the risk of losses with the health insurance companies and the participants in order to avoid complete reliance on the treasury and the tax payers. Congress should expand the Medicare Advantage program using capitation reimbursement, share the risk and then enroll as many people as possible in the program. 

Lets just assume for the moment that Congress authorizes HHS to arrange for the MA health plans to re-engineer their programs and they develop a market basket of products that are affordable and potentially popular with American people. Exactly how many people are in this market and what is their potential for new enrollment? The non-group market churns a lot because most people are always looking for the best deal. If Medicare-Advantage-For-All is offered alongside Obamacare in 2020, the health plans will have a total potential market of more than 29.9 Million Americans.

Insured Market:

• 8.4 Million -ACA Subscribers (ACA 2019)
• 4.3 Million -ACA Drop Outs (down from 13 Million)
• 4.5 Million -Grand mothered & Grand fathered Subscribers (L. Norris- aca sign ups.net 4-15-16)                                                                                    __________
• 17.2 Million -  Total Insured Market Potential

Uninsured Market:

• 30.0 Million -Uninsured (CBO 2019)
• - 5.4 Million -Undocumented Immigrants
• -6.4 Million -Medicaid Eligible
• -5.5 Million -Chronically Uninsured (20%)                                                                                                                                                                               ---__________
• 12.7 Million - Total Uninsured Market Potential

29.9 Million Total Market x $7,500. =  $22,425,000,000.

One hundred percent successful enrollment of this market would enroll approximately 29.9 Million people worth $22.5 Billion Dollars in round number annual premiums. Almost half of these people already have health insurance coverage, so there is no question they can afford health insurance if governement subsidies are maintained at their current levels. The Kaiser Family Foundation (KFF) has determined that 8.4 Million of the uninsured population are between jobs or working for employers that do not offer group insurance, so they are earning an income. KFF also estimates that an additional 5.3 Million uninsured in this market are eligible for federal tax credits, but have still failed to buy their own health coverage. Only about 45% of the uninsured market say they have tried to buy health insurance and could not afford the coverage.

The bottom line is that if we were to make health insurance more affordable and open up the markets so that health insurance carriers could compete with one another for new enrollment, there is a viable and lucrative market for them to go after. If we don't make health insurance more affordable we will be stuck with the most expensive health insurance plans on the planet, until the consumers though up their hands. At that point, Warren Buffet says the governement will be forced to take it over and, "that will probably make it worse." Most True Americans are not going to beable to afford it, unless the tax payers pay most of the cost. A re-engineered Medicare Advantage For All program offered by our health insurance carriers in a more traditional capitated financial arrangement will solve these problems and save the tax payers a ton of money.

D. MINIMUM LOSS RATIOS

The Obama Administration tried to guarantee consumer value by requiring all carriers to adhere to a myriad of consumer regulations, including minimum Maximum Loss Ratio's (MLR’s). Since over 70% of all health insurance carriers in the CIIM Market were voluntarily in compliance with MLR regulations before the ACA, the net effect of MRL's was to increase some health insurance premiums. MLR regulations incentivize health insurance carriers to increase premiums in order to increase their administrative expenses and profits and grow their companies. Such premium increases are either caused by or result in, higher provider reimbursement rates that materially contribute to the overall health care inflation. This is one of the reasons the  Commercial Individual Insurance Market rates increased so precipitously after the ACA's enactment. The government was trying to make sure that the insurance companies didn't make too much money. No reasonable politician would propose limiting the cost of governement to 15% of the tax revenues as a way to effectively reduce governement spending? The Democrats focus on MLR's is another way of indicating their preference for a tax payer financed governement run burocracy. 

Why is it that we never seem to get anybody who understands health insurance legislating our health insurance reform? These MLR Regulations have a most important favored status. In fact, Elizabeth Warren has just introduced a Senate bill in Congress to raise the MLR's to 85% of the premium. Senator Warren's Bill has been co-sponsored by every democrat president ail hopeful, including Senators Sanders, Harris, Gillibrand and Baldwin.

E. PRE-EXISTING CONDTIONS 

The ACA carriers are increasing rates by an average of 20% to 45% simply to cover this Pre-X regulation. Medicare-Advantage-For-All.Com believes health plans should NOT be required to prospectively insure pre-existing conditions for all health insurance plans. Pre-existing conditions should be covered by special risk pools under state Medicaid Plans (which many states already have) regardless of a person's income. These plans are generally "pay as you go - cost plus" plans and 50% to 90% of the cost is paid by the federal governement. The problem is if we allow everyone to avoid buying health insurance until they suffer a serious illness, many people would never get health insurance until they need it. Accepting them into the same risk pools of the ACA plans is like allowing them to burn their house down and then requiring a private property casualty insurance company to enroll them in an insurance program and pay for their fire damages. This practice is not fair. It is just not fair to force people who are responsibly insuring their health risks, who are already in the program to pay for those people who drop in to take care of a health issue and then may just as easily drop out once they have gotten their treatment. It is NOT FAIR to underwrite this health risk on the backs of the people in the program.

This practice of thinking that prospective insurance plans can cover health insurance plans with anti-selection is just praying on the tax payers. We know this from the National Flood Insurance Program (NFIP). This program provides full coverage for properties in high-risk flood zones. This not only encourages people to build and re-build in these areas, but the program losses are also perpetuated by the likelihood that flood prone properties are occupied by people that can least afford to recover from a flood on their own. A resident in a flood prone zone is like someone with a pre-existing health condition. There is no imperative for them to move or take care of their condition if the insurance will always take care of it. Both programs refer to this as adverse selection. The NFIP covers acts of nature. The ACA covers acts of man. NFIP is Billions in debt and Congress has accepted the fact that NFIP can NOT charge adequate and affordable premiums to support the risks covered by the program. Although the True American public has come to this conclusion on the ACA, Congress is not yet there.

To manage this health risk, our recommendation, from Page 40 of the Bi-Partisan Answer Document, is to accept any uninsured applicant with a pre-existing condition, who has been able to qualify for health insurance, provided the coverage has been active no less than 60 days from the effective date of the MAA plan. If they have NOT been able to obtain health insurance for more than 60 days at the time of eligibility, the special State Fund for High-Risks under Medicaid will enroll them. Coverage will be available anytime under this Special Risk Pool (SRP). The federal and state governments will share the cost of SRP using a 1332 state waiver in the Medicaid program as necessary.

Medicare-Advantage-For-All.Com  believes that Medicare Part C plans should not be required to take anyone with a serious and costly pre-existing condition that has not had coverage for that condition for more than 60 days. This at least helps the MAA plan by maximizing the possibility that the new enrollees have their Pre-existing condition under control, i.e. had a successful surgery, arrested cancer with chemotherapy, on maintenance drugs, etc. A lot of people have pre-existing conditions that don’t cost any money because there is no medical treatment for them.

CMS and the states will agree to accept and pay for any and all pre-existing conditions under a “pay as you go” Medicaid plan. No one with a pre-existing condition will be turned away. However, they will only and immediately be eligible for Medicaid, regardless of their level of income, if they have a break in coverage of more than 60 days. After a period in which they may have been able to bring their condition under control, they will be included in periodic Open Enrollments in the MAA Plans, in the same fashion as Original Medicare.

All citizens of the United States that want health insurance, should be able to get it. Since they do not income-qualify for the Medicaid coverage, they should have to pay some premiums. But they will NOT be turned away. This will create an incentive for them to get and keep health insurance coverage and get the condition under control so that they may qualify for one of the Medicare Part C - Medicare Advantage For All Plans in the future.

F. HEALTH PLAN REINSURANCE PROGRAMS
I addition to these Special Risk Pools for Pre-X, the Robert Wood Johnson Foundation has recommended that HHS facilitate the creation of health plan reinsurance programs. This recommendation is the result of their Actuarial Challenge in 2017 which highlighted the consensus among actuaries that reinsurance is a necessary component of stable health risk underwriting. The use of re-insurance with ACA programs in Alaska has recently resulted in lower premium increases. This may prove helpful in managing pre-existing health conditions as well.

The National Flood Insurance Program (NFIP) re-insurance experience is instructive. Since they seek to maintain a meaningful level of private premiums coming into the program by those that are required to maintain the coverage (inadequate as they may be to cover the potential loss) they made the U.S. Treasury their reinsurer. This is similar to the way the Obama Administration provided such coverage in the ACA's early years. This permits the NFIP and their risk-bearing insurance partners to exclude the estimated cost of catastrophic claim losses in their program premiums for everybody. This allows them to reduce the premiums, making their programs more affordable and maximizing the programs participation rate.

G. COMMUNITY HEALTH CENTER PRIMARY CARE HEALTH INSURANCE PROGRAM

If we extend Medicare Advantage For All (MAA) to every American resident, Congress can continue fair ACA sliding scale premium subsidies to make the programs affordable for those that are below the poverty lines and the unemployed not covered by Medicaid. The ideal condition would be for Medicare Advantage Health plans to compete with one another in such a way as to attract as many uninsured Americans as possible. The overall cost of the programs would be reduced over time by CMS negotiations over capitation reimbursement levels and the improvement of health outcomes through integral Health and Wellness programs.

Medicare-Advantage-For-All.Com will soon define and propose a special Public Option Health Plan that will appeal to the low wage workers, who make up approximately 20% of the target population. That target population makes too much money to qualify for ACA federal premium subsidies. This Public Option will rely on the Community Health Centers for primary care and provide tertiary care through a third party insurance mechanism. We will call it the Community Health Center Primary Care Health Insurance Program or CHCHP.

The federal government hasn't been able to offer programs that attract most of the low wage workers, who make up a significant number of the uninsured population. These special CHCHP programs will require the participants to receive all of their primary care from the Community Health Center Network (CHC). The CHC will continue to be a "primary care home" for the Forty-five percent (45%) of uninsured Americans, who think the ACA is too expensive. Many of these workers are NOT going to be able to afford health insurance. And, if the federal government is not going to buy it for them; this program will definitely make their health insurance more affordable.

The Community Health Center network (CHC) currently employs over 51,000 health care workers in 1,400 communities, through over 10,000 service locations, in every state in the country. The CHC is primarily supported by the federal government. However, the health centers also accept all forms of health insurance, including Medicare, Medicaid and private insurance as well as charitable donations. Congress has just re-authorized some funding for the CHC network for another two years. MAA.Com was instrumental in getting that re-authorization passed by the 115th Congress. The Community Health Center Fund and the CHIP Program have always been considered pillars of what we do to make health care accessible and affordable in the United States. Both programs have long enjoyed strong bipartisan support.

Special expertise, support, and direction for the CHCHP will be provided by HHS and the National Association of Community Health Centers. Most Americans are unaware that the Community Health Center network. The Health Center Network is the best kept secret. And, a True American "Jewel" in our health care system. Support for our Community Health Centers is a wonderful thing, for which every American should be very proud. We True Americans believe in the value of our healthcare system and our need to care for one another. We can all be proud of our unique ability to deliver the essential health care services to “We the People” of the United States of America through this vital network. Please don't miss the upcoming Sixth Edition (6th) - The True American for more information on CHCHP.

IV. COST CONTAINMENT, HEALTH AND WELL-BEING

Would you be surprised to learn every major piece of health care legislation, passed by Congress since the enactment of Medicare in 1965 has been an attempt to contain the cost of the program in one way or another? And, these laws have been somewhat successful in at least slowing the escalating cost of the program.

The HMO Act was passed in 1973 to enable Medicare to contract with managed care providers because they were considered to be the key to reducing the cost of Medicare. TEFRA was passed in 1982 creating the Medicare + Choice programs because there was widespread recognition that competing health plans were our best bet to lower the cost of Medicare. In 1997, the re-branding these + Choice Health Plans became the Medicare Advantage (MA) Plans we know today. After another decade of MA program success, the financial guru, Peter Orsag, the Director the Congressional Budget Office (CBO) and later became President Obama's Budget Director,  made the following statement before a Senate Budget Committee in 2007:

“The nations long-term fiscal balance will be determined primarily by the future rate of health care cost growth. And, a Medicare Advantage program that is able to thread the policy needle and offer high-quality health plans while saving money has the potential to improve the performance and sustainability of the Medicare program overall.”

No truer words were ever spoken before the Senate. This statement was made two (2) years before the enactment of Obamacare, which was passed because both the CBO and President Obama said that it would lower the cost of health insurance and reduce the federal budget deficit. The ACA did exactly the opposite. It substantially raised the cost of health insurance, increased the budget deficit and Peter Orszag was one of the key architects of the program.

As you can see, Medicare Advantage programs were created and promoted to lower the cost of Medicare Parts A & B. This experiment was started 20 years ago and is still working successfully today. How many “Medicare Parts” do you think it takes to reduce the cost of health insurance in this country and cover All Americans? Hopefully, not any more than the number of Americans it takes to change a light bulb? We already have Medicare Parts A, B, C and D. Why is four Parts NOT enough to provide for the general welfare of our people, especially since all of these programs are “working”.

As a nation, we have successfully experimented with managed care programs for almost 50 years. We know what we are doing. We are considered to be the world-wide experts at it and people come from all over the globe to study how we do it. But, we can always “do it better.” Just as we are going to have to re-finance SSI and Medicare fee-for-service to make them sustainable, we are also going to have to change the SSI benefits and Medicare program administration, in order to save SSI and the Medicare Trust Funds. The First and most meaningful thing we can do make health insurance more affordable is to promote Medicare-Advantage-For-All Americans. Re-engineering Medicare-Advantage for under age 65 participants will be make a constructive down payment on the Medicare reform and the most feasible approach to lowering the cost of health care for everyone in our nation, without threatening the viability of our healthcare system.

The Second most meaningful thing we can do is recognize the ELEPHANT in the room. We all should know that there is ultimately only one real solution to effectively lowering the cost of health care in the United States. WE MUST IMPROVE THE HEALTH OF OUR PEOPLE. This concept is Not new but pursuing it diligently as a nation is unknown!

Currently our consumer health care system is euphemistically re-branding "improving our health" with the improvement of health outcomes. However, it is more than that. What we really need to do is reduce the severity of our illnesses and decrease the incidence of the necessary health care to treat these illnesses on a national basis. This is THE ONLY WAY we are ever going to reduce the cost of health care and ensure the future commercial success of our nation-state on this planet. We must make our people the healthiest people in the world if we are going to successfully continue to provide leadership to the rest of the world. To accomplish this daunting and quintessential goal, we must improve our diets, increase our level of exercise and increase our public awareness of healthy (lifestyle) living. We are gradually becoming the most overfed, obese nation of spoiled and privileged children and adults in the world. We drink too much. We smoke too much, and we eat too much. We suffer from loneliness and mental illness and over 50% of our medical treatments are for preventable conditions that our people should not be suffering from in the first place. Learn More under the Wellness and Well Being.

The chart below shows, by age, the incidence of Medicare beneficiaries that suffer from chronic illness. Did you know that forty-eight percent (48%) of All Americans suffer from one or more chronic illnesses? Just look at the obesity all around you. In 2016, we had 57 Million Americans covered by Medicare. We spent 1.1 trillion Dollars on chronic illnesses, and our GDP was 17.9%. In 2030, CMS predicts Medicare will cover 77 Million Americans. In 2030, the National Health Council expects the annual cost of chronic illness, for more than 157 Million Americans (81 Million with multiple chronic conditions) will exceed 4.2 Trillion Dollars. If we continue the way we are going, employers will eventually abandon the private health care financial system, and the only alternative will be to nationalize the health care system, the way that many Democrats want you to do it.

                                                                       Here’s how we can fix this problem.

An informed consensus of medical opinion categorically believes that 80% of the chronic diseases from which we suffer in this country are preventable or almost completely reversible with the right combination of health and wellness promotion and medical intervention. The magnitude of this revelation is enormous. For instance, if as a nation, we had eliminated 80% of the cost of treating chronic illnesses in 2016, the U. S. Health Care GDP would have been 13%; which is a full five percentage points (-5%) less than our actual GDP and just equal to our nearest international competitor, Switzerland.

The correct path forward to lowering the U.S. health care GDP is to expand the eligibility of Medicare-Advantage-For-All Americans and require the health plans to implement the New Paradigm for patient care. Health plans should be required to accept the full risk for quality and cost outcomes under new CMS approved value-based payment initiatives, that provide sufficient funding for a meaningful re-allocation of medical resources in order to implement this new methodology. Based on the cost of chronic illness and the professional estimates of the potential reductions in health care utilization, a reduction of eight percent (8%) or more in the U.S. health care GDP is a practical reality. Anything less than this path forward will continue to represent a misallocation of limited national resources, encourage the wrong incentives and perpetuate the epidemic (and the cost) of chronic illness, to the point where nationalization of the U.S. health care system will become inevitable.

Theoretically, if we had a CZAR for health care and Alex Azar will be perfect for the job! CMS would be able to get health plans to re-engineer their programs for people under age 65. The health plans could be compelled to implement comprehensive Wellness and Well-Being programs and monitor their performance, reward the health plans for good performance, and get the same positive results they get now under the STAR system. We are cautiously optimistic that the Administration is moving us in the right direction.

Medicare-Advantage-For-All.Com is skeptical that our States can achieve the kind of savings and effectively lower the Health Care GDP in a Block Grant type federal program like the one favored by Lindsey Graham and the President. It is laudable that they want to get the money out of Washington, D.C. and give more power and innovation to the states. Unfortunately, CMS will have a tremendous challenge in achieving the necessary level of savings under a Wellness and Well-Being program. They have not had a particularly good track record in this area under any program.

However, HHS could be up to the challenge. Did you know that in1984, they put together a world-renown Preventative Services Task Force? Also, after ten long years, HHS has released new and improved Physical Activity Guidelines for Americans, which has been a big step in the right direction. Also, the Center for Medicare and Medicaid Innovation has done some ground breaking work, which we covered in the Wellness & Well-Being. But, so far Warren Buffet's caution rings true for us. Warren warned that "we are a rich country and we can get along doing the Wrong thing for some time, but we can’t get along doing the Wrong thing indefinitely." Now is the time for All of us to do the Right thing.

V. THIS IS A FINANCIAL EMERGENCY (NOT)

As U.S. citizens, you would think we have a health insurance EMERGENCY. We have over 29 Million Americans living and working in our nation that does not have and cannot afford health insurance. Why aren’t we all more upset about this?

We are not too concerned because this is NOT a financial crisis for most Americans. Everybody in the health care system is making money. Hospitals and most medical providers are enjoying some of the best years they have ever had. Hospital bad debt write-offs are at an all-time low. Community hospital profit margins are up, except in many challenging rural areas where there have been many hospital closures for a variety of reasons. Merger and Acquisition activity in the medical provider community is approaching an all-time high. Thirteen healthcare M&A deals made headlines in 2017, with eighty-seven (87) Hospital mergers recorded through the third quarter of 2017. Eight (8) of these hospital deals involved over 8 Billion Dollars in annual revenues, twice as many of these big deals as in 2016. These are major health care providers that are strategically positioning themselves for greater future control of their markets, improving their consumer health care operations and increasing their profitability.

The Council of Economic Advisors reported in their March 2018 Report, “… health insurer profitability in the individual market has risen due to substantial premium increases, government premium tax credits that pay for the premium increases and the large government-funded Medicaid expansion. Since ACA implementation…, health insurance stocks out-performed the S&P 500 by 106%.” Some of the largest health insurance carriers expect earnings to increase between 9 and 20 percent in 2018. (Reference) A.M. Best is projecting that health insurance payers will have a positive year in 2018 as they continue to engage in profitable health plan markets. They further predict that health insurance carriers will continue to be profitable in years to come; if they can successfully work around," the political challenges that We put in front of them."

We are also seeing major healthcare market innovation deals, including Amazon, Berkshire Hathaway and J.P. Morgan forming an independent company to try and improve the nation’s health care system by putting the brakes on the spiraling cost of medical treatment. CVS recently purchased Aetna to gain the ability to better serve their 44.7 Million customers and manage their health care more efficiently. And, Humana and Walmart are looking to combine services to create a “One Stop Shop” where Humana can offer Medicare Advantage and Pharmaceutical Benefit Plans and Walmart can use its massive investment in primary health care clinics to serve both its employees and customers from all their strategic geographic locations.

This “Emergency” that the 116th Congress faces is the high cost of inaction. There is no end in sight for the rising cost of health insurance which is also driving up the cost of health care and making it less and less likely that our low wage and middle-class citizens will be able to take advantage of the innovation, creativity and financial health we are enjoying in the healthcare sector. Congress is bankrupting the nation, and the cost of our healthcare and our government-sponsored health insurance programs are, as Warren Buffet says,” the tapeworm of our American economy.”

In this Emergency, the taxpayers are the real losers. Congress has NOT been able to agree on a way to Repeal or Replace Obamacare, and the Administration never previously put forward a credible alternative. Out of the frustration, Congress almost passed an ACA bail-out, as a part of the bipartisan Omnibus Budget Bill that had the Republicans running for cover. The ACA insurance companies are threatening to raise rates at an even greater pace if they don’t get what they want. And, our Congressional Representatives are increasingly more willing to throw money at the ACA, rather than face the serious problems head-on.

In addition to the democratic opposition to changing the Affordable Care Act, there is another huge influence working against any change. While the general public is concerned about health care and the Democrats have made it an important issue; most voters don't want to pay higher taxes for more health care. Medicare for All is a Non-starter. There is little or no incentive for either the provider community or the health insurance carriers to support any changes. Most of our health care is paid by employers, insurance companies and the government. As has been pointed out, the public/private partnership carriers, with the support of the federal government, currently manages the health insurance programs that cover 74 Million Medicaid, 57 Million Medicare Fee for Service and 21 Million Medicare Advantage subscribers as well as the 8.5 Million ACA participants. While some Medicaid programs are still administered by the states, most are now managed by health insurance carriers. As we learned from the wholesale withdrawal of political support for the Republican Graham-Cassidy Reform Bill, there is almost no provider support for changes in the Medicaid program or any other program for that matter. Consequently, the two most powerful interests in the system, the health insurance plans, and the providers are not generally in favor of the change, because they have their markets pretty much under control.

The Democrat's interest in health care reform and Medicare for All and the Republican's interest in doing away with Obamacare, state block grants and the necessary re-financing of the SSI and Medicare entitlement programs are the positive influences we have going for us. Medicare Advantage For All can become the bipartisan solution for both political parties because it is successful, less costly and our best shot at reforming the system.

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KEY NOTE REMARKS BY SEEMA VERMA AT BETTER MEDICARE ALLIANCE

This Key Note Address on July 22, 2019 is the latest NEWS on the current state of health insurance and health care delivery in the United States. As the head of CMS, Seema Verma is in charge of the largest nation insurer in the country responsible for Medicare, Medicaid and the Obamacare exchanges. She sees the challenges of governement-run programs first hand. These remarks are a road map for Medicare-advantage-for-All.Com and should be a sign to All Americans that this web site and our movement are exactly what we need to get the "Better" health and the "Better" health insurance that we deserve.

https://www.cms.gov/newsroom/press-releases/keynote-remarks-administrator-seema-verma-better-medicare-alliance-bma-2019-medicare-advantage/

COST COMPARISON – ANNUAL AFFORDABLE CARE ACT (ACA) PREMIUM & TAX SUBSIDY PAYMENTS AND MEDICARE ADVANTAGE (MA) PREMIUM PAYMENTS FOR THE YEARS 2015 AND 2016.

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CBO AND JCT'S ESTIMATES OF THE EFFECTS OF THE AFFORDABLE CARE ACT ON THE NUMBER OF PEOPLE OBTAINING EMPLOYMENT-BASED INSURANCE

March 15, 2012

This is the CBO and the Joint Committee on Taxation Report to Congress continue to expect that the Affordable Care Act will lead to a small reduction in the number of people receiving employment-based health insurance and actually reduce the federal deficit.

https://www.cbo.gov/publication/43082

MILLIMAN: 2015 COMMERCIAL HEALTH INSURANCE FINANCIAL RESULTS PROVIDE INSIGHT INTO AFFORDABLE CARE ACT PROGRAM STABILITY

Risk corridor shortfall is seen as a significant driver of underwriting losses in this 2015 Commercial Health Insurance: Overview of financial results” produced by Milliman (March 2017).

https://www.prnewswire.com/news-releases/milliman-commercial-health-insurance-financial-results-provide-insight-into-affordable-care-act-program-stability-300427503.html