Aetna CEO on Private Exchanges

October 29, 2013

Aetna chief executive Mark Bertolini on the company’s third-quarter conference call with Wall Street analysts:

We continue to believe that we are witnessing the start of a marketplace shift to private exchanges as plan sponsors move to defined contribution, converting self-funded membership into fully insured membership. We believe that this shift could…generate financial upside for Aetna shareholders, as fully insured membership typically generates 4 to 5x the profit contribution when compared to self-insured membership. We continue to position the company to capture our fair share of this opportunity, and we’ll participate in many of multi-carrier private exchanges that are emerging today. We are also continuing to develop our own proprietary exchanges.


WellPoint CEO on Exchanges: Initial Consumer Interest is “Robust”

October 25, 2013

WellPoint chief executive Joseph Swedish commenting on health insurance exchanges during the company’s recent earnings call with Wall Street analysts.

As has been widely reported in the press, there have been some interface and technical challenges during the first few weeks. The environment is generally consistent with our expectation that the initial phase of implementation would be choppy and involve greater manual workload. We have prepared and invested for expected challenges with the sign-up period as we have thousands of people dedicated to full-time exchange support in locations across the country. One key issue involves the income verification for individuals who are eligible for federal subsidies. This is a necessary step to complete the enrollment process for these individuals, and we support the efforts of state and federal governments to improve the functionality of the exchange technology and streamline the enrollment process. We have a common goal of increasing access and affordability of health care for as many Americans as possible through our collective efforts.

We can say that initial interest in exchange products appears robust. As a point of reference, during the first week of open enrollment, we received over 35,000 calls into our service centers, which is more than double our historical weekly volume for individual business. In the second week, this increased to nearly 45,000 inbound calls as consumer awareness began to ramp up across the regions. We continue to evaluate our spending and now have localized TV and radio advertising running in targeted markets, with awareness and outreach efforts also underway through partnerships with Univision, serving the Hispanic community, several retailers, and using social media. Our marketing efforts will continue to be informed by our assessment of local market competitive dynamics and overall federal and state exchange readiness. We will keep you updated on our progress as best as we can as we move forward.

Federal Exchange Site ‘Has Been a Disaster’

October 22, 2013

Thoughtful, uncompromising piece from Aaron Carroll of Indiana University School of Medicine, writing for CNN on the federal exchange website disaster:

Those in charge of the rollout of the exchange website were unprepared. They didn’t have the necessary experience to manage the more than 50 different contractors producing software independently that would eventually need to function together as a whole. This is incredibly technical work, and it’s not clear that government was in a good position to direct things here….

Administration officials are now calling in “more computer experts” to try and fix the problem. But this may be too little, too late. Some are saying that even if the administration pours in massive resources, the problems may not be fixed by December 15, the deadline for when insurance needs to be bought for it to be covering people on January 1.

It’s hardly the ObamaCare’s finest hour.  But it’s not the end of the story either.

Ironies of the Erstwhile Government Shutdown

October 17, 2013

From Wonkblog: The shutdown was meant to stop Obamacare. Instead, it provided crucial aid to the struggling law. If not for the drama in Washington,’s disastrous launch would’ve been the top news story in the country. Instead, it was knocked off the front pages. Many assumed, reasonably but wrongly, that the flaws were attributable to the GOP’s shutdown. And Obamacare actually gained in the polls. Rarely has a strategy failed so completely.

From Incidental Economist: “High-end cost estimate of infrastructure: $600 million. Estimated economic losses from 15 days of shutdown: $24 billion.”

Epic Analysis of Federal Exchange Plan Rates

October 11, 2013

From Deutsche Bank:

We have analyzed premium rate data for over 78,000 discrete products offered by all participating carriers operating across all 36 federal facilitated exchanges (FFEs). The findings suggest that many of the exchange markets with high population density will be quite competitive, particularly in the Bronze and Silver metal categories where most of the enrollment will be concentrated. While many investors have viewed the public MCOs as taking a highly conservative approach to the public exchanges (with WLP and HNT being the notable exceptions), the reality is not that simple as both HUM and AET are also competing actively in numerous exchange markets….The other most notable company-specific observation is the lack of participation in any of the FFE individual exchange markets from UnitedHealth.

Medicare Utilization Lower for Publicly Traded Plans

October 11, 2013

Utilization of medical services at publicly traded Medicare Advantage plans is lower than at privately held plans, according to data compiled by CRG in Medicare Advantage: The Best is Yet to Come.  For example, physician visits per 1000 members were 9% lower than for private plans. Bed days per 1000 were 19% lower, and days per admission were 8% lower.  Click here to obtain a copy of the report.


ObamaCare Is Good for Small Business

October 9, 2013

From The New Yorker:

The likely benefits of Obamacare for small businesses are enormous. To begin with, it’ll make it easier for people to start their own companies—which has always been a risky proposition in the U.S., because you couldn’t be sure of finding affordable health insurance. As John Arensmeyer, who heads the advocacy group Small Business Majority, and is himself a former small-business owner, told me, “In the U.S., we pride ourselves on our entrepreneurial spirit, but we’ve had this bizarre disincentive in the system that’s kept people from starting new businesses.” Purely for the sake of health insurance, people stay in jobs they aren’t suited to—a phenomenon that economists call “job lock.” “With the new law, job lock goes away,” Arensmeyer said. “Anyone who wants to start a business can do so independent of the health-care costs.” Studies show that people who are freed from job lock (for instance, when they start qualifying for Medicare) are more likely to undertake something entrepreneurial, and one recent study projects that Obamacare could enable 1.5 million people to become self-employed.

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