Lots of big info out this week, and a few tidbits about pending deals in the workers’ comp services space too. Here are the highlights…(for the latest on deals in the work comp space, scroll down)
There’s a lot of confusion about the Obamacare signups; I’ll cover this in detail next week, but here are the facts as of today…
- more than 7.1 million signed up via the federal and state exchanges (we won’t know the total for a week or so as some state exchanges haven’t posted final March numbers)
- a lot more – i’d guess a million to two million – bought insurance via the private exchanges
- about 20 percent won’t pay the premium and there’s some duplication between all the exchanges and other enrollment methods for reasons we’ll discuss next week
- more than 5 million MORE Americans have insurance today than at the end of 2013.
The net – Obamacare has increased coverage substantially; the uninsurance rate has dropped by 2.7 points.
Meanwhile, Fitch reports the P&C industry is doing just grand, thank you. Profits are up, loss ratios declined, underwriting margins are improving, and revenue is too. Thank the continued hard market and expanding economy.
Work comp is doing better as well, altho there’s still a negative underwriting margin. It remains to be seen if pricing discipline holds, or if some big carriers cross the stupid line.
The “doc fix” is in; Congress passed and the President signed a bill that will increase Medicare reimbursement for physicians by 0.5% for the next 12 months. The bill also:
- delays implementation of ICD-10 for a year till October 2015 – for an excellent discussion of how this will affect workers’ comp, read Sandy Blunt’s piece at workers compensation.com
- and does some other stuff which you probably don’t care about and I won’t bore you with.
Work comp services Coventry is trying to sell their marginally–profitable work comp service business lines – we’re talking CM, UM, MSA, peer review, and likely pharmacy. They will NOT be selling the jewels – bill review and the network, because a) they make huge profits; b) bill review really isn’t sellable as the application is quite dated and would require the buyer to transition to a different platform likely resulting in customer defections; and c) they can’t sell the network.
Coincidentally, another large case management firm is also for sale; word is Apax/OneCallCareManagement is currently the leading contender; most likely they will add the asset to their ever-growing list of companies.
And I’d be remiss if I didn’t speculate that Apax is looking hard at the Coventry assets as well. OCCM CEO Joe Delaney has certainly proved himself a competent manager, but methinks the thought of adding these two to the portfolio would give even the best of execs pause…
Enjoy the weekend, watch some baseball, get out in the gardens, and ride your bike.
Hi Joe,
You state there is a lot of confusion about Obamacare signups and then you go on to provide some “facts”. I’m sorry but what you have provided aren’t really facts at all. The actual fact is that there has been no release of data, that I am aware of, to support the 7.1M number.
There have been many studies recently published on the estimated actual increase in insured individuals, you link to one. (Side note – 100% of the political donations made by the Urban Institute between 2003 and 2010 went to Democratic candidates, US News and World Report 2010)
Here are findings of three other studies which all suggest the increase in total covered lives is something considerably less than 5M. The most interesting being the McKinsey study and their findings on who has actually paid premiums.
– RAND corporation indicates that only one-third of exchange sign-ups were previously uninsured.
– Goldman Sachs anticipates that fully 75 percent of all the Obamacare sign-ups will be from people who already had insurance
– McKinsey – “Of the Obamacare sign-ups, only 27 percent had been previously uninsured in 2013. And of the 27 percent, nearly half had yet to pay a premium. (By contrast, among the 73 percent who had been previously insured, 86 percent had paid).”
If McKinsey is accurate and the 7.1M number is accurate then the math looks like this:
5.2M previously insured and 1.9M were uninsured
4.5M of previously insured have paid their premium
950K of previously uninsured have paid their premium
5.45M have now paid their premium and are insured less the 5.2M that were previously insured = net gain of 250K
This certainly seems like a long way to go for an additional 250K people. Further it strikes me, based on what I’ve read, that many of the previously insured people would prefer to have the coverage they used to have.
Or, maybe the 5M number is right and maybe the argument is that the other 4.75M insured is accounted for by children between the ages of 18-26 who are now covered by their parents’ plans. It makes sense, I could buy this. But, if that is the case couldn’t a simple bill have been passed that would have mandated this extension in coverage?
The only fact right now is there are no facts right now, only speculation and political posturing (from all sides). I’m going to wait for the real data to come out before I decide further.
Thanks again for this administering this forum. On another note – great April Fools post this year!
Mike – glad you liked the AFD post. Im working on next years…
Thanks for the note.
Couple observations. First, the 7.1 Million figure has been released by HHS. This has been widely reported.
Second, I assume (always dangerous) you note the urban institutes donations to insinuate that their research is biased. Not sure if you read the report or reviewed the methodology but it is quite robust and has been in place for quite a while. Moreover it is a credible research organization unlike pacific research and their ilk.
Third the quote you attributed to McKinsey was NOT from the report but from a forbes piece. Which was inaccurate at best. And,the Mckinsey research was based on “old” data from more than six weeks ago and thus does not reflect the current enrolled population. As important, their research focused on individual insurance and included ALL enrollment,not just the exchange population. As many individuals re-enrolled via their insurers’ captive exchanges, it is not surprising the percentage who previously had insurance is relatively high.
The finding you cite was NOT what the report stated. Rather this was a misstatement of the report.
This points to the importance of digging into the specifics of these reports; Mckinley’s work is far too easily misinterpreted – as Forbes and others have done repeatedly.
Fourth as I noted the private exchanges have added north of a million members.
Fifth there are numerous sources which indicate their research shows a significant increase in the insured population. Frankly the 250k figure you give is not in any way supported by any data. If one merely included the increase in California or Kentucky or Medicaid that number would have been far too low.
One needs to consider the federal state and private exchanges as well as non-exchange enrollment when evaluating the size of the insured population.
Sixth I accounted for the non-payers using the generally accepted figure of 10-20%; remember that Medicaid enrollment is NOT affected by member payment.
I would be quite happy to bet you the final decrease in the uninsured population is much closer to my estimate than to yours.
Thanks Joe good stuff.
I have no idea what the right number is and honestly I’m quite sure that my little back of the envelope math exercise is wrong. I sincerely hope you’re number is more right than mine but doesn’t that mean there’s still something like 30M+ uninsured?
BTW – What I presented in regards to the McKinsey study is basically accurate, the only small inaccuracy is the figure that only 27% of sign-ups were previously uninsured. The correct statement is that in the month of February only 27% of sing-ups were previously uninsured, prior to February the number was only 11%. You are correct that the data is only through the end of February. Here’s the link to McKinsey
http://healthcare.mckinsey.com/individual-market-enrollment-updated-view.
Mike , Sorry. Your information on the McKinsey study is wrong. The quote was from a Forbes article by Avik Roy. His information is wrong, misinterpreted, or blatantly misstated. McKinsey never said anything about Obamacare or the Obamacare exchanges. Rather the research discussed the overall enrollment in individual insurance.