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from the dancing-elephants-are-hard-on-the-ants dept.
Submitted via IRC for crutchy with a story from Ars Technica.
Following on the heels of UnitedHealth group and Humana, insurance giant Aetna plans to "dramatically slash its participation in the public insurance marketplace" — "claims losses alone spurred decision, but there are clear links to merger."
[...] In 2017, Aetna will only offer insurance policies in 242 counties scattered across four states—that’s a nearly 70-percent decrease from its 2016 offerings in 778 counties across 15 states.
[...] In April, Mark Bertolini, the chairman and chief executive of Aetna, told investors that the insurance giant anticipated losses and could weather them, even calling participation in the marketplaces during the rocky first years “a good investment.” And in a July 5 letter (PDF) to the Department of Justice, obtained by the Huffington Post by a Freedom of Information Act request, Bertolini explicitly threatened that Aetna would back out of the marketplace if the department tried to block its planned $37 billion merger with Humana.
[Continues...]
From the July 5 letter:
[...] We have been operating on the public exchanges since the beginning of 2014 at a substantial loss. And although we have been working to improve our operations over the last 2 ½ years, we are challenged to get to break even this year and it will be some time before we recoup our investment (including a return on invested capital in the exchange business). As we add new territories, given the additional startup costs of each new territory, we will incur additional losses. Our ability to withstand these losses is dependent on our achieving anticipated synergies in the Humana acquisition.
[...] We have consistently indicated to our investors that the public exchanges and the ACA small group business remain risks to our achieving our financial projections since these markets face significant hurdles as outlined above. Should the deal be blocked the challenges will be exacerbated as we are facing significant unrecoverable costs including carrying costs of the debt required to finance the deal [...] and significant unrecoverable transaction and integration costs. We currently plan to cover the above costs, as well as invest in capabilities, improve benefits, pass savings through to members and customers and expand our business using [...] synergies we expect to obtain through the transaction. If we are unable to close the transaction we will need to recover those costs plus a breakup fee and [...] litigation expenses if the DOJ sues to enjoin the transaction.
[...] We currently plan, as part of our strategy following the acquisition, to expand from 15 states in 2016 to 20 states in 2017. However, if we are in the midst of litigation over the Humana transaction, given the risks described above, we will not be able to expand to the five additional states. In addition, we would also withdraw from at least five additional states where generating a market return would take too long for us to justify, given the costs associated with a potential break- up of the transaction. In other words, instead of expanding to 20 states next year, we would reduce our presence to no more than 10 states. We also would not be in a position to provide assistance to failing cooperative exchanges as we did in Iowa recently.
The Ars Technica article continues:
Sixteen days after the letter was penned, the DOJ moved to block the merger. In announcing the department’s decision to file suit, Attorney General Loretta Lynch said it “would leave much of the multitrillion health insurance industry in the hands of just three mammoth companies, restricting competition in key markets.”
In interviews this week, Bertolini has brushed off the tie between marketplace participation and the merger deal, reiterating that the cuts were all based on finances. “As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision,” Bertolini told The New York Times . He noted that the company faced “a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products.”
But Obama allies weren't buying the explanation. In a Facebook post, Senator Elizabeth Warren (D-Mass.), noted that Aetna has the right to fight the DOJ on the merger. But, she said, “the health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will.”
[To start the discussion: What if, in those exchanges where no insurer chose to provide coverage, people would be permitted to enroll in Medicare? -Ed.]
(Score: 5, Insightful) by bzipitidoo on Saturday August 20 2016, @10:45PM
But they don't. What I find ridiculous is for the insurance adjusted price to be higher than the discount hospitals offer to those who have no insurance. I know, I've been there. I argued with insurance and hospital. They would not budge. I asked that they review their prices, and each time they claimed their prices were correct.
I asked that they explain why they were charging $300 each for three $2 bags of saline solution, and further, why insurance reduced the price of those 3 bags to the wildly different amounts of $151, $64, and $28 respectively, and got a lot of creative bull. No one at the insurer's or hospital's call center could explain it. Some thought it reflected additional drugs added to the saline solution. Nope, each drug is a separate line item. Some thought it was a mistake and set the price to $27 each for all three. No, no mistake, and soon those agents' changes were rejected. One said the prices were meaningless fluff, and the real price was set in a secret agreement between hospital and insurer which neither he nor I would be allowed to see. Wrong again. What I finally learned is that the price of the line item depends on the so called "emergency level". Apparently, emergency level ranges from 1 to 5, and the higher the level, the more expensive every item is. Those 3 prices are for level 4, 3, and 1 respectively. That's the worst cluster fucked, deliberately obscure billing mess I've ever seen, and I'm sure mine was relatively simple compared to many other patients.
I found a helpful medical billing advocate who found a few problems, but not near enough to reduce the charges to anything reasonable. One thing they found was the $151 bag of saline solution should not have been charged at all. Level 4 includes that in the facility fee.
I concluded there were only 2 reasonable choices. Tell the hospital to go to hell, or accept being robbed and pay up. The third choice, which I attempted over a period of a year, was to work within the system to get that bill reduced. It was taking way too much of my valuable time. Seemed calculated to wear the patient down. Peculiarly, if one opts for the first option, refusing to pay, there's little the hospital can do about it. Their debt collector dogs will threaten to ruin your credit rating, but the credit rating agencies recently reclassified medical debt as less serious. So that threat is now mostly empty. The worst they can do is sue, but that's so costly they won't do it, isn't worth the expense and trouble, unless the unpaid amount they claim is very large, say, over $5000. Plus, there's always the chance the victim will fight back and cause facts embarrassing to the hospital to surface.
(Score: 2) by krishnoid on Saturday August 20 2016, @11:43PM
You have another option -- while they may not reduce the line-item charges, you could write them a letter offering to settle the bill for 50% of the total, paid immediately. This worked in a few situations I was involved in -- in some cases they were willing to settle for 50%, in some cases, 60%, in some 70%, in some cases, they insisted on the whole amount, in some cases they wrote off the whole amount.
This was about 2 decades ago, though.
(Score: 2) by bzipitidoo on Sunday August 21 2016, @04:12AM
Yes, you're right. Not an attractive option to me because, as I understand it, that's called a "settlement". Meaning, they'll take that 50%, and still harm your credit rating, just not as much as if you paid nothing. I find that unacceptable. Now, if they agreed to take 50% and not damage your credit at all, then I'd be more interested. One thing the hospital was quick to offer was 20% off if I paid in full right away. They seemed very eager to sell me on that one, as if they knew very well I could refuse to pay at all and they would be unable to do much about it. It's a better deal for them than selling your debt to a debt collector. But no, 20% off was still more, quite a bit more, than the discounted amount they would charge if I had no health insurance at all. They should have offered me the option to not use my health insurance, bill me as if I had none, but they did not. My health plan has such a high deductible that I was on the hook for the entire amount of the not very discounted price the insurer got out of the hospital.
I forgot to mention that one other thing they might wish to try is to deny you service, if you visit again and they feel you owe them for previous services. Be real hard to say no if you should have some life threatening condition in need of immediate treatment. Maybe, they could even band together and maintain a blacklist so you couldn't go to a different provider for treatment. But they can't do that to people. I find it most interesting that denying service is against the law. So they can't get you that way either.
The law seems set up to encourage and drive patients towards becoming deadbeats. All these provisions to make the medics powerless to take your money or really hurt you, if only you will accept being labeled as a rotten, lousy, cheat who won't pay your medical bills. Surely it would make much more sense to reform the system and scrap this "fee for service" model that so warps our medical care. But no, greed rules. And, it's like authorities want dirt on everyone so they can have their way with any peasants so foolish as to stand up for rights or otherwise bother them. As further evidence, one little way the law works against the patient who refuses to pay is that debts can be "re-aged". Debt has a 7 year time limit, but every time you make the tiniest payment, or possibly even just discuss the debt, they can set the 7 year clock back to 0.
(Score: 2) by krishnoid on Monday August 22 2016, @06:25PM
Meaning, they'll take that 50%, and still harm your credit rating, just not as much as if you paid nothing.
I think you can negotiate a 'paid in full' status rather than a settlement. Considering they're in an industry that centers around making people whole again, it seems counterintuitive that they'd actively try to fix your body and then make an additional effort to screw up your life (credit rating) right afterwards -- especially for people who are offering in good faith to pay what they can. I have to suspect that if they wanted to use your credit rating as a weapon, they'd be working in the financial sector instead.
There may be some accounting/financial reporting funniness that requires/encourages they report things this way to the credit agencies. However, I think an independent attorney/advocate could negotiate something that gets them their money and gets you a clean credit rating. Maybe it's worth a shot.