Looks like Obamacare is more “on track” than “train wreck.”

In a striking illustration of the promise that the health law holds for consumers, two Oregon private insurers vying to sell coverage on the state’s Obamacare insurance marketplace this October are reevaluating their opening bids for the plans’ monthly premiums. The reason? A side-by-side regional comparison of all proposed 2014 premiums for Oregon marketplace plans became public on Oregon’s marketplace website Thursday, and showed that the two insurers’ planned monthly premiums were far higher than other proposals. That raised fears among the companies’ officials that their plans wouldn’t be competitive on the market later this year, leading them to proactively request a rate reduction — and as more of Obamacare is implemented, state insurance commissioners expect that trend to continue:

“Posting rate comparisons company-by-company is a taste of what is to come,” says Cheryl Martinis of the Oregon Insurance Division.

Judging by the reaction, there’s already an impact.

Providence Health Plan on Wednesday asked to lower its requested rates by 15 percent. Gary Walker, a Providence spokesman, says the “primary driver” was a realization that the plan’s cost projections were incorrect. But he conceded a desire to be competitive was part of it.

A Family Care Health Plans official on Thursday said the insurer will ask the state for even greater decrease in requested rates. CEO Jeff Heatherington says the company realized its analysts were too pessimistic after seeing online that its proposed premiums were the highest.

“That was my question when I saw the rates was, ‘Can we go in and refile these?’” he said. “We’re going to try to get these to a competitive range.”

Although some insurers have been using Obamacare as an excuse to hike premiums despite record profits, such rate hikes have been rarer — and less extreme — since the law’s passage. And to emphasize, this is all happening before the state has had a chance to review and approve initial plan rates — much less launch the actual marketplace. After the exchange opens up, consumers will have even more detailed information about marketplace plans, including the ability to compare — not just rates — but actual benefits offered on the plans side-by-side.

That’s particularly significant because much of the current variation in health plan premiums stems from rampant health care price opacity and wildly divergent benefits offered on different health plans — a status quo that won’t last in the Obamacare era since the law requires qualifying insurance plans to offer a base level of ten “essential health benefits,” including prescription drug, mental health, and maternity services. That means that Americans will be able to go online and figure out whether a plan costs more because it actually provides more robust benefits, or because an insurance company is just trying to gouge prices and maximize profits. Insurance offered on the marketplaces will be separated into Bronze, Silver, and Gold plans based on how generous their offered coverage is, making consumer comparisons between similar health plans simple.

As Thursday’s development shows, that public information empowers consumers by forcing insurers to compete with one another to attract customers. Or to put it another way — and contrary to conservative fear-mongering about the law — Obamacare is working exactly as it was intended to. And with 24 million Americans expected to gain coverage through the marketplaces by 2016, that’s great news for Americans’ pocketbooks — as well as their health.

California Insurance Commissioner Dave Jones on Wednesday slammed UnitedHealth Group — the nation’s largest private insurance company — over its decision to cut benefits and raise premiums for health plans used by close to 5,000 California small businesses. The combination of cuts and hikes would amount to a nearly eight percent rate hike for small business owners and their employees.

“At a time when small businesses are struggling to survive, UnitedHealthcare’s rate increase is just one more unwarranted economic burden on California’s small business owners and their employees,” said Jones. He estimated that close to 45,000 small business employees could be affected by the hikes.

Jones’ comments were quickly dismissed by UnitedHealth, as a spokesman argued that the annual increase would merely be two percent for customers. But that two percent figure likely only take into account the requested premium rate hike, not the cuts to benefits provided on relevant health plans. Previous, seemingly-arbitrary rate hikes by UnitedHealth and other insurers have led Jones to become a vocal advocate for greater insurance commission authority on the issue, and he has been pushing for the passage of a 2014 popular referendum that would “grant state officials the power to reject unreasonable rate increases for health coverage.”

This certainly isn’t the first time that UnitedHealth has engaged in profit-seeking behavior at the expense of government and employer health expenditures and workers’ benefits. The company recently complained that it wasn’t receiving enough government money despite massive profits and favorable Medicare reimbursement rates, and is one of several companies using Obamacare as a scapegoat for its extravagant rate increases.

In fact, arbitrary rate increases were par-for-the-course long before Obamacare’s passage, and the reform law actually contains protections against sticker shock and fallback measures for Americans who cannot afford private insurance coverage. But given UnitedHealth’s and other insurers’ quests for ever-increasing profits, many state insurance commissioners are looking to more closely scrutinize rate requests to see if they are reasonable.

The total medical costs resulting from last week’s Boston Marathon attack are expected to top $9 million — and that could be a conservative estimate, since the bombings’ injury toll has just been revised up to nearly 300 people. Fortunately, however, the city’s largest health providers are stepping up to ensure that the victims won’t suffer under the full weight of those mounting costs.

The Boston Globe reports that the largest health insurers in Massachusetts are planning to eliminate out-of-pocket fees for the bombing victims who are receiving treatment for their injuries, and three of the city’s hospitals are promising to delay billing those patients. Fortunately, health care providers plan to address ongoing treatment for long-term health issues as well as the initial emergency room care that victims received in the immediate aftermath of the attacks. Tufts Health Plan — a Boston-based insurer whose corporate offices are actually located just blocks away from where the manhunt to capture the bombing suspects first began with a shoot-out on Friday morning — has announced that, in addition to waiving costs for physical treatment, it will also cover the cost of mental health care.

“The physical injuries are easier to determine, but the mental health component is important,” a Tufts spokeswoman told the Boston Globe. “Six months down the road, someone may have a hard time dealing with these issues.” The insurance company has already contacted over a thousand mental health providers to make sure they will be available to take on the extra caseload that may arise as bombing survivors cope with potential post-traumatic stress disorder.

Although other insurers, like Blue Cross and Harvard Pilgrim, have not committed to completely cover all physical and mental health costs, they will review patients’ cases individually to make sure that none of them are struggling to afford their care. And some hospitals have decided to continue billing insurance companies, but refrain from sending bills to patients. “The focus is clearly on getting well and getting the treatment they need, and this is a small act of kindness,” a Harvard Pilgrim spokeswoman explained.

Fortunately, thanks to Massachusetts’ health care system, most of the state residents already have health insurance. But the cost of treating serious injuries, particularly amputations, can still be exorbitant. Some of the bombing victims have already resorted to online fundraising to help raise the anticipated costs for their recovery.

By all appearances, UnitedHealth Group is having a stellar year. The mammoth company, which is the largest health insurer in America and the biggest manager of private Medicare Advantage plans, announced on Thursday that despite a 14 percent decline in earnings, it had still made a profit of $2.1 billion — and that was just in the last fiscal quarter. UnitedHealth also won a major policy victory at the beginning of this month when the Obama Administration reversed course on its plan to cut reimbursements to Medicare Advantage plan providers by two percent. In fact, the Administration went the entirely opposite direction and announce it would raise these rates by 3.3 percent — a swing of 5.3 percent in UnitedHealth’s favor. Apparently, that isn’t enough for the insurance company. UnitedHealth is now threatening to reduce its involvement in managing Medicare plans, claiming that its government reimbursements are still too low.

“We did not expect the fastest growing, most popular and most effective Medicare benefit option serving America’s seniors to be underfunded to this extent in 2014,” UnitedHealth Group CEO Stephen Hemsley said on a conference call with investment analysts. He went on to clarify that the company will likely have to pull out of the Medicare market as it “reshape[s] Medicare networks and benefits to respond to the continuing underfunding of this [Medicare Advantage] program.” But Hemsley’s claims conflict with the company’s own earnings report, as well as the questionable performance of private insurance plans that service Medicare beneficiaries.

Conservatives often claim that having private insurers, rather than a public entity, manage programs like Medicare helps cut costs and make care more efficient. That’s why they have held up programs like Medicare Advantage and used it as a model for dismantling traditional Medicare to turn the public entitlement into a private insurance voucher. But as numerous studies and government reports have shown, private insurers game the Medicare Advantage program as much as they can by encouraging seniors to cherry-pick their health plans relative to their health. That allows companies like UnitedHealth to pay out less in benefits by offering healthier seniors alluring rates — but it raises prices for everybody in the traditional Medicare program by siphoning off less costly beneficiaries. And yet, Medicare Advantage still consistently comes in over-budget while regular Medicare manages to save money. Profit-motivated announcements like UnitedHealth Group’s today help explain why that is.

Obamacare contains cuts to these excess payments to private providers, consequently preserving the more generous and efficient traditional Medicare program. While those cuts are likely the source of Hemsley’s ire, he shouldn’t fret too much. Since Obamacare’s began being implemented, enrollment in Medicare Advantage has actually gone up, while seniors’ premiums have gone down.

Thanks to the tireless work of Boston’s medical professionals, the nearly 200 people who were injured in this week’s bombings have all survived. But the health services that saved those lives don’t come without a cost. The medical costs resulting from the Boston Marathon bombings are projected to potentially exceed $9 million.

Prosthetics can cost up to $45,000 for adults and over $100,000 for children, who need to get them replaced several times as they continue to grow. Rehabilitation treatments for those who have lost limbs can run up $200 per hour. And even for those who were less seriously injured, the emergency room care they received in the immediate aftermath of the explosions could easily top $40,000.

It’s not yet clear who will foot those bills. The hospital employees who are currently busy keeping their patients alive aren’t concerned about those details at this point. As a Brigham and Women’s Hospital spokeswoman told NBC News, “We have not even begun to have the discussion. Still caring for patients.” But eventually, when it’s time to figure out how much the survivors owe, insurance companies and hospital administrators could choose to help ease the burden on survivors by following the example laid out by Aurora, CO:

For some advice, Boston may even turn to leaders in Aurora, Colo. where last July a gunman killed 12 and wounded 70 people in a movie theater. Many survivors and their families have struggled with gaps in medical care, said Rich Audsley, special advisor to the 7/20 Recovery Committee, which oversees a fund for Aurora’s victims.

“This is an opportunity for Boston, a very unique moment,” Audsley said. “If you have the right leadership quotient around the table from the community, they can have an honest dialogue: ‘What is it that we can do?’ That’s the place to begin.

“It’s what’s reasonable. For example, hospital administrators and insurance companies (can agree) to forgive some of the medical expenses for who those who don’t have insurance. They can come together to try to minimize the pain and suffering of the people who’ve been impacted,” added Audsley, a long-time United Way official. After the Aurora theater massacre, such talks were held with Denver-area hospitals and insurance providers.

It’s fortunate that Massachusetts has one of the best health care systems in the country — after all, it served as the model for Obamacare — and every adult who lives in the state is required to have health insurance. Lower-income residents whose annual incomes fall below 150 percent of the federal poverty line qualify for Massachusetts’ Medicaid program, which pays the total cost of their health insurance. So at least among state residents, it’s unlikely there will be survivors who completely lack health care, like the uninsured Aurora shooting victim who racked up $2 million in medical bills for his treatment. And the out-of-state marathon runners who traveled to Boston for the marathon should theoretically be covered under the event’s insurance.

Still, insurers and hospitals could do their part to help Boston recover from the aftermath of this week’s tragedy. Three of the five hospitals that treated Aurora victims ended up limiting or eliminating their hospital costs.

A new government report from the Department of Health and Human Services (HHS) finds that Medicare Part D — the prescription drug benefit that helps eligible seniors afford the medication they need — could have made over $111 million in 2009 alone with a simple change to the way it pays insurers. The findings illustrate that smart systemic tweaks to Medicare’s payment structure could significantly reduce the program’s costs without the need to slash benefits for elderly Americans.

Medicare Part D currently subsidizes the cost of medications on private prescription drug plans — but as the program is structured right now, those private plans can make money off of payments from the federal government without having to provide benefits. Under current law, Medicare has to make advance payments to seniors’ prescription drug plan provider at the beginning of every month. So even if a senior doesn’t submit a claim for drug coverage that month, their plan provider still gets paid.

There’s nothing wrong with that; it’s just how insurance works. But the 2003 law that created the drug benefit also allows private Part D plans to “invest these Medicare funds in interest-bearing instruments until the funds are needed to pay for drug costs and administrative services.” That allows private insurers to take federal Medicare dollars, invest them in an account that garners interest, and then keep netting those interest profits until the beneficiary submits a claim and forces the insurer to pay out. There are no limits to how much money insurers can make off interest payments in this fashion.

And as it turns out, this is costing the government millions of dollars in potential savings every month. The HHS report found that in calendar year (CY) 2009, Part D plans held onto — and profited off of — federal Medicare funds for an average of 20 days before having to pay out pharmacy claims. The auditors go on to explain that if the situation were simply reversed, and the federal government was allowed to hold on to and invest those funds for 20 days before having to pay the private insurer, then Medicare would have netted “$111.2 million of interest income in CY 2009.” Although the Center for Medicare Services claims that such a policy change would just lead Part D providers to raise the price of their bids to the government, the report points out that any decreased savings from such a move would be offset by “the higher interest earned by Medicare trust funds” compared to that earned by Part D plans.

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The Los Angeles Times reports that several large health insurers plan to take advantage of an Obamacare loophole that allows them to renew individual policyholders’ current health plans for up to a year without having to conform to Obamacare’s consumer protections and market reforms. That move would lead to uneven implementation of the landmark reform law in its nascent stages, and could drive up prices for other Americans purchasing insurance through the 2014 Obamacare marketplaces.

Insurers offering their customers the option to renew their current coverage could wind up not having to fully comply with Obamacare until well into 2014, depending on the month that the plan was issued. This gives insurers an extension on implementing important reforms to their plans, such as Obamacare’s ban on annual and lifetime benefit caps. While that could be advantageous for certain individual policyholders — mostly the healthier population — reform advocates fear that it will inevitably lead to cherry-picking that shifts costs onto the broader pool of Americans:

Some policy experts are expressing concern about this practice for fear that insurers will focus on renewing younger and healthier policyholders and hold them out of the broader insurance pool next year. Their absence could leave a sicker and older population in new government insurance exchanges, driving up medical costs and premiums there.

“This could undermine the Affordable Care Act, and it opens the door for exacerbating potential rate shock in the exchanges,” said Christine Monahan, a senior analyst at Georgetown University’s Health Policy Institute. “The health insurers can cherry-pick some healthy people and it raises prices for everyone else.” [...]

If an insurer offers this option, it would then be up to consumers to decide whether they want to renew an existing policy into 2014. The length of any renewal may depend on what month their annual plan year begins. [...]

Renewing an older policy could mean forgoing some of those richer benefits and new limits on out-of-pocket medical expenses.

So far, large insurers are split on whether or not they will take advantage of this loophole. UnitedHealth Group hedged on their intentions to the Times; WellPoint — which runs Blue Cross plans in many states — said that its approach would differ from state-to-state; Kaiser Permanente was the only large provider to explicitly state that it would not renew existing plans beyond January 1, 2014.

Insurers choosing to take advantage of the loophole are simply delaying the inevitable, and will cause significant damage to sicker or poorer Americans without individual policies in the process. That’s why certain states, including California and Oregon, are considering taking legislative action to prevent or substantially limit such dodges by health insurers. As Oregon Insurance Commissioner Louis Savage — whose office issued a rule in the state barring any extension beyond March 31, 2014 — told the Times, “We want to get as many people as possible into the exchange. I think having renewals go deep into 2014 is counterproductive to the goals of the federal healthcare law.”

On Tuesday, the Associated Press (AP) published an article recounting a Society of Actuaries (SOA) study that finds health insurance premiums “will jump an average 32 percent for Americans’ individual policies under President Obama’s overhaul.” That titillating claim formed the basis of multiple news agencies’ headlines Wednesday morning, including NBC News, Fox News, and U.S. News and World. But as several other analyses show — and the report’s own authors admit — these assertions are based on an extremely narrow interpretation of the health care law that assumes rising costs in perpetuity while ignoring its very real cost-cutting measures.

In essence, SOA argues that Obamacare provisions extending health coverage to all Americans regardless of their pre-existing medical conditions will dramatically raise costs in the individual insurance market — especially since sicker, older Americans will have guaranteed access to insurance and cannot be charged more than three times the premiums of younger people. The Society’s projections are quite dramatic, finding that premium rate increases by 2017 “would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland.”

Corporate insurance giants have used many of these same arguments to dishonestly justify double-digit rate hikes on their customers, despite soaring profits. But these claims are founded on a baseline that assumes current health care cost trends to be set in stone, and ignore — even by the SOA’s own admission — almost all of Obamacare’s most important consumer protections and market regulations aimed at lowering overall costs. Rick Foster, a retired Medicare actuary, admitted that, although the study’s projections are consistent with certain health care trends, they don’t necessarily reflect the bigger picture:

“Having said that,” Foster added, “actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.” Actuaries use statistics and economic theory to make long-range cost projections for insurance and pension programs sponsored by businesses and government. [...]

Kristi Bohn, an actuary who worked on the study, acknowledged it did not attempt to estimate the effect of subsidies, insurer competition and other factors that could mitigate cost increases. She said the goal was to look at the underlying cost of medical care.

In fact, more comprehensive studies of the health reform law that incorporate all of its provisions — rather than just the potentially negative ones — have found that “[m]ost young adults and families will be largely shielded from the full effects of the narrower age rating bands thanks to the ACA’s increased eligibility for Medicaid and tax credits offered through state health insurance exchanges or through access to employer-sponsored insurance,” and that Americans between the ages of 21 and 27 purchasing insurance through the individual market “will be protected by Medicaid/CHIP or exchange-based subsidies under reform.”
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With Obamacare on the pathway towards full implementation, critics have attempted to point out every perceived flaw in the health reform law to marshal public opinion against it. Recently, reform opponents have focused their sights on the rule that prevents insurers from charging seniors more than three times the premiums they charge younger Americans, claiming it will cause young people’s health premiums to skyrocket.

That provision is actually meant to protect seniors, who are costlier to cover, from excessive price gouging. But health reform critics point out that insurance companies may try to exploit the rule to raise prices for younger Americans, making these young people’s health coverage unaffordable. According to a new Urban Institute analysis, however, these allegations are rooted more in wishful thinking than policy reality.

According to the Urban Institute’s findings, the 3:1 premium ratio will have little effect on younger Americans, as “they will be eligible for either Medicaid or tax credits through state health insurance exchanges.” The study goes on to conclude that through a combination of elevated Medicaid/CHIP benefits, Obamacare’s provision allowing adults up to 26 years of age to stay on their parents’ insurance, and the health reform law’s private insurance subsidies for Americans living up to 400 percent of the federal poverty level (FPL), younger Americans will not experience the sort of “sticker shock” that the doomsayers have been foretelling:

Most young adults and families will be largely shielded from the full effects of the narrower age rating bands thanks to the ACA’s increased eligibility for Medicaid and tax credits offered through state health insurance exchanges or through access to employer-sponsored insurance. In fact, this is largely true across age groups. Eighty-five percent of policies sold through nongroup exchanges will be to those with incomes at or below 400 percent of federal poverty level (FPL), making them eligible for tax credits.

Looking specifically at young adults age 21–27 purchasing nongroup insurance today, two-thirds will be protected by Medicaid/CHIP or exchange-based subsidies under reform; two-thirds of the remainder are under age 26 and in homes where their parents have employer-based coverage for which they are eligible under the ACA’s dependent coverage provisions.

The study’s findings emphasize both the importance of states taking part in Obamacare’s optional Medicaid expansion and the tendency for Obamacare critics to portray the law as some sort of fiscal bogeyman. Even the media has been complicit in smearing the law, implicitly suggesting that some insurers’ plans to institute double-digit premium hikes are in anticipation of Obamacare’s expansive coverage requirements — they are not. The new Urban Institute analysis is yet further proof that there is a considerable gap between the rhetoric and the reality when it comes to Obamacare.

The quest to improve patient care, maximize medical efficiency, and curb wasteful spending by digitizing Americans’ patient records, insurers’ claims, and providers’ treatment requests just gained a powerful new ally: “Watson,” IBM’s revolutionary data-mining supercomputer that made national waves when it defeated reigning Jeopardy! champion Ken Jennings at his own game.

American Medical News reports that health insurance giant WellPoint has struck up a deal with IBM and Memorial Sloan-Kettering Cancer Center in New York to use the supercomputer — which has spent its post-Jeopardy days amassing and “learning” massive amounts of data about the American health care, insurance, and public health industries — for two pioneer programs to automatically process, review, and pre-authorize medical claims and treatment requests, as well as a third program dubbed “Interactive Care Insights for Oncology” that will “identify individualized treatment options for cancer patients, starting with lung cancer” in order to advise oncologists on the latest and most effective treatment regimens by incorporating up-to-the minute longitudinal medical studies and cancer data into its suggestions.

In an email to ThinkProgress, Cindy Wakefield, a Regional Director for Public Relations at WellPoint, pointed out that the new technology has the potential to have a big impact on the health care industry. “We believe the IBM Watson technology can improve the efficiency and quality of treatment, potentially eliminating unnecessary testing, enhancing the consistency of actions, and accelerating the time to treatment via expedited decision-making processing,” Wakefield explained. “We are continuing to train Watson, and we are teaching Watson by ‘feeding’ it information such as our medical policies and clinical guidelines.”

Using Watson’s technology to automate claims processes could be a potent catalyst for a more efficient American health care industry — which is often bogged down by poor inter-provider communication, incomplete and non-centralized data, and archaic paper records. The supercomputer could also advise providers on the most efficient and appropriate use of treatments based on each individual medical claim, patients’ specific insurance benefits, and patients’ medical histories by analyzing health care data from across the country.

Interestingly, if Watson concludes that a physician or provider’s treatment request is not the most effective one based on a patient’s history and medical benefits, the computer can register its disagreement — but as Wakefield explained to ThinkProgress, it cannot override the provider’s decision or deny treatment requests. Instead, a human nurse would have to review Watson’s alternative suggestion, and then make a judgment call along with the provider on whether or not to comply with it.

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