Last week, we posted an article from the Associated Press about how the U.S. Department of Health and Human Services (HHS) may force the states to eat some of the costs involved with keeping the Pre-existing Condition Insurance Plan (PCIP) going until Dec. 31.
It seems as if the PCIP
Today we have an AP story about how Warren Buffett — a man famous for being a big buyer of underpriced assets — has concerns about how easy (or difficult) it will be for the Federal Reserve Bank to sell all of the bonds it acquired while it was trying to pump up the economy.
Buffett told an AP reporter that selling assets is harder than buying them, and that the Fed move to sell the bonds could be inflationary.
Meanwhile, we run all sorts of homegrown articles in which health policy specialists and representatives from various well-meaning nonprofit groups give private long-term care insurance (LTCI) a cold shoulder and dismiss the idea of private LTCI doing much to help Americans prepare for long-term care (LTC) costs with faint praise.
The nonprofit group reps and think tank reps will say something along the lines of the idea that “private LTCI products might fill niche needs” among the affluent people who can afford the private LTCI products.
Meanwhile, the LTC policy specialists are so cold toward the private LTCI people that, even when the LTC policy specialists are doing something right up the private LTCI companies’ alley — example: promoting the need for increases in the national Alzheimer’s research budget — the private LTCI carriers’ aren’t even represented by an insurance company’s mailroom intern’s roommate, let alone someone with MDRT connections.
At the same time, some state insurance regulators are resisting LTCI carriers’ efforts to increase rates on in-force policies enough to keep the policies’ economically viable.
The PCIP program is, really, an acute health care insurance program for people who, in many cases, are already sick enough that they need help with the activities of daily living.
The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the $5 billion program to provide temporary insurance relief for people who are uninsurable because they have serious health problems. Enrollees are supposed to pay roughly what healthy people in their states would pay for private coverage.
Enrollment has been much lower than the PCIP creators had predicted, but the enrollees are much sicker than expected. The average annual claims cost for the sickest 4 percent is about $225,000.
So, the program is running out of people. Instead of raising rates — people who need $225,000 per year in care generally don’t have a lot of extra cash they can use to pay higher insurance premiums — the federal PCIP managers are, effectively, trying to put the unexpected risk hot potato on the states’ plates by making them help pay excess claims.