(For more on the national implications of health care reform on United States Medicare, and information on other Medicare issues, see theabcsofmedicare blog here.)
OK, that headline's a little over the top but that's apparently how you get people to read blog posts. (Either that or you claim that the Democratic Congresspeople and politicians who just paid you about $4,000,000 are "stupid").
What this post really is about is a great Boston Business Journal summary of Tufts Health Plan's 2014 and 2015 financial outlook by reporter Jessica Bartlett. (But if I just put that in the headline, would you have clicked through?). Bartlett's story is much better than the mail-it-in crap in the Globe this morning which just regurgitates the third quarter numbers without giving the full-year or lookahead context. You might understand that sort of story in the Globe if it were bylined by some junior journalism intern but the Globe story was written by its leading business editor.
Tufts' year-end and 2015 outlook doesn't look good and it looks like number-three-in-the-Massachusetts-market-Tufts' customers can expect higher premiums in the years ahead (if Tufts even survives as an independent entity). Despite its far left wing bent1, Tufts sort of blames its outlook on the Patient Protection and Affordable Care Act (PPACA) of 2010 as amended. There are two aspects of PPACA that will crush Tufts:
- the surge of people covered by Medicaid (less an issue in Massachusetts than nationwide because Massachusetts expanded Medicaid about 15 years ago) and
- the crowd-out of employer sponsored insurance.
In particular, the non-profit (like all leading Massachusetts healthcare insurers) says it is doing all it can to hold down costs by -- in particular -- squeezing its large Medicare customer base. But thanks to the federal Medicare rules concerning public Part C Medicare Advantage supplemental health plans and Massachusetts state rules concerning the marketing of private Medigap Medicare supplements2, that Tufts Medicare customer base can move to Blue Cross or Harvard in a New-York minute. That sets up the inevitable death spiral where Tufts customer base shrinks to eventually cover only the people on its Medicaid subsidiary's rolls and those getting subsidies through PPACA. Both businesses -- unlike the Medicare business -- would seem to be loss leaders not profit generators. And despite the PPACA hype, the number of people covered by PPACA is relatively small from any kind of market analysis perspective.
1Tying back to the headline, the CEO of Tufts Health Plan is James Roosevelt, the grandson of FDR (and he may be FDR's great grandson... not sure). He is a mini-icon of the Democratic left and a big fund raiser for lefty causes of all types
2Continuous, open, guaranteed enrollment in Medigap plans--of which Blue Cross is by far the dominant supplier