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New insurance guidelines would undermine rules of the Affordable Care Act
The Trump administration is urging states to tear down pillars of the Affordable Care Act, demolishing a basic rule that federal insurance subsidies can be used only for people buying health plans in marketplaces created under the law.
According to advice issued Thursday by federal health officials, states would be free to redefine the use of those subsidies, which began in 2014. They represent the first help the government ever has offered middle-class consumers to afford monthly premiums for private insurance.
States could allow the subsidies to be used for health plans the administration has been promoting outside the ACA marketplaces that are less expensive because they provide skimpier benefits and fewer consumer protections. In an even more dramatic change, states could let residents with employer-based coverage set up accounts in which they mingle the federal subsidies with health-care funds from their job or personal tax-deferred savings funds to use for premiums or other medical expenses.
If some states take up the administration’s offer, it would undermine the ACA’s central changes to the nation’s insurance system, including the establishment of nationwide standards for many kinds of health coverage sold in the United States.
Another goal of the ACA, the sprawling 2010 law that was President Barack Obama’s preeminent domestic accomplishment, was to concentrate help on the individual insurance market serving people who do not have access to affordable health benefits through a job. Prices were often out of control and discrimination against unhealthy people was more prevalent before the ACA imposed required benefits, prohibited insurers from charging more to people with preexisting conditions and created a federal health exchange and similar state-run marketplace in which private insurance companies compete for customers.
The ACA health plans have been the only ones for which consumers can use the subsidies, designed to help customers with incomes up to the middle class — 400 percent of the federal poverty line — afford the premiums.
The new advice, called “waiver concepts” because they are ideas for how states could get federal permission to deviate from the law’s basic rules, stray from both of those goals. And it would allow states to set different income limits for the subsidies — higher or lower than the federal one.
The day before they were released by Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, an analysis by the Brookings Institution questioned the legality of the content and method of these concepts. The analysis by Christen Linke Young, a Brookings fellow and HHS employee during the Obama administration, contends that “there are serious questions” about whether the changes are allowable under the law and that “at the very least, it is likely invalid” for CMS to issue the advice to states without going through the formal steps to change federal regulations.
In a statement Thursday, HHS Secretary Alex Azar said: “The Trump administration is committed to empowering states to think creatively about how to secure quality, affordable healthcare choices for their citizens.” He said the four recommendations issued Thursday, including new accounts in which consumers could pool federal subsidies and other funds, are intended to “show how state governments can work with HHS to create more choices and greater flexibility in their health insurance markets, helping to bring down costs and expand access to care.”
In a midday speech before a gathering of the conservative American Legislative Exchange Council, Verma delivered a broadside against the health-care law in explaining the rationale for freeing states to rework health policies on their own. “It was such a mistake to federalize so much of health care in the ACA,” said Verma, who worked as a consultant to states before becoming one of Trump’s senior health-care advisers. While the law sought to make health coverage more available and affordable, she said, “the insurance problem has not been solved. For many Americans it’s even been made worse.”
In urging states to consider the changes, CMS is renaming a provision of the law, known as 1332, which until now has mainly been used to give states permission to create programs to ease the burden on insurers of high-cost customers. CMS is switching the name to “State Relief and Empowerment Waivers,” emphasizing the administration’s desire to hand off health-care policies to states.
The changes go beyond a variety of other steps Trump administration health officials have taken in the past year to weaken the ACA, which the president has opposed vociferously.
Until now, they have focused on bending the ACA’s rules for health plans themselves. The administration has rewritten regulations to make it easier for Americans to buy two types of insurance that is relatively inexpensive because it does not contain all the benefits and consumer protections that the ACA typically requires.
The new steps go further by undercutting the basic ACA structure of the individual insurance marketplaces created for those who cannot get affordable health benefits through a job.
During a conference call with journalists, Verma said that no state would be allowed to retreat from a popular aspect of the ACA that protects people with preexisting medical conditions from higher prices or an inability to buy coverage.
She said that, in evaluating states’ proposals, CMS would focus on several considerations, including whether changes would foster comprehensive coverage and affordability and would not increase the federal deficit. She said federal officials would favor proposals that help, in particular, low-income residents and people with complex medical problems.
Verma reiterated an administration talking point that insurance rates have escalated since the ACA was passed and that health plan choices within ACA marketplaces have dwindled. However, the current ACA enrollment period, lasting until mid-December, is different from the previous few because prices for the most popular tier of coverage have stabilized in many places and more insurers are taking part in the marketplaces.
We can’t afford to hire you
Abstract: This article looks further into the value proposition of a sophisticated Interim Executive.
I have become accustomed to being ruled out of a beauty pageant for an Interim Executive consulting position based on rate alone. In most cases, I am told by the decision maker about this problem after the fact. It is common for the decision to be made without consulting me or giving me a chance to negotiate. While I could have been flexible, my flexibility is limited by the opportunity cost of existing or potential competitive opportunities. When I talked with the decision makers, they were frequently operating from the assumption that the gap was too big to close. Instead, they lost an opportunity to get a resource with my background and experience while settling for an alternative solely based on cost. It is clear that these decision makers severely discounted the potential value of engaging a more experienced resource. Or, I could have simply been beat on price by an equally or better-qualified competitor but I doubt it. I have seen too many cases of decision makers making what could be a critical decision based on the hourly rate alone. Lest this come across as bitter, I have not failed to end up with a desirable engagement and I am generally happy with the outcome. I have learned that as Mick Jagger said, “You can’t always get what you want. But if you try sometime (sic), you find you get what you need.” I cannot help but wonder how things are going in the organizations that passed me by.
What would some of the common excuses for a supposedly otherwise intelligent decision maker making a choice solely on rate?
We are in financial distress. Interim Executive Services typically price on the experience and relevance of a proposed interim to a specific situation. This is analogous to hiring a lawyer. One of my friends liked to say that one of the worst things that can happen to you is to end up with the second best attorney in a critical situation. To gain access to the best and most experienced talent in a law firm, you must be willing to pay the firm’s highest rates. The reason that older, more experienced law firm partners’ rates are higher is that the market will bear their rates whatever they are because their time and expertise are in very high demand. For those of us that make a living selling time, you are limited as to how much you can sell. A firm in financial distress can end up in bankruptcy. Another bad outcome for a firm in distress is to default on debt obligations that can result in the Board and leadership team losing control of the organization. Banks and bondholders can and will accelerate the debt and take other actions to preserve their interests. The pertinent question for the decision maker to make in this situation is what is the best resource available to avoid the undesired outcome regardless of cost because the cost of failure is infinitely higher. If you think an Interim Executive is expensive, check the rates of bankruptcy attorneys and debtor in possession consultants.
I can get someone else for less money. Inexperienced or ignorant people do not understand the differences between physicians. They assume a doctor is a doctor is a doctor. They do not understand the difference between a pathologist and a proctologist. This is the kind of logic used by a decision maker that assumes that there is no difference in interim executives and places the first and/or cheapest resource they can find in an effort to get someone, anyone with a heartbeat into a position. The pertinent question in this situation is what is the cost of failure and how small is this cost as a percentage of the cost of the cheapest resource available vs. a competent, experienced advisor. I followed an interim CFO in a hospital that had somehow managed to miss a growing over-valuation of accounts receivable that ultimately led to a write-down of A/R in excess of $50 million and a number of executives including the CEO of the place losing their jobs. Maybe the CEO should have looked at my article on how to avoid getting whacked. In my experience, hiring decision makers rarely account for the personal career risk they may be taking by thier involvement in bringing an interim aboard.
We can absorb the workload. This is one of my favorites. Really? Are you telling me that the departed executive did so little that a potentially prolonged vacancy of their position will not be missed and there is no risk in not having the role filled? If this is the case, the decision maker should eliminate the position. Just because the departed executive may have not been meeting the organization’s needs does not translate to their role not being worth filling with someone that knows what they are doing. As a matter of fact, putting an experienced interim into a key role say CEO or CFO, might go a long way towards demonstrating to the organization how the role should be filled and carried out. If you engage a sophisticated interim, there is a very good chance that the permanent executive you hire to ultimately fill the position will not come close to the value-adding potential of an experienced interim executive. On this point, it is not a good idea nor is it fair to candidates to benchmark them against an experienced interim. This makes it hard on everyone by unnecessarily delaying the recruiting process in some cases and potentially creating unreasonable expectations for a permanent candidate when there is a successful recruitment.
These are but a few of the excuses I have heard as reasons to rule me out of an Interim gig. I am sure my readers can contribute others possibly spawning a series of articles on this topic. One of the key things to remember if you are an interim executive as I said in my article about the value proposition of interim executives is what Zig Ziglar said, ‘You cannot control what someone else is going to do. All you can control is how you respond.” Don’t take rejection personally. Remember, in baseball, a hitting failure rate of 70% or more is considered to be an excellent performance. Another thing to think about is you never know what you may be saved from. I can say from experience that I have been fortunate on more than one occasion to not get something I desperately wanted at the time. You may never know the degree to which fate or divine intervention may be bearing on the outcome of one of your proposals. If you are a decision maker, you owe it to yourself and those around you whose fate may be tied to yours to undertake the most objective, evidence-based decision-making process you are capable of whether the decision has to do with engaging an interim or any other key decision for that matter.
Contact me to discuss any questions or observations you might have about these articles, leadership, transitions or interim services. I might have an idea or two that might be valuable to you. An observation from my experience is that we need better leadership at every level in organizations. Some of my feedback is coming from people that are demonstrating an interest in advancing their careers, and I am writing content to address those inquiries.
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JAMA Forum: Medicaid as a Safeguard for Financial Health
Home insurance doesn’t make a home less flammable. It protects homeowners against financial disaster should something happen to their home. The same holds true for auto insurance, for life insurance, and for disability insurance. And though we often talk about health insurance in terms of making people healthier, its true goal is the same as with other insurance: to safeguard the financial health of beneficiaries in the face of undesirable circumstances.
Even in that respect, the Medicaid expansion appears to be working.
Many articles have focused on the positive effects of Medicaid on health and well-being of recipients. A recent National Bureau of Economic Research working paper highlighted instead the effect of Michigan’s Medicaid expansion on Medicaid recipients’ financial health.
You’re still here? I said go read it at the JAMA Forum!
https://www.nber.org/papers/w25053
Healthcare Triage: Medicare for All and Administrative Costs
Healthcare Triage: Medicare for All and Administrative Costs
Political talk is getting more and more serious around Medicare for All in the United States. The argument, as usual comes down to costs. One of the advantages that proponents always bring up are the very low administrative costs of Medicare. Are those low costs for real? Would they hold up if everyone was in the system? Healthcare Triage looks at the facts.
ACA Slow Enrollment as Uninsured Rate Remains Steady
https://www.healthaffairs.org/do/10.1377/hblog20181120.831184/full/
In most states across the country, the open enrollment period for 2019 began on November 1 and will end on December 15, 2018. As we near the halfway point for enrollment—at least for the states with a federal marketplace—recent federal data suggests that enrollment in Affordable Care Act (ACA) marketplace plans is lagging relative to last year.
In its “week 2” enrollment snapshot, the Centers for Medicare and Medicaid Services (CMS) announced that nearly 1.2 million consumers selected a plan between November 1 and November 10 in the 39 states that use HealthCare.gov. Of these consumers, about 275,000 were new consumers while about 901,000 were renewing their coverage from last year. This reflects a significant increase from the first three days of open enrollment when about 371,000 consumers selected a plan.
“Week 2” plan selections are down by about 302,000 consumers relative to last year. This can be read as between an 8 to 13 percent decline in plan selections compared to last year, when a total of 11.8 million consumers in all 50 states and DC selected or were automatically reenrolled in a marketplace plan. Enrollment remained largely stable from 2017 to 2018 despite a shortened open enrollment period and significant cuts to advertising and navigator funding.
This year, however, brings additional changes that could be contributing to what is, at least so far, depressed enrollment through HealthCare.gov. These changes include repeal of the individual mandate penalty; 2019 is the first year that consumers will no longer pay a penalty for being uninsured under the ACA. In addition, new federal rules are enabling expanded access to non-ACA plans (such as short-term, limited-duration insurance and association health plans). These non-ACA plans typically have a much lower premium than ACA plans and could lure consumers away from the marketplace.
It is too early to tell if the reduced enrollment trend will hold and if this pattern will continue. Enrollment may increase significantly before the December 15 deadline, and millions of Americans will enroll in coverage before the end of the year.
The declines are, however, significant. The former chief marketing officer for HealthCare.gov recently noted that the data “should be a wake-up call to everyone who cares about people having health care … on the need to step up efforts to raise awareness.” CMS intends to release enrollment snapshots on a weekly basis. Each snapshot also includes point-in-time estimates of call center activity and visits to HealthCare.gov and CuidadoDeSalud.gov, among other data.
The new open enrollment data comes at a time when the uninsured rate continues to remain steady. Data from the National Center for Health Statistics—in reports both from late August and November—shows that the uninsured rate of about 8.8 percent for 2018 remains largely unchanged from 2017. Although there was not a significant shift from 2017 to 2018, there has been a sizable drop in the uninsured rate since the ACA was enacted in 2010. Between 2010 and the first six months of 2018, the uninsured rate dropped from 16 percent (48.6 million people) to 8.8 percent (28.5 million people).
Five controversial health actions on Trump’s agenda
The Trump administration is expected to push ahead with a range of controversial health policies next year despite Democrats retaking the House.
Democrats captured the House majority in part on their health-care message. But despite that there are a slew of actions where the administration is moving ahead on its own agenda.
Here are five controversial moves Trump officials are expected to make on health care.
Roll back transgender protections
A new policy from the Trump administration could limit or completely eliminate federal protections for transgender individuals.
The move would narrow the definition of gender under a federal civil rights law to either male or female, as defined by a person’s sex at birth. It’s being spearheaded by the Department of Health and Human Services and reportedly being pushed across multiple agencies.
The potential change has alarmed activists and medical professionals. The American Medical Association, the country’s largest physician lobbying group, said it will “oppose efforts to deny an individual’s right to determine their stated sex marker or gender identity.”
The new policy could be related to a broader proposed rule that’s been under review by the White House Office of Management and Budget since April, that opponents say would make it easier for doctors and hospitals to deny treatment to transgender patients and women who have had abortions.
That rule is expected to roll back a controversial anti-discrimination provision buried within ObamaCare, which prohibits health care providers and insurers who receive federal money from denying treatment or coverage to anyone based on sex, gender identity, or termination of pregnancy, among other conditions.
Religious providers say they expect the Trump administration’s rule would merely reinforce their right not to provide treatment that’s against their beliefs.
Limit abortion providers from getting federal money
The administration is expected to finalize regulations in January that would make it harder for Planned Parenthood and other abortion providers to receive federal family planning money.
The rule would ban clinics that receive Title X family planning funds from referring women for abortions while also removing a requirement that clinics counsel women on abortion as an option.
It would also require Title X grantees have a physical and financial separation from abortion providers.
Anti-abortion groups, like the Susan B. Anthony List, have pushed the Trump administration to implement these rules as a way to cut Planned Parenthood and other abortion providers from the program.
Title X funds organizations offering family planning services, like birth control and pregnancy tests, to low-income women and men.
Similar regulations were issued under former President Ronald Reagan, and later upheld by the Supreme Court, but never went into effect due to a lengthy legal battle.
The regulations are expected to be in effect for the next batch of Title X grants, which begin in April.
Approve more state Medicaid work requirements
The Department of Health and Human Services is committed to allowing states to impose work requirements on Medicaid beneficiaries.
The administration has approved work requirements in five states so far, and several more are expected in the coming months.
Just this week, the administration reapproved a plan in Kentucky to charge premiums, impose work requirements and remove people from the Medicaid program if they don’t comply.
The initial effort was blocked by a federal judge, but by re-approving it with only technical changes, the administration showed its commitment to forge ahead despite criticism.
Opponents say the requirements are a way to punish poor people. They argue the requirements are only meant to kick people off Medicaid and save states money.
Arkansas was the first state to implement a work requirement, and more than 12,000 people have lost health coverage as a result.
The administration insists work requirements are empowering, and help people lift themselves out of poverty and government dependence.
Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma sounded a defiant tone when she announced the administration’s approval of Wisconsin’s work requirements at the end of October.
“We will not retreat from this position,” Verma said. “Community engagement requirements in Medicaid are not a blunt instrument. This is a thoughtful and reasonable policy, and one that is rooted in compassion.”
Indefinitely detain migrant families
The Trump administration is seeking to indefinitely jail migrant children with their families, a policy that would overturn 20 years of protections for immigrant children.
The administration is expected to issue final regulations that would terminate and replace the Flores agreement, which has governed the detention of migrant children since 1997.
The plan, which was issued in September, would allow immigration officials to keep children and their parents detained together for the entire length of their court proceedings, which could take months in some cases.
Comments on the proposal were due earlier this month, and the rule could be made final next year.
The Flores rules are the result of a settlement in a federal class-action lawsuit over the physical and emotional harm done to children held in jail-like settings for extended periods. The settlement was only meant to be temporary, until it could be written into federal law.
Multiple administrations have challenged the rules and attempted to extend the time migrant children can be detained, but the federal judge overseeing the case has rejected those attempts.
The Trump administration is trying something novel; no administration has attempted to replace the Flores agreement with new regulations. It’s not a guarantee of success, and advocates have promised a challenge as soon as the final rules are announced.
Loosen nursing home emergency preparedness rules
Senate Democrats are decrying a move by the Trump administration to change safety rules for nursing homes.
The administration says the proposal would reduce a regulatory burden and save money for providers. But critics say that instead of making nursing homes safer, the proposal would put seniors at risk.
Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee, said the administration is moving in the opposite direction of what they should be doing in the wake of hurricanes last year that left dozens of people dead across multiple states.
Last year, 12 people died when a Florida nursing home lost power in the wake of Hurricane Irma. In Texas, multiple facilities decided not to evacuate after Hurricane Harvey, despite warnings about the threat of catastrophic flooding.
The original emergency preparedness requirements went into effect just last year, more than a decade after the Department of Health and Human Services (HHS) Office of Inspector General first called for reform in the wake of hurricanes Katrina and Rita.
A report from Senate Finance Committee Democrats included 18 recommendations to improve nursing home safety during natural disasters. But Wyden said the administration is ignoring them in order to “pad the pockets of medical providers.”
HENRY KOTULA 