Category Archives: Health Policy

Democratic Debate Turns Ferocious Over Health Care

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Medicare, Medicare Buy-In, Medicare for All, Out of Pocket Expenses, Public Option, Single Payer Health System, Single Payer Healthcare System, Underinsured, Uninsured, Universal Healthcare System • Leave a comment

Candidates in the first night of this week’s Democratic presidential debates sparred over health care coverage.

It took only one question — the very first — in Tuesday night’s Democratic presidential primary debate to make it clear that the issue that united the party in last year’s congressional elections in many ways now divides it.

When Jake Tapper of CNN asked Senator Bernie Sanders whether his Medicare for All health care plan was “bad policy” and “political suicide,” it set off a half-hour brawl that drew in almost every one of the 10 candidates on the stage. Suddenly, members of the party that had been all about protecting and expanding health care coverage were leveling accusations before a national audience at some of their own — in particular, that they wanted to take it away.

“It used to be Republicans that wanted to repeal and replace,” Gov. Steve Bullock of Montana said in one of the more jolting statements on the subject. “Now many Democrats do as well.”

Those disagreements set a combative tone that continued for the next 90 minutes. The health care arguments underscored the powerful shift the Democratic Party is undergoing, and that was illustrated in a substantive debate that also included trade, race, reparations, border security and the war in Afghanistan.

In the end, it was a battle between aspiration and pragmatism, a crystallization of the struggle between the party’s left and moderate factions.

It is likely to repeat itself during Wednesday night’s debate, whose lineup includes former Vice President Joseph R. Biden Jr. and Senator Kamala Harris of California. He supports building on the Affordable Care Act by adding an option to buy into a public health plan. She released a proposal this week that would go further, eventually having everyone choose either Medicare or private plans that she said would be tightly regulated by the government.

Democrats know all too well that the issue of choice in health care is a potent one. When President Barack Obama’s promise that people who liked their health plans could keep them under the Affordable Care Act proved to be untrue, Republicans seized on the fallout so effectively that it then propelled them to majorities in both the House and Senate.

On Tuesday night, Representative Tim Ryan of Ohio evoked those Republican attacks of years ago on the Affordable Care Act, saying the Sanders plan “will tell the union members that give away wages in order to get good health care that they will lose their health care because Washington is going to come in and tell them they have a better plan.”

Republicans watching the debate may well have been smiling; the infighting about taking away people’s ability to choose their health care plan and spending too much on a pipe-dream plan played into some of President Trump’s favorite talking points. Mr. Trump is focusing on health proposals that do not involve coverage — lowering drug prices, for example — as his administration sides with the plaintiffs in a court case seeking to invalidate the entire Affordable Care Act, putting millions of people’s coverage at risk.

It was easy to imagine House Democrats who campaigned on health care, helping their party retake control of the chamber, being aghast at the fact that not a single candidate mentioned the case.

Mr. Sanders’s plan would eliminate private health care coverage and set up a universal government-run health system that would provide free coverage for everyone, financed by taxes, including on the middle class. John Delaney, the former congressman from Maryland, repeatedly took swings at the Sanders plan, suggesting that it was reckless and too radical for the majority of voters and could deliver a second term to Mr. Trump.

Mr. Sanders held firm, looking ready to boil over at time — “I wrote the damn bill,” he fumed after Mr. Ryan questioned whether benefits in his plan would prove as comprehensive as he was promising. Senator Elizabeth Warren of Massachusetts, the only other candidate in favor of a complete overhaul of the health insurance system that would include getting rid of private coverage, chimed in to back him up.

At one point she seemed to almost plead. “We are not about trying to take away health care from anyone,” she interjected. “That’s what the Republicans are trying to do.”

Mr. Delaney has been making a signature issue of his opposition to Medicare for all, instead holding up his own plan, which would automatically enroll every American under 65 in a new public health care plan or let them choose to receive a credit to buy private insurance instead. He repeatedly disparaged what he called “impossible promises.”

He was one of a number of candidates — including Beto O’Rourke, the former congressman from Texas; Senator Amy Klobuchar of Minnesota and Mayor Pete Buttigieg of South Bend, Ind. — who sought to stake out a middle ground by portraying themselves as defenders of free choice with plans that would allow, but not force, people to join Medicare or a new government health plan, or public option. (Some candidates would require people to pay into those plans, while others would not.)

The debate moderators also pressed Mr. Sanders and Ms. Warren on whether the middle class would have to help pay for a Sanders-style plan, which would provide a generous set of benefits — beyond what Medicare covers — to every American without charging them premiums or deductibles. One of the revenue options Mr. Sanders has suggested is a 4 percent tax on the income of families earning more than $29,000.

In defending his plan, Mr. Sanders repeatedly pointed out how many Americans are uninsured or underinsured, unable to pay high deductibles and other out-of-pocket costs and thus unable to seek care.

Analysts often point out that the focus on raising taxes to pay for universal health care leaves out the fact that in exchange, personal health care costs would drop or disappear.

“A health reform plan might involve tax increases, but it’s important to quantify the savings in out-of-pocket health costs as well,” Larry Levitt, executive vice president for health policy at the nonpartisan Kaiser Family Foundation, tweeted during the debate. “Political attacks don’t play by the same rules.”

A Kaiser poll released Tuesday found that two-thirds of the public supports a public option, though most Republicans oppose it. The poll also found about half the public supports a Medicare for all plan, down from 56 percent in April. The vast majority of respondents with employer coverage — which more than 150 million Americans have — rated it as excellent or good.

In truth, Mr. Delaney’s own universal health care plan could also face political obstacles, not least because it, too, would cost a lot. He has proposed paying for it by, among other steps, letting the government negotiate drug prices with pharmaceutical companies and requiring wealthy Americans to cover part of the cost of their health care.

Had Mr. Sanders not responded so forcefully to the attacks, it would have felt like piling on, though some who criticized his goals sounded more earnest than harsh.

“I think how we win an election is to bring everyone with us,” Ms. Klobuchar said, adding later in the debate that a public option would be “the easiest way to move forward quickly, and I want to get things done.”

 

 

White House races to come up with health-care wins for Trump’s campaign

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Hospital Industry, Pharmaceutical Industry • Leave a comment

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White House advisers, scrambling to create a health-care agenda for President Trump to promote on the campaign trail, are meeting at least daily with the aim of rolling out a measure every two to three weeks until the 2020 election.

One of the initiatives would allow states to import lower-priced drugs from Canada and other countries and another would bar Medicare from paying more than any other country for prescription drugs, according to two senior administration officials and lobbyists — controversial ideas in line with Democratic proposals. Yet it remains unclear the administration has the legal authority to execute some of these policies without Congress.

The White House is already facing fierce pushback on some proposals from Republicans on Capitol Hill and the pharmaceutical industry, which will likely go to court to challenge any measure it opposes.

The furious push reflects the administration’s sense of vulnerability on an issue that Democrats successfully used in 2018 to win control of the House of Representatives. White House officials are eager to inoculate the president against a repeat of that strategy in 2020 — and reduce the GOP disadvantage on an issue that pollsters say plays to Democratic strengths. Most of the Democratic presidential candidates have made health-care proposals, including Medicare-for-all plans, key to their campaigns. Health care is already playing a starring role in the debates and Democrats are sure to assail Trump for his attempts to eliminate coverage for millions of people by challenging the Affordable Care Act in court.

“President Trump has said we will protect people with preexisting conditions, lower drug prices, end surprise medical bills, and make sure Americans get the highest quality of care they deserve,” said White House spokesman Judd Deere. “While the radical left has sweeping proposals for a total government takeover of the health system that will hurt seniors and eliminate private insurance for 180 million Americans, the Trump administration is working on real solutions.”

Some, however, are doubtful a flurry of executive orders and new regulations would have an immediate effect on consumers’ pocketbooks. What is clear is that the approach, which includes White House support for a bipartisan Senate bill to cap Medicare drug price increases to the rate of inflation, is putting congressional Republicans in a tough spot: Embrace Trump’s agenda and abandon conservative precepts about interference in the marketplace, or buck the president on one of his top priorities.

While Republicans have largely fallen in line with Trump on free trade and immigration even when he has blown up GOP orthodoxy, many rely heavily on donations from the pharmaceutical industry and are reluctant to sour those relationships.

One lobbyist, who spoke on the condition of anonymity, described being stunned at a recent White House meeting when Domestic Policy Council Director Joe Grogan said the administration would not let Democrats run to the president’s left on lowering the prices of prescription medicines.

In another tense meeting, top pharmaceutical executives were told bluntly “it wasn’t in the industry’s best interests” to block the bipartisan Senate bill backed by Trump. If it failed, they were told, they’d see “the president of the United States negotiating with Nancy Pelosi [on allowing the government to negotiate drug prices in Medicare],” said a person familiar with the meeting.

On Wednesday, Health and Human Services Secretary Alex Azar announced the outlines of a plan to eventually allow Americans to import certain lower-cost drugs from Canada and other countries. White House officials are also weighing an Obamacare replacement that Congress would take up after the election, a Medicare plan to contrast with Democratic Medicare-for-all proposals, help for beleaguered rural hospitals and steps to reduce maternal death rates, according to two senior administration officials.

The health-care effort is being driven by the White House’s Domestic Policy Council Director Joe Grogan, Chief of Staff Mick Mulvaney and the White House Office of Management and Budget acting director Russ Vought. Other participants in the sometimes contentious daily meetings include Azar, the president’s son-in-law and senior adviser Jared Kushner, White House counselor Kellyanne Conway and representatives from the vice president’s office.

One senior administration official, who spoke on the condition of anonymity to discuss internal deliberations, said the White House believes it has “tremendous authority” to write executive orders under food, drug and cosmetic laws, as well as through the ACA, which gives the government broad power to test ways to improve health care and reduce costs in government programs.

“We think the [ACA] authority is pretty tremendous,” the official said. The administration is currently arguing in federal court to overturn the law, however, with a decision expected late summer or fall.

But many health policy and legal experts disagree and are also skeptical the steps the administration is talking about would have a tangible effect on consumers before the election.

“It’s unlikely the administration is going to be able to use an executive order that Americans are going to be able to notice before the election,” said Benedic Ippolito, a health economist at the American Enterprise Institute. “It’s an incredibly ambitious timeline.”

Others see court challenges as inevitable, noting the drug industry has already shown a willingness to sue the administration over policies it opposes; it recently won a lower court victory against an Health and Human Servies regulation that would have required drugmakers to include the list prices of their medications in television ads.

“I’m not sure they can get anything done and survive a court challenge before the election,” said Chris Meekins, a former HHS official who is now a health care policy research analyst at Raymond James, a financial services firm.

The White House is also attempting to build support for the Senate bill authored by Finance Committee Chairman Charles E. Grassley (R-Iowa) and ranking Democrat Sen. Ron Wyden (Ore.), that for the first time would require drugmakers to pay back the federal government if they raised the prices of medications in the Medicare program in excess of the rate of inflation. It would also limit out-of-pocket costs for beneficiaries.

The pharmaceutical industry opposes the bill, and some Republicans have already derided the legislation as tantamount to negotiating drug prices or imposing “price controls” — a line in the sand for many who oppose what they see as government interference in the market. Senate Majority Leader Mitch McConnell (R-Ky.) has not said whether he will bring a drug-pricing legislative package up for a vote, but he is generally opposed to voting on health-care legislation ahead of the election.

Against the advice of many congressional Republicans, White House advisers are also working to craft an Obamacare replacement plan that Trump could campaign on, especially if the Fifth Circuit should declare the law unconstitutional this fall and catapult the issue to the forefront of the 2020 races.

Some GOP lawmakers and strategists worry about rolling out a plan that has no chance of passage in the current Congress and that Democrats could pick to pieces during a long campaign. Many also have little appetite to return to the debate over repealing Obamacare.

Nonetheless, the White House is considering a plan, put together by conservative think tanks, that would eliminate the ACA’s subsidies for low-income consumers and replace the open-ended federal commitment to Medicaid with a lump-sum payment for each state in the form of a block grant, according to a copy posted online. The proposal largely follows the outlines of a 2017 Republican bill, which the Senate never voted on because it did not garner enough support.

“We don’t have a lot of buy in on the Hill,” acknowledged the senior administration official, “but we’re figuring it out.”

Some of the other health-care proposals under review also appear largely aspirational, for instance, a draft executive order that instructs agencies to speed development of a universal flu vaccine, first reported by Politico, that proposes no new funding. Other efforts, such as the initiatives to reduce HIV infections, reduce end-stage kidney disease and double the number of transplants, contain new funding and have been widely heralded.

“Every chance we have to set or tweak a rule we are doing it.” said the senior official. “This administration has been more creative and accomplished more when it comes to health care and health than anybody has given us credit for.”

How a Medicare Buy-In or Public Option Could Threaten Obamacare

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Medicare, Medicare Buy-In, Medicare for All, Pharmaceutical Industry, Public Option • Leave a comment
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Some Democrats are proposing a government alternative to private insurance. But allowing people to choose such a plan may destabilize the A.C.A., some experts say.

It seems a simple enough proposition: Give people the choice to buy into Medicare, the popular federal insurance program for those over 65.

Former Vice President Joseph R. Biden Jr. is one of the Democratic presidential contenders who favor this kind of buy-in, often called the public option. They view it as a more gradual, politically pragmatic alternative to the Medicare-for-all proposal championed by Senator Bernie Sanders, which would abolish private health insurance altogether.

A public option, supporters say, is the logical next step in the expansion of access begun under the Affordable Care Act, passed while Mr. Biden was in office. “We have to protect and build on Obamacare,” he said.

But depending on its design, a public option may well threaten the A.C.A. in unexpected ways.

A government plan, even a Medicare buy-in, could shrink the number of customers buying policies on the Obamacare markets, making them less appealing for leading insurers, according to many health insurers, policy analysts and even some Democrats.

In urban markets, “a public option could come in and soak up all of the demand of the A.C.A. market,” said Craig Garthwaite, a health economist at the Kellogg School of Management at Northwestern University.

And in rural markets, insurers that are now profitable because they are often the only choices may find it difficult to make money if they faced competition from the federal government.

Some insurers could decide that a smaller and uncertain market is not worth their effort.

If the public option program also matched the rates Medicare paid to hospitals and doctors, “I think it would be really hard to compete,” Mr. Garthwaite said. Even leading insurers do not have the leverage to demand lower prices from hospitals and other providers that the government has.

Whether to implement a public option or Medicare buy-in has become a defining question among Democratic presidential candidates and is likely to be a contentious topic at this week’s debates.

On Monday, Senator Kamala Harris took an alternate route, unveiling a plan that would allow private insurers to participate in a Medicare-for-all scheme, akin to their role currently offering private plans under Medicare Advantage.

The recent spate of proposals reprises some of the most difficult questions leading up to the passage of the A.C.A., in many ways a compromise over widely divergent views of the role of the government in ensuring access to care.

After a shaky start, the federal and state Obamacare marketplaces are surprisingly robust, despite repeated attempts by Republicans to weaken them. They provide insurance to 11 million customers, many of whom receive generous federal subsidies to help pay for coverage.

The A.C.A. is now a solidly profitable business for insurers, with several expanding options after earlier threats to leave. For example, Centene, a for-profit insurer, controls about a fifth of the market, offering plans in 20 states. It is expected to bring in roughly $10 billion in revenues this year by selling Obamacare policies.

In spite of stock drops because of investors’ concerns over Medicare-for-all proposals, for-profit health insurers have generally thrived since the law’s passage.

But a buy-in shift in insurance coverage could profoundly unsettle the nation’s private health sector, which makes up almost a fifth of the United States economy. Depending on who is allowed to sign up for the plan, it could also rock the employer-based system that now covers some 160 million Americans.

In a recent ad, Mr. Biden features a woman who wants to keep her current coverage. “I have my own private insurance — I don’t want to lose it,” she said.

A spokesman for Mr. Biden argued that a public option can extend the success of the Affordable Care Act.

“Joe Biden thinks it would be an egregious mistake to undo the A.C.A., and he will stand against anyone — regardless of their party — who tries to do so,” said Andrew Bates, a spokesman for Mr. Biden, in an email.

Major insurers and hospital chains, pharmaceutical companies and the American Medical Association have joined forces to try to derail efforts like Medicare-for-all and the public option. Mr. Sanders denounced these powerful interests in a recent speech.

“The debate we are currently having in this campaign and all over this country has nothing to do with health care, but it has everything to do with the greed and profits of the health care industry,” he said.

Other critics of the public option, including Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, argue Democrats’ programs will lead to a “complete government takeover.”

“These proposals are the largest threats to the American health care system,” she said in a speech earlier this month.

Some experts predict that private insurers will adapt, while others warn that the government could wind up taking on the sickest customers with high medical bills, leaving the healthier, profitable ones to private insurers.

It’s uncertain whether hospitals, on the other hand, could thrive under some versions of the public option. If the nation’s 5,300 hospitals were paid at much lower rates by a government plan — rates resembling those of Medicare — they might lose tens of billions of dollars, the industry claims. Some would close.

One variant of the public option — letting people over 50 or 55 buy into Medicare — is often depicted as less drastic than a universal, single-payer program. But this option would also be problematic, experts said.

This consumer demographic is quite valuable to insurers, hospitals and doctors.

Middle-aged and older Americans have become the bedrock of the Obamacare market. Some insurers say this demographic makes up about half of the people enrolled in their A.C.A. plans and, unlike younger people who come and go, is a reliable and profitable source of business for the insurance companies.

The aging-related health issues of people in this group guarantee regular doctor visits for everything from rising blood pressure to diabetes, and they account for a steady stream of lucrative joint replacements and cardiac stent procedures.

The 55-to-64 age group, for example, accounts for 13 percent of the nation’s population, but generates 20 percent of all health care spending, according to the Kaiser Family Foundation.

Health Spending

People age 55–64 are responsible for one fifth of total health spending and account for a sizable share of the private insurance market. People 65 and older are eligible for Medicare and account for one third of total spending.

Several experts said that designing a buy-in program that is compatible with the existing public and private plans could be daunting.

“You’d have to do it carefully,” said Representative Donna Shalala, a Florida Democrat who served as the secretary of health and human services under President Bill Clinton.

Linda Blumberg, a health policy expert at the Urban Institute, a nonpartisan think tank, agreed. “The idea of Medicare buy-ins was taken very seriously before there was an Affordable Care Act,” she said. “In the context of the A.C.A., it’s a lot more complicated to do that.”

Many dismiss concerns about whether insurers can compete.

“Any time a market shrinks in America, insurers don’t like it,” said Andy Slavitt, the former acting Medicare administrator under President Obama and a former insurance executive. Mr. Slavitt noted that insurers raised similar concerns about the federal law when it was introduced. “They’ll figure it out,” he said.

In Los Angeles County, five private insurers that sell insurance in the A.C.A. market already compete with L.A. Care Health Plan, which views itself as a kind of public option, said John Baackes, the plan’s chief executive.

The insurer offers the least expensive H.M.O. plan in the county by paying roughly Medicare rates. “We’ve proved that the public option can be healthy competition,” he said.

But the major insurance companies, which were instrumental in defeating the public option when Congress first considered making it a feature of the A.C.A., are already flexing their lobbying muscle and waging public campaigns.

In Connecticut, fierce lobbying by health insurers helped kill a state version of the public option this spring. Cigna resisted passage of the bill, threatening to leave the state. “The proposal design was ill-conceived and simply did not work,” the company said in a statement.

Blue Cross plans could lose 60 percent of their revenues from the individual market if people over 50 are shifted to Medicare, said Kris Haltmeyer, an executive with the Blue Cross Blue Shield Association, citing an analysis the company conducted. He said it might not make sense for plans to stay in the A.C.A. markets.

Siphoning off such a large group of customers could also lead to a 10 percent increase in premiums for the remaining pool of insured people, according to the Blue Cross analysis. More younger people with expensive medical conditions have enrolled than insurers expected, and insurers would have to increase premiums to cover their costs, Mr. Haltmeyer said.

Tricia Neuman, a senior vice president at the Kaiser Family Foundation, which studies insurance markets, said a government buy-in that attracted older Americans could indeed raise premiums for those who remained in the A.C.A. markets, especially if those consumers had high medical costs.

But some experts countered that prognosis, predicting that premiums could go down if older Americans, whose health care costs are generally expensive, moved into a Medicare-like program.

“The insurance companies are wrong about opposing the public option,” Ms. Shalala said.

Dr. David Blumenthal, the president of the Commonwealth Fund, a foundation that funds health care research, said a government plan that attracted people with expensive conditions could prove costly.

“You might, as a taxpayer, become concerned that they would be more like high-risk pools,” he said.

Jonathan Gruber, an M.I.T. economist who advised the Obama administration during the development of the A.C.A., likes Mr. Biden’s plan and argues there is a way to design a public option that does not shut out the private insurers.

“It’s all about threading the needle of making a public option that helps the failing system and not making the doctors and insurers go to the mat,” he said.

Many experts point to private Medicare Advantage plans, which now cover one-third of those eligible for Medicare, as proof that private insurers can coexist with the government.

But the real value of a public option, some say, would stem from the pressure to lower prices for medical care as insurers were forced to compete with the lower-paying government plans, like Medicare.

Washington State recently passed the country’s first public option, capping prices as part of its plan to provide a public alternative to all residents by 2021.

“It’s couched in this language in expanding coverage, but it does it by regulating prices,” said Sabrina Corlette, a health policy researcher at Georgetown University.

The hospital industry would most likely fight just as hard to defeat any proposal that would convert a profitable group of customers, Americans who are privately covered at present, into Medicare beneficiaries.

Private insurers often pay hospitals double or triple what Medicare pays them, according to a recent study from the nonprofit Rand Corporation.

While Ms. Shalala supports a public option as an alternative to “Medicare for All,” she is clear about how challenging it will be to preserve both Obamacare and the private insurance market. “You can’t do it off the top of your head,” she said.

 

No partial Medicaid expansions

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Medicaid, Medicaid Block Grants, Medicaid Expansion • Leave a comment

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The Trump administration made a very big decision over the weekend: It won’t approve full federal funding for a partial Medicaid expansion.

Why it matters: The partial expansion had looked like a key weapon in red states’ continued resistance to the ACA. Without it, Medicaid enrollment likely will keep growing.

Between the lines: Although the reasoning is different, the Trump administration is now adopting the same policy as the Obama administration — a decision many experts believe the law compels.

Details: Utah voters approved the full ACA expansion last year, but the state legislature overruled them to pass a more limited version.

  • Utah believed that the federal Centers for Medicare & Medicaid Services would approve full federal funding even for the partial expansion, which prompted other red states to explore the same idea.

The intrigue: While the Obama administration rejected these requests on the grounds that federal law dictates the terms of a Medicaid expansion, the Trump administration went a different route, per the Washington Post.

  • “White House advisers argued that it did not make sense to approve generous federal funding under the ACA while the administration is arguing that the entire law should be overturned,” the Post reports.

The bottom line: Utah has a backup plan in place — the full Medicaid expansion that Utah residents voted for in the first place.

  • Partial expansion was mainly attractive to red states facing pressure to expand but had leaders who didn’t want to. With that option off the table, don’t be surprised if more states end up just going along with the expansion.

 

 

 

 

A small group of patients account for a whole lot of spending

Posted on by • Posted in Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, Out of Pocket Expenses, Preexisting Conditions • Leave a comment

https://www.axios.com/drug-prices-health-care-costs-spending-employers-63a65abc-0148-4f98-bd39-b30e4d3c9caf.html

Illustration of a $100 bill going into a small pill bottle

A very small group of patients with major illnesses is responsible for an outsized share of health care spending, and new data show that prescription drugs are a big part of the reason their bills are so high.

The big picture: Among people who get their coverage from a large employer, just 1.3% of employees were responsible for almost 20% of overall health spending, averaging a whopping $88,000 per year.

Between the lines: “Persistently high spenders” are people who have accumulated big health care bills for at least 3 consecutive years.

  • They often have HIV, MS, cystic fibrosis, rheumatoid arthritis, diabetes, cancer and other serious conditions requiring frequent and often costly care.
  • Drugs are lifesavers for these patients, but also big offenders when it comes to costs.

By the numbers: Prescription drugs account for about 40% of this group’s costs, not counting rebates — compared with just 10% for the country as a whole.

  • Their bills just for prescription drugs average out to about $34,000 per year. That’s much more than the average premium for family coverage.

Why it matters: These are exactly the people our insurance system is failing. They have insurance and a major illness, but still struggle with their medical bills as deductibles and other out-of-pocket costs keep rising faster than wages.

One solution might be to exempt this small group of high spenders with serious illnesses from drug or other copays, and limit their deductibles.

  • Congress is also considering proposals to lower the cost of the most expensive drugs, which could make a dent in both employer and employee spending for this population.

The bottom line: I have had family members in the 1.3%.

  • I know from experience as well as the data that we should take care not to sacrifice needed care as we try to reduce spending for this small group of very high spenders with complicated medical needs.

 

 

 

Red states’ Medicaid gamble: Paying more to cover fewer people

Posted on by • Posted in 2020 Election Issues, ACA, Block Grants, Center for Medicare and Medicaid Services (CMS), Health Policy, Medicaid, Medicaid Block Grants, Medicaid Expansion • Leave a comment

https://www.axios.com/republicans-medicaid-affordable-care-act-expensive-d7057a8e-0a55-4f0d-906e-e42aa3f00ba9.html

Illustration of a price tag hanging from an IV stand

Red states are getting creative as they look for new ways to limit the growth of Medicaid. But in the process those states are taking legal, political and practical risks that could ultimately leave them paying far more, to cover far fewer people.

Why it matters: Medicaid and the Children’s Health Insurance Program cover more than 72 million Americans, thanks in part to the Affordable Care Act’s Medicaid expansion. Rolling back the program is a high priority for the Trump administration, and it needs states’ help to get there.

The big picture: The Centers for Medicare & Medicaid Services, under the leadership of Administrator Seema Verma, has made clear that it wants to say “yes” to new limits on Medicaid eligibility, and has invited states to ask for those limits.

  • But CMS hasn’t actually said “yes” yet to some of the most significant limits states have asked for.
  • In the meantime, states are left either with vague ambitions they’re not sure how to implement, or with risky plans that put their own budgets on the line.

What we’re watching: State-level Republicans are waiting for CMS to resolve two related issues: how much federal funding their versions of Medicaid can receive, and the extent to which they’re able to cap enrollment in the program.

  • “These issues are going to continue to be intertwined,” said Joan Alker, the executive director of Georgetown University’s Center for Children and Families.

Verma has reportedly told state officials that she wants to use her regulatory power to convert Medicaid funding into a system of block grants — which would be an enormous rightward shift and probably a big cut in total funding.

  • CMS probably cannot do that on its own, experts said, but it could achieve something similar by approving caps on either enrollment or spending.

Where it stands: GOP lawmakers in a handful of states are looking to Utah, which has bet big on Verma’s authority, for signals about what’s possible.

  • Utah voters approved the full ACA expansion last year, but the state legislature overruled them to pass a more limited version.
  • By foregoing the full expansion, Utah passed up enhanced federal funding. It’s still asking for that extra money — a request CMS has never previously approved.
  • Utah will also ask CMS to impose a per-person cap on Medicaid spending — a steep cut that was part of congressional Republicans’ failed repeal-and-replace bill, and which may strain CMS’ legal authority.
  • If Utah doesn’t get those two requests, its backup plan is simply to adopt the full expansion.

What’s next: Utah is not the only red state leaning into Verma’s agenda, but it’s further out on a limb than any other.

  • Idaho, like Utah, overruled its voters to pass a narrower Medicaid bill. But it preserved an option for people to buy into the ACA’s expansion.
  • Alaska Gov. Mike Dunleavy has said he wants to take Verma up on her offer of block grants; so have legislators in Tennessee and Georgia. But in the absence of any detail about what that means, or what CMS will approve, that’s all pretty vague right now.

If CMS does move forward on any of this, it could face the same threat of lawsuits that have stymied its first big Medicaid overhaul — work requirements.

  • Those rules are on ice in two states because a judge said they contravene Medicaid’s statutory structure and goals. The same argument could await a partial expansion or tough spending caps.

“There’s a clear agenda here to get a handful of states to take up these waivers, which fundamentally undermine the central tenets of the Medicaid program — which [are] that it is a guarantee of coverage, and a guarantee of federal funding,” Alker said.

 

 

 

 

Could States Do Single-Payer Health Care?

Posted on by • Posted in 2020 Election Issues, Health Insurance Coverage Adequacy, Health Policy, Single Payer Health System, Single Payer Healthcare System • Leave a comment

https://www.healthaffairs.org/do/10.1377/hblog20190717.466249/full/?utm_source=Newsletter&utm_medium=email&utm_content=Health+Spending+Briefing%3B+Single-Payer%3B+Drug+Prices%3B+Cannabis+Patients%3B+ACA%3B+Access+To+Antidiabetic+Drugs%3B+Skilled+Nursing+Facilities&utm_campaign=HASU

 

The Affordable Care Act (ACA) transformed the US health care system by increasing coverage, expanding federal involvement in private health insurance, and changing public expectations for access to affordable coverage. Yet, the ACA did not provide universal coverage and has proven unstable under political and legal attacks since its enactment in 2010. While proposals for replacing the ACA with single-payer health care have attracted national political attention, discussions of a federal single-payer system such as “Medicare for All” remain light on specifics. At the state level, however, state legislators have drafted and introduced dozens of detailed bills to implement single-payer systems. Our study of state single-payer proposals in the ACA era highlights the extent to which states must contort their health reforms to overcome federal legal hurdles—particularly the threat of preemption by the Employee Retirement Income Security Act (ERISA) of 1974—and prompts questions about whether states can actually implement single-payer health care.

State Single-Payer Proposals (2010–19)

We define state single-payer bills as legislative attempts to achieve universal health care coverage for all residents in a state by combining financing for health care services into a single, state-administered payer. Using this definition, we collected and coded bills introduced in state legislatures since 2010, identifying the number of unique proposals by excluding substantially similar legislation introduced in different chambers or with different designations in the same session. From 2010 through 2019, legislators in 20 states have proposed 59 unique single-payer bills (Exhibit 1).

Most, but not all, of the single-payer proposals come from states that expanded Medicaid under the ACA, leaving only a small fraction of the population uninsured. Thus, it appears that beyond achieving universal coverage, state single-payer bills also seek to control health spending through expansive rate-setting authority and streamlined administration, as well as to relieve individuals of their growing out-of-pocket expenses. These state single-payer bills share many common elements: They all provided universal eligibility for state residents, and most also included expansive provider eligibility, rate-setting for health care services and prescription drugs, low or no cost sharing for patients, comprehensive benefits, and limits on the ability of health insurers (but not employers) to offer coverage that duplicates the single-payer benefits.

Legal And Financial Hurdles For State Single-Payer Health Care

To finance these universal and comprehensive benefits, state single-payer bills use several strategies to capture health expenditures from the existing multipayer system, while navigating a number of financial and legal impediments. First, the state bills would consolidate federal funds from Medicare, Medicaid, and the ACA exchanges into the state single-payer plan using waiver provisions in those federal programs. The Department of Health and Human Services has considerable discretion to deny state applications for each of these federal waivers; however, and the state bills generally lack fallback plans for capturing federal funds should the agency deny the waivers. Nor do the state single-payer bills confront financial obstacles from state constitutional prohibitions on deficit spending, which constrain state plans when tax revenues fall during economic recession.

Second, but perhaps more crucially, state single-payer bills must find ways to redirect the employer-sponsored health plans that currently cover 49 percent of Americans—a daunting legal task under ERISA. ERISA preempts all state laws that “relate to” employer-sponsored benefits, so states cannot simply mandate that employers cease offering health benefits. States do retain broad power to regulate health care providers and health insurers, but ERISA preempts the application of state insurance regulations to employers’ self-funded health plans, which now comprise more than 60 percent of all employer-sponsored health benefits. ERISA challenges states’ abilities to capture employer health spending—a source of funding that would be critical to the viability of a single-payer system.

The labyrinth of ERISA preemption has inspired creative drafting of state single-payer bills to do indirectly what ERISA prohibits them from doing directly. Our survey revealed three strategies for state bills to capture employer expenditures and move employees into the state single-payer system: levy payroll taxes on employers and income taxes on employees; restrict providers from accepting private-insurer reimbursement; and allow the single-payer plan to pay for all eligible patients’ care, then recoup those payments from other coverage a patient may have. The taxes fund the single-payer plan’s coverage of resident employees and nudge employers to cease offering private coverage. The provider reimbursement restriction further encourages a shift to single-payer coverage by shrinking provider networks for private insurance. The pay-and-recoup provision enables those employers who wish to continue providing benefits to do so without fully eroding the administrative advantages of the single-payer system.

Nearly all states’ bills include one of these strategies; most include a combination of them. Vermont is the only state that has actually enacted single-payer legislation, before abandoning its implementation largely due to the cost of its payroll and income taxes.

The Unnecessary Uncertainty For State Single-Payer Health Care

To gird against the looming threat of ERISA preemption, state legislatures have resorted to elaborate measures that may dilute their broader aims of achieving universality, solidarity, and efficiency in health care coverage. There are strong legal arguments why provisions to capture employer health spending should survive ERISA preemption. States have wide latitude to levy taxes and regulate health care in general, and providers in particular. The bills’ provisions do not require employers to alter their employee benefit plans, they merely encourage a shift to the state’s health plan. But federal appellate courts have split over the extent to which states may use financial incentives to affect employers’ health benefit decisions. In short, state single-payer plans should survive ERISA preemption, but courts’ unpredictable applications of ERISA cast a pall of uncertainty over the viability of single-payer plans.

State single-payer proposals face formidable legal uncertainties that a federal single-payer plan would not. On the other hand, health reform of this scale presents an experiment well-suited to the laboratories of the states. States’ experimentation with single-payer care could test various models and inform federal health reform debates about the benefits of single-payer over more incremental reforms, or about structuring a single-payer system to minimize disruption for health care providers and patients. The road to reform often starts with the states. This was the path for the ACA, which was first modeled in Massachusetts, and for Canada’s single-payer system, which got its start in Saskatchewan. Significant health reforms tested at the state level may pave the road to better policy at the national level.

While ERISA preemption has bedeviled state health reforms for decades, this wave of state single-payer legislation highlights the depth of the problem. At a time when states are the engines of health policy innovation, ERISA continues to unnecessarily thwart state health reform efforts. Thus, any meaningful health reform should start with ERISA reform. For example, Congress could amend ERISA to narrow its preemption provisions or add a waiver provision similar to other federal health care statutes. While states may successfully contort their health reform efforts to avoid ERISA preemption, they should not have to do so. The time has come to remove ERISA’s obstructions and to unlock states’ capacities as laboratories of health reform.

Most, but not all, of the single-payer proposals come from states that expanded Medicaid under the ACA, leaving only a small fraction of the population uninsured. Thus, it appears that beyond achieving universal coverage, state single-payer bills also seek to control health spending through expansive rate-setting authority and streamlined administration, as well as to relieve individuals of their growing out-of-pocket expenses. These state single-payer bills share many common elements: They all provided universal eligibility for state residents, and most also included expansive provider eligibility, rate-setting for health care services and prescription drugs, low or no cost sharing for patients, comprehensive benefits, and limits on the ability of health insurers (but not employers) to offer coverage that duplicates the single-payer benefits.

 

 

Democrats are making Republican arguments about health care. Why?

Posted on by • Posted in 2020 Election Issues, ACA, Dignity, Health Insurance Coverage Adequacy, Health Policy, Medicare, Medicare Buy-In, Medicare for All, Respect, Single Payer Health System, Single Payer Healthcare System, Universal Healthcare System • Leave a comment

https://www.washingtonpost.com/opinions/2019/07/26/democrats-are-making-republican-arguments-about-health-care-why/?fbclid=IwAR1mA1uEcNMiO12elygl_lSLxDD12kvHhzfYOO78Z50u7HAEv56yEVGL2Pc&utm_term=.e2f83bcb12ec

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The Democratic argument over health care is beginning to get heated, which unfortunately means that things are becoming more problematic. In fact, the candidates making what is arguably the most sensible policy choice are justifying it with some absolutely abominable arguments — arguments that should warm the heart of the Republican Party.

Right now there’s a divide within the party, with some of the presidential candidates including Bernie Sanders and Elizabeth Warren supporting single payer (though Warren hasn’t been specific), and most of the others including Joe Biden, Amy Klobuchar and Pete Buttigieg suggesting some form of public option that would be voluntary, not Medicare For All but Medicare For All Who Want It.

I’ve come to believe that for all the benefits of a single payer system, trying to move immediately to one is a task with such overwhelming political obstacles and policy complications that it’s probably a better idea to achieve universal coverage through a dramatic expansion of public insurance while, for the moment, leaving substantial portions of the private system intact, even if that’s in many ways distasteful. I realize many readers will disagree with that, which is fine; we should continue to debate it.

But let’s at least grant that it’s a reasonable position to take. The problem with what’s happening now is that some advocates of the public option approach are sounding a lot like, well, Republicans.

Their most common talking point when defending their plan is some variation of “We can’t kick 150 million people off their insurance,” referring to the number of people who are covered by employer plans:

  • “We should have universal health care, but it shouldn’t be the kind of health care that kicks 150 million Americans off their health care,” says John Delaney.
  • Beto O’Rourke says Medicare-for-all “would force 180 million Americans off their insurance.”
  • “I am simply concerned about kicking half of America off their health insurance within four years, which is what [Medicare-for-all] would do,” says Amy Klobuchar.

The generous interpretation of this line is that it’s warning about widespread disruption; the other interpretation is that it’s meant to stoke the fear that if you now have coverage and single payer passes, you could be left with no insurance at all, which is just false. If we passed single payer, you’d move from your current plan to a different plan, one that depending on how it’s constructed would probably offer as good or better coverage at a lower cost.

The further danger is that that kind of talk inevitably leads one toward the promise that got Barack Obama into such trouble, “If you like your plan, you can keep it.” In fact, here’s O’Rourke saying that under his plan, “For those who have private, employer-sponsored insurance or members of unions who have fought for health care plans … they’ll be able to keep that.” And here’s Biden saying much the same thing: “If you like your health care plan, your employer-based plan, you can keep it. If in fact you have private insurance, you can keep it.”

Haven’t they learned anything?

While there may be political value in communicating to people that a public option would be voluntary, we have to tell them the truth, which is that if you’re going to open it to employers and not just individuals, some people will be moved to the public plan whether they want to or not, since their employers will make that choice for them. That’s how employer coverage works: What plan you’re on is seldom up to you, it’s a decision made by your employer.

And the broader truth is that no one, I repeat, no one gets to keep their plan if they like it even under the status quo. “If you like your plan, you can keep it” is a fantasy. If you have insurance through your employer, you’ve probably had the experience of your employer changing insurers or changing plans; many do it every year. Sometimes the new plan is better; often it’s not. But if you liked your plan, you didn’t get to keep it.

That’s even true of people on public insurance plans, though to a far lesser degree. Medicare and Medicaid go through changes, and benefits are added or taken away. It’s not up to you.

The trouble is that we have a situation where change is constant yet everyone is afraid of change, which makes it awfully tempting to encourage that fear. But the more we propagate the fiction that Americans, especially those with private insurance, aren’t vulnerable under the current system, the easier it will be to crush any reform effort.

Apart from the praise of the Affordable Care Act, this video could almost have been scripted by the Republican National Committee, with its paeans to private health insurance. Of particular note is the woman’s explanation of how she and her husband “earned” health coverage through decades of work, which implies that health care is not a right, as most Democrats believe, but a privilege one has to earn.

To top it off, Biden’s caption to the video says that “Because a union fought for their private health insurance plan, Marcy and her husband were able to retire with dignity and respect,” which is why Biden wants to let them stay on their existing insurance.

Let me suggest a crazy idea: What if retiring with dignity and respect wasn’t something you only got if you were lucky enough to be represented by a union (as a mere 1 in 10 American workers is, and 1 in 16 private sector workers), and only if that union happened to be successful in its fight to get you health benefits? What if everybody got dignity and respect? Isn’t that the world Joe Biden is trying to create?

You can make a strong case for both a single payer plan and one built around a public option. But please, Democrats, when you’re arguing for your preferred solution, don’t undermine the entire philosophical approach your party takes to health care. That only makes the job of reform more difficult.

 

 

Politicians Tackle Surprise Bills, but Not the Biggest Source of Them: Ambulances

Posted on by • Posted in Ambulance, Balance Billing, Health Policy, High Prices, Out of Network, Out of Pocket Expenses, Rev Cycle Management, Surprise Bills • Leave a comment

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A legislative push in Congress and states to end unexpected medical bills has omitted the ambulance industry.

After his son was hit by a car in San Francisco and taken away by ambulance, Karl Sporer was surprised to get a bill for $800.

Mr. Sporer had health insurance, which paid for part of the ride. But the ambulance provider felt that amount wasn’t enough, and billed the Sporer family for the balance.

“I paid it quickly,” Mr. Sporer said. “They go to collections if you don’t.”

That was 15 years ago, but ambulance companies around the nation are still sending such surprise bills to customers, as Mr. Sporer knows well. These days, he oversees the emergency medical services in neighboring Alameda County. The contract his county negotiated allows a private ambulance company to send similar bills to insured patients.

In most parts of medical care, you can choose a doctor or hospital that takes your insurance. But there are some types of care where politicians have begun tackling the “surprise” bills that occur when, say, patients go to an emergency room covered by their insurance and are treated by a physician who is not.

Five states have passed laws this year to restrict surprise billing in hospitals and doctor’s offices. Congress is working on a similar package of measures, after President Trump held a news conference in May urging action on the issue.

But none of these new policies will protect patients from surprise bills like the one Mr. Sporer received. Ordinary ambulances that travel on roads have been left out of every bill.

“Ambulances seem to be the worst example of surprise billing, given how often it occurs,” said Christopher Garmon, a health economist at the University of Missouri-Kansas City. “If you call 911 for an ambulance, it’s basically a coin flip whether or not that ambulance will be in or out of network.”

Mr. Garmon’s research finds that 51 percent of ground ambulance rides will result in an out-of-network bill. For emergency room visits, that figure stands at only 19 percent.

Congress has shown little appetite to include ambulances in a federal law restricting surprise billing. One proposal would bar surprise bills from air ambulances, helicopters that transport patients who are at remote sites or who have life-threatening injuries. (These types of ambulances tend to be run by private companies.)

But that interest has not extended to more traditional ambulance services — in part because many are run by local and municipal governments.

Lamar Alexander, the chairman of the Senate Committee on Health, Education, Labor and Pensions, and a key author of a Senate surprise billing proposal, said in an email that surprise bills from air ambulances were the more pressing issue because federal law prevents any local regulation of their prices. “Unlike air ambulances, ground ambulances can be regulated by states,” said Mr. Alexander, a Republican from Tennessee. “And Congress should continue to learn more about how to best solve that problem.”

The ambulance industry has brought its case to Capitol Hill, arranging meetings between members of Congress and their local ambulance operators.

“When we talk to our members of Congress, what we really emphasize is that we’re a little different from the other providers in the surprise billing discussion,” said Shawn Baird, president-elect of the American Ambulance Association. “We have a distinct, public process. The emergency room isn’t subject to any oversight of that kind.”

Patient advocates contend that this public oversight isn’t doing enough to protect patients, who often face surprise bills and forceful collection tactics from ambulance providers.

Anthony Wright, executive director of Health Access California, worked on a 2016 California law to restrict surprise billing. Initially, he thought it made sense to include ambulances in that legislation.

“It’s our experience that ambulance providers bill quicker and are more aggressive in sending bills to collection,” Mr. Wright said. “If they’re being more aggressive, you might want legislation to deal with that one first.”

But obstacles quickly began to mount. Some were about policy, like whether California would need to offset the revenue local governments would lose.

Then there were the politics. “There is the political reality that it’s hard to go after an entire industry at once,” Mr. Wright said. “It’s hard to have a bill opposed by doctors and hospitals and ambulances. We did manage to get a strong protection against doctor billing, but that was an epic, brutal, three-year fight.”

The California law that passed in 2016 did not regulate ambulance prices.

Patient groups elsewhere also say they ran into political trouble. Of the five states that passed surprise billing regulations in 2019, only Colorado’s new law takes aim at ambulance billing — not by regulating it, but by forming a committee to study the issue.

“The surprise bills laws are hard enough to get,” said Chuck Bell, program director for advocacy at Consumer Reports, who worked to pass a Florida surprise billing law in 2016. “You’re struggling with health plans, hospitals and doctors and other provider groups. At a certain point you don’t want to invite another big gorilla in the room to further widen the brawl.”

On Capitol Hill, the ambulance services have been less aggressive than other health care providers in lobbying against their inclusion in reforms. But lawmakers have largely declined to even include them in the conversation.

Consumer advocates say the lack of state-level legislation has been a barrier.

“Since there are issues related to ambulances being run by municipalities, and, at the state level, there hasn’t been a lot of model law to inform federal law, I think that’s made some members hesitant to wade into that space,” said Claire McAndrew, the director of campaigns and partnerships at the health care consumer group Families USA.

Local governments generally finance their ambulance services through a mix of user fees and taxes. If ambulances charge less to patients, they typically need more government funding.

Municipal governments often publish the prices of their ambulance services online, and they can range substantially. In Moraga and Orinda, in the Bay Area, the base rate for an ambulance ride is $2,600, plus $42 for each mile traveled. In Marion County, Fla., the most basic kind of ambulance ride costs $550, plus $11.25 per mile.

In many communities, there is no choice of ambulances.

Older patients are not charged such fees. Medicare, which also covers some people with disabilities, pays set prices for ambulance rides — a base rate of around $225 for the most typical type of care, in addition to a mileage fee — and forbids the companies to send patients additional bills.

In Bucks County, Pa., where it is $1,500 for a basic ambulance ride, in addition to $16 per mile, the emergency medical service gets 78 percent of its revenue from ambulance billing, according to Chuck Pressler, the executive director of the Central Bucks Emergency Medical Services. The rest of the budget comes from taxes raised by local cities and fund-raising drives.

“There is an expectation that we just plant money trees, that people should come in and work for free,” Mr. Pressler said of proposals to tamp down ambulance billing. “When was the last time you saw the police send out a fund-raiser? They don’t have to do that. Why do we have to raise money to come get you when you’re sick?”

 

 

 

As HHS muses more MA flexibility, payers see roadblocks to nonmedical benefits

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Health Policy, Medicare, Medicare Advantage • Leave a comment

https://www.healthcaredive.com/news/as-hhs-muses-more-ma-flexibility-payers-see-roadblocks-to-nonmedical-benef/559350/

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New regulatory flexibility letting Medicare Advantage plans sell supplemental benefits has opened up a new world of services, from transportation to nutrition, for tens of millions of beneficiaries. But implementation challenges, uncertain return on investment and a lack of clarity on what benefits are allowed may be giving payers, especially the smaller ones, pause on offering the options, experts say.

CMS expanded supplemental benefits in the popular privately-run Medicare plans in an April final rule. Now, Medicare Advantage plans can offer a host of non-traditional benefits, such as at-home grocery delivery, non-emergency medical transportation to doctor appointments or home modifications like installing air conditioning for beneficiaries with asthma and home renovations for fall-prone elderly.

And the department wants to go further than the MA supplemental benefits introduced in April, HHS Secretary Alex Azar said this week at a Better Medicare Alliance annual conference. Because MA plans have budgetary restrictions and a higher risk appetite, the government is comfortable granting them more leeway if it lowers costs and boosts health outcomes.

“We want to open up more opportunities for MA plans and entities they work with, including creative value-based insurance design arrangements, moving care to the home and community and new ways for MA plans to improve a patients’ health over the long term,” Azar said Tuesday.

A number of payers have increased their MA offerings recently to till the fertile ground set up by CMS, including startups Bright Health and Oscar along with heftier players like Centene and UnitedHealthcare.

Currently, MA plans enroll more than one-third of all Medicare beneficiaries, and enrollment is rising steadily every year. At least 40% of those plans offered non-medical benefits in the current plan year at no additional cost to beneficiaries, according to consultancy Avalere.

But further flexibility could present a problem for payers already struggling to assimilate to the increased flexibility and the administrative burden it entails.

Not enough time, money or guidance

Though it approved of the flexible benefit options, payer lobby America’s Health Insurance Plans was concerned in April about the regulatory changes coming just two months before the submission deadline for plan offerings for the 2020 plan year.

That’s because shaping a new benefit can take two to three years, Robert Saunders, research director at the Duke-Margolis Center for Health Policy, told Healthcare Dive. Plans have to work with their actuaries to price what a potential benefit is worth and then incorporate that into their bid.

“Just because you have policy flexibility doesn’t mean you can just now, tomorrow, offer new services,” Saunders said.

While the April rule also increased MA payment rates by 2.5% in 2019 (and rates are expected to hike another 1.6% for 2020), payers also have only a finite amount of funds they can pay back toward medical care. Medicare reimburses MA plans a fixed amount each month, so to provide auxiliary benefits payers have to trim down in other areas.

“If you’re paying for groceries, what else is getting cut?” Jennifer Callahan, executive director of MA product strategy and implementation for Aetna, said. “Is groceries more important than dental coverage? We don’t know.”

Under the CMS regulatory guidance, MA organizations can only develop and offer non-traditional medical benefits if they have a reasonable expectation the services will boost health. That has injected a lot of confusion into the system for payers that may not know what that means, how to measure it and whether they’ll be penalized for slipping up.

“Health plans, especially the small ones, are still looking for clarification on what’s actually allowed,” Nick Johnson, principal at actuarial and consulting firm Milliman, said. Smaller payers often don’t have a large enough sample size to draw conclusions about the positives and negatives of offering specific supplemental benefits, especially in light of substandard quality measures issued from CMS.

A subset of the expanded nonmedical benefits that address social determinants of health factors are officially called “Special Supplemental Benefits for the Chronically Ill” (SSBCI) and can only be offered to an “eligible chronically ill enrollee”: those who have at least one chronic condition and a high risk of hospitalization or adverse health outcomes and require coordinated care.

MA plans can currently offer nonmedical benefits to enrollees for a limited duration of time — typically four weeks, a CMS spokesperson told Healthcare Dive. But only under SSBCI can plans provide these benefits over the long term.

That pigeonholes MA plans from providing additional benefits for a wider spectrum of patients — for example, a person recuperating with serious injuries following a fall who can’t go out and get groceries themselves might appreciate getting them delivered.

However, “just because you were perfectly healthy before, you by definition don’t qualify,” Aetna’s Callahan said. “For me that’s one of the biggest gaps.”

More flexibility unlikely to help rural enrollees

Another concern is that the supplemental benefits could potentially exacerbate health disparities, including the divide between services offered in rural versus urban areas. Non-metropolitan markets tend to be highly concentrated, meaning just one or two insurers dominate the space.

MA is no different. In 619 U.S. counties that account for 4% of overall Medicare beneficiaries, no more than 10% of beneficiaries are enrolled in the privately-run Medicare plans, according to the Kaiser Family Foundation. Many of these low-penetration counties are in rural areas, and less competition means less reason to offer diversified, comprehensive coverage.

“At a national level, what we’re seeing is other places in the country where there’s at least one new benefit offered tend to be urban,” Saunders said.

Many of the add-on services require a specialty workforce — for example, at-home caregivers for long-term services and supports or drivers for non-emergency medical transportation. That makes it harder for plans to introduce them in rural areas that may already be suffering from workforce shortages, a lack of primary care physicians or health facilities, experts said.

For non-emergency medical transportation, companies like Uber and Lyft are combating lower use in rural areas with scheduled rides. Larger NEMT brokers will also partner with transportation companies in the community.

But offering supplemental benefits such as NEMT must be profitable for the insurer and its local partners, experts said. Initiatives that don’t yield a strong return on investment will likely be phased out for the next plan year.

“It’s a really difficult space to be in terms of scalability right now,” Callahan said. “It’s going to take some time.”