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States Take the Lead on Reinsurance to Stabilize the ACA Marketplaces

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http://www.commonwealthfund.org/publications/blog/2018/may/reinsurance-to-stabilize-marketplaces?omnicid=EALERT1408707&mid=henrykotula@yahoo.com

 

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Recent actions by Congress and the Trump administration are likely to disrupt Affordable Care Act (ACA) marketplaces in 2019, leading to higher premiums for individuals and families. These actions include Congress’ termination of financial penalties for failing to obtain health insurance and the administration’s resistance to paying cost-sharing reductions for low-income purchasers of marketplace coverage, its encouragement of the sale of short-term policies and association health plans, and its defunding of advertising and outreach in federally facilitated marketplaces. Recent estimates suggest that there have already been small but significant declines in coverage.

A total collapse of ACA marketplaces is unlikely because of continuing federal subsidies for the purchase of insurance by individuals with incomes below 400 percent of the federal poverty level. But those not eligible for subsidies may face higher premiums in some states, and some may be forced to forgo coverage. Those who remain in the market may be sicker than average, leading to a higher-risk pool and fueling premium increases.

A key way to mitigate the adverse effects of these recent policies is by offering reinsurance, a policy that is garnering bipartisan support at the federal and state levels.

What Is Reinsurance?

Reinsurance was a critical feature of ACA marketplaces in their first three years. The marketplaces were new, and insurers faced considerable uncertainty about the health status of enrollees. The law thus offered insurers some protection against unexpectedly high claims through a reinsurance program. Reinsurance protects insurers by limiting their exposure to very high, unpredictable medical expenses incurred by their members by covering some of those expenses when they exceed a certain threshold. For example, the ACA stipulated that insurers with claims costs that exceeded a threshold amount for a particular individual — $45,000 in 2014 — qualified for reinsurance payments for 100 percent of the excess up to $250,000. The program was financed by fees on both individual and employer plans, including self-insured employers, and was thus deficit neutral. It is estimated that reinsurance reduced average premiums in the marketplaces by as much as 14 percent.

The ACA legislation phased down the reinsurance program over 2014–2016 since it was assumed that as insurers gained more familiarity with enrollees, they could price their products with greater certainty. After the program ended in 2016, premiums rose in 2017 more sharply than they had in prior years, an increase that was partly attributed to the loss of reinsurance.

Industry stakeholders and health policy experts have suggested that reinsurance could stabilize the individual market. Researchers Chrissy Eibner and Jody Liu of RAND estimated that reinstating the reinsurance program could reduce premiums in the marketplaces by 3.9 percent to 19.3 percent in 2020, depending on the generosity of the program. Because lower premiums also reduce what the federal government spends on tax credits, the researchers projected federal deficit savings of $2.9 billion to $13.1 billion. However, the researchers also assume that some of those fees ultimately would be passed on to people enrolled in private plans.

Federal reinsurance programs have appeared in a number of recent Congressional bills. Last year, ACA repeal-and-replace bills included reinsurance programs for the individual market that would be financed directly by the federal government. Senators Susan Collins (R–Maine) and Bill Nelson (D–Fla.) introduced a bill with a similarly structured reinsurance program at the end of 2017. And a recently introduced bill from Senators Jeff Merkley (D–Ore.) and Chris Murphy (D–Conn.) proposing that a Medicare plan be offered through the marketplaces and by employers also includes a reinsurance program.

Some of these proposals would fund reinsurance through upfront federal expenditures, rather than charging fees to insurers. Deficit reductions could be lower under this scenario, but may still be possible because the federal expenditures on reinsurance would be offset by savings on lower tax credit expenditures as premiums fall. However, the RAND researchers find that the cost to taxpayers would be about the same under both approaches, since insurers would likely pass on fees to their customers in the form of higher premiums.

States Take the Lead

In the absence of consensus in Congress on how to strengthen the marketplaces, several states have secured, or are seeking, approval from the federal government to establish state-based reinsurance programs through the ACA’s innovation waiver program. Under the waiver program, states can make changes to their marketplaces as long as they cover at least the same number of people and maintain the same levels of affordability. Reinsurance has been the most common innovation pursued by states.

Alaska, Minnesota, and Oregon have received federal approval to establish reinsurance programs. There are notable differences in their approaches:

  • In Alaska, medical claims for individuals with at least one of 33 high-cost conditions are covered by the Alaska Reinsurance Program. The program was responsible for preventing the state’s last remaining insurer from leaving the individual market in 2017.
  • In Minnesota, the reinsurance program covers 80 percent of claims for individuals up to $250,000 once a $50,000 threshold is passed. For the 2018 plan year, insurers submitted two sets of premiums, one assuming reinsurance and one without it. The rates accounting for reinsurance were approximately 20 percent lower.
  • Oregon’s waiver application sought approval for a program that would reimburse 50 percent of claims between a yet-to-be-established threshold up to $1 million. The U.S. Department of Health and Human Services approved the proposal in October 2017.

Six more states have passed legislation or submitted applications to establish reinsurance programs.

  • On May 9, Maine became the latest state to submit a waiver application to the federal government seeking funding for a state-based reinsurance program. Earlier this year on April 18, Wisconsin also submitted a waiver application for a reinsurance program.
  • New Hampshire and Louisiana are developing similar applications, and New Jersey and Maryland passed legislation in April to establish state-operated reinsurance programs.

Experience with reinsurance programs clearly demonstrates their efficacy in reducing health insurance premiums in the private individual market. Implemented at the federal level, such programs also reduce federal spending and deficits. Though enterprising states are moving forward with these initiatives, a more comprehensive national effort to help private insurers manage unpredictable risks in individual health insurance markets has enduring appeal.

 

 

Red states find there’s no free pass on Medicaid changes

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Red states find there’s no free pass on Medicaid changes from Trump

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Red states are getting a reality check from the Trump administration in just how conservative they can remake their Medicaid programs.

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) rejected a request from Kansas to limit Medicaid eligibility to just three years.

CMS Administrator Seema Verma followed up on the Kansas decision by saying the administration will not allow any states to impose lifetime limits on Medicaid.

“We’ve indicated that we would not approve lifetime limits and I think we’ve made that pretty clear to states,” Verma said last week at a Washington Post event on health care.

The Trump administration has made state innovation a priority and has promised to fast-track Medicaid waivers, especially those that will impose work requirements on beneficiaries.

Four states have been granted permission to do so — Arkansas, Kentucky, Indiana and New Hampshire — and six others have pending waivers.

States have also been allowed to impose lockout periods if beneficiaries can’t meet the work requirements and to charge higher premiums than the Obama administration allowed.

But the decision on lifetime limits marks the first time the administration completely rejected a policy favored by conservatives and shows there is no blank check for red states.

Verma never promised automatic approvals of conservative ideas, though some might have interpreted it that way, according to Jeff Myers, president and CEO of the Medicaid Health Plans of America.

He said it’s becoming clear that what the Trump administration wants is to construct policies that will make Medicaid beneficiaries self-sufficient, but that will not take away their benefits entirely.

Verma has long argued that promoting self-sufficiency is key to any changes states make to Medicaid. In explaining the decision to reject lifetime limits, Verma noted that states only temporarily suspend benefits if work requirements aren’t met.

“An individual may not comply with a requirement around cost-sharing and they could potentially lose coverage. But we want to make sure that there’s a pathway back into the program … if they’re compliant with the requirements,” Verma said last week.

Medicaid experts said officials in Kansas and other red states were mistaken if they thought they could get the Trump administration to approve changes just because they happen to be conservative.

“Contrary to some states’ expectations, there really is a waiver approval process,” said Joe Antos, a health policy expert at the American Enterprise Forum, a conservative think tank.

“Decisions will move more rapidly than they were … [but] that doesn’t mean approvals,” he said.

Matt Salo, executive director of the National Association of Medicaid Directors, said any time there’s a change in administration, states jockey to see what policies they can get approved.

“There’s a lot of pent-up interest in pursuing flexibility and changes that the Obama administration would not entertain, [but] I don’t think anyone thought it was a blank check, do whatever you want,” Salo said.

The administration has yet to make a decision on other conservative wish list policies, such as Wisconsin’s proposal for drug testing Medicaid recipients, and partial Medicaid expansion, which would let states expand coverage for only a fraction of the population and still receive full federal funding under ObamaCare.

Salo said federal officials want to make sure that any waivers they approve will survive the inevitable lawsuits that follow.

“People are pretty savvy … if you’re just going to approve something that gets torn down in the courts, you’re wasting everyone’s time,” Salo said. “The granting of a wish list that gets trounced doesn’t do any good, and even sets the agenda back somewhat. Everyone’s better off if there’s a real rationale.”

CMS recently declined to issue a decision on a request by Arkansas to roll back the eligibility levels for Medicaid beneficiaries. The agency also declined to rule on Kansas’s request to impose work requirements, which experts have speculated could be an implicit rejection of the proposals.

Unlike the other four states that have been approved, Kansas is not a Medicaid expansion state, and the administration has not approved work requirements in any nonexpansion states.

Kansas officials indicated they were still working with federal officials.

“While we will not be moving forward with lifetime caps, we are pleased that the Administration has been supportive of our efforts to include a work requirement in the 1115 waiver. This important provision will help improve outcomes and ensure that Kansans are empowered to achieve self-sufficiency,” Gov. Jeff Colyer (R) said in a statement.

 

Despite Attacks on Obamacare, the Uninsured Rate Held Steady Last Year

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The Uninsured Rate Held Steady

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The numbers suggest a surprising resilience of the health law.

Last year, Trump administration officials declared Obamacare “dead,” pulled enrollment ads offline, distributed social media videos critical of the law and sent signals that the law’s requirement to buy health insurance was no longer in effect.

But the number of Americans with health insurance stayed largely unchanged. The results of a big, government survey on health insurance status were published Tuesday, and they show that the uninsured rate remained basically flat at 9.1 percent in the first year of the Trump presidency.

The numbers suggest a surprising resilience of the health law, and its expansion of insurance coverage, even in the face of efforts that the law’s defenders call “sabotage.”

The new statistics come from the Centers for Disease Control and Prevention, which monitors the number of Americans with and without health insurance every quarter. Some smaller private surveys, from Gallup and the Commonwealth Fund had shown the uninsured rate rising last year. But the C.D.C. research includes a larger sample size, and is generally regarded as a more definitive study. Tuesday’s study contains data from the entire calendar year of 2017.

Among states that expanded their Medicaid programs under the Affordable Care Act, the uninsured rate actually fell last year. Among states that didn’t expand, it rose a little.

Overall, Obamacare has substantially reduced the number of Americans without insurance. According to the report, 19.3 million fewer people were living without health insurance in 2017 compared with 2010, when the Affordable Care Act passed Congress.

New health insurance options aren’t the only thing that has changed since the passage of the Affordable Care Act. A strengthening economy has nudged more Americans into the work force, increasing people’s access to health insurance at work.

Obamacare has shown other signs of hardiness. This year, the Trump administration slashed the program’s advertising budget by 90 percent, and withdrew key subsidies from insurance companies, leading to premium increases for some customers. But every market had at least one insurer that continued to offer plans on the Obamacare marketplaces, and sign-ups dipped only slightly.

That does not mean that the insurance trends will hold forever. There are several reasons the uninsured rate may rise in the future:

  • In the face of rising premiums, it is likely that some who do not qualify for federal subsidies have dropped coverage this year.

  • Several states are trying to set up work or other “community engagement” requirements for some Medicaid beneficiaries. A few will impose such rules this year. States requesting such changes estimate they will result in a declining number of residents covered by Medicaid.

  • The Trump administration is working on regulations to allow more loosely regulated insurance plans into the market. These plans could prove appealing to some people who are currently uninsured. But they could cause prices to rise for insurance plans with all of the Obamacare consumer protections, prompting other people to drop their coverage. According to an estimate from the Urban Institute, about 2.6 million fewer people may have comprehensive coverage next year.

  • The tax penalty for people who decline to obtain insurance will disappear entirely next year. That change alone is likely to cause several million fewer Americans to have insurance. Early filings by insurance carriers suggest the change will cause another round of big price increases. And economists at the Congressional Budget Office estimate that the policy’s disappearance will also cause fewer people eligible for government help from even investigating such options.

The combination of those changes is likely to mean some backsliding. But last year’s data suggest that Obamacare’s policies have helped create options that are appealing to many Americans who would have gone without insurance in the years before its passage.

 

 

 

 

Are You And Your Primary Care Doc Ready To Talk About Your DNA?

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https://khn.org/news/are-you-and-your-primary-care-doc-ready-to-talk-about-your-dna/

If you have a genetic mutation that increases your risk for a treatable medical condition, would you want to know? For many people the answer is yes. But such information is not commonly part of routine primary care.

For patients at Geisinger Health System, that could soon change. Starting in the next month or so, the Pennsylvania-based system will offer DNA sequencing to 1,000 patients, with the goal to eventually extend the offer to all 3 million Geisinger patients.

The test will look for mutations in at least 77 genes that are associated with dozens of medical conditions ranging from heart disease to cancer, as well as variability in how people respond to pharmaceuticals based on heredity.

“We’re giving more precision to the very important decisions that people need to make,” said Dr. David Feinberg, Geisinger’s president and CEO. In the same way that primary care providers currently suggest checking someone’s cholesterol, “we would have that discussion with patients,” he said. “‘It looks like we haven’t done your genome. Why don’t we do that?’”

Some physicians and health policy analysts question whether such genetic information is necessary to provide good primary care — or feasible for many primary care physicians.

The new clinical program builds on a research biobank and genome-sequencing initiative called MyCode that Geisinger started in 2007 to collect and analyze its patients’ DNA. That effort has enrolled more than 200,000 people.

Like MyCode, the new clinical program is based on whole “exome” sequencing,analyzing the roughly 1 percent of the genome that provides instructions for making proteins, where most known disease-causing mutations occur.

Using this analysis, clinicians might be able to tell Geisinger patients that they have a genetic variant associated with Lynch syndrome, for example, which leads to increased risk of colon and other cancers, or familial hypercholesterolemia, which can result in high cholesterol levels and heart disease at a young age. Some people might learn they have increased susceptibility to  malignant hyperthermia, a hereditary mutation that can be fatal since it causes a severe reaction to certain medications used during anesthesia.

Samples of a patient’s blood or spit are used to provide a DNA sample. After analysis, the results are sent to the patient’s primary care doctor.

Before speaking with the patient, the doctor takes a 30-minute online continuing education tutorial to review details about genetic testing and the disorder. Then the patient is informed and invited to meet with the primary care provider, along with a genetic counselor if desired. At that point, doctor and patient can discuss treatment and prevention options, including lifestyle changes like diet and exercise that can reduce the risk of disease.

About 3.5 percent of the people who’ve been tested through Geisinger’s research program had a genetic variant that could result in a medical problem for which clinicians can recommend steps to influence their health, Feinberg said. Only actionable mutations are communicated to patients. Geisinger won’t inform them if they have a variant of the APOE gene that increases their risk for Alzheimer’s disease, for example, because there’s no clinical treatment. (Geisinger is working toward developing a policy for how to handle these results if patients ask for them.)

Wendy Wilson, a Geisinger spokeswoman, said that what they’re doing is very different from direct-to-consumer services like 23andMe, which tests customers’ saliva to determine their genetic risk for several diseases and traits and makes the results available in an online report.

“Geisinger is prescribing DNA sequencing to patients and putting DNA results in electronic health records and actually creating an action plan to prevent that predisposition from occurring. We are preventing disease from happening,” she said.

Geisinger will absorb the estimated $300 to $500 cost of the sequencing test. Insurance companies typically don’t cover DNA sequencing and limit coverage for adult genetic tests for specific mutations, such as those related to the breast cancer susceptibility genes BRCA1 or BRCA2, unless the patient has a family history of the condition or other indications they’re at high risk.

“Most of the medical spending in America is done after people have gotten sick,” said Feinberg. “We think this will decrease spending on a lot of care.”

Some clinicians aren’t so sure. Dr. H. Gilbert Welch is a professor at the Dartmouth Institute for Health Policy and Clinical Practice who has authored books about overdiagnosis and overscreening, including “Less Medicine, More Health.”

He credited Geisinger with carefully targeting the genes in which it looks for actionable mutations instead of taking an all-encompassing approach. He acknowledged that for some conditions, like Lynch syndrome, people with genetic mutations would benefit from being followed closely. But he questioned the value of DNA sequencing to identify other conditions, such as some related to heart disease.

“What are we really going to do differently for those patients?” he asked. “We should all be concerned about heart disease. We should all exercise, we should eat real food.”

Welch said he was also concerned about the cascading effect of expensive and potentially harmful medical treatment when a genetic risk is identified.

“Doctors will feel the pressure to do something: start a medication, order a test, make a referral. You have to be careful. Bad things happen,” he said.

Other clinicians question primary care physicians’ comfort with and time for incorporating DNA sequencing into their practices.

A survey of nearly 500 primary care providers in the New York City area published in Health Affairs this month found that only a third of them had ordered a genetic test, given patients a genetic test result or referred one for genetic counseling in the past year.

Only a quarter of survey respondents said they felt prepared to work with patients who had genetic testing for common diseases or were at high risk for genetic conditions. Just 14 percent reported they were confident they could interpret genetic test results.

“Even though they had training, they felt unprepared to incorporate genomics into their practice,” said Dr. Carol Horowitz, a professor at the Icahn School of Medicine at Mount Sinai in New York, who co-authored the study.

Speaking as a busy primary care practitioner, she questioned the feasibility of adding genomic medicine to regular visits.

“Geisinger is a very well-resourced health system and they’ve made a decision to incorporate that into their practices,” she said. In Harlem, where Horowitz works as an internist, it could be a daunting challenge. “Our plates are already overflowing, and now you’re going to dump a lot more on our plate.”

 

 

Prime Healthcare Services unlawfully stopped nurses’ anniversary raises, court rules

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https://www.beckershospitalreview.com/legal-regulatory-issues/prime-healthcare-unlawfully-stopped-nurses-anniversary-raises-court-rules.html

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A federal appeals court ruled that Ontario, Calif.-based Prime Healthcare Services violated the National Labor Relations Act when it canceled anniversary raises for unionized nurses, according to a Reuters report.

Here are six things to know about the issue.

1. The U.S. Court of Appeals for the D.C. Circuit made the ruling May 18, affirming a previous ruling by the National Labor Relations Board.

2. The NLRB found Prime “violated both the unilateral change doctrine and the duty to provide relevant information during negotiations with its employees’ bargaining representatives, Service Employees International Union Local 121RN and SEIU United Healthcare Workers-West,” according to the May 18 ruling. The NLRB specifically found Prime canceled anniversary step increases for nurses after the expiration of its labor deals with the two SEIU bargaining units, and determined the private for-profit hospital operator failed to provide information about employee healthcare programs as requested by the units. The NLRB ordered Prime to resume the raises, take care of any owed back pay due to the discontinuation of the raises and provide the requested information.

3. Both sides reached a settlement regarding complaints related to UHW’ unfair labor practice charges in the matter, and the unfair labor practice charges filed by 121RN remained at issue, according to the ruling. Prime’s agreements with 121RN, as well as UHW, were effective from Jan. 1, 2007, through March 31, 2011. The 121RN bargaining unit represents registered nurses at Prime’s Encino (Calif.) Hospital Medical Center, while UHW represents service and technical employees at Encino and Prime’s Garden Grove (Calif.) Hospital Medical Center.

4. Prime argued, among other things, that the anniversary step increases were terminated when the labor deal with 121RN expired in 2011 because they were tied to annual pay increases in the expired contract, according to the ruling.

5. The appeals court found “no merit in these challenges, however. Accordingly, we deny the petition for review and grant the [NLRB] board’s cross-application for enforcement of its order.”

6. In response to the ruling, Jamie Konn, outside counsel for Prime, told Becker’s Hospital Review: “This is an old matter that is now behind us. Encino and 121RN entered into a collective bargaining agreement in November 2014. The parties will continue to work together, and this matter should be resolved soon.”

 

Aetna whistle-blower put on leave after accusing CVS Caremark of $1B billing scheme

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https://www.beckershospitalreview.com/legal-regulatory-issues/aetna-whistle-blower-put-on-leave-after-accusing-cvs-caremark-of-1b-billing-scheme.html

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Aenta’s former chief Medicare actuary was placed on administrative leave after filing a whistle-blower lawsuit alleging pharmacy benefits manager CVS Caremark overbilled Medicaid and Medicare for prescription drugs, according to The Columbus Dispatch.

Here are four things to know about the lawsuit.

1. Sarah Behnke, Aetna’s former chief Medicare actuary, filed the pending whistle-blower suit after her internal investigation found CVS Caremark has been allegedly overbilling the federal government for prescriptions since 2007, according to the lawsuit. Ms. Behnke accused CVS Caremark of inappropriately billing the government $1 billion-plus in fraudulent charges.

2. Aetna placed Ms. Behnke on administrative leave after the whistle-blower suit was unsealed in federal court in early April. The unsealing comes as CVS Health, the parent company of CVS Caremark, is attempting to buy Aetna for $69 billion.

3. Ms. Behnke’s lawyer told The Columbus Dispatch Aetna’s decision to place its then-Medicare actuary on administrative leave was “retaliatory and inappropriate.”

4. CVS Caremark rejected the allegations and said it will hand documents over to the court by June 1. The company said it was unaware who filed the lawsuit until after its parent put out an offer to Aetna. CVS Health spokesperson Michael DeAngelis told the publication, “We believe this complaint is without merit, and we intend to vigorously defend ourselves against these allegations.” Aetna officials declined The Columbus Dispatch‘s request for comment.

 

Cartoon – Unprecedented Levels of Unverifiable Productivity

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