Tag Archives: Health Insurance Individual Market

Senate GOP Has 12 Days to Repeal Obamacare and No Room for Error

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , , , , • Leave a comment

https://www.bloomberg.com/news/articles/2017-09-19/senate-gop-has-12-days-to-repeal-obamacare-and-no-room-for-error

Image result for time running out

Senate Republicans making one last-ditch effort to repeal Obamacare have the daunting task of assembling 50 votes for an emotionally charged bill with limited details on how it would work, what it would cost and how it would affect health coverage — all in 12 days.

They need to act by Sept. 30 to use a fast-track procedure that prevents Democrats from blocking it, but the deadline doesn’t leave enough time to get a full analysis of the bill’s effects from the Congressional Budget Office. The measure would face parliamentary challenges that could force leaders to strip out provisions favored by conservatives. Several Republicans are still withholding their support or rejecting it outright.

And even if Republicans manage to get it through the Senate by Sept. 30, the House would have to accept it without changing a single comma.

Most Senate Republicans are still trying to figure out what it’s in the bill, which was authored by Republicans Lindsey Graham of South Carolina and Bill Cassidy of Louisiana. Until the past few days, most assumed that GOP leaders had no interest in reviving the Obamacare repeal effort after their high-profile failure to pass a measure this summer.

Republican Senator Steve Daines of Montana said he’s still trying to figure out how the bill will affect his state and wants to hear what GOP leaders say at a closed-door lunch Tuesday.

‘Active Discussion’

“It will be a very active discussion,” he said.

The new repeal bill would replace the Affordable Care Act’s insurance subsidies with block grants to states, which would decide how to help people get health coverage. The measure would end Obamacare’s requirements that individuals obtain health insurance and that most employers provide it to their workers, and it would give states flexibility to address the needs of people with pre-existing medical conditions.

But lawmakers won’t have much more information about the legislation by the time the Senate would have to vote. The CBO said Monday it will offer a partial assessment of the measure early next week, but that it won’t have estimates of its effects on the deficit, health-insurance coverage or premiums for at least several weeks. That could make it hard to win over several Republicans who opposed previous versions of repeal legislation.

So far, President Donald Trump has suggested he’d support the bill, but he hasn’t thrown his full weight behind it.

Majority Leader Mitch McConnell has told senators he would bring up the bill if it had 50 votes, and under fast-track rules he could do so at any time before Sept. 30. That’s the end of the government’s fiscal year, when the rules expire and the GOP would have to start over.

Several Holdouts

Republicans can only lose two votes in the 52-48 Senate and still pass the measure, with Vice President Mike Pence’s tie-breaker. There are at least four holdouts, and getting any of them to back the measure would require the senators to change their past positions. Pence, who would cast the potentially deciding vote, will return to Washington from New York Tuesday, where he’s been taking part in United Nations General Assembly events, to attend Senate GOP lunches.

Republican Rand Paul of Kentucky said Monday he’s opposed to the Graham-Cassidy bill, saying it doesn’t go far enough. John McCain of Arizona said he’s “not supportive” yet, citing the rushed legislative process.

Two other Republicans — Susan Collins of Maine and Lisa Murkowski of Alaska — have voted against every repeal bill considered this year in the Senate, citing cuts to Medicaid and Planned Parenthood as well as provisions that would erode protections for those with pre-existing conditions. The Graham-Cassidy bill contains similar provisions on those three areas.

“I’m concerned about what the effect would be on coverage, on Medicaid spending in my state, on the fundamental changes in Medicaid that would be made,” Collins told reporters Monday evening.

She said that Maine’s hospital association has calculated the state would lose $1 billion in federal health spending over a decade compared to current law.

“That’s obviously of great concern to me,” she added.

Hard Sell

Murkowski is getting a hard sell from Republican backers of the bill.

“What I’m trying to figure out is the impact to my state,” Murkowski told reporters Monday. “There are some formulas at play with different pots of money with different allocations and different percentages, so it is not clear.”

McCain, who is close friends with Graham, cast the deciding vote to sink an earlier repeal bill in late July when he made a dramatic return to the Senate after a brain cancer diagnosis. At the time, he made an eloquent plea for colleagues to work with Democrats and use regular legislative procedures instead of trying to jam it through on a partisan basis.

John Weaver, a former top adviser to McCain, said supporting Graham-Cassidy would require the Arizona senator to renege on his word.

‘Fair Process’

“I cannot imagine Senator McCain turning his back not only on his word, but also on millions of Americans who would lose health care coverage, despite intense lobbying by his best friend,” Weaver said in an email. “Graham-Cassidy, if truly attempted to pass, will bypass every standard of transparency and inclusion important to people who care about fair process.”

Despite the obstacles, the bill’s backers are putting on a good face about the prospects.

“We’re making progress on it,” said Republican Senator Ron Johnson of Wisconsin. “I’m still cautiously optimistic, but there are a lot of moving parts.” Johnson is planning a Sept. 26 hearing on the measure in the Homeland Security and Governmental Affairs Committee, which he leads. The Senate Finance Committee is planning its own hearing Sept. 25 on the measure.

“There’s a lot of interest,” Senator Pat Toomey of Pennsylvania said Monday. “Those guys have done some very good work.”

A number of Republicans are still pushing for changes to the bill, so the final version may evolve. It’s also subject to parliamentary challenges under the reconciliation process being used to circumvent the 60-vote threshold in the Senate. That could allow Democrats to strike provisions that take aim at Obamacare’s regulatory structure.

Last Chance

If it passed the Senate, the House would have to pass the bill without any changes. House Speaker Paul Ryan said Monday that the measure is Republicans’ last best chance to repeal Obamacare.

“We want them to pass this, we’re encouraging them to pass this,” Ryan told reporters at a news conference in Wisconsin. “It’s our best, last chance of getting repeal and replace done.”

But that won’t be easy either. The measure strives to equalize Medicaid funding between states, which means that some House Republicans from Medicaid expansion states could find it hard to support. That includes states like New York and California, which stand to lose federal funds under Graham-Cassidy. Those states have only Democratic senators, but have some GOP House members.

Another Run

In some ways, it’s remarkable that Republicans are mounting another run at repeal.

Two months ago, Majority Leader Mitch McConnell’s effort to pass a replacement with only Republican support suffered a spectacular defeat in the Senate. When members of the Senate health committee then began working on a bipartisan plan to shore up Obamacare, Graham and Cassidy revved up a new bid to get their GOP-only bill to the Senate floor.

Graham and Cassidy are hoping to channel the GOP’s embarrassment at failing to repeal Obamacare this summer after seven years of promising to do so. But Paul said Monday this legislation shouldn’t be treated like a “kidney stone” you pass “just to get rid of it.”

Despite all the obstacles, Democrats quickly geared up for another campaign against repeal, warning that the latest bill is a serious threat.

“This bill is worse than the last bill,” Senate Democratic leader Chuck Schumer of New York told reporters Monday. “It will slash Medicaid, get rid of pre-existing conditions. It’s very, very bad.”

Healthcare: It’s complicated

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , , , , , • Leave a comment

http://www.theactuary.com/features/2017/07/its-complicated/

Istock_america_health

It has been a little over seven years since the US began implementing healthcare reform at the national level, following the passage of the Patient Protection and Affordable Care Act (ACA), also known as Obamacare. However, the future of the law’s programmes has never seemed more uncertain now that the United States House of Representatives has passed legislation repealing and replacing many of the ACA’s key provisions.

While the ACA and the proposed replacement legislation are fundamentally different in their approaches to financing and regulating healthcare, they do have one thing in common: both are extraordinarily complicated.

Actuaries have had a front-row seat as healthcare reform has unfolded, and they are in a unique position to help address the challenges our complex system presents – whether that involves setting premium rates, calculating reserves, or just trying to explain healthcare policy to their Facebook friends. After all, actuaries were working to promote the financial stability of our complex healthcare system long before the ACA came along.

Even so, one might ask: Why is the American healthcare system so complicated? Does it have to be that way? Most stakeholders acknowledge that our current system has room for improvement, although opinions vary widely on what to do about that. In part, the complexity of our system is rooted in our history.

The healthcare system that we have today wasn’t formed in one fell swoop. Instead, it has been stitched together gradually over the past century by policymakers working to meet the challenges of their times. For example, the prevalence of employer-sponsored insurance was at least partly driven by price-wage controls implemented by the federal government in the 1940s during the Second World War, together with very favourable tax treatment. When the employer-sponsored market began to flourish, healthcare coverage became unaffordable for the non-working population – in particular, low-income workers, seniors, and disabled individuals – and the Medicare and Medicaid programmes were born. Currently, healthcare in the US is provided and funded through a variety of sources:

  • Employer-sponsored insurance – either self-funded by the employer or insured through a carrier
  • Individual major medical insurance – currently subsidised by the federal government for many individuals under the ACA
  • Medicare, Medicaid, and military health coverage – subsidised by federal and state governments and increasingly administered by privately managed care organisations
  • Other – for instance, the Indian Health Service, care provided to correctional populations, and uncompensated care provided to the uninsured.

 

It’s therefore not surprising that the policies being proposed today are an attempt to fix the problems we currently face, such as expanding access to affordable healthcare, reducing the cost of healthcare, or improving the quality of care received by patients.

However, our system has evolved in such a way that trying to implement a solution is like trying to solve a Rubik’s Cube – it is hard to make progress on one side without introducing new problems into other parts of the puzzle. For a Rubik’s Cube, successful solvers focus on both the local and global picture, and sometimes must make short-term trade-offs to achieve a longer-term solution. Unfortunately, the short-term nature of political pressures make it difficult to implement longer-term strategies for healthcare. Yet, we see many areas where actuaries can be instrumental in addressing the challenges presented by our complex healthcare system.

Complex times call for complex models

The ACA made sweeping changes that impacted almost every source of coverage listed above. The most profound changes, besides the expansion of Medicaid coverage, were the changes made to the individual and small employer health insurance markets. These already small markets were fractured into several separate pieces (grandfathered business from before the ACA became law, ‘transitional’ business issued before 2014, and ‘ACA-compliant’ business issued in 2014 and beyond). The only constant has been change, with many regulatory changes occurring each year (often after premium rates were set by insurers) and with the stabilisation programmes intended to mitigate risk during this time of change often paradoxically increasing uncertainty. This led some to question whether these markets were inherently too unpredictable to be viable, whereas others felt that the markets were finally starting to stabilise before the election changed everything.

Besides predictability problems caused by regulatory or political factors, two challenges facing health actuaries during these transitional years have been (1) the lag between when market changes are implemented and when data on policies subject to the new rules becomes available, and (2) the difficulty in predicting consumer behaviour in reaction to major changes in market rules such as guaranteed issue and community rating. How many of the uninsured would sign up? How price-sensitive would members be when they renewed their coverage each year? How will changes in other sources of coverage (such as Medicaid expansion) impact the individual market? How will potential actions by competitors affect an insurer’s risk?

Despite the daunting nature of these challenges, actuaries have, out of necessity, found ways to try to address them. For example, faced with the data lag problem, they explored ways to augment traditional claim and enrollment data with new data sources such as marketing databases or pharmacy history data available for purchase. Such sources can be used to develop estimates of the health status of new populations not previously covered by an insurer. Many actuaries also developed agent-based stochastic simulation models that attempted to model the behaviour of consumers, insurers and other stakeholders in these new markets. Such models continue to be used to evaluate the potential outcomes of future changes to the healthcare system, and will probably be essential should efforts to repeal and replace the ACA prove successful.

Information problems: what is a rational actor to do?

Most goods and services in the US have a price tag that consumers can use to ‘shop’ for the option that they feel gives them the best value for their dollar. Healthcare is different. If you ask how much a healthcare service will cost in the US, the answer is “it depends”. List prices such as billed charges for hospitals and physicians and average wholesale prices for pharmaceuticals are increasingly meaningless, given the enormous contractual discounts and rebates that typically apply. The same service may have wildly different prices depending on who is paying for it, and prices may not correlate well with either the clinical value the service provides to the patient or the actual cost to the healthcare provider who renders it. Layered on top of this complex foundation are the often arcane policy provisions that determine a member’s ultimate cost for a claim.

Moreover, even if a patient can determine the cost of treatment at different healthcare providers, making an informed choice often requires clinical knowledge the average person is unlikely to possess. Also, many of the most costly services are non-discretionary and often emergent in nature. In other words, even if a consumer wanted to shop they would be hard-pressed to do so.

All of this means that it is exceedingly hard for various stakeholders – patients, doctors, even insurers – to know the true cost of a service at the point of care, much less manage it. Yet a lot of effort has been spent in trying to better align cost incentives for providers and patients. Past efforts have often used crude methods, such as high deductibles paired with health savings accounts, to create incentives. Current efforts such as value-based insurance designs, which vary cost sharing based on a patient’s clinical profile, use more nuanced approaches to encourage patients to use high-value care. Moving from fee-for-service to value-based payment models for reimbursing healthcare providers has been a focus of both private and public payers in the US.

While such initiatives show promise, they come at the price of even more complexity – and it isn’t always clear that this price is worth paying. The proliferation of more complex benefit designs and provider contracting arrangements can exacerbate the price transparency problems that existed even in the relatively simple fee-for-service world.

Actuaries are well equipped to help insurers, providers and consumers navigate these waters. For example, repricing healthcare claims in an equitable way using actuarial techniques, such as comparing reimbursement rates with a standard fee schedule, is

an efficient way for providers and payers to evaluate cost levels consistently across contracts that may use very different reimbursement methodologies.

Actuaries also have a role to play in developing tools to support clinicians and consumers in understanding the financial dimensions of their healthcare decisions.

Technology: the cause of, and solution to, all our cost problems?

For better or worse, Americans seem determined to seek technological solutions to our health problems, even when lifestyle changes in diet and exercise habits might be just as effective.

Technological advances drive a significant portion of healthcare cost increases, and while many do result in profoundly valuable new therapies, some provide only marginal benefit over existing options at a significantly higher cost. Finding ways to leverage our love of technology to achieve health outcomes more cheaply would be a worthy goal, and one where an actuary could make a difference. Work to use machine learning (for example, in radiology), smarter medical devices, and other data-intensive methods to improve healthcare are still in their infancy, but show promise. From a policy perspective, actuaries could assist in designing novel approaches toward rethinking the incentives for clinical innovation, such as linking payment for new therapies to their clinical value relative to alternatives.

Will the US ever change its relationship status with healthcare from “it’s complicated” to something less ambiguous? In the near term, the answer seems to be “no.” But perhaps we can hope that – with a little help from actuaries – even a complicated relationship can be a good one.

Centrist Democrats Turn to Pragmatism, Seek Bipartisan ACA Fixes

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , • Leave a comment

https://morningconsult.com/2017/09/15/centrist-dems-seek-bipartisan-aca-fixes-not-single-payer-plan/

Click to access attachment-1.pdf

Image result for healthcare policy

While some progressives campaigned this week for “Medicare for all,” a group of moderate House Democrats aligned themselves with a more modest push to stabilize the Affordable Care Act, arguing that it could spur broader health care reforms in the future.

Thirty-eight of the 61 members of the New Democrat Coalition sent a letterFriday urging the leaders of the Senate Health, Education, Labor and Pensions Committee to agree on a bipartisan bill to keep premiums from rising further for Obamacare enrollees next year.

The letter outlines five short-term proposals agreed to by the group — several of which are likely to be included in the Senate bill, such as the extension of key insurer payments known as cost-sharing reductions.

New Democrat Coalition Chair Rep. Jim Himes (D-Conn.) said that while some Democrats and Republicans continue to push polarizing health care plans after the July collapse of Senate Republicans’ Obamacare repeal push, some lawmakers of both parties are ready to try bipartisanship.

“There’s a pretty substantial group of Democrats and Republicans who are ready to work together and get some things done on this most politically charged of topics,” Himes said in an interview Thursday.

Only three of the 38 Democrats who signed the letter are co-sponsors of a single-payer health care bill introduced by Rep. John Conyers (D-Mich.) that has been endorsed by approximately 60 percent of the House Democratic caucus; Sen. Bernie Sanders (I-Vt.) introduced similar legislation in the Senate on Wednesday.

But the progressive single-payer legislation has almost no chance of passing the Republican-led Congress, and members of the New Democrat Coalition are taking a more pragmatic approach: While “Medicare for all” proponents support placing nearly all Americans on a government plan, the New Democrat Coalition is backing reforms to improve private health insurance coverage and reduce health care costs.

“We believe these ideas provide a framework to reduce health care costs for families and seniors, increase choices for consumers, and encourage participation by the young and healthy,” the Democrats wrote in the letter.

Some members of the New Democrat Coalition are also in the House Problem Solvers Caucus, which consists of centrist GOP and Democratic lawmakers and sent its own letter Wednesday urging the Senate HELP and Finance committees to move toward a bill as a crucial Sept. 27 deadline for insurers approaches.

HELP Committee Chairman Lamar Alexander hopes to reach an agreement on the legislation by early next week, the Tennessee Republican said at a hearing on Thursday.

 

Hospital group comes out against new ObamaCare repeal effort

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , , , • Leave a comment

Hospital group comes out against new ObamaCare repeal effort

Hospital group comes out against new ObamaCare repeal effort

America’s Essential Hospitals announced its opposition to a new ObamaCare repeal and replace bill, warning of cuts and coverage losses.

The group, which represents hospitals that treat a high share of low-income people, said it is opposed to a last-ditch bill to repeal ObamaCare from Sens. Bill Cassidy (R-La.), Lindsey Graham (R-S.C.), Dean Heller (R-Nev.) and Ron Johnson (R-Wis.).

Dr. Bruce Siegel, the group’s president and CEO, said in a statement the bill “would shift costs to states, patients, providers, and taxpayers.”

“Further, by taking an approach so close to that of the earlier House and Senate plans, it’s reasonable to conclude it would have a similar result: millions of Americans losing coverage,” he added.

America’s Essential Hospitals is one of the first major health groups to come out in opposition to the bill. Most have not yet weighed in on the measure, which was only introduced on Wednesday.

Many are also skeptical of the bill’s chances, but it appears to be gaining at least some momentum.

Cassidy told reporters Friday that he thought the bill had the support of 48-49 senators, just shy of the needed 50. Still, the effort faces long odds and a fast-approaching procedural deadline of Sept. 30.

America’s Essential Hospitals was one of the most outspoken opponents of the earlier repeal bills, along with other hospital groups. Many doctors groups were also opposed and many insurers eventually weighed in against provisions to change ObamaCare pre-existing condition rules.

How Would Coverage, Federal Spending, and Private Premiums Change if the Federal Government Stopped Reimbursing Insurers for the ACA’s Cost-Sharing Reductions?

Posted on by • Posted in Uncategorized • Tagged , , , , , , • Leave a comment

http://www.rwjf.org/en/library/research/2017/09/how-would-coverage-federal-spending-and-private-premiums-change.html

http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2017/rwjf440003

Home

 

Elimination of federal cost-sharing reductions could increase marketplace spending by 18 percent or increase the uninsured by 9.4 million, depending on insurer response.

The Issue

The Affordable Care Act (ACA) requires insurers to provide cost-sharing reductions (CSRs) that lower deductibles, co-payments, co-insurance, and out-of-pocket maximums for people eligible for tax credits and with incomes below 250 percent of the federal poverty level. With current policy uncertainty surrounding these CSRs, there are multiple future scenarios, but all involve increases in insurance premiums for consumers and there is a potential for large reductions in the insured population.

Key Findings

The report analyzes three potential scenarios and outcomes:

  • Insurers have enough time before the start of the plan year to incorporate their anticipated CSR costs into a surcharge placed on silver plan premiums.
  • Insurers exit the marketplaces in response to the loss of CSRs and other policy uncertainties and changes.
  • The federal government does not reimburse insurers for CSRs and lawmakers alter the ACA so that insurers are no longer required to pay CSRs to eligible enrollees.
Conclusion

In 2018, the number of uninsured Americans could increase by 9.4 million, and average premiums could increase by nearly 37 percent, if insurers abandon the marketplaces because of a decision to eliminate federal reimbursement of health insurance CSRs.

 

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.

How to turn healthcare’s single-payer threat into a reality

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , • Leave a comment

http://www.modernhealthcare.com/article/20170913/NEWS/170919942

Related image

What’s behind the renewed enthusiasm in the Democratic Party for Sen. Bernie Sanders’ single-payer healthcare bill? The GOP still controls both houses of Congress and the White House. The Affordable Care Act still faces an existential crisis.

Unless something is done in the next few weeks to shore up the exchanges for 2018 and reverse HHS’ mean-spirited efforts to undermine enrollment, the enormous progress made over the past four years—last week the Census Bureau announced the nation’s uninsured rate had dropped sharply over that period to 8.8%—will begin to reverse. For those desperately working to avert the immediate danger, single-payer advocacy is a distraction.

Unfortunately, the logic of contemporary politics made the current push for single-payer inevitable. President Donald Trump and the tea party set the table. They proved that in a populist moment, extreme positions that cater to a sliver of the electorate are a viable path to electoral success.

Expect left-wing challengers supporting single-payer to win numerous Democratic House and Senate primaries next spring. A wave election typical of first-term, off-year elections will lead to a single-payer caucus in the next Congress with as much power as the tea party caucus had after the wave of election of 2010.

Single-payer looms as their threat. If you destroy President Barack Obama’s grand compromise-his eponymous plan relied on private insurers and preserved the employer-based system- the fire next time will get rid of both.

Unlike the tea party, single-payer advocates have history on their side. The U.S. over the last half century has moved inexorably toward universal coverage: Medicare and Medicaid; the Children’s Health Insurance Program; the ACA. It will get there one way or another.

Sanders asked the right question in his op-ed last week in the New York Times. “Do we, as a nation, join the rest of the industrialized world and guarantee comprehensive health care to every person as a human right?”

Polls now report growing support for single-payer health insurance. When asked if the government has the responsibility to guarantee access to healthcare for all Americans, nearly 60% answer yes. In other words, a clear majority of Americans now say yes to Sanders’ question.

It’s not just a human-rights issue. Universal access through universal insurance coverage is a necessary if insufficient component of getting healthcare costs under control. It is also a building block for restoring the nation’s economic competitiveness, especially in areas of the country suffering from a prolonged decline. No region can thrive unless it has a well-educated, healthy workforce.

Industrialized countries diverged in how they achieved universal coverage. Some chose a government-funded, single-payer system. Others chose well-regulated private insurers. Still others chose a combination of the two.

The U.S., because its employers used health benefits to get around World War II’s wage-and-price controls, accidentally chose a mixed system. It was the erosion of the employer-based system that led to Obamacare.

Sanders and his 15 Senate co-sponsors propose to eliminate the employer-based system entirely. He would gradually expand Medicare to cover everyone over four years.

The legislation is silent on how to transfer the $1.1 trillion spent by employers on health insurance to government coffers, necessary to defray the cost of his plan. He doesn’t address how he would counter the tremendous opposition that disrupting the existing system would draw from employers and their workers, including those in many unions.

Sanders decries the lack of progressive think tanks to come up with answers to those and other transition questions. But the problem isn’t the absence of good ideas. It’s the absence of fertile soil in which those ideas can grow.

That will change rapidly if Republicans succeed in repealing Obamacare, or undermine it and send the uninsured rate soaring again. That, and only that, will turn the single-payer threat into the last viable path to universal coverage.

WHY RETURNING TO A PRE-ACA MARKET ISN’T AN OPTION

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , , • Leave a comment

http://www.managedhealthcareconnect.com/article/why-returning-pre-aca-market-isn-t-option

Image result for aca

 

After the recent failed attempts to repeal the Affordable Care Act (ACA), it is anyone’s guess as to what comes next. Tax reform and infrastructure now appear to have moved ahead of health care on the legislative agenda—leaving the ACA largely out of lawmakers’ hands, and the Department of Health and Human Services (HHS) at the helm.

The President has implied that the federal government might halt federal payments to insurance companies meant to provide financial assistance to consumers who qualify for subsidies if they purchase health insurance on the ACA exchange. So far that has not happened. In a recent appearance on ABC’s “This Week” Sunday newsmagazine, HHS Secretary Tom Price, MD, said that he and his team are combing through the specifics of the ACA law, “asking the question, ‘does this help patients or does it harm patients? Does it increase costs or does it decrease costs?’”

There are more than 1400 instances in the law where the HHS Secretary has discretion to make changes, making the HHS the most likely source for any forthcoming health reform.

Republicans generally favor pushing more decision-making down to the states, and offering more choice to consumers. Dr Price has talked up a provision drafted by Senator Ted Cruz (R-Texas) that was included in the Senate’s plan. It would have given consumers the choice to purchase insurance that does not meet the ACA’s standard of the essential health benefits, but instead meets a given State’s definition of which service it deems essential. Coupled with the ability to grant state waivers for changes to the current law, many have suggested this could lead to consumers purchasing plans that do not cover most services.

“Dusting Off” The Old Way

The so-called Consumer Freedom Option is strongly opposed by the nation’s largest health insurers, which seemed to bewilder Secretary Price.

“It’s really perplexing, especially from the insurance companies, because all they have to do is dust off how they did business before Obamacare,” he said during the This Week interview. It is “exactly the kind of process that has been utilized for decades.”

Even though the Cruz provision went down with the rest of the Senate bill in July, it is not unreasonable to wonder if Secretary Price might try to figure out how to offer low-cost “skinny plans.” Or if Congress might do that same if and when health care moves back into the limelight.

This begs two questions:

  1. Can the United States ever go back to the way health insurance worked before the ACA, dusting things off, as Secretary Price suggested?
  2. Can selling insurance inside and outside of the ACA—as the Cruz provision envisioned—work?

Most industry experts offer a resounding “no” to both questions. As we have reported previously, it is difficult to take benefits away once they are given. For that reason, there is consensus that the ACA in some form or fashion is here to stay. There is also near universal agreement that certain parts of the ACA—notably the exchanges—need work. But experts also point out that provisions like Sen Cruz’s, that propose parallel systems where different rules apply, will not improve the exchanges, and indeed will likely hasten the so-called death spiral.

AHIP Objects, Actuaries Agree

In a July letter to Senate leaders, America’s Health Insurance Plans (AHIP) pointed out that even though the Cruz provision calls for a single risk pool, such a pool would be established “in name only. In fact, it creates two systems of insurance for healthy and sick people.”

A paper published this year by the American Academy of Actuaries, reinforces this claim.

“If insurers were able to compete under different issue, rating, or benefit coverage requirements, it could be more difficult to spread risks in the single risk pool…. Changes to market rules, such as increasing flexibility in cost-sharing requirements, could require only adjustments to the risk adjustment program. Other changes, such as loosening or eliminating the essential health benefit requirements, could greatly complicate the design and effectiveness of a risk adjustment program, potentially weakening the ability of the single risk pool to provide protections for those with preexisting conditions.”

Such a system, according to the paper, would effectively create two risk pools, and premiums in the ACA plans would be much higher than in those not subject to ACA regulations, leading to a destabilized ACA market. Moreover, things would get worse if people were allowed to move between plans depending on their health status.

Making the Problems Worse

The experts we spoke with agreed, citing the potential for confusion and flawed benefit design. Additionally, it does not adequately address the ACA exchange problems, and indeed may exacerbate them.

“The Cruz amendment would not likely achieve anything other than allowing young/healthy individuals to purchase cheaper, inadequate coverage at a lower price,” David Marcus, director of employee benefits at the National Railway Labor Conference, explained. “It would generally do nothing to lower premiums for ACA-compliant coverage.”

Gary Owens, MD, president of Gary Owens Associates, a medical management and pharmaceutical consultancy firm, implied that Cruz’s plan is a half-baked solution that most would have a difficult time navigating.

“This seems to just one more attempt to cobble together a solution to address the issue of healthcare access and coverage,” he said. “It would probably create more confusion for consumers about which plan is appropriate for their needs.”

Norm Smith, president of Viewpoint Consulting, Inc, which surveys managed markets decision-makers for the pharmaceutical industry, concurred.

“Many of the people buying these plans would not be able to define what’s covered, and what’s not,” he said. “Plans would be difficult for state insurance commissions to control without standardized benefit design.” He added that ACA plans would be crippled as younger, healthier people leave in favor of non-ACA coverage.

F Randy Vogenberg, PhD, RPh, principal at the Institute for Integrated Healthcare, said that the Cruz approach is a tepid response to what he sees as failure on the ACA exchanges.

“It has no merit because it does not address the need to change from the current exchange products,” he explained.

More Choice or Inadequate Coverage?

Proponents cite the fact that skinny plans give more choice to consumers, and that free-market principles are needed, vs increased government intervention. Mr Smith reminded us that the ACA—which is based on the Romney plan that became law in Massachusetts—already contains free-market components. For that reason, he said that introducing more choice could work in theory. However, in practice, “with the level of medical insurance literacy being so low, I’m not sure most members will understand what they are buying.”

Mr Marcus added that “The marketplace is already designed to have market principals, though the insurance that is available through [it] is limited to certain types of coverage.  Offering more choice means certain people can get cheaper plans, but those cheaper plans are generally inadequate methods of protecting against health costs.”

Dr Owens explained that health reform will take much more than simply going back to the way insurance was sold in the 1990s, or tacking piecemeal amendments onto the ACA one after the other.

“Trying to glue on a piecemeal solution is not the answer,” he said. “Congress needs to drop the partisan approaches, put together a real working group that will take the needed time and use the available expertise to develop a comprehensive plan that takes the ACA to the next level.”

New Consumer Expectations

In the end, a big reason that insurers cannot simply dust off their plans from the past may be due to customer preference. Consumers often feel hamstrung when it comes to buying appropriate, affordable coverage. Yet they possess more power than many believe, as evidenced by the backlash Washington lawmakers have faced at local town hall meetings. This, in large part, led to the downfall of ACA repeal efforts.

The term “pre-existing conditions” is now a part of almost every health consumer’s lexicon, and people do not expect to be shut out of the market or forced to buy an exorbitantly expensive plan just because they have such a condition. The ACA appears to have cemented that mindset.

Dr Owens explained that insurers are more eager to work within the already established system of regulations, as opposed to wading into uncharted regulations.

“I don’t think the insurers want to increase the complexity of the marketplace,” he said.

Mr Smith agreed, adding that there would need to be “an awful lot of explaining before members knew what they were buying.”

“Going back just doesn’t make sense,” Mr Marcus noted. “Insurance carriers have spent huge sums of money developing systems to comply with the ACA. Profits at the largest carriers are the highest they have ever been. Insured individuals now have an expectation for ACA market reforms to be continued, but the concept behind the Cruz amendment would not change that.”

Additionally, the health insurance industry as a whole is probably concerned about payers who would choose to sell substandard plans outside of the ACA exchanges. Consumers would be left “in a bind when they need to access coverage,”  Dr Owens said, which would not reflect well on the industry. — Dean Celia

Hospital Impact—The only thing clear about healthcare policy is the continued lack of clarity

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , • Leave a comment

http://www.fiercehealthcare.com/hospitals/hospital-impact-only-thing-clear-about-healthcare-policy-continuing-lack-clarity?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWldFeE1XUXlPRFE0TlRneCIsInQiOiJ5dzRsZ1IwekxcL2FMZnN3NkJIOHZGbnpNV1RPcmtMNmdPd1MwV0RLUXNBSXl6QzJnK0s0NktPVzBLOUtRRjF1K0puZzZMZG95dERnN2VUcVRpeForakRVZVJsXC9GWllyU1g1Rk9ZY2pERVRQcjVyT1wvQkMycXdobjd5UnNKa2p3NiJ9

Executive looking out window

For healthcare leaders, it’s discouraging that federal policy decisions seem to be made at the last minute without much planning or consideration of unintended consequences.

I spent my Labor Day vacation in Monterrey, California, watching the waves crash into the sand and wondering what the future of healthcare will look like in the coming months and years. Some clarity is emerging that we have not seen in the past, and I feel comfortable making some observations and predictions:

  • Congress will not revisit the repeal and replacement of the Affordable Care Act before the end of the year. It is simply dealing with far too many other issues—passing a budget, raising the debt ceiling, approving disaster aid for Harvey and Irma, not to mention its desire for tax reform—that lawmakers must address.
  • While the Senate HELP committee is attempting a bipartisan effort to shore up the ACA, the issues listed above will make it almost impossible for such a law to be passed during this session.
  • The leadership of the Department of Health and Human Services ideologically opposes the very concept of the ACA and is also responsible for implementing the law. The tension between those two facts will lead to confusion and uncertainty for those of us in healthcare.
  • The passage of the ACA changed the terms of debate around healthcare reform. Granting health insurance to more than 20 million Americans has now shifted public opinion so that a solid majority believes the federal government should ensure that its citizens have insurance.
  • The ACA is not failing, but going forward it can be undermined without congressional action.

As a former anatomic pathologist, I am always interested in postmortem examination of failures, and the failure of Republicans to repeal the ACA ranks high in any list of stunning political disasters. Pundits have identified several possible causes:

  • Republicans never had a clear replacement plan or goal.
  • Taking away benefits from 22 million Americans is politically unpopular.
  • The ACA was not in a “death spiral.”
  • The president did not exert necessary leadership to get GOP senators to support his unpopular position.
  • Republican governors who had expanded Medicaid did not support the effort.
  • Organized opposition to repeal led to most Americans not supporting repeal.

Autopsy results always arrive too late for those of us who are still alive, and it is more important for those of us in healthcare to interpret the mixed messages coming out of HHS and Congress so that our organizations can continue to care for patients under the current system.

HHS seems willing and eager to let states experiment with healthcare reform. Alaska has received approval for $323 million over five years to subsidize insurance carriers and stabilize its individual ACA marketplace. Iowa is likely to receive approval for a radical 1332 waiver approach to healthcare reform in the Hawkeye state, and other states are preparing waiver submissions.

Meanwhile, HHS actions that seem to undermine the ACA include refusing to guarantee cost-sharing reduction subsidies to insurance companies and slashing the budget to support ACA enrollment for 2018. HHS recently announced advertising budget cuts of 90% for 2018 and the navigator program cuts of 40%.

A recent study—detailed in a post on The Incidental Economist blog—compared Kentucky ACA enrollment under a Democratic governor who supported advertising and a Republican governor who cut advertising. It found that lack of TV advertising led to 450,000 fewer page views on the ACA website and 20,000 fewer unique visits to the enrollment website.

ACA supporters, meanwhile, have recently put together a private enrollment campaign for 2018 to fill in the gap created by HHS decisions, Axios reported.

Last week, the Senate HELP Committee heard from state insurance commissioners and governorsabout ideas to stabilize the ACA marketplaces. They include:

  • Funding the cost-sharing reduction subsidies to insurance companies.
  • Facilitating reinsurance programs.
  • Expanding the ACA 1332 waiver programs to let states innovate.
  • Funding enrollment activities such as advertising and navigator programs.

Although health policy experts largely support these recommendations, it is hard to see how such a divided Congress could pass such proposals. Even if such legislation were approved, it would likely come too late to impact health insurance company decisions for 2018.

So, as of early September, we are left with the ACA continuing to be the law of the land, but with those in charge of the federal government not entirely supporting its success. Healthcare organizations have difficulty caring for patients when the rules keep changing and when clarity is hard to come by. It is also discouraging that decisions seem to be made at the last minute without much planning or consideration for unintended consequences.

That said, we still need to keep taking care of patients. My advice is to:

  • Continue to prepare for the transition from fee-for-service to value-based payments, but be aware that the Trump administration might slow down this process.
  • Continue to cut unnecessary costs.
  • Continue to improve the measurable quality of the care you give.
  • Participate in efforts in your individual states to innovate through waiver programs.
  • Collaborate with your physicians who are confused by all the uncertainty.
  • Keep up to date with the frequent changes that nobody can predict.

 

 

Healthcare Triage News: Congress is Back, and Healthcare Should Be on the To-do List

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , • Leave a comment

Healthcare Triage News: Congress is Back, and Healthcare Should Be on the To-do List

Image result for Healthcare Triage News: Congress is Back, and Healthcare Should Be on the To-do List

Congress is back in session, and it has a full month ahead. They have to deal with hurricanes, raise the debt limit, fund the government, keep us out of war, AND they want to talk about cutting taxes, too. With all this going on, it’s going to be hard to get anything done around healthcare, but there’s lots that needs to be done.

There’s one Obamacare repeal bill left standing. Here’s what’s in it.

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , , , , , , , • Leave a comment

https://www.washingtonpost.com/graphics/2017/politics/cassidy-graham-explainer/?utm_term=.c90e0ce41aa2

Image result for cartoon dilbert beating a dead horse

After a dramatic series of failed Senate votes in July, there’s one repeal-and-replace plan for the Affordable Care Act left standing. Trump is pushing for a vote, per Politico, and John McCain has announced his support, but the bill has yet to gain significant traction.

The proposal, crafted by Sens. Bill Cassidy (R-La.), Lindsey O. Graham (R-S.C.) and Dean Heller (R-Nev.), essentially turns control of the health-care markets over to the states. Rather than funding Medicaid and subsidies directly, that money would be put into a block grant that a state could use to develop any health-care system it wants. It also allows states to opt out of many ACA regulations. “If you like Obamacare, you can keep it,” Graham has said, using a common nickname for the health-care law. “If you want to replace it, you can.”

In reality, that may not be true. The Medicaid expansion and subsidy funding would be cut sharply compared to current spending, going to zero in a decade.

 “You can’t actually keep the same program if your federal funding is being cut by a third in 2026,” said Aviva Aron-Dine, a senior fellow at the left-leaning Center on Budget and Policy Priorities. And even putting aside the cuts, she said, the block grant structure would fundamentally change the health-care landscape. “[Funding] is capped, so it wouldn’t  go up and down with the economy,” when fewer or more people become eligible for subsidies.

Republicans contest this. The drop in funding “gives strong incentives for the states to be more efficient with their program,” said Ed Haislmaier, a senior fellow at the conservative Heritage Foundation. That is, states may be able to maintain the ACA structure and regulations as long as they streamline operations.

If the streamlining turns out to be insufficient, the cuts would hit liberal states the hardest, according to a report by the Center for Budget and Policy Priorities. This is largely because they tend to be the biggest spenders on health care: They’ve expanded Medicaid and aggressively signed people up for marketplace coverage. They have the most to lose.

 On the whole, Aron-Dine says, “This is a lot more similar to the [Senate repeal bill] than different. All of them end with devastating cuts to marketplace subsidies, Medicaid, and weakening of consumer protections.”

Haislmaier agreed, pointing out the Cassidy-Graham plan was originally intended as an amendment to the Senate bill.

Here’s the nitty gritty of what would change, compared to the ACA and the Senate plan that failed in July:

Who would need to be covered

Under the Cassidy-Graham plan, the mandates would be eliminated at the federal level. States could choose to keep the measure, replace it or get rid of it completely.

How they would pay for coverage

The federal health insurance subsidies that help most people with ACA marketplace plans afford their coverage would change. This bill would shift those subsidies to the state-level, so people in some states may see their subsidy scaled back or eliminated.

Proposed changes to Medicaid

The bill would restructure Medicaid and decrease its funding. That would make it very difficult for states to maintain the Medicaid expansion.