Tag Archives: Health Policy

What individual insurance market trends mean for providers

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http://www.fiercehealthcare.com/finance/implications-individual-insurance-market-trends-for-providers?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWTJFNU1EQm1aREUyWW1FMSIsInQiOiJlVnd2K1hXVFcwN1wvUTMzTGpkR1lxV3huNGNnXC9IN2c2eEpxNFZBTDBuWmtIR1wvV0RSQXpBOFJnbEs1cHB0UUJJcEFKQnhhYUQ4UDcxNUxTZldTekNBalJMeGpDcWVZa2lpdVJxTHJVZSs5TmRvMWVqSGl0N1V2OUV4azBcL2R3M2QifQ%3D%3D

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Amid uncertainty about the future of healthcare reform, hospitals and health systems must be aware of and prepare for the potential challenges posed by the individual health insurance marketplaces.

Costs in the individual marketplaces have been volatile, so one way providers can support patients who have those plans is to understand the total costs associated with treating them, writes Paul Keckley, Ph.D., health policy analyst and editor of the Keckley Report, in an article for Hospitals & Health Networks.

Until now, much of the discussion from the provider side on the future of healthcare reform has centered on proposed changes to Medicaid. States that expanded Medicaid saw uncompensated care costs drop significantly, and provider groups largely came out against Republican efforts to repeal and replace the Affordable Care Act as well as proposed sweeping cuts to Medicaid.

But, Keckley writes, providers need to monitor trends in the individual market as well, which may result in more problems for them. For example, higher copays and deductibles may put preventive care, including key tests and screenings, out of reach for this patient population. Furthermore, the individual market is likely to grow as more employers push responsibility for insurance costs on employees, which in turn could push more costs of care onto providers.

“Hospitals must prepare for two realities: The individual market will grow, and the risks associated with its management will be challenging,” according to Keckley.

One solution that some hospitals are considering is to offer sponsored health plans that target individual market enrollees. But this could backfire, Keckley writes, as premiums will likely increase significantly. Just because a big hospital name is on the plan, that doesn’t mean it will attract more enrollees if premiums are too high to draw interest. Instead, he suggests providers engage in greater advocacy on these issues with state and local leaders.

 

S&P report: ACA individual market is fragile, but not in a ‘death spiral’

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http://www.fiercehealthcare.com/aca/s-p-report-aca-individual-market-fragile-but-no-death-spiral

Wall Street

Based on 2016 results and enrollment so far in 2017, the Affordable Care Act’s individual market is not in a “death spiral” as some have claimed—but it also isn’t on very stable footing, according to a new report from Wall Street analysts.

The report, from the ratings agency Standard & Poor’s, noted that 2016 brought the first signs that the ACA’s marketplaces could be manageable for insurers after a rough 2014 and 2015.

For example, the weighted average of the medical loss ratios of Blue Cross Blue Shield plans included in the analysts’ study dipped below 100% for the first time last year. That’s a positive sign, but insurers with MLRs above 90% still generally face an underwriting loss after factoring in administrative costs, suggesting more room for improvement.

This year, the analysts believe that meaningful premium increases, product and network changes, as well as “regulatory fine-tuning” of ACA rules, will get insurers closer to breaking even. But it will take another year or two of improvements for most to get to their target profitability levels.

Notably, the premium hikes insurers put in place didn’t result in a major drop in enrollment—and potential death spiral—the analysts wrote. In fact, open-enrollment signups dropped only slightly from 2016 to 2017, in part because the ACA’s subsidies increase along with premiums.

Looking ahead, the analysts expect premiums to rise in 2018, but “at a far lower clip” than they did this year. If the ACA’s rules stay largely intact, they predict low-single-digit growth in individual market membership next year, with most counties continuing to have at least one insurer. Recent insurer exits, however, might leave certain counties with no options on the exchanges.

But the analysts note that their predictions for the rest of this year and 2018 won’t hold if there is a major legislative overhaul of the marketplaces, like an ACA repeal. In addition, much depends on whether insurers will get clarification about cost-sharing subsidies, and whether the Trump administration will continue to conduct enrollment outreach and enforce the individual mandate.

The market still needs time to mature, the report argues, and “every time something new (and potentially disruptive) is thrown into the works, it impedes the individual market’s path to stability.”

What You Need to Know About High-Risk Insurance Pools

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http://time.com/money/4748384/high-risk-insurance-pools/?xid=homepage

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High-risk health insurance pools are back in the news after it was reported House Republicans are considering making them a component of their plan to repeal and replace the Affordable Care Act.

The GOP is toying with the idea of allowing states to seek a waiver to the ACA’s prohibition on charging sick people higher premiums if the states set up high-risk pools. Insurers would still be prohibited from denying people coverage outright, but they would be able to jack up premiums for people with a range of conditions and illnesses, effectively pricing them out of the individual market. Instead, people with pre-existing conditions—which ran the gamut, from cancer to high blood pressure, in the pre-ACA days—would be segregated into “high-risk pools.”

Many states had these pools in place before the passage of the ACA, and research showed that they did not keep costs down. So what exactly are high-risk pools, and why didn’t they work before? Here’s what you need to know.

5 Things to Know About Health That Could Shut Down the Government

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http://www.realclearhealth.com/articles/2017/04/26/5_things_to_know_about_health_that_could_shut_down_the_government_110565.html?utm_source=RC+Health+Morning+Scan&utm_campaign=5d3df6bbc3-EMAIL_CAMPAIGN_2017_04_26&utm_medium=email&utm_term=0_b4baf6b587-5d3df6bbc3-84752421

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Congress must pass a bill this week to keep most of the government running beyond Friday, when a government spending bill runs out. It won’t be easy.

The debate over a new spending bill focuses on an esoteric issue affecting the Affordable Care Act.

The question is whether Congress will pass — and President Donald Trump will sign — a bill that also funds subsidies for lower-income people who purchase health insurance under the law. These “cost-sharing reductions” (CSR) have become a major bargaining point in the negotiations between Republicans and Democrats, because the spending bill will require at least some Democratic votes to pass.

Here are five things to know about these cost-sharing subsidies:

How are these subsidies different from the help people get to purchase insurance?

There are two types of financial aid for people who buy insurance from an ACA exchange. People with incomes up to four times the poverty line, or $81,680 for a family of three, are eligible for tax credits to help pay their premiums.

In addition to that help, people with incomes up to two-and-a-half times the poverty line, or $51,050 for a family of three, get additional subsidies to help pay their out-of-pocket costs, including deductibles and copayments for care, as long as they purchase a silver-level plan. Insurance companies are required in their contracts with the government to provide these cost-sharing reductions to eligible people, then get reimbursed by the government.

Why are cost-sharing reductions suddenly front and center?

The fight dates to 2014, when Republicans in the House of Representatives filed suit against the Obama administration, charging that Congress had not specifically appropriated money for the cost-sharing subsidies and therefore the administration was providing the funding illegally.

A year ago, a federal district court judge ruled that the House was correct and ordered the payments stopped. However, she put that ruling on hold while the Obama administration appealed. That’s where things stood when Trump was inaugurated.

If the Trump administration drops the appeal, the funding would cease. However, Congress could also opt to approve funding the payments, which is what Democrats are pushing in the spending bill.

What would happen if these subsidies are stopped?

First, Do No Harm to Patients With Pre-Existing Conditions

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http://www.realclearhealth.com/articles/2017/04/26/first_do_no_harm_to_patients_with_pre-existing_conditions__110567.html?utm_source=RC+Health+Morning+Scan&utm_campaign=5d3df6bbc3-EMAIL_CAMPAIGN_2017_04_26&utm_medium=email&utm_term=0_b4baf6b587-5d3df6bbc3-84752421

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The recent U.S. House decision to pull the first iteration of the American Health Care Act (AHCA) off the floor doesn’t necessarily mean efforts to reform health care are at an end. As members of Congress work to develop legislation that will change the current health care system, they must develop policy that ensures people with pre-existing conditions will receive coverage without additional costs in premiums, deductibles or coinsurance for their pre-existing condition.

As it stands, the Affordable Care Act (ACA) prohibits insurers from denying coverage to Americans with pre-existing conditions – no matter how severe or costly their medical care might be. Had the AHCA passed, a new provision would have required that patients with pre-existing conditions maintain continuous coverage without a lapse of more than 63 days.

Theoretically, this provision should ensure all Americans have constant coverage. In reality, however, it’s possible many patients with pre-existing conditions would have difficulty meeting this requirement. For starters, many individuals with chronic conditions, such as spina bifida or sickle cell disease, often earn lower incomes precisely because of their medical needs – which in turn makes it difficult for them to afford meaningful insurance that covers their care. Further, millions of sick patients with chronic diseases rely on Medicaid for coverage. Any health reform legislation must ensure that these patients don’t lose coverage altogether by 2020.

These changes could inflict grave harm on Americans. A recent report from the Department of Health and Human Services estimates that anywhere from 61 million to 133 million non-elderly Americans have pre-existing conditions. All of these Americans could have been denied coverage, or offered coverage at extraordinarily steep prices, had they needed to shop for individual health insurance before 2014, when the ACA’s coverage provisions went into effect. In fact, between 2010 and 2014, the number of uninsured Americans with pre-existing conditions fell by 22 percent – a clear sign of the impact of the ACA’s market reforms.

The ACA is not perfect. Changes such as reducing prescription costs, addressing cost barriers created by high deductible plans and reducing unnecessary administrative burdens on physicians and patients would improve the law.

However, the current law’s provisions like the ban on discriminating against Americans with pre-existing conditions have led to an historically low number of uninsured Americans – estimated at 8.9 percent last November. In turn, that coverage, combined with access to primary physicians, leads to more timely prevention and treatment of disease and, ultimately, improved public health for all Americans.

Family physicians serve on the front lines of our health care system, and we know how important it is that chronically ill patients receive the care the need to get healthy. We have witnessed firsthand the positive effects of the ACA’s prohibition on discriminating against Americans with pre-existing conditions, and we urge our leaders in Washington – both in Congress and in the administration – to continue to protect them.

Moderates mum on repeal bill changes that would strip consumer protections

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http://www.politico.com/story/2017/04/24/obamacare-repeal-consumer-protections-237541

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While hardline House conservatives are falling in line behind the latest Republican Obamacare repeal bill, there’s ominous silence from most moderates whose support is also essential to getting the measure passed in the House.

The latest version would allow states to opt out of several key Obamacare protections, allowing insurers to charge older and sicker people more than younger and healthier people, according to a summary obtained by POLITICO. So far, none of the moderates who opposed an earlier repeal bill have publicly committed to supporting the latest version.

“This amendment doesn’t do anything to change my position on the health care bill,” said Rep. Charlie Dent (R-Pa.), who co-chairs the centrist Tuesday Group. “This amendment seems too much about meeting an artificial 100-day timeline,” he added, referring to President Donald Trump’s upcoming milestone date.

A proposal from Tom MacArthur (R-N.J.), and negotiated with the leader of the Freedom Caucus, would allow states to decline to require insurers to offer a minimum set of benefits and provisions allowing health plans to charge people more based on their age and health status. States can also opt out of enforcing a 30 percent surcharge for people who don’t maintain insurance coverage, according to a brief update sent to Energy and Commerce members.

The legislative text had been expected over the weekend. But the House has no plans to take up a repeal measure this week, despite the White House’s urging last week to do so. Republicans are expected to remain focused on funding the government past a Friday deadline for a new spending bill, with Obamacare repeal discussions likely continuing in the background. Members of the Freedom Caucus are expected to review the legislation together on Tuesday or Wednesday.

So far, moderates have largely remained mum on the latest changes to the repeal bill. Several moderates who opposed the bill said Monday through spokespersons that they hadn’t yet seen the legislative text.

“That hurts any timeline of [a vote] this week or next week,” said an aide to one lawmaker.

MacArthur is one of three co-chairmen of the Tuesday Group. At least some of the group of moderate Republicans would have to support the repeal bill if it has any chance of getting through the House.

“It’s our party, frankly, that has to get together and really realize sometimes you can’t vote for a perfect bill,” Rep. Adam Kinzinger (R-Ill.) said. “We need to work together, and that’s a learning process, I think, for Republicans in the House right now.”

MacArthur spent the congressional recess negotiating the deal directly with Freedom Caucus Chairman Mark Meadows (R-N.C.), leaving the Tuesday Group largely out of the loop. Indeed, some members had not seen any of the proposal’s details until drafts of the amendment were leaked out through the press.

States would be allowed to opt out of several of Obamacare’s consumer protections as long as they have set up high-risk pools, where consumers with costly medical expenditures would presumably be able to get coverage.

The waivers would strongly encourage people to maintain continuous coverage — even more than prior versions of the Republican repeal bill. In states that get a waiver, people who don’t stay insured can be charged more for insurance policies based on their health status.

The latest changes appear to preserve Obamacare’s requirement that insurers accept anyone regardless of their pre-existing conditions. But critics of the repeal bill argue that allowing insurers to charge sicker people more could in effect shut out those individuals because insurers will be able to charge whatever they want.

Under the Affordable Care Act, insurers had to charge sick and healthy consumers the same, with only a limited number of exceptions, including for age and tobacco use.

And with the House set to return to Washington on Tuesday, members of the Tuesday Group said there hasn’t been any coordination aimed at building support for the changes.

“Mr. LoBiondo has tweeted his thoughts thus far on the discussion — nothing additional to add at this point,” said an aide to Frank LoBiondo (R-N.J.), who tweeted Friday he’ll continue to oppose the bill. “I’m sure Politico will have any copy of the legislative text before members do.”

Healthcare Triage: Gaming the System – Orphan Drugs Part 3

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Healthcare Triage: Gaming the System – Orphan Drugs Part 3

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Even if the Orphan Drug Act were working properly, its enormous costs might outweigh its exiguous benefits. But it’s not working properly. Drug manufacturers are gaming the Act in at least three important ways. They’re the topic of this week’s Healthcare Triage.

Health care fixes miss the mark

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http://www.detroitnews.com/story/opinion/2017/04/23/valenti-health-care/100822732/

 

 

The phrase “repeal and replace Obamacare” might be in the news, but any new legislation regarding it means little for Michiganians.

Obamacare and the Republicans’ fix, the American Health Care Act, are almost entirely focused on the individual insurance market, yet the majority of Americans receive employer-sponsored health insurance coverage. More importantly, more than one million Metro Detroiters are covered by employers who “self-fund” or self-insure their employee health care benefits.

What does self-insure mean? It means your employer pays, right out of its annual budget, 100 percent of employee medical claims. Your card might read Blue Cross Blue Shield or Aetna, but the insurance company is simply the administrator who collects the claims and sends them off to your employer for payment.

Regardless of who is paying, rising health care costs are the No. 1 threat to American prosperity. Health care costs forced General Motors, Chrysler and the city of Detroit into bankruptcy; health care costs are the main reason wages have not grown in 20 years; and, Michigan spends 40 percent (and growing) of its annual budget on health care — crowding out spending on everything else.

But fixing our health care cost problem today doesn’t require a single action from Congress. Instead of marching on Washington and yelling at elected officials, we should be talking to our CEOs and heads of human resources.

Self-insured employers have tremendous power to change health care. Most employers simply outsource health care benefit construction to consultants and brokers — the same people who are compensated to perpetuate our high-cost health care status quo.

When the lame, status quo attempts at cost-control fail, the usual employer response is to cut, cut, cut. They resort to using an axe to prune rose bushes; high deductible health plans are blunt force instruments that do not sustainably control health care costs and will eventually exacerbate our cost problem.

Indeed, a few, truly innovative employers are providing better employee benefits and reducing health care costs 20-50 percent. If everyone followed their lead, it could result in $2,500 to $5,000 annual raises for each of us and immediately pump $2 billion to 4 billion into the Metro Detroit economy every year.

The solution isn’t a secret. In fact, a non-profit/501(c)(3) called the Health Rosetta was formed to publicize the simple fixes. The organization was spurred by a concerned citizen and the former global head of Microsoft’s health care business named Dave Chase.

The Health Rosetta identifies a few, easy to implement, specific improvements, the most important of which focuses on the intake or front-end of the system: primary care. Hence, the Health Rosetta’s foundation is called Value-Based Primary Care or Direct Primary Care. Other improvements are then built on top, such as “Transparent Medical Markets,” where patients receive up-front pricing and even quality guarantees on a range of surgeries and procedures.

These are the kinds of solutions employers should be considering as everyone wrestles with skyrocketing health care costs.

Tom Valenti is the founding partner of Forthright Health.

Can Obamacare Survive Another Round in the Congressional Boxing Ring?

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http://www.realclearhealth.com/articles/2017/04/25/can_obamacare_survive_another_round_in_the_congressional_boxing_ring_110564.html?utm_source=RC+Health+Morning+Scan&utm_campaign=2fcc8f4477-EMAIL_CAMPAIGN_2017_04_25&utm_medium=email&utm_term=0_b4baf6b587-2fcc8f4477-84752421

Can Obamacare Survive Another Round in the Congressional Boxing Ring?

The Affordable Care Act (ACA) has survived its biggest challenge to date with the failed attempt to repeal and replace by the GOP. But will it survive in the long run? Republican comments and President Trump’s many tweets would suggest the law is still doomed. It is hard to predict what will happen, but let’s examine some themes we are seeing so far to try to gain some insight:

One of the first things the GOP Congress wanted was to retract the cost sharing payments to insurers for low-income exchange plan members. Without these payments, insurers would lose even more money, driving many of them to not offer plans in the state exchanges. The jury is still out on whether the replacement bill’s failure will move the budget reconciliation process forward, but insurers have only two months to decide if they will provide a plan in the exchanges for 2018. If insurers do decide to stay in the exchanges, significant premium increases are very likely to help cover their costs. This will force many people who cannot afford the monthly cost to drop out of coverage. Either of these situations would push people back into the uninsured ranks where providers would lose that reimbursement revenue and drive up uncompensated care.

Loosening the individual mandate’s enforcement is another theme being discussed. New HHS Secretary Price has stated he plans to allow states to loosen the restrictions on waivers for the individual mandate. Combined with premium increases, this would allow people to opt out of coverage much more easily. The CBO report has stated 7 million people would have opted out of coverage if the American Health Care Act (AHCA) had been passed, since many people do not think they need it. Most of these people would be younger and healthier, creating higher costs for insurers, while driving up premiums and/or driving insurers to exit the exchange.

Secretary Price has also mentioned giving states the ability to set requirements to individuals to maintain Medicaid coverage, like applying for work. Studies have shown in the past this activity causes people to fall out of coverage. It is expected that this move would cause many to fall off the Medicaid roles and drive them to the uninsured ranks as well.

The federal deficit is upwards of $540 billion for 2017. And If the ACA does not change at all, then the federal government is expected to spend $1.2 trillion on Medicaid coverage alone through 2026. Previous CBO estimates indicate this would drive our yearly national deficit to over a trillion dollars in 10 years. The U.S. economy survives today because financial institutions buy treasury bonds to fund that deficit each year. But when deficits reach the heights predicted if the ACA remains entirely intact, and the national debt reaches a significant portion of our yearly GDP, bond sales could and likely will slow down. That means damage to the U.S. economy as it continues to stabilize post-recession.

A federal budget has been submitted that makes some spending cuts, but without the AHCA’s passage they pale when faced with the real problem of balancing our budget. This is not an indictment of policy to cover people with insurance, but simply a fact that our nation must find a way to balance our finances. There are many ways to cut cost, but the GOP seems fixated on cutting Medicaid spending as the key to accomplishing this.

We can only theorize what might become of the ACA, but looking at some of the themes and recent comments by the current administration, it would appear some things will change if not a complete revisit of the repeal and replace bill. Will those changes effectively kill the law since it will lack the ability to function as planned? Quite possibly, but only time will tell.

Change will happen. It will result in some sort of reimbursement cuts and very likely push more people back to the uninsured roles. Providers need to ready themselves, and start thinking about ways to improve productivity and reduce the cost to collect while increasing cash collections.

Shawn Yates serves as Director of Product Management for Ontario Systems, defining the company’s strategy for product and service offerings in the health care market. With over 20 years of experience managing self-pay receivables and collection operations for a top 20 health care system, Shawn’s background also includes working for a national outsourcing company helping clients manage their insurance and self-pay receivables, and Experian Health, the largest data and analytics company in the country.

The views above belong solely to the author.

California Employer Health Benefits: Prices Up, Coverage Down

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http://www.chcf.org/publications/2017/03/employer-health-benefits?utm_source=CHL&utm_content=From%20The%20Foundation&utm_campaign=Footer

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Since 2000, the percentage of employers offering health benefits has declined in California and nationwide, although coverage rates among offering firms have remained stable. Only 55% of California firms reported providing health insurance to employees in 2016, down from 69% in 2000. Implementation of the Affordable Care Act (ACA) in 2014 does not appear to have impacted the overall trend in employer offer rates.

Nineteen percent of California firms reported that they increased cost sharing in the past year, and 27% of firms reported that they were very or somewhat likely to increase employees’ premium contribution in the next year. The prevalence of plans with large deductibles also continues to increase.

California Employer Health Benefits: Prices Up, Coverage Down presents data compiled from the 2016 California Employer Health Benefits Survey.