Tag Archives: Health Policy

The Health 202: ‘Medicare for all’ is the dream. ‘Medicaid for more’ could be the reality.

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https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/08/02/the-health-202-medicare-for-all-is-the-dream-medicaid-for-more-could-be-the-reality/5b61d4ed1b326b0207955ea2/?utm_term=.f54d337c2d74

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“Medicare for all” is the hottest position on the left these days, but there’s a quieter push afoot to create a public option using Medicaid. 

Chanting “Medicaid for more” may not sound as bold for progressives seeking to prove their bona fides before the midterm elections. Yet all the most-hyped 2020 Democratic presidential candidates are on board with the idea, including the Medicare expansion’s biggest champion, Sen. Bernie Sanders (I-Vt.).

The idea in concept is simple: Allow states to open up their Medicaid programs to anyone regardless of income. Those people could buy in to the social safety net and have access to Medicaid’s provider network and benefits. The groundwork for expanding the program for low-income Americans has already been laid to some extent as 34 states have expanded Medicaid under the Affordable Care Act.

Sen. Brian Schatz (D-Hawaii) has introduced the “State Public Option Act” to promote states to expand Medicaid — co-sponsored by some familiar Democratic faces: Sanders, Elizabeth Warren (Mass.), Cory Booker (N.J.), Kamala Harris (Calif.) and Kirsten Gillibrand (N.Y.). But the real efforts are happening at the state level where legislatures all over the country are seriously considering the idea.

Heather Howard, a lecturer at Princeton University who also helps states with their health-care systems, said many plans are in their infancy, but that 14 states across the country have made moves to, at minimum, weigh the benefits and challenges of shifting Medicaid to a publicly available health insurance option.

“There are a lot of policy considerations to think about, but while the federal policy debate is stalled, you have states thinking about what tools do we have. [Medicaid] is the immediate tool you have,” she told me.

That’s because Medicare is operated at the federal level so any major changes to it have to be decided in Washington. Medicaid, on the other hand, is run by the states, so they have more discretion over how the program is set up. 

There are real critiques of Medicaid as it now exists, such as low reimbursement rates for doctors and uniform access to care. To offer it to everyone would require responding to those criticisms as well as new questions such as the cost to states, whether states have to apply for federal waivers to alter the program and whether a public option lives on or off the ACA exchanges.

This week stakeholders across New Mexico met with President Obama’s former Centers for Medicare and Medicaid Services Administrator Andy Slavitt to begin some of those conversations. Earlier this year, New Mexico’s state legislature passed a bill to create a committee to study a Medicaid buy-in program. Medicaid is popular there; one-third of New Mexicans are enrolled. Yet 230,000 people remain uninsured in the state, according to Kaiser Family Foundation data, and proposed premium rates for 2019 for those who don’t qualify for ACA subsidies are increasing anywhere from 9.2 percent to 18.5 percent.

Slavitt is the board chair of a new group, United States of Care, which has an impressive roster of bold-faced names leading it from investor Mark Cuban to former Obama speechwriter Jon Favreau to former congresswoman Gabrielle Giffords (D-Ariz.) and her astronaut husband Mark Kelly. In the absence of Washington leadership, the group is working with states on ways to improve health care.

Allison O’Toole, the group’s director of state affairs, was also on the ground in New Mexico this week and told me there’s a “real hunger” and “momentum” around the idea of allowing states to expand Medicaid.

“Washington is in gridlock and not addressing people’s real concerns around the cost and affordability of health care,” O’Toole said. “This has created a greater sense of urgency and necessity by states to pick up that ball and run with it.”

With the Republicans’ failure to repeal the ACA and the public outcry when they tried, Democrats are feeling emboldened this year to talk ambitiously about their health-care goals. 

Health care is a leading issue heading into November, and polls show at least half of Americans are in favor of a “Medicare for all” program. But even if Democrats win the House majority and make gains in the Senate, President Trump has said Obamacare is unsustainable and his administration has worked persistently to chip away at it.

That’s why Michael Sparer, a public- health professor at Columbia University, believes “Medicaid for more” is not only good policy, but also good politics. It’s the type of proposal, he reasons, that could peel off moderate Republicans in a way that a national Medicare program never could. 

It’s true that Medicaid is a favorite GOP punching bag. The Trump administration is urging states to add work requirements to their programs and the GOP playbook has long included capping how much the federal government pays each state to administer Medicaid.

Yet 34 states, including many with Republican governors, expanded the ACA under Medicaid to include more low-income residents, and several more red states are on the precipice of following them. It’s a program that has endured and grown for 53 years.

“The Medicaid buy-in is more of a compromise program, it’s not viewed as a big national program. People who believe in states’ rights can view it as states having more flexibility,” Sparer said.

Sparer has written extensively on the topic and told me his support for expanding Medicaid is heavily influenced by the political viability of focusing on the program for low-income Americans versus the one covering seniors — meaning states don’t have to wait for a new president to do something meaningful. But that doesn’t mean he thinks national political figures like Sanders should stop talking about “Medicare for all.”

“The advantage is [Medicaid buy-in] is incremental, it adds populations here and there. But incremental isn’t a great political slogan. You put ‘let’s change the system’ on a bumper sticker and I get that,” he said. “But the more there’s momentum for ‘Medicare for all,’ then ‘Medicaid for more’ could be the back up plan.”

“Given the ever-present debate,” he added, “a more incremental path is a better path.”

 

 

How Would Individual Market Premiums Change in 2019 in a Stable Policy Environment?

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Click to access Individual-Market-Premium-Outlook-20191.pdf

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Introduction

In recent weeks, insurers in many areas of the country have unveiled the premiums they propose to
charge for individual market health insurance policies in 2019. In setting premiums for 2019, insurers
are taking account of several policy changes that will be newly in effect for the 2019 plan year, including
repeal of the individual mandate penalty and Trump Administration actions to expand the availability
of plans that are exempt from various Affordable Care Act (ACA) requirements. These policy changes
are generally expected to cause many healthier people to leave the individual market and thereby raise
individual market premiums (e.g., CBO 2018a; Blumberg, Buettgens, and Wang 2018).

This analysis examines how premiums might have changed in 2019 in a stable policy environment. To
do so, I first estimate insurers’ revenues and costs in the ACA-compliant individual market through
2018, drawing primarily on insurers’ reports to state and federal regulators. With these estimates as a
starting point, I then estimate how premiums would have changed in 2019 under various assumptions
about how insurers’ costs and margins would have evolved in 2019 without the major pending policy
changes. This analysis reaches two main conclusions:

 Insurers will earn large profits in the ACA-compliant individual market in 2018:
I project that insurers’ revenues in the ACA-compliant individual market will far exceed their
costs in 2018, generating a positive underwriting margin of 10.5 percent of premium revenue.
This is up from a modest positive margin of 1.2 percent of premium revenue in 2017 and
contrasts sharply with the substantial losses insurers incurred in the ACA-compliant market
in 2014, 2015, and 2016. The estimated 2018 margin also far exceeds insurers’ margins in the
pre-ACA individual market. These estimates for 2018 as a whole are broadly consistent with
estimates for the first quarter of 2018 derived from insurers’ first quarter financial filings by
researchers at the Kaiser Family Foundation (Semanskee, Cox, and Levitt 2018).

The estimated improvement in insurers’ margins for 2018 is driven by the substantial
premium increases insurers implemented for 2018, which will almost certainly be more than
sufficient to offset the loss of cost-sharing reduction (CSR) payments and what appears likely
to be another year of moderate growth in underlying claims spending. Prior analysis of
insurers’ 2018 rate filings suggests that many insurers expected policy changes that are now
scheduled to take effect in 2019, notably repeal of the individual mandate penalty, to take effect
in some form during 2018 (Kamal et al. 2017). This may have led insurers to incorporate those
policy changes into their premiums a year early.

 In a stable policy environment, average premiums for ACA-compliant plans
would likely fall in 2019: In this analysis, I define a stable policy environment as one in
which the federal policies toward the individual market in effect for 2018 remain in effect for
3
2019. Notably, this scenario assumes that the individual mandate remains in effect for 2019,
but also assumes that policies implemented prior to 2018, like the end of CSR payments,
remain in effect as well. Under those circumstances, insurers’ costs would rise only moderately
in 2019, primarily reflecting normal growth in medical costs. Meanwhile, for reasons I discuss
in detail in the main text, it is unlikely that insurers would set 2019 premiums with the goal of
keeping margins at their unusually high 2018 level. Downward pressure on premiums from
falling margins would likely more than offset upward pressure on premiums from underlying
cost pressures, so premiums would fall on net.

Indeed, under my base assumptions, I estimate that the nationwide average per member per
month premium in the individual market would fall by 4.3 percent in 2019 in a stable policy
environment. This estimate is subject to some uncertainty, primarily because of uncertainty
about underlying individual market claims trends and about the margins insurers are likely to
target for 2019. However, I estimate that average premiums would have declined in a stable
policy environment under a range of plausible alternative assumptions.

The remainder of this analysis proceeds as follows. The first section provides an overview of my
methodology for estimating insurers’ revenues and costs through 2018, and the second section
presents the resulting estimates. The final section examines what these estimates imply for premium
changes in 2019 in a stable policy environment. A pair of appendices provide additional detail.

 

 

Trump’s undermining of Obamacare violates the Constitution, new lawsuit charges

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https://www.nbcnews.com/politics/donald-trump/trump-s-undermining-obamacare-violates-constitution-new-lawsuit-charges-n896626

Image: People Sign Up For Health Care Coverage Under The Affordable Care Act During First Day Of Open Enrollment

ASHINGTON — After congressional Republicans repeatedly failed last year to repeal the Affordable Care Act, President Donald Trump promised to “let Obamacare implode” on its own.

A new lawsuit being filed Thursday argues that Trump’s efforts to make good on that promise violate the U.S. Constitution.

Trump has “waged a relentless effort to use executive action alone to undermine and, ultimately, eliminate the law,” the complaint charges, according to a draft obtained by NBC News. The lawsuit is being filed in Maryland federal court by the cities of Baltimore, Chicago, Cincinnati and Columbus, Ohio.

Since Trump’s first executive order directing federal agencies to claw back as much of the Affordable Care Act as possible, his directives have increased health coverage costs and depressed enrollment, the complainants say.

Specifically, the suit argues that Trump is violating Article II of the Constitution, requiring the president to “take care that the laws be faithfully executed.”

“There’s a clear case of premeditated destruction of the Affordable Care Act,” said Zach Klein, Columbus city attorney.

This includes making it easier for individuals and trade groups to purchase coverage outside the law’s insurance markets; threatening to eliminate cost-sharing reduction payments; cutting funding for “navigators,” or those who help individuals enroll in the program; and using federal funds Congress dedicated to implementing the law toward making videos criticizing it.

On Wednesday, Health and Human Services Secretary Alex Azar announced a plan for cheaper, short-term insurance plans, the latest example of actions that critics say will drive up costs on Obamacare exchanges.

During a call-in appearance on Rush Limbaugh’s radio show Wednesday, Trump took credit for all but ending the Affordable Care Act.

“I have just about ended Obamacare. We have great health care,” he said. “We have a lot of great things happening right now. New programs are coming out.”

The suit also relies on a list of Trump’s tweets indicating his intent to unravel the law, according to a lawyer involved in the case.

Constitutional scholars have long debated the extent to which the chief executive must “faithfully” execute U.S. laws under Article II — from Franklin Roosevelt’s objections to legislative veto provisions and Harry Truman’s seizure of steel mills.

Citing the same “take care” clause, Republicans took issue with President Barack Obama’s executive orders on immigration as well as his delayed implementation of the health law.

This case stands apart from all others, says Abbe Gluck, a Yale University law professor and expert on Article II, because it’s not about the extent to which Trump is “faithfully” implementing a law. Rather Trump has been frank that he is sabotaging the law, she said.

“That’s what makes this case novel, first of its kind and really important,” Gluck said. “No scholar or court has ever said the president can use his discretion to implement a statute to purposely destroy it.”

“If there’s ever going to be a violation of the ‘take care’ clause, this is it,” she said.

If successful, the suit would strike down aspects of a Trump rule designed to undercut insurance markets; render a judgment he’s violating his constitutional obligation to enforce the statute; and issue an injunction that he implement the law faithfully.

LOCAL IMPACT

The suit also cites Trump scaling back oversight of insurance issuers, cutting open enrollment in half, urging a federal court to throw out Obamacare’s protections for pre-existing conditions and undermining the individual mandate.

All of these actions, they say, undercut confidence in the program and enrollment, the keys to its success. The whole concept of insurance, whether it’s for cars, homes or people, is to minimize risk by creating a diverse pool — in this case of healthy and unhealthy, young and old participants.

John Yoo, a law professor at the University of California, Berkeley, and former Bush Justice Department official, said a president can’t refuse to enforce a law just because he disagrees with it.

Still, Obamacare was written in a way that gives great leeway to the executive, said Yoo.

“Is there something specific in the statute that he is refusing?” he said, adding that funding reductions don’t qualify. “That’s the constitutional standard,” said Yoo.

In 2017, there was a 37 percent average increase in premiums nationwide, and 3 million more people lacked health insurance than did in 2016. In Columbus, city-subsidized health centers saw almost 3,000 more uninsured patients in 2017. As the uninsured rate increases, Columbus must also pay more for ambulance transports, draining millions of dollars from localities.

“The accumulation of these (acts) has cost Americans thousands of dollars more, and it was done in a way that can be clearly traced” to Trump’s orders, said Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid under Obama.

The budget strain is also hampering efforts to address the opioid crisis. Ohio has the second-highest drug overdose death rate, according to the Centers for Disease Control and Prevention, with the city of Columbus averaging nine or 10 Naloxone administrations a day to prevent deaths.

“The time for criticism is over,” Klein said. “We have no ability to recoup that money. We just have to eat it due to the Trump administration’s efforts to sabotage the law.”

HEALTH CARE POLITICS

The plaintiffs deny politics play a role in the timing of the suit, which they say they have been building for the past year.

But it will likely serve as a reminder to voters of Trump’s hand in rising premiums just as they are set to skyrocket. Trump’s 2016 campaign platform was built in part on greater economic security for working-class Americans.

Insurance companies are hiking rates in the individual market, citing decisions being made in Washington. And premiums are set to surge in 2019, with a majority of states proposing increases over and above the previous year.

After several elections in which Republicans used Obamacare to attack Democrats, the party says it’s regained the advantage on the health care issue. In the past few years, the Republican-led Congress has voted dozens of times to try and repeal the law, failing each time. “People got to see they (the GOP) have no better alternative,” said Slavitt.

“Most Democrats are saying ‘look we never said the ACA is perfect, but the other person is trying to take away your coverage,” said Slavitt.

Trump’s former Health and Human Services Secretary Tom Price has also faulted Congress’s repeal of the individual mandate for coming premium increases. Further, Trump’s Justice Department is taking aim at Obamacare’s most popular provisions: a ban on insurance companies’ discriminating against individuals with pre-existing conditions.

CONSTITUTIONAL OBLIGATION

The suit seeks to force Trump to adopt policies intended to expand rather than shrink enrollment; reduce rather than increase premiums; and promote instead of attack the ACA.

Among the specific rules plaintiffs seek to reverse are allowing exchanges to strip individuals of tax credits without notification and reducing oversight of insurance agents and brokers, as well as oversight of the law in general.

“What’s insidious here is the administration is doing it knowing that confidence in the act is key to its success,” said Adam Grogg, senior counsel at Democracy Forward and the lead litigator on the case. The fewer Americans who enroll in the program, the more volatile the market, he said.

“The overall picture here is one of sabotage that drives up the rates of uninsured and underinsured and leaves cites and counties holding the bag,” Grogg said.

Four cities are charging that the president is failing to execute the law by actively undercutting the Affordable Care Act.

 

High Deductibles Aren’t Working

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High Deductibles Aren’t Working

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Each year, for well over a decade, more people have faced higher health insurance deductibles. The theory goes like this: The more of your own money that you have to spend on health care, the more careful you will be — buying only necessary care, purging waste from the system.

But that theory doesn’t fully mesh with reality: High deductibles aren’t working as intended.

A body of research — including randomized studies — shows that people do in fact cut back on care when they have to spend more for it. The problem is that they don’t cut only wasteful care. They also forgo the necessary kind. This, too, is well documented, including with randomized studies.

People don’t know what care they need, which is why they consult doctors. There’s nothing inherently wrong with relying on doctors for medical advice. They’re trained experts, after all. But it runs counter to the growing trend to encourage people to make their own judgments about which care, at what level of quality, is worth the price — in other words, to shop for care.

Shopping for health care may sound ludicrous on its face — and sometimes is. People don’t have time, let alone the cognitive focus, to shop for treatments while having a heart attack, or during any other emergency.

But not all care we need is related to an emergency. Some care is elective, and so potentially “shoppable.” Scholars have estimated that as much as 30 or 40 percent of care falls into this category. It includes things like elective joint replacements and routine checkups.

And yet very few people shop for this type of care, even when they’re on the hook for the bill. Maybe it’s just too complex. Even when price transparency tools are offered to consumers to make it easier, almost nobody uses those them.

A National Bureau of Economic Research working paper published Monday adds a lot more to the story. The study team from Yale, Harvard and Columbia considered a health care service that should be among the easiest to shop for: nonemergency, outpatient, lower-limb M.R.I.s.

This is the kind of imaging you might get if you’re having some trouble with a knee or ankle, but not bad enough to need the image right away.

The study, which focused on more than 50,000 adults between 19 and 64, strongly suggests that people get their M.R.I.s wherever their doctors advise, with little regard to price. The authors didn’t eavesdrop on patients, so they don’t know exactly what the doctors said about where to get M.R.I.s.

But the identity of a patient’s orthopedist explains a lot more about where he or she got her M.R.I. than any other factor considered, including price and distance. Less than 1 percent of patients in the study sample availed themselves of a price comparison tool to shop for M.R.I.s before receiving one.

By this reasoning, the authors concluded that doctors sent people to more expensive locations than they had to. On the way to their M.R.I., patients drove by an average of six other places where the procedure could have been done more cheaply.

“Many patients are going to very expensive providers when lower-price options with equal quality are available,” said Zack Cooper, a health economist at Yale and a co-author of the study. Though patients seem to follow the advice of their doctors on where to go, their doctors don’t have all the information on hand to make the best decisions for the patient either.

There are over 15 M.R.I. locations within a half-hour drive for most patients. As with many health care services, there is a large variation of prices across these locations, which means a tremendous opportunity to save money by selecting lower-priced ones. In one large, urban market, prices for the procedure are as low as about $280 and as high as about $2,100.

If patients went to the lowest-cost M.R.I. that was no farther than they already drove, they’d save 36 percent. Savings rise if they’re willing to travel farther. Within an hour’s drive, for example, savings of 55 percent are available. Savings are split between patient and insurer, depending on cost sharing. On average, patients pay just over $300 toward the cost of the procedure.

There is no evidence that the quality of low- and high-priced M.R.I.s differs, at least enough to be clinically meaningful. The study found that virtually none of the M.R.I.s at any price level had to be repeated — strong evidence that the doctors relying on them are satisfied even with the lower-priced images.

At almost $1,500, the average price of a hospital M.R.I. is more than double that of one at an imaging center. The study found that doctors who work for hospitals (rather than independently) are more likely to send their patients for more expensive hospital-based imaging. Just getting all patients to use M.R.I.s that are no farther away and not in a hospital could save 16 percent.

What this latest study suggests, in the context of other studies, is that if people can’t shop for elective M.R.I.s, there’s hardly a chance they are going to do so with other health care procedures that are more complicated and variable.

Even if 40 percent of health care is shoppable, people are not shopping. What seems likelier to work is doing more to influence what doctors advise.

For example, we could provide physicians with price, quality and distance information for the services they recommend. Further, with financial bonuses, we could give physicians (instead of, or in addition to, patients) some incentive to identify and suggest lower-cost care. An alternative approach is for insurers to refuse to pay more than a reasonable price — like the market-average — for a health care service, though patients could pay the difference if they prefer a higher-priced provider.

Leaving decisions solely to patients, and just making them spend more of their own money, doesn’t work.

 

SHORT-TERM HEALTH PLANS ALLOWED UP TO 3 YEARS

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https://www.healthleadersmedia.com/finance/short-term-health-plans-allowed-3-years

A final rule expands access to non-ACA-compliant plans, which the Trump administration has touted as cheaper alternatives to full coverage.

KEY TAKEAWAYS

Only about 200,000 people are expected to exit the ACA exchange market as a result of the final rule.

Gross premiums for marketplace plans are expected to rise 1% next year attributable to this policy change.

The administration notes that ‘these products are not for everyone,’ so buyers should review their options carefully.

Beginning this fall, consumers will be allowed to buy short-term limited-duration health plans renewable for up to three years, the Trump administration announced Wednesday morning with a newly finalized rule.

The policy change expands access to lower-grade coverage options the Obama administration had restricted to three months, without a renewal option, in light of the Affordable Care Act. The looser rules finalized Wednesday allow terms up to 12 months, renewable up to 36 months.

While critics contend the short-term options will pull younger healthier beneficiaries out of ACA-compliant exchange plans, driving up premiums for sicker populations left behind, the administration says any negative effects will be minimal and outweighed by the market benefits of having more options.

James Parker, MBA, a former Anthem executive who serves as director of the Health and Human Services Office of Health Reform and as one of four key senior advisors to HHS Secretary Alex Azar, said the administration doesn’t expect a mass exodus from the ACA exchanges to these short-term options.

“What we do believe, however, is that there will be significant interest in these policies from individuals who today are not in the exchange and, in many cases, have been priced out of coverage as insurance premiums have significantly increased over the past four to five years,” Parker said during a call with reporters Tuesday evening.

Randy Pate, a deputy administrator of the Centers for Medicare & Medicaid Services who oversees individual and small-group markets as director of the Center for Consumer Information and Insurance Oversight, said the administration expects about 600,000 people to enroll in the short-term plans next year as a result of the expanded access. Only an estimated 200,000 will leave the exchange market as a result of the final rule, he said.

This shift is expected to increase gross premiums for marketplace plans by 1% next year, with net premiums decreasing by 6%, Pate said during the call.

  • The wrong direction? When the administration announced its plans earlier this year to expand access to short-term coverage options, American Hospital Association President and CEO Rick Pollack called it “a step in the wrong direction for patients and health care providers.” If consumers are unaware of the limits on their skimpy coverage, it could ultimately drive bad debt for hospitals, he said.
  • Disclosure requirements beefed up: The final rule includes additional language to make sure consumers know what they are buying, Pate said. “We fully recognize these products are not necessarily for everyone, but we do think they will provide an affordable option to many, many people who have been priced out of the current market under the Obamacare regulation,” he said.
  • There’s an opportunity for insurers. As consumers gain interest in their short-term options, insurers will have an opportunity to meet the rising demand. “The impact is going to vary depending on the insurer, whether this is a business they have been in in the past and whether they have been longing to get back into it when consumer interest reached an acceptable level,” Christopher Holt, director of healthcare policy with D.C.-based think tank American Action Forum, told HealthLeaders Media. “There also could be some who see it as a new opportunity to claim a share of the marketplace they’re not reaching.”
  • But insurers have some skepticism. Matt Eyles, president and CEO of America’s Health Insurance Plans, wrote a letter to HHS in April. “We are concerned that substantially expanding access to short-term, limited duration insurance will negatively impact conditions in the individual health insurance market, exacerbating problems with access to affordable comprehensive coverage for all individual market consumers,” Eyles wrote.
  • Trump administration boosters: Beyond simply opening a door to longer short-term plans, the Trump administration has touted these and other non-ACA-compliant options as viable rescue mechanisms for individuals squeezed by rising premiums. Navigators, who have been tasked in past years with helping people sign up for exchange coverage, will now be encouragedto provide information on short-term and association health plans as well.
  • States can block: The final rule released Wednesday addresses the federal government’s definition of short-term limited-duration health insurance, but states retain the authority to impose stricter regulations, Pate said. They can limit or even ban the plans altogether.

While lawmakers seem to have backburnered their aspirations for broad healthcare reform in the near-term, Parker said the administration will continue taking incremental steps to improve affordability of coverage.

 

 

Reinsurance in Wisconsin expected to stabilize individual market

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https://www.healthcarefinancenews.com/news/reinsurance-wisconsin-expected-stabilize-individual-market?mkt_tok=eyJpIjoiTVdJMVlUVmtNMlppTUdZNSIsInQiOiJublwvXC83VVdcL2dcL1U3a3FHNGNMRHppSldoOThiRGtNQXk4UFJyZE5FUkRQeWZWZEQ1NDMxT3FZeGRhZjdGOUlnQUtaQTUyeEMrcnBSaDNKQjZLWEIzRkVCaFlNelNXSmI1R1ZrZFdOcXlzTWVUcGk3OXl5WnNRZDlaTjhjN09WM3MifQ%3D%3D

Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

Wisconsin has received a federal waiver to leverage $200 million to implement a state-based reinsurance program to cover high-cost claims in the individual health insurance market.

Reinsurance covers a portion of the most expensive claims. The move helps to stabilize the individual market by reducing insurer claim costs and decreasing premiums.

Insurers don’t have the uncertainty that a small number of high-risk individuals could dramatically increase their expenses because there aren’t enough healthy consumers to balance out the risk pool.

Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

The Department of Health and Human Services and the Department of the Treasury on Sunday approved the 1332 state innovation waiver under the Affordable Care Act. The five-year program starts Jan. 1, 2019 and ends Dec. 21, 2023.

The approved waiver allows the state to have access to $200 million in reinsurance funding. The federal government will pay an estimated $166 million and the state, $34 million.

The program is budget neutral to the federal government. The money comes from savings from premium tax credits. The federal waiver allows the premium tax credits to be passed through to the state, rather than going directly to the consumer.

Consumers will see the savings in an expected 3.5 percent drop in their premiums in the individual market, starting in 2019, according to a released statement from the Centers for Medicare and Medicaid Services and Wisconsin Governor Scott Walker. This compares to a 44 percent rate hike on premiums in 2018.

Walker submitted the waiver request for the state’s Health Care Stability Plan in April.

In an unrelated waiver request, Wisconsin has asked to impose work requirements as a condition of Medicaid beneficiaries receiving coverage.

While CMS Administrator Seema Verma and HHS Secretary Alex Azar have reportedly said that a judge’s decision in Kentucky barring work requirements will not stop the Trump administration from considering similar waivers, Wisconsin’s request awaits federal approval.

Last month, a federal judge blocked Kentucky’s plan to implement a work requirement waiver. In light of the action, CMS decided to reopen Kentucky’s 30-day federal public comment through August 18.

 

Individual market enrollment dropping amid premium increases

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Individual market enrollment dropping amid premium increases

Individual market enrollment dropping amid premium increases

Enrollment in the individual health insurance market — the market for people who don’t get coverage through work — has declined 12 percent in the first quarter of 2018, compared to the same period last year, according to a new analysis released Tuesday.

The analysis from the Kaiser Family Foundation showed enrollment in the individual market grew substantially after the implementation of the Affordable Care Act (ACA) and remained steady in 2016, before dropping by 12 percent in 2017.

There were 17.4 million people enrolled in the individual market in 2015, compared to 15.2 million in 2017 and 14.4 million in the first quarter of 2018.

The study notes that much of the decline is concentrated in the off-exchange market, where a number of enrollees are not eligible for ObamaCare subsidies and therefore not protected from significant premium increases in 2017 and 2018.

In this market, enrollment numbers dropped by 38 percent from the first quarter of 2017 to the first quarter of 2018.

The Trump administration last year canceled key ObamaCare subsidies for insurers, leading insurers to increase premiums substantially.

The anticipation of the repeal of ObamaCare’s individual mandate has also contributed to premium increases.

While ObamaCare enrollees who receive subsidies are mostly shielded from these increases, those who don’t are left to pay the full price.

“While the vast majority of exchange consumers receive subsidies that protect them from premium increases, off-exchange consumers bear the full cost of premium increases each year,” the analysis notes.

“In 2017, states that had larger premium increases saw larger declines in unsubsidized ACA-compliant enrollment, suggesting a relationship between premium hikes and enrollment drops.”

Despite the rises in premiums, enrollment in the ObamaCare exchanges has remained stable. There were 10.6 million people on the exchanges in the first quarter of this year, compared to 10.3 million in the first quarter of last year.

 

 

States sue Trump administration over AHP expansion

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https://www.healthcaredive.com/news/states-sue-trump-administration-over-ahp-expansion/528875/

Dive Brief:

  • Attorneys general from 11 states and Washington, D.C. are suing the Trump administration in hopes of putting the brakes on association health plan expansion.
  • Expanding AHPs is a key plank in President Donald Trump’s healthcare platform, but critics call the plans “junk insurance” that will sidestep Affordable Care Act regulations.
  • Meanwhile, the House of Representatives passed two bills last week that look to lower restrictions on health savings accounts (HSAs).

Dive Insight:

Trump, who repeatedly calls the ACA a “disaster,” said AHPs and allowing anyone to get catastrophic health insurance will offer flexibility and reduce health insurance costs.

In announcing the final rule last month, the Department of Labor said the regulation included anti-discrimination protections similar to those for large employers. It also allows states to regulate AHPs.

Though supportive of those protections, AHP critics are still concerned about the plans. They charge that AHPs will offer fewer consumer protections, lead to higher premiums in individual and small-group markets and result in fraudulent companies in the AHP market.

Tempting people with lower-cost offerings, AHPs and catastrophic plans could cause millions to flee the ACA exchanges. A recent report from the Society of Actuaries predicted between 3% and 10% of those in ACA marketplace plans will leave for AHPs. Those people are more likely to be young and healthy. Leaving the marketplace plans will result in an unstable risk pool with higher premiums in the exchanges.

A recent report from Avalere predicted individual rates would increase by between 2.7% and 4% and small group by between 0.1% and 1.9% with AHP expansion. Avalere said 130,000 to 140,000 more people will become uninsured because of the premium increases in the individual market by 2022.

Millions of people and small employers once got coverage through AHPs. However, the ACA instituted consumer protections for AHPs and said they should be regulated the same as individual and small-group market plans, such as requiring them to cover people with pre-existing conditions. The consumer protections increased the costs of AHPs, and many of them folded. The Kaiser Family Foundation said only 6% of employers with fewer than 250 employees offered health insurance through AHPs in 2017.

The Trump administration wants to make AHPs a low-cost solution with fewer regulations and consumer protections. However, the lawsuit involving 11 states and Washington, D.C. alleges the Department of Labor’s rule to expand AHPs violates the Administrative Procedures Act. The suit said that allowing for more AHPs “increases the risk of fraud and harm to consumers, requires states to redirect significant enforcement resources to curb those risks and jeopardizes state efforts to protect their residents through stronger regulation. The rule is unlawful and should be vacated.”

Meanwhile, the Republican-led House of Representatives is promoting more use of health savings accounts, which are a crucial part of high-deductible health plans and the drive toward consumerism.

One bill the House passed would allow members more flexibility to use their HSA until meeting their deductible. It also lets spouses contribute to an HSA and loosens restrictions on how members can use the account. The second piece of legislation would let people set aside more money for their HSA. That bill would also reduce the health insurance tax for two years, a change supported by the insurance lobby. The ACA created the tax as a way to pay for coverage improvements, but payers say it increases premiums.

 

 

MAINE SECURES WAIVER TO RESURRECT ‘INVISIBLE HIGH-RISK POOL’

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https://www.healthleadersmedia.com/finance/maine-secures-waiver-resurrect-invisible-high-risk-pool

The reinsurance program, which the state operated in 2012 and 2013, before the ACA’s transitional reinsurance took effect, is expected to reduce insurance costs in Maine’s individual insurance market.

The federal government approved another waiver application Monday under the Affordable Care Act, giving Maine the go-ahead to reinstate a reinsurance program it had operated briefly before the ACA took effect.

Maine is the fifth state to secure a Section 1332 waiver to establish a state-run reinsurance program, following closely on the heels of Wisconsin’s waiver request being granted Sunday. Alaska, Minnesota, and Oregon won their waivers last year, and two other states—Maryland and New Jersey—have similar applications pending.

Although the Trump administration has taken a number of actions that would appear to harm the individual market, approving these waivers seems to be a positive step in the opposite direction, says Matthew Fiedler, PhD, a fellow with the Brookings Institution Center for Health Policy who served as chief economist of the Council of Economic Advisers during the Obama administration.

“Reinsurance waivers will reduce premiums in the individual market in these states and will result in more people being covered. I think they’re a reasonable way for states to spend money,” Fiedler tells HealthLeaders Media. “There may be better ways to spend money to improve the individual market, but this is certainly an actionable one and one that states can implement more or less on their own.”

Maine projects that premiums will be 9% lower in 2019 than they would be without reinsurance. Those lower premiums are expected to encourage more people to sign up for coverage, reducing Maine’s uninsured population by 1.7%, according to independent actuarial projections cited by the state and federal governments.

A modest gain in enrollment could translate to a slight benefit for insurers and could reduce the burden of uncompensated care on hospitals, Fiedler says.

‘INVISIBLE HIGH-RISK POOL’

In a letter submitted last May to Health and Human Services Secretary Alex Azar, Maine Bureau of Insurance Senior Staff Attorney Thomas M. Record said the program, which is known formally as the Main Guaranteed Access Reinsurance Association (MGARA), had “become popularly known as Maine’s ‘ invisible high risk pool.'”

Record described the program as a key feature of health reform legislation Maine lawmakers passed in 2011. The program, which was active in 2012 and 2013, successfully reduced premiums in the individual market by about 20%, he said.

Despite that success, MGARA was suspended at the beginning of 2014, when the ACA’s transitional reinsurance program rendered it redundant, according to Maine’s waiver application. The federal reinsurance program ended as scheduled on the final day of 2016.

Material released by the Centers for Medicare & Medicaid Services describe MGARA as operating a hybrid-model reinsurance program that includes traditional and conditions-based components. High-risk patients with any of eight conditions will be ceded automatically. Other high-risk enrollees will be ceded voluntarily. The program will offer 90% coinsurance for claims in the $47,000-77,000 range and 100% coinsurance for higher claims up to $1 million.

For claims above $1 million, the program will cover the amount left uncovered by the federal government’s high-cost risk-adjustment program.

Maine estimates that its program will result in a net spending reduce of more than $33 million per year, for 2019 through 2023, with that federal savings to be passed along to the state to fund the program.

The program’s total expenses are projected to cost $90-104 million annually during the five-year waiver period.

Insurers and providers have responded positively to the prospect of state-run reinsurance programs, seeing the development as good news for business and patients alike. But the benefits should not be overstated.

“The one downside of these programs is that because tax credits fall dollar-for-dollar when premiums fall, they don’t really do anything to make coverage more affordable for people with incomes below 400% of the poverty line,” Fiedler says.

“That doesn’t mean they’re a bad thing. But they can only be one part of an overall strategy for making individual market insurance affordable.”

 

 

Market Concentration Variation of Health Care Providers and Health Insurers in the United States

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https://www.commonwealthfund.org/blog/2018/variation-healthcare-provider-and-health-insurer-market-concentration?omnicid=EALERT%%jobid%%&mid=%%emailaddr%%

Market concentration will cause high prices

 

Over the past several decades in the United States, more and more health care providers and health insurers have consolidated, increasing their market power.1,2Highly concentrated markets have contributed to the growth in U.S. health care spending because they are associated with higher health care prices and insurance premiums, yet are not typically associated with higher quality of care.2-4 Given that states play a large role in regulating health care provider and insurer markets, it’s important to understand how concentration levels vary across the country, as well as examine the relative concentration levels between providers and insurers at the local level. Our previous research has shown that in markets with both high provider and insurer concentration, insurers have bargaining power to reduce prices, yet consumers and employers don’t usually benefit.5Regulators can use this information to determine if policies are needed to protect consumers, as well as employers that provide health benefits to their workforces.

To illustrate health care market concentration variability across the United States, we tabulated the market concentration of health care providers — hospitals, specialist physicians, and primary care physicians — and health insurers for each metropolitan statistical area (MSA) in 2016 using the methods and data described in the Appendix. Regulators classify markets into categories that range from unconcentrated to moderately concentrated to highly concentrated.6 We created a fourth category called “super concentrated,” to distinguish among the most concentrated markets (see the Appendix for details).

Market Concentration Levels Across the United States

When looking at market concentration levels across the United States, we found that, for both providers and insurers, the concentration levels varied, typically between two concentration categories (see table). For providers, the vast majority of the MSAs were at the concentrated end of the spectrum, either being highly concentrated (47.1%) or super concentrated (43.0%). By comparison, for insurers, almost all the MSAs fell into the middle categories, either being highly concentrated MSAs (54.5%) or moderately concentrated (36.9%).

When examining the relative concentration between providers and insurers, providers generally had the upper hand. Provider concentration was in a higher category relative to insurers in 58.4 percent of the MSAs, while the opposite was true in only 5.8 percent of the MSAs.

State and Federal Scrutiny Is Needed

This study shows that health care market concentration levels vary across the United States. To protect consumers and employers from high prices and premiums, state-level regulatory scrutiny — coupled with federal regulatory scrutiny — of potentially anticompetitive behavior is needed. State officials better understand the nuances of their local markets and are able to ascertain what steps, if any, may be required. For example, more populous MSAs may have lower measured concentration levels because they comprise more than one market. And even if a market is found to be highly or super concentrated, regulators should examine other competitive factors that may mitigate the potentially harmful impact of high concentration. These might include whether it is easy for competitors to enter a market or if there are economies of scale that might lead to lower costs.6 For example, as health care diagnoses and treatments become more complex, larger, more-integrated, and well-capitalized health care providers may be better equipped to lower costs and improve quality. Still, it is important for regulators to increase the likelihood that the benefits of consolidation ultimately flow to consumers and employers.