‘What The Health?’ It’s Nerd Week

Podcast: KHN’s ‘What The Health?’ It’s Nerd Week

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The Trump administration this week issued the rules governing next year’s Affordable Care Act insurance marketplaces, and they make some potentially large changes that could result in higher premiums and fewer benefits.

Meanwhile, states are going different ways in addressing the health insurance markets in their states in response to the federal activity. And House Speaker Paul Ryan announced his retirement — leaving an intellectual void among House Republicans when it comes to health care.

This week’s panelists for KHN’s “What the Health?” are:

  • Julie Rovner of Kaiser Health News
  • Stephanie Armour of The Wall Street Journal
  • Sarah Kliff of Vox.com
  • Paige Winfield Cunningham of The Washington Post

Among the takeaways from this week’s podcast:

  • The federal rules for the ACA’s marketplaces could dramatically alter how state regulators determine what plan benefits must be covered.
  • Those rules also change some conditions allowing people to qualify for exemptions to the requirement to have coverage — and they make those exemptions retroactive to 2017. So, some people who opted not to buy insurance and paid a penalty for 2017 may be able to file for refunds from the government.
  • Insurance companies are concerned about a number of the new provisions, including those that might drive healthy consumers away from the marketplaces and alter how insurers are compensated for having unusually high numbers of expensive customers.
  • An announcement from the White House this week said the administration is hoping to extend the work requirements that some states are seeking for Medicaid to other safety-net programs.
  • California and Maryland are among the states looking at ways to shore up their individual insurance markets in light of the changes being made at the federal level.


The politics of ACA rate hikes will be 2016 in reverse


Protester holds sign saying "ACA Saves Lives"

We are about to see a replay of the 2016 election fight over premium increases, but this time in reverse. Last time, it was the Republicans hammering Democrats for the rate hikes. This time, it will be Democrats accusing Republicans of driving up premiums by sabotaging the Affordable Care Act.

What to watch: It’s going to be a balancing act for the Democrats. They can (and will) score political points by blaming Republicans for the coming premium increases, but another campaign debate about rising premiums could also undermine the ACA by focusing on its continuing problems.

In 2016, fear of rising premiums jumped the individual market, and a majority of Americans came to believe that rising premiums were somehow affecting them when only a small share of the public was impacted. That undermined the ACA and may have affected the election.

This time, Democrats will be on the offensive, buttressed by polling that shows the public sees Republicans and President Trump owning the ACA’s problems. Democrats are sure to call out Republicans and the administration for steps they have taken to undermine the law.

These include:

  • Eliminating the penalty for not buying insurance.
  • Failing to pass stabilization legislation.
  • Developing regulations to allow the sale of short-term policies and the wider sale of association health plans.

Taken together, these actions provide more options for the healthy, but will drive up rates overall.

Reality check: Last year, far more Americans came to believe they were affected by premiums increases than the relatively small number of unsubsidized people in the non-group market who were actually affected.

Our August 2017 tracking poll showed that fully 60% of the American people believed they were negatively affected by the premium increases, when in reality, just a sliver of the public — the unsubsidized people in the individual health insurance market — were actually affected.

The numbers that matter, per Kaiser Family Foundation estimates:

  • Affected: 6.7 million
  • Unaffected: 319 million

No doubt the broader public’s fears about rising premiums fueled cynicism about the ACA. Some political scientists say it contributed to the Republican victory in 2016.  In fact, premiums for most Americans with private coverage have been growing at a 3% clip, a historically moderate level.

The bottom line: As the midterms approach, Republicans’ first impulse may be to attack the law to rev up their base as they have done before. The tradeoff they face is that they now own the ACA in the eyes of the public, including the problem of rising premiums which they will have helped to create.

And Democrats now have a chance to score political points on the ACA for the first time — but the risk is a disproportionate public reaction, much like in 2016, that undermines the law they worked so hard to pass.



Five Worrisome Trends in Healthcare


healthcare; insurance; drugs; drug companies; Government-run Insurance Program Sure to Backfire | iHaveNet.com

A reckoning is coming, outgoing BlueCross executive says.

A reckoning is coming to American healthcare, said Chester Burrell, outgoing CEO of the CareFirst BlueCross BlueShield health plan, here at the annual meeting of the National Hispanic Medical Association.

Burrell, speaking on Friday, told the audience there are five things physicians should worry about, “because they worry me”:

1. The effects of the recently passed tax bill. “If the full effect of this tax cut is experienced, then the federal debt will go above 100% of GDP [gross domestic product] and will become the highest it’s been since World War II,” said Burrell. That may be OK while the economy is strong, “but we’ve got a huge problem if it ever turns and goes back into recession mode,” he said. “This will stimulate higher interest rates, and higher interest rates will crowd out funding in the federal government for initiatives that are needed,” including those in healthcare.

Burrell noted that 74 million people are currently covered by Medicaid, 60 million by Medicare, and 10 million by the Children’s Health Insurance Program (CHIP), while another 10 million people are getting federally subsidized health insurance through the Affordable Care Act’s (ACA’s) insurance exchanges. “What happens when interest’s demand on federal revenue starts to crowd out future investment in these government programs that provide healthcare for tens of millions of Americans?”

2. The increasing obesity problem. “Thirty percent of the U.S. population is obese; 70% of the total population are either obese or overweight,” said Burrell. “There is an epidemic of diabetes, heart disease, and coronary artery disease coming from those demographics, and Baby Boomers will see these things in full flower in the next 10 years as they move fully into Medicare.”

3. The “congealing” of the U.S. healthcare system. This is occurring in two ways, Burrell said. First, “you’ll see large integrated delivery systems [being] built around academic medical centers — very good quality care [but] 50%-100% more expensive than the community average.”

To see how this affects patients, take a family of four — a 40-year-old dad, 33-year-old mom, and two teenage kids — who are buying a health insurance policy from CareFirst via the ACA exchange, with no subsidy. “The cost for their premium and deductibles, copays, and coinsurance [would be] $33,000,” he said. But if all of the care were provided by academic medical centers? “$60,000,” he said. “What these big systems are doing is consolidating community hospitals and independent physician groups, and creating oligopolies.”

Another way the system is “congealing” is the emergence of specialty practices that are backed by private equity companies, said Burrell. “The largest urology group in our area was bought by a private equity firm. How do they make money? They increase fees. There is not an issue on quality but there is a profound issue on costs.”

4. The undermining of the private healthcare market. “Just recently, we have gotten rid of the individual mandate, and the [cost-sharing reduction] subsidies that were [expected to be] in the omnibus bill … were taken out of the bill,” he said. And state governments are now developing alternatives to the ACA such as short-term duration insurance policies — originally designed to last only 3 months but now being pushed up to a year, with the possibility of renewal — that don’t have to adhere to ACA coverage requirements, said Burrell.

5. The lackluster performance of new payment models. “Despite the innovation fostering under [Center for Medicare & Medicaid Innovation] programs — the whole idea was to create a series of initiatives that might show the wave of the future — ACOs [accountable care organizations] and the like don’t show the promise intended for them, and there is no new model one could say is demonstrably more successful,” he said.

“So beware — there’s a reckoning coming,” Burrell said. “Maybe change occurs only when there is a rip-roaring crisis; we’re coming to it.” Part of the issue is cost: “As carbon dioxide is to global warming, cost is to healthcare. We deal with it every day … We face a future where cutbacks in funding could dramatically affect accessibility of care.”

“Does that mean we move to move single-payer, some major repositioning?” he said. “I don’t know, but in 35 years in this field, I’ve never experienced a time quite like this … Be vigilant, be involved, be committed to serving these populations.”

What The Health? VA Secretary Out, Privatization In?

Podcast: KHN’s ‘What The Health?’ VA Secretary Out, Privatization In?

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David Shulkin, the secretary of Veterans Affairs, was fired Wednesday night by President Donald Trump. To replace him, Trump will nominate his White House physician, naval Rear Adm. Ronny Jackson. Shulkin, however, is not going quietly. He took to The New York Times op-ed page to claim he was pushed out by those who want to privatize VA health services for profit.

Meanwhile, two more states, Iowa and Utah, passed legislation that would sidestep some of the requirements of the Affordable Care Act. Iowa wants to allow the sale of health plans that cover fewer benefits — or restrict coverage for people with preexisting health conditions. Utah wants to expand Medicaid to those higher up the income scale — but not as high as prescribed by the ACA.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Anna Edney of Bloomberg News, Sarah Kliff of Vox.com and Alice Ollstein of Talking Points Memo.

Among the takeaways from this week’s podcast:

  • If Shulkin is right that the administration is keen on privatizing the VA, would it move to something akin to the Medicaid managed-care systems that many states have set up?
  • Veterans groups haven’t yet shown their cards on whether they think Jackson is a suitable choice to replace Shulkin.
  • Iowa is poised to allow farmers groups to offer health plans that could sidestep some of the consumer protections in the federal Affordable Care Act, such as requiring that preexisting conditions be covered. Tennessee has a program similar to what Iowa is implementing, and some consumer groups have complained it pulls healthy individuals out of the ACA marketplace and drives up premiums for those who remain.
  • Utah’s request for a federal waiver so that it can offer a Medicaid expansion program to people earning up to 100 percent of the federal poverty level — and not the 138 percent included in the ACA — will show whether the Trump administration has a different standard than the Obama administration. Obama officials rejected partial Medicaid expansion requests.
  • Sen. Elizabeth Warren (D-Mass.) introduced a bill that offers provisions to help middle-income customers buying insurance on the ACA marketplace. But it suggests Democrats are still not sure what is the best health care strategy heading into the midterm elections.


State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting the Risk to the Individual Market



  • Issue: Certain forms of individual health coverage are not required to comply with the consumer protections of the Affordable Care Act (ACA). These “alternative coverage arrangements” — including transitional policies, short-term plans, health care sharing ministries, and association health plans — tend to have lower upfront costs and offer far fewer benefits than ACA-compliant insurance. While appealing to some healthy individuals, they are often unattractive, or unavailable, to people in less-than-perfect health. By leveraging their regulatory advantages to enroll healthy individuals, these alternatives to marketplace coverage may contribute to a smaller, sicker, and less stable ACA-compliant market. The Trump administration recently has acted to reduce federal barriers to these arrangements.
  • Goal: To understand how states regulate coverage arrangements that do not comply with the ACA’s individual health insurance market reforms.
  • Methods: Analysis of the applicable laws, regulations, and guidance of the 50 states and the District of Columbia.
  • Findings and Conclusions: No state’s regulatory framework fully protects the individual market from adverse selection by the alternative coverage arrangements studied. However, states have the authority to ensure a level playing field among coverage options to promote market stability.


Recent federal actions have created the potential for instability in the individual health insurance market, through which approximately 18 million Americans currently purchase their health insurance coverage.1 In October 2017, President Trump issued an executive order to encourage the sale of health insurance products that do not comply with the consumer protections of the Affordable Care Act (ACA).2 In December, Congress repealed, effective in 2019, the tax penalty for individuals who can afford to maintain health insurance coverage but decline to do so (the individual mandate penalty).3

Prior to health reform, insurers in the individual market had wide latitude to deny coverage, charge an unaffordable premium, or limit benefits based on a person’s medical history. As a consequence, individual market health insurance routinely proved inadequate for consumers’ health and financial needs and was often inaccessible to those with even minor health problems.4 The ACA established numerous consumer protections designed to make it easier for consumers in the individual market to access affordable, adequate health insurance. The law requires insurers that sell individual health insurance to offer coverage to all individuals regardless of health status, requires coverage of preexisting conditions, and prohibits insurers from charging higher premiums based on a person’s medical history or gender. It also includes limits on cost-sharing and requires insurers to cover a minimum set of essential health benefits, including coverage for mental and behavioral health care, prescription drugs, and maternity services.

For these consumer protections to work as intended and to keep premiums affordable, they need to be paired with policies that encourage a broad and balanced risk pool. To promote continuous enrollment by the sick and healthy alike, the ACA imposes an individual mandate and provides financial assistance to make coverage more affordable for those with lower and moderate incomes. Importantly, the ACA also defines what types of coverage were sufficiently protective for purposes of satisfying the individual mandate. To prevent cherry-picking of individuals who are low health risks, it also requires all individual market insurers to play by the same rules.

In many ways, the ACA’s regulatory approach to the individual market has proven successful. During the most recent open enrollment period, approximately 11.7 million Americans signed up for coverage through the ACA marketplaces (also called exchanges), most of whom are eligible for subsidies to help with the cost of coverage.5 In turn, improved access to comprehensive individual health insurance under the ACA, along with the expansion of Medicaid, has helped to reduce the uninsured rate by a third, as of 2018, and lower consumers’ average out-of-pocket costs.6 And, despite insurers’ continued uncertainty over the possible repeal of the health law and the Trump administration’s approach to implementing the ACA, analysis showed that, on average, states’ individual markets were stabilizing, with some insurers reaching profitability.7

However, challenges remain. In the past two years, the individual market in most states has seen significant increases in premiums, coupled with decreases in the number of participating insurers.8 While the ACA’s premium subsidies insulate many consumers from these price hikes, many millions of consumers are not eligible for subsidies, and those individuals identify the cost of coverage as a significant barrier to care.9 And though marketplace sign-ups remain stable despite federal policy uncertainty and Trump administration actions seen as undermining the ACA, enrollment remains well below early expectations.10

These challenges are interrelated and can be attributed to many factors. Still, the availability of coverage options that are not compliant with the ACA’s rules, as well as confusion over them, likely has played an important contributing role.

Policy Implications

Although states’ approaches to implementing the ACA can sharply differ, the law’s consumer protections operate nationwide, and nearly all states have taken responsibility for enforcing these reforms in their jurisdictions. The insurance exchanges in most states have proven resilient in the face of significant change and uncertainty, with millions of Americans now able to depend on individual health insurance to protect them both medically and financially.

However, maintaining a stable individual market will become more challenging, thanks to an environment in which healthy consumers are not required to maintain insurance and federal regulations are loosened to promote coverage arrangements likely to weaken insurance risk pools and raise premiums. These developments may incline healthy individuals to look increasingly outside the compliant market for coverage, leaving those who remain to face higher costs and fewer plan choices.68

Based on our review of state laws and standards, it appears that no state maintains a regulatory environment that fully protects its individual health insurance market from being undermined by the alternative coverage options we have identified. However, states continue to be the primary regulators of private health insurance. Although the ACA set a federal floor of consumer protections for insurers that operate in the individual market, it did not curtail states’ power to regulate above these minimum standards and to exercise full authority over coverage arrangements that fall outside the scope of federal insurance law.

How We Conducted This Study

This analysis is based on a review of applicable laws, regulations, and guidance enacted or promulgated prior to February 1, 2018, by each of the 50 states and the District of Columbia. This review was supplemented by correspondence with state regulators in 48 states and the District of Columbia.

A number of states have taken steps to limit the availability of non-ACA-compliant products and protect against adverse selection. Massachusetts and New York promptly discontinued transitional coverage and effectively prohibit underwritten short-term policies, while several other states tightly restrict the duration of such plans. Significantly, Massachusetts also has its own individual mandate, requiring state residents to maintain coverage that meets minimum standards.69 Other states have begun to explore enactment of similar policies in anticipation of the federal mandate’s 2019 repeal.

On many fronts, states face a federal regulatory approach to the individual market that is significantly different from what was originally envisioned under the Affordable Care Act. In light of these changed circumstances, there may be value for states in considering regulatory options for protecting their individual insurance markets and their insured beneficiaries from the detrimental effects of non-ACA-compliant policies. The decisions states make will likely have a significant impact on their residents’ access to adequate and affordable coverage and on the stability of their individual health insurance markets.



What to watch for in the individual health insurance market


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On Tuesday, March 6, the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy and the USC-Brookings Schaeffer Initiative for Health Policy co-hosted an event examining where the individual health insurance market is today and where it is heading. The event featured an opening presentation followed by a panel discussion featuring speakers from a variety of perspectives. The discussion examined how the individual market has evolved since the implementation of the main Affordable Care Act (ACA) reforms in 2014, the likely impact of recent policy changes implemented by the Trump Administration and Congress, and how federal policy toward the market might evolve in years to come.

Here are highlights from each of the participants.

Fiedler’s opening presentation: An overview of recent individual market trends and policy changes

The event opened with a presentation by Matthew Fiedler, a fellow at the Brookings Institution’s Center for Health Policy (slides available here). Fiedler started by showing that individual market enrollment grew significantly after implementation of the ACA’s reforms in 2014, but that individual market insurers also incurred significant losses. Those losses set the stage for a pricing correction in 2017, which he estimated returned premiums to a roughly sustainable position.

Fiedler then examined the implications of three significant policy changes under the Trump Administration: the end of cost-sharing reduction payments, the pending repeal of the individual mandate, and the proposed expansion of short-term, limited-duration plans. Fiedler argued that “the market will survive and will find a new equilibrium” because many enrollees in the ACA-compliant individual market are eligible for large subsidies that will make remaining in the market attractive.

Nevertheless, he concluded that repeal of the individual mandate and the expansion of short-term plans, will reduce the number of people covered, increase the number of people with lower-quality coverage, and reduce pooling of risk between healthier and sicker individuals. On the other hand, he argued that the Trump Administration’s decision to end cost-sharing reduction payments will have the unintended consequence of lowering premiums after subsidies for many enrollees and increasing federal spending.

Corlette: Short-term plans pose risks to consumers

A major topic for the panel discussion was the Trump Administration’s proposal to expand the definition of “short-term, limited duration” plans from a plan lasting less than 3 months (with no renewals permitted) to a plan lasting less than 12 months (with renewals permitted). Short-term plans are exempt from a broad range of federal regulatory requirements, including the ban on varying premiums based on health status and the ACA requirement to cover the so-called essential health benefits package.

Panelists noted that broader availability of short-term plans is likely to weaken the market for ACA-compliant plans since many healthier enrollees will migrate into the short-term market. Sabrina Corlette, a research professor at Georgetown University, argued that short-term plans pose significant risks not only to the market for ACA-compliant plans but also to consumers who buy them. These short-term plans are potentially harmful, she argued, because they “walk and talk a lot like traditional comprehensive health insurance” but many consumers will find themselves liable for “thousands of dollars of medical bills because these things simply don’t cover anything.”

Capretta: Recent policy changes are expanding state flexibility in beneficial ways

In discussing various policy changes implemented by the Trump Administration, James C. Capretta, a fellow at the American Enterprise Institute, noted that many of these policy changes have the effect of increasing state flexibility. He argued that state flexibility could help illuminate the path forward for federal policy. Given the stalemate at the national level, maybe we need a two or three-year period where a lot of states try a couple of different things,” he said. “If some states want to re-impose the individual mandate they can do so. If they want to impose continuous coverage penalties they can do so. They can restrict which plans are sold on the insurance market,” he said.

Patterson: What is the next national goal for health policy?

Panelists discussed their views on next steps for federal policymakers. Kevin Patterson, CEO of Connect for Health Colorado, said that policymakers need “to think about what we are going to challenge ourselves to actually deal with.” Patterson noted that the Affordable Care Act had a national goal of improving access to care. “But what’s the next national goal? Is there one?,” Patterson asked. Patterson identified reducing the underlying cost of care as a potential priority. Patterson noted that the “big bad insurance company” often gets blamed for high premiums, “but a lot of what they have to do is just reflect the cost that they’re seeing in what the provider networks are charging.”

Geraghty: Increasing competition among providers can reduce the cost of care

Following on Patterson’s comment, Geraghty highlighted the importance of increasing competition among health care providers if the goal is to reduce costs. “We as a country have not looked at competition on the delivery side,” he said. Geraghty noted that there were particular challenges in many rural markets.  “If you’re in a rural area and you’ve got one hospital and they bought up the physician groups around them, they now set the market and they set the price,” he explained. Geraghty argued that improvements in communications technology might make it possible to deliver more care remotely, which could facilitate increased competition in many markets with a small number of providers.


The ACA at Eight: Resilient but Still at Risk


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It’s Obamacare’s birthday. After eight years of relentless pounding, the Affordable Care Act (ACA) is still the law of the land. Its resilience reflects the fundamental decency of the American people who — when faced with the reality of taking coverage away from millions of their neighbors — refused to let that happen. They filled town hall meetings, they flooded the corridors of Congress, and support for the law surged to its current 54 percent.

That is not to say that the law’s future is assured. As part of its recent tax reform legislation, Congress eliminated financial penalties for not having health insurance — the teeth of the so-called individual mandate. The Congressional Budget Office (CBO) predicts that this will raise health insurance premiums in individual private markets by an average of 10 percent, and 13 million Americans could lose their health insurance. If Congress fails to enact recent bipartisan market stabilization proposals, these numbers could go even higher.

The current administration is also using executive authority to weaken the law. The U.S. Department of Health and Human Services has encouraged states to impose a range of new restrictions on Medicaid recipients — work requirements, premiums, copays — that may reduce the number of poor and near-poor Americans who enroll in this program.

The administration has also proposed new rules that would allow health insurers to sell plans that evade the ACA’s standards regarding preexisting conditions and minimum benefits. For example, the administration would permit insurers to market short-term plans — coverage limited to a year in duration — without the requirement that they accept all comers, and with various restrictions on benefits. These cheaper, less generous plans would appeal to healthier individuals, who would then likely choose not to purchase the more expensive, comprehensive insurance sold in ACA marketplaces. Only sicker individuals would buy ACA plans, raising their costs and making them unaffordable to millions who have come to depend on them. The net effect is to add choices for healthy Americans, but reduce options for the sick.

Efforts to curtail the ACA will likely increase the number of Americans without insurance, now at a historic low of 14 percent of working-age adults, according to the Commonwealth Fund’s Affordable Care Act Tracking Survey. These efforts will also likely increase health disparities between states. A number of the restrictions sought by the administration will go into effect only if states embrace them. States must request waivers to limit Medicaid benefits. So far, only Republican-led states are doing so. Similarly, states have discretion about whether to permit the sale of short-term plans. Many blue states are considering banning or regulating them.

Despite these threats, however, fundamental elements of the ACA remain in effect. Federal financial assistance for purchase of health insurance in ACA marketplaces remains available for individuals with incomes below 400 percent of the federal poverty level. This is one reason why 11.8 million people had signed up for ACA plans through the marketplaces by the end of January. Federal support for states to expand Medicaid persists. Thirty-four states and the District of Columbia have done so, resulting in 15 million more beneficiaries of that program.

Recent legislative and executive restrictions on the ACA will not totally reverse these gains. Paradoxically, some states that refused previously to expand Medicaid may decide to do so now that they may be able to impose work requirements, premiums, and copays, and thus give expansion a conservative stamp. This could actually increase the total number of Americans with some Medicaid coverage.

In fact, the continuing struggle over the ACA fits a decades-old pattern of steady, if erratic, expansion of health insurance coverage in the United States. Since the creation of Medicare and Medicaid 53 years ago, the federal government has periodically extended insurance to new populations: the disabled, those with end-stage renal disease, children. The federal government also massively expanded Medicare benefits to cover drugs. Once provided, these benefits have proved politically difficult to peel back — in a recent poll, 92 percent of Americans said they felt all of us should have the right to health care.

What does this mean for the ACA? While it will not achieve all its supporters’ goals, it will survive, and provide a new foundation upon which Americans can build if they choose, as they have in the past, to help their vulnerable neighbors deal with the scourge of illness. To paraphrase Martin Luther King, one might even say that the arc of history is long, but it bends toward health coverage.