Tag Archives: Skinny Health Plans

Five Worrisome Trends in Healthcare

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https://www.medpagetoday.com/publichealthpolicy/healthpolicy/72001?xid=fb_o_

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?

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https://khn.org/news/podcast-khns-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

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http://www.commonwealthfund.org/publications/fund-reports/2018/mar/state-regulation-coverage-options-outside-aca?omnicid=EALERT1377329&mid=henrykotula@yahoo.com

Abstract

  • 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.

Background

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.

 

 

The ACA at Eight: Resilient but Still at Risk

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http://www.commonwealthfund.org/publications/blog/2018/mar/aca-at-eight?omnicid=EALERT1374267&mid=henrykotula@yahoo.com

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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.

 

Republicans release new plan to lower health premiums, stabilize Obamacare markets

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https://www.usatoday.com/story/news/politics/2018/03/19/republicans-release-new-plan-lower-health-premiums-stabilize-obamacare-markets/439216002/

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 Sen. Lamar Alexander and other congressional Republicans are pressing forward with their latest plan to stabilize Obamacare health insurance markets and help provide coverage for patients with high medical costs.

But while previous versions have had bipartisan support, Democrats are refusing to back the latest bill.

Alexander and three key Republicans filed legislation Monday that they said could provide coverage for an additional 3.2 million individuals and lower premiums by as much as 40 percent for people who don’t get their health insurance through the government or their employer.

Beginning in 2019, the bill would reinstate for three years the government subsidies paid to insurers that provide health-care coverage to low-income clients. It also would provide $30 billion in funding – $10 billion a year over three years – to help states set up high-risk insurance pools to provide coverage for people with high medical costs.

The proposal also would revise the Obamacare waiver process so that states will have more flexibility to design and regulate insurance plans. In addition, it would require the Department of Health and Human Services to issue regulations allowing insurers to sell plans across state lines.

“Our recommendations are based upon Senate and House proposals developed in several bipartisan hearings and roundtable discussions,” the proposal’s Republican sponsors said in a statement.

The bill is sponsored in the Senate by Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee, and Sen. Susan Collins, R-Maine. The sponsors in the House are Rep. Greg Walden, R-Ore., who chairs the House Energy and Commerce Committee, and Rep. Ryan Costello, R-Penn.

The lawmakers are hoping to include the bill in a massive spending package that Congress is expected to take up by the end of the week. President Donald Trump told Alexander and Collins in a conference call over the weekend that he wants money to lower health insurance premiums included in the spending package.

The bill marks the latest attempt by lawmakers to offer short-term fixes that could bring some stability to the volatile health insurance markets created under the Affordable Care Act and help offset the higher insurance premiums expected to result from the repeal of the Obamacare requirement that most Americans buy insurance.

Alexander and the Senate health committee’s top Democrat, Sen. Patty Murray of Washington, struck a deal last fall to extend the cost-sharing subsidies for two years. Trump has halted the payments, established under the Affordable Care Act, which are worth around $7 billion each year.

But Murray and other Democrats are refusing to sign onto the latest proposal because it includes language that they say would expand the restrictions on federal funding of abortions.

“Senator Murray is disappointed that Republicans are rallying behind a new partisan bill that includes a last-minute, harmful restriction on abortion coverage for private insurance companies instead of working with Democrats to wrap up what have been bipartisan efforts to reduce health care costs,” said Murray’s spokeswoman, Helen Hare.

Murray “hopes the unexpected release of this partisan legislation isn’t a signal from Republicans that they have once again ended ongoing negotiations aimed at lowering families’ health care costs in favor of partisan politics, and that they come back to the table to finally get this done,” Hare said.

Republicans, meanwhile, pointed to an analysis by health care experts at the management consulting firm Oliver Wyman that compared the new proposal to what people in the individual market will pay if Congress fails to act.

The analysis showed that the package would reduce premiums by up to 40 percent in the individual market for farmers, small business owners and others who don’t buy their insurance from the government or their employer.

A self-employed plumber making $60,000, for example, may be paying $20,000 for health insurance now, but over time that insurance bill could be cut up to $8,000, the lawmakers said.

Preliminary projections from the Congressional Budget Office indicated that the plan could be adopted without adding to the federal debt.

 

Obamacare insurers just had their best year ever — despite Trump

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https://www.politico.com/story/2018/03/17/obamacare-insurers-2017-profit-analysis-422559

Flyers promoting Blue Cross Blue Shield are pictured. | AP Photo

A new POLITICO analysis finds many health plans turned a profit for the first time as GOP fumbled repeal.

Obamacare is no longer busting the bank for insurers.

After three years of financial bloodletting under the law — and despite constant repeal threats and efforts by the Trump administration to dismantle it — many of the remaining insurers made money on individual health plans for the first time last year, according to a POLITICO analysis of financial filings for 29 regional Blue Cross Blue Shield plans, often the dominant player in their markets.

The biggest reason for the improvement is simple: big premium spikes. The Blue plans increased premiums by more than 25 percent on average in 2017, meaning many insurers charged enough to cover their customers’ medical costs for the first time since the Affordable Care Act marketplaces launched in 2014 with robust coverage requirements.

“2017 was the first year we got our head above water in the individual market since the ACA passed,” said Steven Udvarhelyi, CEO of Blue Cross and Blue Shield of Louisiana.

However, one good year won’t ease the trepidation many insurers feel as they start planning for 2019. After knocking out the law’s individual mandate and a subsidy program worth billions of dollars to insurers late last year, the Trump administration is soon expected to finalize rules making it easier to buy cheaper plans exempt from some Obamacare rules.

“I don’t think we’ve turned the corner,” said Kurt Kossen, president of retail markets at Health Care Service Corporation, which operates Blue plans in five states. The insurer lost $2.5 billion on its individual market business during Obamacare’s first three years, he noted. “One year of being able to make a profit out of four certainly is not a stable market,” he said.

“They understand the risks of the market better now than they did at the start of the ACA exchanges,” said Deep Banerjee, an analyst with Standard & Poor’s who has written extensively about the marketplaces.

The gains were particularly notable among some of the biggest insurers. Health Care Service Corporation spent 77.7 percent of premiums on medical claims, an improvement of 18.5 percentage points over the prior year. Similarly, Blue Cross Blue Shield of North Carolina saw its margin improve by just over 10 percentage points.

But not all insurers have figured out how to make money in the troubled markets, which have failed to attract enough young and healthy customers to function effectively in many states. Of the 29 insurers analyzed, eight plans spent more than 90 percent of premium revenues on medical costs last year, meaning they almost certainly lost money in the marketplaces.

The POLITICO analysis provides a snapshot of financial performance in the marketplaces in 2017, not a definitive portrait. Combined, the 29 Blue plans had 4.5 million individual market customers at the end of last year, accounting for about one-fifth of the total market for people who buy their own coverage.

The healthier balance sheets are a welcome development for insurers after three years of major Obamacare losses, estimated at more than $15 billion by McKinsey. That led many national insurers, including UnitedHealth Group and Aetna, to flee the law’s marketplaces, in some cases leaving Blue Cross Blue Shield plans as the only option for customers.

But their improved financial fortunes could also complicate efforts to convince Republican lawmakers to support an Obamacare stabilization package as part of the massive spending bill Congress is trying pass by March 23. Lawmakers are looking to add new funds to help insurers with especially sick customers and restore a subsidy program known as cost-sharing reductions that helps insurers pay medical bills for their low-income customers.

However, a dispute over abortion language is holding up the Obamacare package in Congress. And many conservatives are wary of providing more funding to prop up the marketplaces, deriding it as a bailout for insurance companies.

“The rates can stay low without these payments,” said Rep. Larry Bucshon (R-Ind.), a member of the Energy and Commerce Committee, regarding the cost-sharing reductions that President Donald Trump cut last fall.

Insurers argue that looking at financial performance over a single year is misleading, and they say they’ve been repeatedly blindsided by changes to the law. For instance, because of budgetary restraints Republicans demanded, insurers haven’t received an expected $12 billion from a program meant to help them cover particularly expensive customers. Dozens of insurers are now suing the federal government to recover payments.

“If you don’t want to stabilize the current market, what’s your solution?” Udvarhelyi said. “The fact that we’ve hung in there losing hundreds of millions of dollars is a testament to the fact that we do care, but we need responsible action on the part of policymakers right now.”

Patrick Conway, CEO of Blue Cross and Blue Shield of North Carolina, points out his company would have kept 2018 premiums flat if Trump hadn’t eliminated the cost-sharing subsidy. Instead, the insurer jacked up rates by an average of 13 percent to make up for the lost funding.

“We’re dedicated to having the lowest possible premiums for our customers, and market stabilization would help us have the lowest possible premiums,” Conway said. “I’ve been traveling around the state and people are really worried about the cost.”

As insurers start to crunch the numbers on 2019 premiums, they will have to account for uncertainty over congressional funding and recent steps taken by the Trump administration weakening Obamacare. The elimination of the requirement to purchase insurance, which takes effect in 2019, and the administration’s efforts to make it easier to sell cheaper, skinnier plans that don’t meet Obamacare’s coverage requirements, are likely to further destabilize the markets.

The insurers’ biggest concern is fewer healthy individuals will buy Obamacare plans, either going without coverage, since they’ll no longer face a fine next year, or buying a new cheaper plan that covers far less.

“These things will chip away at the market,” S&P’s Banerjee said. “It’s not going to get meaningfully worse, but it doesn’t get any better.”

Insurers are warning that they’ll again have to jack up rates in 2019 if Congress doesn’t take action to stabilize the markets. A study from California’s marketplace suggests premium spikes around the country are likely to range from 16 to 30 percent next year. That means many Obamacare customers could be facing sticker shock just weeks before heading to the polls.

Polling has consistently shown that Republicans will shoulder most of the blame for future problems in Obamacare, since they’re fully in charge of the federal government. That could spur them to begrudgingly take action to tamp down premium increases, despite their disdain for the health care law.

“I think the people in charge, whether it’s fair or not, will probably [get the blame],” said Rep. Brett Guthrie (R-Ky.), vice chair of the House Energy and Commerce health subcommittee. “Everybody’s prices are going up. We’re going to have to figure out some way to improve it.”

 

 

White House pitch to bolster Obamacare includes tough trade-offs for Democrats

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https://www.politico.com/story/2018/03/06/obamacare-democrats-white-house-insurance-stable-388816

The White House is pictured. | Getty

The White House is seeking a package of conservative policy concessions — some of which are certain to antagonize Democrats — in return for backing a legislative package bolstering Obamacare markets, according to a document obtained by POLITICO.

The document indicates the administration will support congressional efforts to prop up the wobbly marketplaces, in exchange for significantly expanding short-term health plans and loosening other insurance regulations.

The document also makes severalreferences to abortion language that will be problematic for Democrats. A potential stumbling block in passing any stabilization package is whether conservatives will insist on including language prohibiting the use of government dollars to pay for abortions.

“Although congressional efforts to provide taxpayer money to prop up the exchanges is understandable, any such efforts must also provide relief to middle-class families harmed by the law and protect life,” the document states.

The source of the document provided to POLITICO isn’t identified and it isn’t dated. The White House declined to comment on the document but didn’t question its authenticity. A spokesperson for HHS said the department does not comment on leaked documents.

Two health policy experts who have been in contact with White House officials indicated that the document is consistent with ideas the administration has discussed for creating more stability and flexibility in the insurance markets.

“It’s legit,” said one former White House policy official.

Republican and Democratic lawmakers have been in delicate negotiations over a stabilization package that could clear the House and Senate. Democrats want to bolster the federal health care law after Republicans failed in their efforts to repeal it last year.

The list of White House policy requests includes allowing insurers to charge older enrollees up to five times as much as their younger counterparts, as opposed to the current three-to-one cap. That policy would require amending the Affordable Care Act.

The White House is also seeking to allow short-term plans — which offer skimpier benefits with lower premiums — to be renewed. Short-term plans, exempt from Obamacare rules, can deny people coverage or charge them more based on a health condition, in a process known as underwriting. The Trump administration recently proposed expanding the maximum length of these plans from three months to one year. However, the White House document envisions allowing people to renew this coverage “without those individuals going through health underwriting.”

The document doesn’t include support for reinsurance, which insurers have been pushing to shield them from the costs of particularly expensive customers.

The document also reiterates that the administration supports funding for cost-sharing reduction payments, which Trump cut off in October. The president’s budget proposal including funding for the payments, which help insurers reduce out-of-pocket costs for low-income Obamacare customers.

There is at least one item on the White House list that could garner bipartisan support: Expanding the use of health savings accounts. Last week, a bipartisan group of House members introduced a package of potential changes, and business groups have been pushing for HSA proposals to be part of the appropriations package Congress must pass by March 23.

Republicans fear another year of eye-popping premium increases will hit voters just before Election Day — and that they’ll get the blame this time since they’re now in charge.

But the White House asks could further unsettle those talks. In particular, the emphasis on abortion language tripped up earlier negotiations.

Democrats have been seeking a very different list of policies to boost the markets. They want to increase the subsidies provided to Obamacare customers, reinstate funding for outreach and marketing, and prevent the executive branch from expanding the availability of what they deride as “junk” insurance plans.

“People nationwide are looking at higher premiums and out-of-pocket costs as a direct result of the damage President Trump has done on health care,” said Sen. Patty Murray (D-Wash.), who has been in the middle of negotiations over a stabilization package, in a statement to POLITICO. “I certainly hope the president and Republican leaders won’t once again sabotage an opportunity to undo some of the damage they’ve done by choosing to play politics with women’s health and making last-minute, harmful demands that would raise families’ costs even more and place an age tax on seniors.”

 

A Big Divergence Is Coming in Health Care Among States

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Little by little, the Trump administration is dismantling elements of the Affordable Care Act and creating a health care system that looks more like the one that preceded it. But some states don’t want to go back and are working to build it back up.

Congress and the Trump administration have reduced Obamacare outreach, weakened benefit requirements, repealed the unpopular individual insurance mandate and broadened opportunities for insurers to offer inexpensive but skimpy plans to more customers.

Last week, the administration released its latest proposal along these lines, by changing the definition of so-called short-term plans. These plans don’t need to follow any of the Obamacare requirements, including popular rules that plans include a standard set of benefits, or cover people with pre-existing conditions. If the rule becomes final, these plans could go from short term to lasting nearly a year or longer.

Taken together, experts say, the administration’s actions will tend to increase the price of health insurance that follows all the Affordable Care Act’s rules and increase the popularity of health plans that cover fewer services. The resultcould be divided markets, where healthier people buy lightly regulated plans that don’t cover much health care, lower earners get highly subsidized Obamacare — and sicker middle-class peopleface escalating costs for insurance with comprehensive benefits.

But not everywhere. Several states are considering whether to adopt their own versions of the individual mandate, Obamacare’s rule that people who can afford insurance should pay a fine if they don’t obtain it. A few are looking to tighten rules for short-term health plans. Some states are investing heavily on Obamacare outreach and marketing, even as the federal government cuts back.

The result is likely to be big differences in health insurance options and coverage, depending on where you live. States that lean into the changes might have more health insurance offerings with small price tags, but ones that are inaccessible to people with health problems and don’t cover major health services, like prescription drugs. States pushing back may see more robust Obamacare markets of highly regulated plans, but the price of those plans is likely to remain higher.

 Legislation to replace the individual mandate has already been introduced in Maryland and New Jersey with prominent sponsors. Political leaders in other states, including California, Washington, Rhode Island, Vermont, Connecticut as well as the District of Columbia, are weighing options for replacing the mandate this year, as Stephanie Armour reported in The Wall Street Journal. The mandate was designed to give healthier people an incentive to buy insurance before they fell ill, lowering the cost of insurance for everyone who buys it.

“Clearly, I think the federal administration and Congress are moving in one direction,” said Brian Feldman, a Maryland state senator who leads the state health subcommittee and was the primary sponsor of mandate legislation there. “And I think states like Maryland would like to move in a different direction.”

Mr. Feldman and his colleagues aren’t planning simply to replicate the federal individual mandate. Instead, they are trying a new strategy. People who fail to obtain insurance would still be charged a fine, but they would be allowed to use that money as a “down payment” on a health plan if they wished. Legislators estimate that many people subject to the penalty would not owe anything more to buy health insurance, after federal tax credits are applied.

Other states are hoping to mimic the expiring federal policy more closely. The board governing the insurance marketplace for the District of Columbia voted last week to recommend the adoption of an individual mandate replacement. Connecticut’s governor, Dannel Malloy, is considering a proposal by a Yale health economist.

Those plans are more similar to the Affordable Care Act’s approach, in part for expedience. The federal mandate is set to expire next year, and insurance companies need to develop their health plans and submit 2019 prices by this summer.

“The idea that a state would be able to stand up something, and put out any guidance, and advise stakeholders, and be able to do it by 2019, is pretty infeasible,” said Jason Levitis, a former Obama administration Treasury Department official who has developed legislation to help states draft mandate replacement bills.

Imposing state-level versions of the mandate may be a political challenge even in blue states. But other strategies are in play, too. California is one of a handful of states considering a bill that would effectively ban the short-term insurance plans proposed by the Trump administration. (New York, New Jersey and Rhode Island already effectively block them.)

A number of states across the political spectrum are also considering policies that would provide so-called reinsurance funds, to help protect health insurers from rare, very expensive patients, and help them lower the prices for everyone else.

Alaska, Minnesota and Oregon have already adopted such plans. Washington, New Jersey, Maine, Colorado, Wisconsin and Maryland are working on proposals. Heather Howard, who directs the state health and values strategies program at Princeton University, said that reinsurance plans operated more like a “carrot” in stabilizing insurance markets. They may prove appealing to a broader array of states, while the mandate, a “stick,” may interest politicians only in the most liberal places.

Some Obamacare-averse states are pursuing policies meant to circumvent the health law’s rules for insurance, and broaden options for cheaper, lightly regulated health plans. Idaho has announced a plan to allow insurers to offer health plans that don’t comply with many of Obamacare’s core rules, and one insurer, Blue Cross of Idaho, has said it will begin selling such plans next month.

Alex Azar, the Health and Human Services secretary, has been cagey about whether he will step in to enforce federal law forbidding such products. Meanwhile, the Iowa legislature is considering a bill that would allow a different type of health plan to circumvent Obamacare rules, as The Des Moines Register recently reported. Medica, the only insurer currently offering Obamacare plans, said it might depart the Iowa market if the plan were approved.

The Affordable Care Act was drafted with room for state customization, but one of its primary goals was to make health insurance around the country more uniform. Thanks to state resistance to the health law, varying local conditions and a Supreme Court decision that made the Medicaid expansion optional, results have been much more uneven. Some states have seen much bigger reductions in the share of the uninsured than others. Only some states have seen insurance premiums stabilize.

“Without question I think we’re going to see a natural experiment in the states and a growing divergence in outcomes,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute.

Evidence of that divergence is already here. This year, signups for Affordable Care Act health plans were nearly flat compared with last year, despite huge cuts in federal outreach and advertisement. But states that ran their marketplaces and spent heavily on advertising saw stronger signups, while states that were more resistant to the health law experienced drops. The loss of the mandate, and the proliferation of health plans that don’t follow Obamacare’s rules, are likely to widen those gulfs.

 

 

UPDATE: CMS seeks expansion of short-term plans to sidestep ACA

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https://www.healthcaredive.com/news/cms-seeks-expansion-of-aca-skirting-short-term-plans/517399/

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Dive Brief:

  • HHS issued a proposed rule on Tuesday that expands the availability of short-term health insurance by allowing the purchase of plans providing coverage for up to 12 months, the latest in the Trump administration’s plans to weaken the Affordable Care Act. The action builds off a request for information by HHS last June on ways to increase affordability of health insurance.
  • The current maximum period for such plans is less than three months, a change made by the Obama administration in 2016. The proposed rule would mark a return to the pre-2016 era, but CMS noted that it is seeking comment on offering short-term plans for periods longer than 12 months.
  • Short-term plans are not required to comply with federal rules for individual health insurance under the ACA, so the plans could charge more for those with preexisting conditions and not provide what the ACA deemed essential health benefits like maternity care.

Dive Insight:

The proposed rule builds off of an executive order President Donald Trump signed in October, which instructed the federal government to explore more access to association health plans, expanding short-term limited duration plans and changes to health reimbursement arrangements or HRAs.

Consumers buying these short-terms plans could lose access to certain healthcare services and providers and experience an increase in out-of-pocket expenditures for some patients, according to the proposal.

The short-term plans “would be unlikely to include all the elements of ACA-compliant plans, such as the preexisting condition exclusion prohibition, coverage of essential health benefits without annual or lifetime dollar limits, preventive care, maternity and prescription drug coverage, rating restrictions and guaranteed renewability,” according to the proposed rule.

The Trump administration argues that expanding access to short-term plans is increasingly important due to rising premiums in the individual markets.

But if young and healthy people leave the individual market for short-term plans, it could contribute to an unbalanced risk pool. HHS itself states that the exodus of young and healthy exchange members could contribute to rising premiums within the ACA exchange markets.

“If individual market single risk pools change as a result, it would result in an increase in premiums for the individuals remaining in those risk pools,” the proposed rule stated.

But when asked about concerns that the idea might hurt the stability of the ACA marketplaces by siphoning healthy people away, CMS Administrator Seema Verma argued there would be little impact.

“No, we don’t think there’s any validity to that — based on our projections only a very small number of healthy people will shift from the individual market to these short-term limited duration plans. Specifically, we estimate that only 100,000 to 200,000 people will shift. And this shift will have will have virtually no impact on the individual market premiums,” Verma said on a press call.

But the insurance lobby cautioned that the action could increase insurance prices for the most vulnerable.

The American Hospital Association and Association for Community Affiliated Plans also slammed the short-term plans, saying they would increase the cost of comprehensive coverage.

“Short-term, limited-duration health plans have a role for consumers who experience gaps in coverage. They are not unlike the small spare tire in a car: they get the job done for short periods of time, but they have severe limitations and you’ll get in trouble if you drive too fast on them,” ACAP CEO Margaret Murray said in a statement.

“While we are reviewing the proposed rule to understand its impact on the people we serve, we remain concerned that expanded use of short-term policies could further fragment the individual market, which would lead to higher premiums for many consumers, particularly those with pre-existing conditions,” said Kristine Grow, SVP of communications at America’s Health Insurance Plans.

HHS anticipates most individuals switching from individual market plans to short-term coverage plans would be relatively young or healthy and not eligible to receive ACA’s premium tax credits.

CMS said the proposal is one to help the 28 million Americans without health insurance, pointing to the 6.7 million who chose to pay the individual mandate penalty in 2015 as evidence that ACA-compliant plans are too expensive.

“In a market that is experiencing double-digit rate increases, allowing short-term, limited-duration insurance to cover longer periods gives Americans options and could be the difference between someone getting coverage or going without coverage at all,” Verma said in a statement.

Senate HELP Committee Chair Lamar Alexander, R-Tenn., praised the action, but cautioned that states still have a responsibility to protect consumers.

“Millions of Americans who are between jobs and who pay for their own insurance will welcome this extended option for lower-cost, short-term policies. States will have the responsibility for making sure these policies benefit consumers,” Alexander said in a statement.

Democrats largely oppose the move, arguing it will further destabilize the market for millions of Americans in the ACA exchanges. “Widespread marketing of these bare bones, junk plans will further destabilize health insurance markets, and will lead to higher premiums for everyone,” a group of House Democrats said in a joint statement.

As Republicans are not likely to take up ACA repeal again any time soon, the Trump administration has been working to pare back the law in the past several months. It halved the enrollment period and stopped paying cost-sharing reduction payments to insurers. Also, the recent tax overhaul included a repeal of the law’s requirement that most people have coverage.

Idaho Blue Cross Jumps Into Controversial Market For Plans That Bypass ACA Rules

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https://khn.org/news/idaho-blue-cross-jumps-into-controversial-market-for-plans-that-bypass-aca-rules/?utm_campaign=KFF-2018-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=60750320&_hsenc=p2ANqtz-_fH8PLw8MQcK5-6PQpM5hnAT-lUReNyxbqcVv3CQftN_JErkzwdKT74g8pG-zb0KDTi4MLTSaD8zofdRUaejz_MhZWpw&_hsmi=60750320

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That didn’t take long.

It’s barely been two weeks since Idaho regulators said they would allow the sale of health insurance that does not meet all of the Affordable Care Act’s requirements — a controversial step some experts said would likely draw legal scrutiny and, potentially, federal fines for any insurer that jumped in.

On Wednesday, Blue Cross of Idaho unveiled a menu of new health plans that break with federal health law rules in several ways, including setting premiums based on applicants’ health.

“We’re trying to offer a choice that allows the middle class to get back into insurance coverage,” said Dave Jeppesen, the insurer’s executive vice president for consumer health care.

The firm filed five plans to the state for approval and hopes to start selling them as soon as next month.

The Blue Cross decision ups the ante for Alex Azar, the Trump administration’s new Health and Human Services secretary. Will he use his authority under federal law to compel Idaho to follow the ACA and reject the Blues plans? Or will he allow state regulators to move forward, perhaps prompting other states to take more sweeping actions?

At a congressional hearing Wednesday, even as Blue Cross rolled out its plans, Azar faced such questions.

“There are rules. There is a rule of law that we need to enforce,” Azar said. Observers noted, however, he did not specifically indicate whether the federal government would step in.

Robert Laszewski, a consultant and former insurance industry executive, thinks it should.

“If Idaho is able to do this, it will mean other … states will do the same thing,” he said. “If a state can ignore federal law on this, it can ignore federal law on everything.”

Idaho’s move stirs up more issues about individual insurance market stability.

Policy experts say that allowing lower-cost plans that don’t meet the ACA’s standards to become more widespread will pull younger and healthier people out of Obamacare, raising prices for those who remain. Supporters say that is already happening, so this simply provides more choices for people who earn too much to qualify for subsidies to help them purchase ACA coverage.

The state’s move to allow such plans, announced in January, drew harsh and swift criticism.

“Crazypants illegal,” tweeted Nicholas Bagley, a law professor at the University of Michigan and former attorney with the civil division of the U.S. Department of Justice, who said that states can’t pick and choose which parts of federal law to follow. Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms, pointed out that health insurers could be liable for sharp fines if they are found to be in violation of the ACA.

But both Idaho regulators and Blue Cross officials say they are not worried.

Jeppesen said the ACA gives states regulatory authority “to make sure the market works and is stable,” and the insurer is simply “following what the state has given us guidance” to do.

Other insurers in Idaho are taking a much more cautious approach, telling The Wall Street Journal they are not stepping up immediately to offer their own plans.

Laszewski said they are likely waiting to see what legal challenges develop.

“If I were running an insurance company, there’s no way I would stick my neck out until the high court has ruled in favor of this — and they’re not going to,” he said.

Jeppesen said his company has consulted with legal experts and is moving ahead with confidence. The aim is to bring people back into the market, particularly the young, the healthy and those who don’t get a tax credit subsidy and can’t afford an ACA plan.

For some people — especially younger or healthier applicants — the new plans, which the insurer has named Freedom Blue, cost less per month than policies that meet all ACA rules.

They accomplish that by limiting coverage. If they are allowed to be sold, consumers will need to weigh the lower premiums against some of the coverage restrictions and variable premiums and deductibles, policy experts say.

The plans, for example, will include a “waiting period” of up to 12 months for any preexisting conditions if the applicant has been without coverage for more than 63 days, Jeppesen said.

Additionally, they cap total medical care coverage at $1 million annually. And premiums are based, in part, on a person’s health: The healthiest consumers get rates 50 percent below standard levels, while those deemed unhealthy would be charged 50 percent more.

All those caveats violate ACA rules, which forbid insurers from rejecting coverage of preexisting conditions or setting dollar caps on benefits or higher premiums for people with health problems.

But the rates may prove attractive to some.

Premiums for a healthy 45-year-old, for example, could be as low as $195 a month, according to a comparison issued by the insurer, while a 45-year-old with health problems could be charged $526. In that case, the 45-year old would find a lower price tag — $343 a month — for an ACA-compliant bronze plan.

While Freedom Blues plans cover many of the “essential health benefits” required under the ACA, such as hospitalization, emergency care and mental health treatment, they do not include pediatric dental or vision coverage. One of the five plans does not include maternity coverage.

When compared with one of the Blues’ ACA-compliant plans — called the Bronze 5500 — the new standard Freedom Blue plan’s annual deductibles are a mixed bag.

That’s because they have two separate deductibles — one for medical care and one for drugs. If a consumer took only generic drugs, the new plan would be less expensive, according to details provided by the plan. But with a $4,000 deductible for brand-name drugs, the Freedom Blue plan requires more upfront money before full coverage kicks in than the ACA-compliant plan it was compared with.

Jeppesen said the insurer hopes to attract many of the “110,000 uninsured state residents who cannot afford [ACA] coverage.”

That’s the total number of uninsured people who earn more than 100 percent of the federal poverty level in the state, he said.

Sarah Lueck, senior policy analyst for the Center on Budget and Policy Priorities, cautioned that some of those residents might actually be eligible for subsidies under the ACA, which are available to people earning up to four times as much.

“Many … could be getting subsidies for more comprehensive coverage through the [ACA-compliant state exchange] and would be better off,” Lueck said.