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Podcast: ‘What The Health?’ While You Were Celebrating …
The year in health policy has already begun: The Trump administration Thursday released a long-awaited regulation aimed at making it easier for small businesses and others to form “association health plans.” Now advocates and opponents will be able to weigh in with more specific recommendations.
Meanwhile, in December, the health policy focus was on the tax bill and its repeal of the Affordable Care Act’s “individual mandate” penalty for most people who don’t have health insurance. But some recent key court decisions could reshape the benefits millions of people receive as part of their health coverage.
This week’s “What the Health?” guests are Julie Rovner of Kaiser Health News, Paige Winfield Cunningham of The Washington Post, Alice Ollstein of Talking Points Memo and Margot Sanger-Katz of The New York Times.
They discuss these topics, as well as the prospects for pending health legislation on Capitol Hill.
Among the takeaways from this week’s podcast:
- The Trump administration’s decision to expand association health plans faces a number of obstacles, including the lack of good oversight in many states and the poor track record of many past plans.
- Consumer advocates fear that growth of association plans could leave many consumers without adequate benefits because some plans will not cover the same essential benefits that Obamacare plans guarantee. They also are concerned that healthy customers will migrate to the new plans and leave the ACA’s marketplace plans with an abundance of enrollees who are ill.
- The prospects of the bill to stabilize the individual insurance market sponsored by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) appear to be dimming.
- Two federal judges have ruled against the Trump administration rule to change the ACA’s contraception mandate. The decisions, though, are not based on the policy but on faulty rule-making.
- In another highly watched court case, a federal judge has ruled that the Equal Employment Opportunity Commission has until 2019 to set new rules on what employers can require of workers in their wellness programs.
Association health plan proposal: Experts wary of weak consumer protections, oversight issues
The new proposal to expand association health plans promises to provide more affordable insurance options for small-business owners and employees. But some experts aren’t convinced that this is the right solution.
For one, the proposal’s promises of consumer protections aren’t as strong as they seem, said Timothy Jost, a Washington and Lee University professor emeritus who closely follows the ACA.
Association health plans can’t charge higher premiums or deny coverage based on health status, according to the Department of Labor (DOL). But because AHPs would be subject to large-employer market rules, they wouldn’t have to cover the list of essential health benefits that the Affordable Care Act mandates.
The upshot, Jost told FierceHealthcare, is that insurers could legally weed out those with costly conditions while still complying with regulations that bar them from denying those individuals coverage or hiking their premiums.
“If you can’t exclude someone because they have cancer, it’s easy to just not cover chemotherapy,” he said. “Or if you can’t exclude people who have mental illness, it’s easy to just not cover mental health care.”
And Larry Levitt, senior vice president of the Kaiser Family Foundation, pointed out in a Twitter post that insurers could still hike premiums based on factors other than health status:
Cherry-picking enrollees
Association health plans are also likely to be marketed toward the healthiest, youngest individuals, Jost noted.
“I doubt anybody is going to be out there writing association coverage for occupations that are predominantly people who are older or have chronic health problems,” he said.
The problem, then, is that AHPs would siphon more low-risk consumers out of the individual marketplaces—thus skewing that risk pool and likely causing insurers to raise premiums.
“I think everybody understands that this is going to undermine the market for ACA-compliant plans,” Jost said.
Andy Slavitt, the former Centers for Medicare & Medicaid Services acting administrator, laid out his own criticisms in a Twitter thread—including pointing out that breaking up risk pools goes against the proposal’s stated purpose of giving small businesses more clout:
Limited impact
Merrill Matthews, Ph.D., a resident scholar at the right-leaning Institute for Policy Innovation, praised the new proposed rule, noting that it allows small businesses to do what large employers have long been able to: self-insure.
“Self-insured employers have been able to avoid many of the state and federal mandates imposed on the small group and individual markets, which helped employers keep down the cost of coverage,” he said.
But even Matthews acknowledged that the impact of the proposed policy changes is likely to be limited, as it will only apply to small employers and possibly some self-employed individuals. Since the proposed changes are “unlikely to provide much relief” for those affected by high premiums in the individual market, he said, “Congress still needs to repeal the Affordable Care Act.”
Questions about oversight
Perhaps the biggest issue that Jost saw with the new proposal was the fact that AHPs have had past issues with insolvency, bankruptcy and even fraud.
“There’s just a long history of association health plans being formed that are thinly capitalized, that pay large salaries and expenses for their owners, and disappear when the going gets rough,” he said.
For its part, the DOL said it will “closely monitor these plans to protect consumers.” But Jost pointed out that the agency has experienced staff and budget cuts that might undermine that goal.
Even the DOL itself said in the proposed rule that “the flexibility afforded AHPs under this proposal could introduce more opportunities for mismanagement or abuse, increasing potential oversight demands on the department and state regulators.”
Ultimately, what plays out will largely be decided by how states respond to the new regulations once they are implemented, Jost added.
“In states that try to take an aggressive approach to regulating them, there won’t be that much activity,” he said. “And in states that take a hands-off approach and let anything go, there will be probably quite a bit of activity until [AHPs] start going belly up.”
AP-NORC Poll: Health Care Is the Issue That Won’t Go Away
https://www.nytimes.com/aponline/2017/12/21/us/politics/ap-us-ap-poll-health-care.html
As President Donald Trump completes his first year in office, Americans are increasingly concerned about health care, and their faith that government can fix it has fallen.
A new poll by The Associated Press-NORC Center for Public Affairs Research finds that 48 percent named health care as a top problem for the government to focus on in the next year, up 17 points in the last two years.
The poll allows Americans to name up to five priorities and found a wide range of top concerns, including taxes, immigration and the environment. But aside from health care, no single issue was named by more than 31 percent.
And 7 in 10 of those who named health care as a top problem said they had little to no confidence that government can improve matters. The public was less pessimistic in last year’s edition of the poll, when just over half said they lacked confidence in the problem-solving ability of lawmakers and government institutions.
“We are way up there on the cost, and as far as giving good health care, we are way down,” said Rebekah Bustamante of San Antonio, a retired medical imaging technician. “Now in health care, you’re a number.”
Bustamante said she voted for Trump, but “he’s learning on the job, and he’s got a long way to go.”
Trump initially promised his own plan that would deliver “insurance for everybody” and “great” health care, “much less expensive and much better.” But the White House never released a health care proposal from the president.
GOP legislation to repeal and replace former President Barack Obama’s health care law failed in Congress, although the tax bill scraps the Obama requirement that most people get health insurance. Bloodied on both sides, Republicans and Democrats seem to have battled to an uneasy draw on health care.
Meanwhile, conflicting policy signals from Washington, including an abrupt White House decision to cancel insurer subsidies, roiled insurance markets. Premiums on health plans purchased by individuals jumped by double digits. Progress reducing the number of uninsured stalled, and one major survey found an uptick this year.
“There is zero bipartisanship, and it’s frustrating,” said Eric Staab, a high school teacher from Topeka, Kansas. “It seems like we have thrown everything at this dartboard, and nothing is improving the coverage.”
Rumblings of discontent have political repercussions for next year’s midterm elections and the presidential contest in 2020, said Robert Blendon, a professor at the Harvard T.H. Chan School of Public Health, who follows opinion trends on health care.
“It’s the issue that won’t go away,” said Blendon. “Given the news cycle, taxes should be first, the economy should be second, and this health care thing should be buried.”
Three in 10 Americans listed taxes among their top priorities, about double the percentage who said that last year. About a quarter mentioned immigration, and just under 2 in 10 mentioned environmental issues and education. Meanwhile, concerns about unemployment plunged to 14 percent, about half the mentions as last year.
Health care was by far the top issue mentioned by Democrats and independents. Republicans were about equally likely to mention immigration, health care and taxes.
Democrats were more likely than Republicans to say they have little to no confidence that the government will make progress on health care, 84 percent to 57 percent.
The reason health care doesn’t fade away is that costs aren’t getting any more manageable, said some people who took part in the AP-NORC survey.
Bustamante said she is planning a trip to Mexico for some dental work, because she can obtain quality service for much less there. “Thank God I live in Texas, where getting to Mexico isn’t that far away,” she said. “But everybody doesn’t have that option.”
ShyJuan Clemons of Merrillville, Indiana, said he’s currently uninsured because his previous health plan was costing too much money for the benefit he got from it. He faced his insurance plan’s annual deductible when he went to the doctor, so he’d wind up paying out-of-pocket for visits, on top of premiums.
“You are not constantly worried about taxes, but you are constantly worried about health care — be it major or minor,” said Clemons, a personal care attendant who works with disabled people. “You catch a cold, and you just think about it in passing — ‘I hope it doesn’t develop into a problem.'”
Clemons, a Democrat, said he’s disappointed that Trump and Republicans in Congress seem to be trying to tear down “Obamacare” instead of building on it. “I would like to see them make the thing run smoothly so we can do better, instead of just trying to cripple it,” he said.
The lack of confidence in the ability of government to find pragmatic solutions extended to other problems in the AP-NORC poll, including climate change, immigration, and terrorism.
Just 23 percent said that Trump has kept the promises he made while running for president, while 30 percent said he’s tried and failed, and 45 percent said he has not kept his promises at all.
Nearly 2 in 3 said they were pessimistic about the state of politics in the U.S. About half were downbeat about the nation’s system of government, and 55 percent said America’s best days are behind.
Marketplace Confusion Opens Door To Questions About Skinny Plans
Marketplace Confusion Opens Door To Questions About Skinny Plans
Consumers coping with the high cost of health insurance are the target market for new plans claiming to be lower-cost alternatives to the Affordable Care Act that fulfill the law’s requirement for health coverage.
But experts and regulators warn consumers to be cautious and are raising red flags about one set of limited benefit plans marketed to individuals for as little as $93 a month. Offered through brokers and online ads, the plans promise to be an “ACA compliant, affordable, integrated solution that help … individuals avoid the penalties under [the health law].”
Legal and policy experts have raised concerns that the new plans could leave buyers incorrectly thinking they are exempt from paying a penalty for not having coverage. Additionally, they say, plans sold to individuals must be state-licensed.
Apex Management Group of Oak Brook, Ill., and Pennsylvania-based Xpress Healthcare have teamed up to offer the plans, and executives from both companies say they don’t need state approval to sell them.
In California, Insurance Commissioner Dave Jones has already asked for an investigation.
“Generally speaking, any entity selling health insurance in the state of California has to have a license,” Jones said earlier this month. “I have asked the Department of Insurance staff to open an investigation with regard to this company to ascertain whether it is in violation of California law if they are selling it in California.”
Asked about a possible investigation, Apex owner Jeffrey Bemoras recently emailed a statement saying the firm is not offering the plans to individuals in California.
Bruce Benton, spokesman for the California Association of Health Underwriters, which represents the state’s health insurance agents, said his organization has not heard of Apex or Xpress and does not know of anybody who is selling their skinny plans in California.
These skinny plans — sold for the first time to individuals in other states across the country — come amid uncertainty over the fate of the ACA and whether President Donald Trump’s administration will ease rules on plans in the individual market. Dozens of brokers are offering the plans.
“The Trump administration is injecting a significant amount of confusion into the implementation of the ACA,” said Kevin Lucia, project director at Georgetown University’s Health Policy Institute. “So it doesn’t surprise me that we would have arrangements popping up that might be trying to take advantage of that confusion.”
David Shull, Apex’s director of business development, said “this is not insurance” and the plans are designed to meet the “bulk of someone’s day-to-day needs.”
In his email, Bemoras wrote that “Apex Management group adheres closely to all state and federal rules and regulations surrounding offering a self-insured MEC [minimal essential coverage] program.” He added: “We are test marketing our product in the individual environment, [and] if at some point it doesn’t make sense to continue that investment we will not invest or focus in on that market.”
Price-Tag Appeal, But What About Coverage?
The new plans promise to be a solution for individuals who say that conventional health insurance is too expensive. Those looking for alternatives to the ACA often earn too much to qualify for tax subsidies under the federal law.
Donna Harper, an insurance agent who runs a two-person brokerage in Crystal Lake, Ill., found herself in that situation. She sells the Xpress plans — and decided to buy one herself.
Harper says she canceled her BlueCross BlueShield plan, which did meet the ACA’s requirements, after it rose to nearly $11,000 in premiums this year, with a $6,000 annual deductible.
“Self-employed people are being priced out of the market,” she said, noting the new Xpress plan will save her more than $500 a month.
The Xpress Minimum Essential Coverage plans come in three levels, costing as little as $93 a month for individuals to as much as $516 for a family. They cover preventive care — including certain cancer screenings and vaccinations — while providing limited benefits for doctor visits, lab tests and lower-cost prescription drugs.
There is little or no coverage for hospital, emergency room care and expensive prescription drugs, such as chemotherapy.
Harper said she generally recommends that her clients who sign up for an Xpress plan also buy a hospital-only policy offered by other insurers. That extra policy would pay a set amount toward in-patient care — often ranging from $1,500 to $5,000 or so a day.
Still, experts caution that hospital bills are generally much higher than those amounts. A three-day stay averages $30,000, according to the federal government’s insurance website. And hospital plans can have tougher requirements. Unlike the Xpress programs, which don’t reject applicants who have preexisting medical conditions, most hospital-only plans often do. Harper says she personally was rejected for one.
“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she said. And if she winds up in the hospital? “I’ll just pay the bill.”
About 100 brokers nationwide are selling the plans, and interest “is picking up quick,” said Edward Pettola, co-owner and founder of Xpress, which for years has sold programs that offer discounts on dental, vision and prescription services.
Caveat Emptor
Experts question whether the plans exempt policyholders from the ACA’s tax penalty for not having “qualified” coverage, defined as a policy from an employer, a government program or a licensed product purchased on the individual market.
The penalty for tax year 2017 is the greater of a flat fee or a percentage of income. The annual total could range from as little as $695 for an individual to as much as $3,264 for a family.
Trump issued an executive order in October designed to loosen insurance restrictions on lower-cost, alternative forms of coverage, but the administration has not signaled its view on what would be deemed qualified coverage.
Responding to questions from KHN, officials from Apex and Xpress said their plans are designed to be affordable, not to mimic ACA health plans.
“If that is what we are expected to do, just deliver what every Marketplace plan or carriers do, provide a Bronze, Silver Plan, etc. it would not solve the problem in addressing a benefit plan that is affordable,” the companies said in a joint email on Nov. 14. “Individuals are not required to have an insurance plan, but a plan that meets minimum essential coverage, the required preventive care services.”
Bemoras, in a separate interview, said his company has been selling a version of the plan to employers since 2015.
“As we see the political environment moving and wavering and not understanding what needs to be done, the individual market became extremely attractive to us,” Bemoras said.
Still, experts who reviewed the plans for KHN said policies sold to individuals must cover 10 broad categories of health care to qualify as ACA-compliant, including hospitalization and emergency room care, and cannot set annual or lifetime limits.
The Xpress/Apex programs do set limits, paying zero to $2,500 annually toward hospital care. Doctor visits are covered for a $20 copayment, but coverage is limited to three per year. Lab tests are limited to five services annually. To get those prices, patients have to use a physician or facility in the PHCS network, which says it has 900,000 providers nationwide. Low-cost generics are covered for as little as a $1 copay, but the amount patients pay rises sharply for more expensive drugs.
“I’m very skeptical,” said attorney Alden J. Bianchi of Mintz Levin, who advises firms on employee benefits. “That would be hard [to do] because in the individual market, you have to cover all the essential health benefits.”
The details can be confusing, partly because federal law allows group health plans — generally those offered by large employers — to provide workers with self-funded, minimal coverage plans like those offered by Apex, Bianchi said.
Apex’s Shull said in a recent email that the firm simply wants to offer coverage to people who otherwise could not afford an ACA plan.
“There will be states that want to halt this. Why, I do not understand,” he wrote. “Would an individual be better off going without anything? If they need prescriptions, lab or imaging services subject to a small copay, would you want to be the one to deny them?”
Some consumers might find the price attractive, but also find themselves vulnerable to unexpected costs, including the tax liability of not having ACA-compliant coverage.
Harper, the broker who signed up for one of the plans, remains confident: “As long as Xpress satisfies the [mandate], which I’m told it does, my clients are in good hands. Even if it doesn’t, I don’t think it’s a big deal. You are saving that [the tax penalty amount] a month.”
HENRY KOTULA 