G.O.P. Plans to Replace Health Care Law With ‘Universal Access’

By Robert Pear and Thomas Kaplan
The New York Times, December 15, 2016

House Republicans, responding to criticism that repealing the Affordable Care Act would leave millions without health insurance, said on Thursday that their goal in replacing President Obama’s health law was to guarantee “universal access” to health care and coverage, not necessarily to ensure that everyone actually has insurance.

“Our goal here is to make sure that everybody can buy coverage or find coverage if they choose to,” a House leadership aide told journalists on the condition of anonymity at a health care briefing organized by Republican leaders.

The House leadership aide said that lowering the cost of insurance was a much better way to encourage people to opt in.

“We would like to get to a point where we have what we call universal access, where everybody is able to access coverage to some degree or another,” the aide said.

http://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

After an unrelenting campaign of promising to repeal and replace Obamacare, the Republicans are now in a position, having won the election, that they will have to deliver on that promise, or at least appear to do so. But it is the replacement that they are stumbling over.

The options they have been considering will leave many individuals worse off, particularly those who are most vulnerable because of medical needs or financial limitations. Realizing that most people, other than the very wealthy, will be unhappy with their proposals, they are searching for a framing that they might use to try to convince us that their proposals would result in a better system.

The Republican House leadership sent out an aide to the media to float the concept of “universal access” as a replacement program. Since their proposals would increase the number of uninsured, instead of promoting universal coverage they suggest that our goal should be to ensure that everyone has access to health care and health care coverage.

Since being released almost two weeks ago, the concept has not gained traction. Access to health insurance does not mean anything if a person cannot pay for it. If the insurance is made affordable by stripping out most of its benefits then access to actual health care becomes unaffordable. This particular concept of “universal access” will certainly face ridicule if they push it much further.

It appears that they will be exiting through the back door with their most likely strategy. They will take immediate action to appear to fulfill their promise of repealing Obamacare “on day one” or close to that. They will not actually repeal ACA but they will merely pass a resolution stating the intent to repeal it at some later date, preferably after the next presidential election. They will claim that they need the time to enact replacement legislation, though they will be reluctant to pass anything that may cause individuals to lose their current adequate coverage, which is what their proposals would do, especially those that they could move forward through the reconciliation process.

Another possible strategy that they could use would be to bring forth unacceptable legislation that must clear a Democratic filibuster. Then when it is blocked they can claim that it is the Democrats who are obstructing the replacement process. They can then move on to their other transformative legislative goals knowing that voters likely will forget about repeal and replace by the next presidential election.

Don’t pay managed care firms a penny more

By the Editorial Board
The Des Moines Register, December 22, 2016

Iowa’s Medicaid program was operated by the state for decades. With modest administrative costs and among the lowest per-patient spending in the country, it worked well.

Then along came Gov. Terry Branstad and his unpopular idea of handing over the government health insurance program to three for-profit insurers. While providing no reliable evidence, he insisted privatization would save the state money and improve the health of more than 600,000 Iowans who rely on Medicaid. On April 1, three managed-care companies took over the program’s administration.

These insurers signed contracts with the state, agreeing to cover the health expenses of Iowans in exchange for fixed monthly payment rates based on actuarial projections reviewed by both parties. The companies, including giant UnitedHealthcare, didn’t just fall off the health insurance turnip truck. They knew exactly what they were doing.

And within months, they were begging for more public money. In October, Iowans unexpectedly discovered the state agreed the companies could milk an additional $127 million out of the state and federal government.

Private companies receiving billions of public dollars to operate a public program refuse to be accountable to the public. They want to do their business with the state behind closed doors.

So what is happening behind closed doors? The companies are complaining that the controversial privatization project is “drastically underfunded” and the situation has been a “catastrophic experience.”

One insurance executive wrote that without changes — such as paying the companies more or allowing them to cut benefits and reimbursement rates — privatized Medicaid may not be sustainable.

Great. The program should not be sustained.

It has been a disaster. Since privatization began, numerous Iowans have complained about everything from catheters to surgeries not being covered. Health providers have not been reimbursed for services, forcing them to borrow money or close their doors.

The state should not pay the private insurers a single penny more than what was agreed upon in the contracts. If the companies don’t like it, they can jump ship, bail out of the contracts, and Iowa can return to the state-run Medicaid that was a trusted, reliable payer of health services.

Because what MCOs are doing in Iowa looks eerily like what they’ve done in other states: Secure a state contract with agreed-upon payment rates and come back later to demand more and more taxpayer dollars. They attempt to essentially hold the state hostage.

Iowa is less than nine months into privatization and insurers are laying the groundwork to pocket more public health dollars. Giving it to them defies the very premise of managed care, which is to create budget predictability for the state going forward.

And why would Iowa fork over more cash anyway? To sustain a privatized system that has been a disaster for Iowa patients and providers?

No thanks.

http://www.desmoinesregister.com…

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Comment:

By Don McCanne, M.D.

Medicaid is a chronically under-funded government health care program for the poor. Private Medicaid managed care organizations have been taking over these programs from the state governments contending that they can provide care at lower costs.

These organizations have higher expenses due to the complex administrative infrastructure that they create, not to mention the extra costs of high executive compensation and funds siphoned off for investor profits. The only way to save money is to spend less on health care. That means a reduction in remuneration for the already underpaid health care professionals and institutions, or a reduction in essential health care benefits provided to the patients, or, more likely, both.

We need to reduce administrative waste, not create more of it. Regular readers of this blog should have an idea of how we could do that.

But now let’s share with all our holiday of peace and joy as we clear political hurdles to make this a better America and a better world for all of us.

Challenges in Estimating the Number of People With Nongroup Health Insurance Coverage Under Proposals for Refundable Tax Credits

By Susan Yeh Beyer and Jared Maeda
Congressional Budget Office, December 20, 2016

Some policymakers have expressed interest in developing proposals to replace the current tax-based subsidies for the purchase of private health insurance in the nongroup (or individual) market under the Affordable Care Act (ACA) with refundable tax credits that would be structured differently from those under current law. Many such proposals would also eliminate or reduce the extent of current federal laws regulating the nongroup market, particularly the rules governing health insurance benefits

CBO and JCT face several challenges in estimating the number of people who would purchase private insurance coverage in the nongroup market under an alternative refundable tax credit proposal. It is difficult to predict what regulations states would impose on the nongroup market, what types of products insurers might offer given those regulations, and which types of insurance products people might purchase based on their preferences and their characteristics (such as age, income, and health).

One way to predict the types of plans that people might purchase is to look at the types of plans that existed in the nongroup market before enactment of the ACA. Before then, nongroup market regulations varied widely across states. Only a few states required guaranteed issue and implemented modified community rating rules. Although many states specified a set of services that insurers had to cover, no states regulated the depth of coverage or the amount of cost sharing. Most plans sold in the nongroup market included major medical benefits that provided comprehensive coverage for a range of services, including care by physicians and at hospitals. But certain services, such as maternity benefits and prescription drugs, were not always covered. Many of those plans also had very high deductibles and maximum annual or lifetime limits on benefits. Nevertheless, many of them would meet the broad definition of coverage that CBO and JCT have typically used in the past.

Looking back at the pre-ACA nongroup market is not enough to determine what might happen under a tax credit proposal, however, because no such financial incentive to purchase health insurance existed in that market. Plans that were previously offered in that market might be offered again in the future, and new products might also be offered. In the absence of a clear definition of what type of plan qualifies for a tax credit, some plans would probably have premiums that covered minimal services and would be priced close to the amount of the tax credit.

In addition to the response by states and insurers, people at different income levels might have different preferences for the depth and extent of their insurance coverage. For example, low-income people might prefer coverage for preventive services and routine physicians’ visits to keep their monthly expenses low, even if such a policy did not cover more costly services such as hospital care. High-income people might not care as much about predictable monthly expenses and might prefer catastrophic coverage to protect their assets against high medical costs.

People’s preferences for insurance products might also vary with other characteristics, such as their sex or health. In states without regulations that limit insurers’ ability to exclude people with high expected medical costs, however, those individuals would probably face high premiums or have access to insurance plans with only limited coverage.

In response to a future policy that had minimal federal or state regulations, CBO and JCT expect that some new insurance products would be offered that limited coverage to the amount of the tax credit. Some of those insurance products purchased by people using a tax credit would probably not offer much financial protection against high out-of-pocket costs. Depending on the size of the tax credit, however, the depth and extent of coverage and the premiums of plans could vary. CBO does not count plans that have very limited benefits in measuring the extent of private insurance coverage; in such an assessment, it counts only people with a comprehensive major medical policy as having private insurance.

Under such proposals, CBO and JCT would separately estimate the number of people who would receive the tax credits and, if policymakers expressed interest in such estimates, the number of people who would purchase private insurance in the nongroup market that met a broad definition of coverage. In that case, the latter estimate of the number of people with coverage would probably be smaller than the estimate of the number of people who would receive the tax credit.

https://www.cbo.gov…

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Comment:

By Don McCanne, M.D.

Although the Republicans have promised to repeal the Affordable Care Act it remains uncertain what the replacement would be. Most likely there would be some form of refundable tax credit to assist with the purchase of coverage in a highly deregulated market of private health plans.

This blog from the Congressional Budget Office is helpful in that we can say, without knowing other details of replacement proposals, that the non-group insurance market will be disrupted with many losing their coverage and many more ending up with grossly inadequate coverage.

It is no wonder that the Republicans are signaling their intent on taking a few years to decide on a replacement proposal, hoping that we’ll forget that they won this election partly based on Donald Trump’s promise that “we are going to replace Obamacare with something so much better.” That cannot happen in a deregulated market of private plans.

Member Turnover Challenges Public Exchange Markets

By Jose Diaz
Express Scripts, December 20, 2016

In the current discussions about the advantages and disadvantages of the Affordable Care Act (ACA), one important challenge that goes unnoticed is the topic of member turnover. For every 10 Americans who enroll in the public exchanges, only six will re-enroll during annual open enrollment. The remaining 40% fall into member “churn,” meaning that they will enroll in Medicaid, Medicare or employer-sponsored coverage, or perhaps forgo health insurance altogether. This does not include members who stay within the public exchanges but switch to a new plan – another factor that exacerbates the issue of member turnover for health plans.

With some health plans leaving the public exchange market and an incoming administration looking to repeal the ACA, high member turnover is expected to continue into the 2017 enrollment period. Health plans, yet again, potentially face a membership churn of higher than 40%, leading to member care disruption and limiting a health plan’s ability to recoup costs over a patient’s tenure.

http://lab.express-scripts.com…

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Comment:

By Don McCanne, M.D.

Each year forty percent of enrollees leave the insurance exchanges established by the Affordable Care Act, and this does not even include the numbers who move to different plans within the exchanges during the open enrollment period. This churning is yet one more of a multitude of design flaws resulting from the fact that our legislators decided to build on our highly dysfunctional, fragmented health care financing infrastructure instead of replacing it with one that is far more effective in meeting reform goals.

Churning has serious consequences. Because health plans do not use the same provider networks, enrollees often lose their choices of their health care professionals and sometimes their hospitals. Networks tend to have even fewer choices of specialists, depriving patients of affordable access to specialized care that may be more appropriate for their circumstances. The practice locations of the network providers may be inconvenient, adding transportation issues to the complexity of obtaining care within our system. Drugs that are commonly used by patients with more serious, chronic conditions are frequently placed in tiers with very high coinsurance, often making those drugs unaffordable, not to mention discouraging those patients from enrolling in the plans in the first place.

Another problem is that insurers have less incentive to cover programs that will improve the long term health of their enrollees since a forty percent churn rate means that very few of the current enrollees will be there in even three years.

It is also more difficult for patients to select the best plan since they have to weigh the differences in plan premiums, the size of the deductible, the differences in copayments and coinisurance, the composition of the provider networks, the geographic accessibility of the physicians and hospitals, and perhaps splitting up integrated primary care for the family when some are covered by other plans. Churning is also compounded by “life events” which force a change in coverage outside of the open enrollment period.

This instability was built into the ACA reform model knowing that patients would not fare as well in such a system, but it was designed to ensure that private insurers would have a viable market for their plans. As it turns out, the model does not work well for insurers either, as we see them increase their premiums, further limit their networks, reduce benefits, and many are pulling out of the markets because it is simply not a good deal for them.

What is really curious is that we are not seeing more of a demand to eliminate this dysfunctional market of private plans and replace it with a model that prevents or corrects these many defects – a well designed, single payer national health program – an improved Medicare for all. Do people just not understand the magnitude of the benefits of making the change?

Fact Sheet: Pre-Enrollment Verification for Special Enrollment Periods

Centers for Medicare and Medicaid Service (CMS), December 2016

The Centers for Medicare and Medicaid Services (CMS) is committed to making sure that Health Insurance Marketplace special enrollment periods are available to those who are eligible for them, and equally committed to avoiding any misuse or abuse of special enrollment periods. Over the last year, we have taken a number of steps to balance these commitments. Today, we are announcing a pilot program starting in 2017 that will test the impact of pre-enrollment verification of special enrollment period eligibility through HealthCare.gov on compliance, enrollment, continuity of coverage, the risk pool, and other outcomes.

The Pre-Enrollment Verification Process:

• CMS will pilot pre-enrollment verification in all states and all counties served by the HealthCare.gov platform.

• All special enrollment period types will be subject to enhanced verification in some form, whether through the pilot or through other enhanced procedures. In particular, applications based on loss of minimum essential coverage will be included in the pilot.

• The pilot will begin in June 2017 and CMS anticipates basing future decisions about special enrollment period verification procedures on the results of the pilot.

• 50 percent of new applications with relevant special enrollment periods will be part of the pilot and applicants will be required to submit documents before their coverage begins. Applications will be randomly selected for the pilot.

• Consumers included in the pilot will still be able to submit their application and select a plan, with a coverage effective date determined by the date of plan selection. However, the Marketplace will “pend” the consumer’s enrollment until the consumer submits documents that establish their eligibility for a special enrollment period.

• Consumers will be given 30 days to provide document. They can upload documents into their account on HealthCare.gov or send their documents in the mail. The Marketplace Call Center will be able to provide consumers with information on the status of their documents.

• Once a consumer has submitted appropriate documents, the Marketplace will send their enrollment to the issuer. The consumer will be able to pay their premium, and their coverage will begin, generally with the original coverage effective date.

• CMS will evaluate the impact of pre-enrollment verification on the risk pool, using data on 2017 claims that will become available in the spring of 2018. CMS will also evaluate the impact of the pilot on enrollment and other metrics on an ongoing basis.

Prior Special Enrollment Period Program Integrity Actions:

Earlier this year, CMS added warnings to HealthCare.gov to discourage the inappropriate use of special enrollment periods. We have also eliminated several special enrollment periods that were no longer needed and tightened the eligibility rules for certain special enrollment periods.

We have begun to learn about how the Special Enrollment Confirmation Process is affecting the Marketplace. Since implementing this process in June, we have seen a 20 percent reduction in the number of consumers enrolling through special enrollment periods, compared to 2015, with every week since the implementation of the confirmation process in 2016 showing lower enrollment than the corresponding week in 2015.

The early results of the Special Enrollment Confirmation Process also suggest that younger consumers are disproportionately likely to fail to complete the verification process. A preliminary snapshot of consumers selected for review showed that 73 percent of applications with a household contact ages 55-64 submitted documents after initial outreach, but only 55 percent of those ages 18-24 did so.

https://www.cms.gov…

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New Special Enrollment Rules Will Shift Paperwork Burden To Consumers

By Michelle Andrews
Kaiser Health News, December 20, 2016

People who want to sign up for a policy on healthcare.gov after the annual open enrollment period ends Jan. 31 may have to produce a paper trail proving that they qualify for a “special enrollment period” before their coverage can begin, according to details of a pilot program described last week by federal officials. But the verification measures, long sought by insurance companies, may deter the very consumers the marketplace needs to attract: healthy people who may not bother signing up if doing so is a hassle.

The insurance needs of many of the shoppers who use the health marketplaces don’t fit neatly into the three-month annual open enrollment period. For example, nearly 30 million people — workers plus their families — lose employer-sponsored coverage every year outside of open enrollment, researchers at the Urban Institute found. But they estimated that only about 5 percent of those eligible for a special enrollment period signed up for marketplace coverage in 2015.

“We have a lot of experience that eligible consumers faced with [documentation requirements] will drop out of the process,” said (Stan Dorn, a senior fellow at the Urban Institute).

http://khn.org…

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Comment:

By Don McCanne, M.D.

The policy community has gone out of its way to initiate studies that would enhance the business outcomes of the private insurers, almost regardless of any negative impact on patients. This study on special enrollment periods being initiated by CMS is no exception and may actually violate standards of ethics in research.

For most of the year individuals are prohibited from enrolling in ACA exchange plans in order to prevent individuals from signing up only when they need care and dropping out after receiving it. Obviously this is designed to protect insurers from excessive losses though it does so at a cost of reducing patients’ access to health insurance.

People do experience “life events” that require a change in their insurance. For this reason, special enrollment periods are offered on an individual basis. The insurers claim that many people “abuse” this process and simply wait until they need coverage. To reduce this “abuse,” one-half of special enrollment applicants will be required to submit documentation of the qualifying event or their pending coverage will be rejected. They will be compared with the other half who still have to meet the same requirements but will not have to provide documentation.

We already have a few facts at hand. Many people eligible for the exchange plans never apply for them, and some will remain uninsured. Since rules for the special enrollment periods were tightened earlier this year, the enrollment rate has dropped 20 percent. We know that people eligible for programs will drop out of the process when faced with sometimes burdensome documentation requirements. We do not need another study to show that those facing documentation requirements will enroll at a lower rate. Many of them will remain uninsured, with potential adverse health and financial outcomes.

This study will harm patients. It is a violation of medical and health policy ethics to institute a study in which harm to patients is an expected outcome.

Besides, we do not need this study. Instead, we need a health care financing system in which everyone is enrolled, automatically, for life.

We need a new ethical principle and that is that it is a violation of ethics to establish policies that benefit private insurers at a cost of the physical and financial well-being of patients. But under such a principle the business model of private insurers would fail because they would lose all of their patient-unfriendly innovations that have made the insurers such a business success.

That is why we need to replace them with our own single payer national health program – an improved Medicare for all. Such a public service model would eliminate the perversities of the insurers’ private business model. It’s a matter of ethics.

Price Transparency Is Nice. Just Don’t Expect It to Cut Health Costs.

By Austin Frakt
The New York Times, December 19, 2016

Lack of price transparency in health care has been cited as one of the reasons we spend too much on it. It’s easy to overpay. Health care prices vary tremendously. And there is no established relationship with quality.

Over half of the states have passed laws that either establish websites with health care prices or require plans, doctors and hospitals to disclose them to patients.

But improved transparency isn’t working as well as hoped. Health care pricing apps and websites don’t always help patients spend less.

That’s the conclusion from a study published this year in The Journal of the American Medical Association. It investigated the effect of the Truven Treatment Cost Calculator, a website available to more than 21 million workers and their family members.

The study found that price transparency did not reduce outpatient spending, even among patients with higher deductibles or who faced higher health care costs because of illness.

Study after study has showed the same thing.

If there’s one thing we’ve learned time and again, it’s that there’s no single best way for reducing health care spending. Price transparency may be part of the answer, but it clearly isn’t the entire answer.

http://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

One of the reasons given for using high deductibles in health plans is that they supposedly reduce spending by encouraging patients to shop for lower health care prices. Austin Frakt shows us that the impact of price transparency on spending has been relatively trivial.

What little benefit it has is not worth t ahe cost in the form of causing patients to forgo beneficial health care and in exposing patients to financial hardship because of out-of-pocket spending.

Frakt repeats what many others have said, “there’s no single best way for reducing health care spending.” But that assumes that we keep our current flawed financing infrastructure in place and merely tweak it with a few innovations – primarily from the private insurance industry.

In contrast, a single payer system would reduce administrative waste by a few hundred billion dollars and would set the health cost trajectory on a lower path (“bending the curve”). That is the single best way of controlling health care spending. We should do it.