Most Regionally Ranked Hospitals Stay In-Network with Marketplace Plans, But Participation Declines

By Katherine Hempstead, PhD, MA
Robert Wood Johnson Foundation,  February 6, 2016

Looking at network participation by state, nearly all highly ranked regional hospitals were in-network with at least one marketplace plan in both 2015 and 2016.

Key Findings

*  Network participation decreases significantly, however, as more than half of hospitals reduce the number of networks in which they participate between 2015 and 2016.

*  The percent of hospitals in-network with only one marketplace plan increased from 7 percent in 2015 to 20 percent in 2016.

*  Network participation declined more in metro areas.

*  Customers loyal to a particular hospital can in most cases still find a marketplace plan that includes it, but choices are narrowed in 2016 relative to 2015; plans with these hospitals may be more expensive.

Conclusion

Many consumers returning to the marketplace in 2016 may find that their choices have changed in ways that limit their access to certain providers. Yet it is still the case that almost all of these highly rated hospitals are in-network with at least one marketplace plan.

http://www.rwjf.org/en/library/research/2016/02/most-regionally-ranked-hospitals-stay-in-network-with-marketplac.html

Brief (15 pages, mostly tables):
http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2016/rwjf426368

***

Comment:

By Don McCanne, M.D.

A well-functioning health care system should be designed such that patients who would specifically benefit from the services of a highly ranked regional hospital should be assured of access to that hospital. Instead, we have a health care system that ignores the primacy of the patient, and, in this instance, places the highest priority on the business relationship between the hospital and the insurer. As a result, far too many insured patients do not have coverage for highly ranked regional hospitals.

In many communities, only one insurer includes the highly ranked hospital. Thus the patient must make a choice between buying that plan, which is usually more expensive, or buying a competing plan which otherwise may be more suitable because of the many other variables between plans. This is getting worse since participation of highly ranked hospitals in multiple plan networks is declining.

A far better system would provide the patient with a choice of primary care services wherein guidance can be provided to ensure access to the most appropriate facilities and specialized services in the community. To inject into the consideration private insurer restrictions on what services and facilities can be used is the epitome of poor health planning. Yet this is the system that many politicians and policy wonks insist that we must protect, limiting changes to incremental tweaks.

What incremental change would fix this? Should we require all insurers to cover all health care professionals and all facilities? If so, then how would an insurer have any power to negotiate lower rates with a provider that must be included? Instead of negotiating individually with providers should we set standard rates, as Medicare does? If so, then why would we continue to use a wasteful, fragmented market of private plans and public programs when one public entity could administer the system much more efficiently?

These are not examples of incremental steps that preserve our multi-payer system. This is one step that replaces our dysfunctional financing system with a single payer national health program. Our financing system is beyond repair, and incremental additions won’t change that. It’s the fundamentally flawed financing infrastructure that needs to be replaced.

Most Regionally Ranked Hospitals Stay In-Network with Marketplace Plans, But Participation Declines

By Katherine Hempstead, PhD, MA
Robert Wood Johnson Foundation,  February 6, 2016

Looking at network participation by state, nearly all highly ranked regional hospitals were in-network with at least one marketplace plan in both 2015 and 2016.

Key Findings

*  Network participation decreases significantly, however, as more than half of hospitals reduce the number of networks in which they participate between 2015 and 2016.

*  The percent of hospitals in-network with only one marketplace plan increased from 7 percent in 2015 to 20 percent in 2016.

*  Network participation declined more in metro areas.

*  Customers loyal to a particular hospital can in most cases still find a marketplace plan that includes it, but choices are narrowed in 2016 relative to 2015; plans with these hospitals may be more expensive.

Conclusion

Many consumers returning to the marketplace in 2016 may find that their choices have changed in ways that limit their access to certain providers. Yet it is still the case that almost all of these highly rated hospitals are in-network with at least one marketplace plan.

http://www.rwjf.org/en/library/research/2016/02/most-regionally-ranked-hospitals-stay-in-network-with-marketplac.html

Brief (15 pages, mostly tables):
http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2016/rwjf426368

A well-functioning health care system should be designed such that patients who would specifically benefit from the services of a highly ranked regional hospital should be assured of access to that hospital. Instead, we have a health care system that ignores the primacy of the patient, and, in this instance, places the highest priority on the business relationship between the hospital and the insurer. As a result, far too many insured patients do not have coverage for highly ranked regional hospitals.

In many communities, only one insurer includes the highly ranked hospital. Thus the patient must make a choice between buying that plan, which is usually more expensive, or buying a competing plan which otherwise may be more suitable because of the many other variables between plans. This is getting worse since participation of highly ranked hospitals in multiple plan networks is declining.

A far better system would provide the patient with a choice of primary care services wherein guidance can be provided to ensure access to the most appropriate facilities and specialized services in the community. To inject into the consideration private insurer restrictions on what services and facilities can be used is the epitome of poor health planning. Yet this is the system that many politicians and policy wonks insist that we must protect, limiting changes to incremental tweaks.

What incremental change would fix this? Should we require all insurers to cover all health care professionals and all facilities? If so, then how would an insurer have any power to negotiate lower rates with a provider that must be included? Instead of negotiating individually with providers should we set standard rates, as Medicare does? If so, then why would we continue to use a wasteful, fragmented market of private plans and public programs when one public entity could administer the system much more efficiently?

These are not examples of incremental steps that preserve our multi-payer system. This is one step that replaces our dysfunctional financing system with a single payer national health program. Our financing system is beyond repair, and incremental additions won’t change that. It’s the fundamentally flawed financing infrastructure that needs to be replaced.

Farm Contractors Balk At Obamacare Requirements

By April Dembosky
Kaiser Health News, February 11, 2016

Obamacare is putting the agricultural industry in a tizzy.

Many contractors who provide farm labor and must now offer workers health insurance are complaining loudly about the cost in their already low-margin business.

Some are also concerned that the forms they must file with the federal government under the Affordable Care Act will bring immigration problems to the fore. About half of the farm labor workforce in the U.S. is undocumented.

Last year, employers with 100 or more full-time employees had to offer health insurance to their workers or pay a stiff penalty. This year, employers with 50 to 99 full-time employees must comply.

“There’s definitely going to be some repercussions to it,” said Jesse Sandoval, a farm labor contractor based in Stockton, California.

Sandoval has about 100 workers on his payroll. When farmers need a crew to pick cherries, pumpkins or asparagus, they call him to send the workers. He has to offer them insurance this year, and he’s smarting over the price tag. At $300 a month per employee, he’s looking at a $30,000 monthly bill.

Sandoval said he can’t absorb the hit. “The numbers aren’t there,” he said. “My margin is 10 percent, and I have to increase expenses 10 percent? Well, that doesn’t work.”

So, like a lot of contractors, he’s passing the bill on to the farmers, who in turn are passing the bill on to the farm workers. Under the Affordable Care Act, employees can be asked to contribute 9.5 percent of their income toward health premiums.

But for farm workers who pick oranges or peaches for $10 an hour, that’s still too much. Agostin Garcia of Fresno, California, said the two contractors he works for near Fresno offered him insurance directly. But when he saw the price tag, he turned them both down.

“For me, I’m the only one in my house who works,” he said. “There’s five of us in the family. It just wouldn’t work. Either I pay for health insurance, or I pay the rent and utilities.”

Garcia said only a fraction of his co-workers have signed up for coverage. He said when farm labor contractors hand out packets explaining the coverage, the page where workers reject it is right on top.

“I think they do it intentionally,” Garcia said. “They comply with the laws by saying, ‘I offered.’ But they know that nobody’s going to accept it, they know that nobody’s going to pay those amounts.”

The cost isn’t the only thing about Obamacare stressing people out in the ag industry. Some are worried about immigration problems. Employers have to file new health care forms with the IRS for all their workers, whether or not they accept the insurance.

Farm labor contractors say they’re stuck in a Catch-22. Technically, immigrants who are in the U.S. illegally aren’t eligible for Obamacare benefits. But employers can’t admit that any of their employees may be working illegally, so they have to offer the insurance or face stiff fines from the IRS, maybe even a discrimination claim.

http://khn.org/news/farm-contractors-balk-at-obamacare-requirements-2/

Seasonal agricultural workers do not fit into a neat slot in the dysfunctional, fragmented financing system that President Obama and Congress have selected for us.

Following is a paragraph from my Quote of the Day of June 1, 2010 on this topic:

“Just briefly touching on some of the policies inherent in PPACA: employers with over 50 full-time equivalent employees will have to purchase coverage for their seasonal employees or pay a $2000 penalty per employee, even though that may be a staggering bill because of a temporary ten-fold increase in the number of employees; since most seasonal employees are uninsured, moving in and out of coverage during the harvest season results in instability of coverage; many seasonal workers are undocumented and thus ineligible for purchase of plans in the exchanges, defeating the purpose of the individual mandate; seasonal workers might be able to obtain care through community health centers, though that depends on having clinics accessible and may mean that important specialized services may not be provided, and the mere existence of such clinics may not fulfill the mandate requirements anyway; though the workers and their families might be eligible for Medicaid on an income basis, that may conflict with the employer mandate; etc.”

At that time, I wrote, “What would fix this would be a single payer national health program with automatic enrollment for everyone, financed separately though equitable tax policies.”

Yet our politicians rejected single payer, and instead insisted on improving the Affordable Care Act incrementally. Now that the topic of single payer has become one of the leading issues in the presidential campaign, there has been a surge of politicians, policy wonks, and columnists who are telling us that only incremental reform can work. They say we have to build on the current system.

So what incremental steps have been taken on improving coverage of seasonal agricultural workers since I wrote the above critique over five years ago? None. Now give some thought to incremental changes that we might introduce now that would ensure seasonal agricultural workers affordable access to health care throughout the year. (Pause.) Still thinking? We’ll give it some more time. Okay. Ready to describe the incremental changes to ACA that would ensure year-round affordable coverage for these workers? Thought not.

Regular readers understand that incremental reforms cannot do much more than tweak the current system. The reason is that the health financing infrastructure perpetuated by ACA is so highly flawed that it cannot be repaired. It proves the lie that “we have to build on the system we have.” We need a new, effective infrastructure.

The next time that someone says that single payer is too hard politically, demand that she tell you the precise incremental changes that will ensure health insurance coverage for the seasonal workers who help put food on our tables. As she stammers, or maybe repeats a non-responsive 15 second canned sound bite, emphatically point out that single payer would do it.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

InHealth customers mad about late notice dropping OhioHealth

By Ben Sutherly
The Columbus Dispatch, February 10, 2016

Some central Ohio consumers say a Westerville-based health insurer intended to keep quiet about its plan to drop OhioHealth hospitals and doctors from its provider network until it was too late for many of its enrollees to change their health plan.

In those complaints, the consumers, who mostly live in Franklin or Delaware counties, expressed frustration over InHealth Mutual’s last-minute notice to consumers about its plan to drop most OhioHealth providers as of March 1.

Many consumers said they were not notified of InHealth’s plan to narrow its provider network until last week, though some received robocalls on Jan. 30, the day before the deadline to sign up for health insurance through the federally run health-insurance marketplace.

During the first half of January, InHealth’s leaders decided to drop OhioHealth from the provider network. An official with the Ohio Department of Insurance said that InHealth contacted the department late on Jan. 15, triggering a required 15-day review period during which department officials review documents to ensure that insurance companies clearly explain provider-network changes to consumers.

However, an official with the Ohio Department of Insurance said nothing stops insurers from starting the notification process during the 15-day review period.

Ohioans who buy coverage through healthcare.gov typically cannot sign up for a different plan after the open-enrollment period ends. There are some exceptions that allow for a special enrollment period; among them, the loss of a job, a move or the birth of a child. But an eleventh-hour change in an insurance company’s provider network isn’t one of them.

The federal government will not create a special enrollment period for people affected by InHealth’s decision, said Andy Slavitt, acting administrator for the Centers for Medicare & Medicaid Services, in a conference call last week.

http://www.dispatch.com/content/stories/local/2016/02/09/Consumers-upset-about-insurer-dropping-hospitals.html

***

Comment:

By Don McCanne, M.D.

One of the more important considerations in selecting plans offered through the healthcare.gov insurance exchanges is whether or not an individual’s physicians and hospitals are included in the provider networks selected by the insurer. Although this is supposed to place more control into the hands of the health care consumer, in fact, the insurer is free to change the provider network at any time, yet the patient is prohibited from changing insurers outside of the open enrollment period. Patients lose their providers and can’t do anything about it until open enrollment for the next year.

The Affordable Care Act does allow special enrollment periods for unavoidable circumstances wherein a person loses their coverage, but CMS is reducing these special enrollments to prevent patients from supposedly gaming the system. Apparently it is acceptable for insurers to game the system through bait and switch of their provider networks, but Andy Slavitt, the acting CMS administrator, stated that he will not open up enrollment for these victims of bait and switch.

Really, is cracking down on special enrollment periods to the detriment of the patient the type of incremental change we can expect going forward? Great for the insurers, terrible for the patients.

What is wrong here? It is that the model of health care financing that has been foisted on us is one that is designed to take good care of the insurers while treating patients as a necessary nuisance since insurers otherwise would not have a business without them.

Yesterday the citizens of New Hampshire had something to say about a government that takes good care of the wealthy but makes middle- and low-income individuals second class citizens. We have a crying need for a single payer national health program, so it has to be up to us to select politicians who will bring it to us. Most of those currently in office are not going to do it.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

InHealth customers mad about late notice dropping OhioHealth

By Ben Sutherly
The Columbus Dispatch, February 10, 2016

Some central Ohio consumers say a Westerville-based health insurer intended to keep quiet about its plan to drop OhioHealth hospitals and doctors from its provider network until it was too late for many of its enrollees to change their health plan.

In those complaints, the consumers, who mostly live in Franklin or Delaware counties, expressed frustration over InHealth Mutual’s last-minute notice to consumers about its plan to drop most OhioHealth providers as of March 1.

Many consumers said they were not notified of InHealth’s plan to narrow its provider network until last week, though some received robocalls on Jan. 30, the day before the deadline to sign up for health insurance through the federally run health-insurance marketplace.

During the first half of January, InHealth’s leaders decided to drop OhioHealth from the provider network. An official with the Ohio Department of Insurance said that InHealth contacted the department late on Jan. 15, triggering a required 15-day review period during which department officials review documents to ensure that insurance companies clearly explain provider-network changes to consumers.

However, an official with the Ohio Department of Insurance said nothing stops insurers from starting the notification process during the 15-day review period.

Ohioans who buy coverage through healthcare.gov typically cannot sign up for a different plan after the open-enrollment period ends. There are some exceptions that allow for a special enrollment period; among them, the loss of a job, a move or the birth of a child. But an eleventh-hour change in an insurance company’s provider network isn’t one of them.

The federal government will not create a special enrollment period for people affected by InHealth’s decision, said Andy Slavitt, acting administrator for the Centers for Medicare & Medicaid Services, in a conference call last week.

http://www.dispatch.com/content/stories/local/2016/02/09/Consumers-upset-about-insurer-dropping-hospitals.html

One of the more important considerations in selecting plans offered through the healthcare.gov insurance exchanges is whether or not an individual’s physicians and hospitals are included in the provider networks selected by the insurer. Although this is supposed to place more control into the hands of the health care consumer, in fact, the insurer is free to change the provider network at any time, yet the patient is prohibited from changing insurers outside of the open enrollment period. Patients lose their providers and can’t do anything about it until open enrollment for the next year.

The Affordable Care Act does allow special enrollment periods for unavoidable circumstances wherein a person loses their coverage, but CMS is reducing these special enrollments to prevent patients from supposedly gaming the system. Apparently it is acceptable for insurers to game the system through bait and switch of their provider networks, but Andy Slavitt, the acting CMS administrator, stated that he will not open up enrollment for these victims of bait and switch.

Really, is cracking down on special enrollment periods to the detriment of the patient the type of incremental change we can expect going forward? Great for the insurers, terrible for the patients.

What is wrong here? It is that the model of health care financing that has been foisted on us is one that is designed to take good care of the insurers while treating patients as a necessary nuisance since insurers otherwise would not have a business without them.

Yesterday the citizens of New Hampshire had something to say about a government that takes good care of the wealthy but makes middle- and low-income individuals second class citizens. We have a crying need for a single payer national health program, so it has to be up to us to select politicians who will bring it to us. Most of those currently in office are not going to do it.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

Will Healthcare.gov Get A California Makeover?

By Pauline Bartolone
Kaiser Health News, February 9, 2016

Experts say the California exchange uses more of its powers as an “active purchaser” than the vast majority of other states. That means it can decide which insurers can join the exchange, what plans and benefits are available and at what price.

The federal government — in pending proposed rules for 2017 — has signaled it too wants to have more of a hand in crafting plans. Healthcare.gov would be forging ahead on a path California already paved, swapping variety for simplicity in plan design.

“Not letting [health] plans define what’s right for consumers, but defining it on behalf of consumers … is a better model for the market,” said Peter Lee, executive director of Covered California.

“We want to make sure every consumer has good choice but not infinite choice,” said Lee.

Most other states, including those in the federal exchange, haven’t subscribed to that idea so far. They have a clearinghouse model, in which all health insurers and plan designs are accepted as long they comply with the Affordable Care Act. That can mean the same insurer offers multiple plans with slightly different premiums, deductibles and copays. Even within one metal tier, say silver, the same insurer might offer half a dozen slightly different plans.

Now, the federal government proposes to create standard cost-sharing designs in various metal tiers and make them easily accessible on healthcare.gov. And it’s considering how to improve “value” by being more selective about plans.

Covered California holds insurers to a higher bar than what’s required under the Affordable Care Act.

Covered California says it’s the only exchange in the country that requires all plans to be standardized (not just some, which the federal government is proposing).

But one of two health insurance regulators in California, the state Department of Insurance, said Covered California’s strict guidelines may not benefit consumers.

It has created a situation in which the exchange “has fewer carriers than would otherwise be the case,” said Janice Rocco, deputy commissioner of the California Department of Insurance.

Health insurers on a national level are “strongly” opposed to an active purchaser model for states served by healthcare.gov, including standardized benefits.

“It could discourage many from enrolling if they can’t find a policy that works best for them,” said Clare Krusing from America’s Health Insurance Plans.

“Where there is competition and choice is where consumers benefit and where health plans benefit,” said Krusing.

http://khn.org/news/will-healthcare-gov-get-a-california-makeover/

***

Comment:

By Don McCanne, M.D.

Covered California – one of the more successful state-operated ACA insurance exchanges – has two features that are currently being considered for the federally-operated ACA exchanges: standardized cost-sharing designs and active purchasing of plans.

By creating standards for deductibles and other cost sharing, it makes it easier for plan shoppers to compare plans since the out-of-pocket expenses theoretically would be the same. After checking provider lists to see if their physicians are in-network, and checking formularies to see if their drugs are covered, shoppers can then select their plans based on the premiums.

Of course there are still some uncertainties. It is not uncommon to obtain care out of network, so another plan’s network may have turned out to be preferable. Also medical conditions change which might require drugs that are not in the plan’s formulary but may be covered by other plans.

In contracting with plans for the exchanges, Covered California decided to use active purchasing. In a non-transparent process, Covered California negotiates with the plans in an attempt to gain the best value for the plan beneficiaries. Under this process, not all plans are accepted, thus the insurers are motivated to offer better value than they might otherwise.

Active purchasing introduces more instability into the process. Plans moving into or out of the exchanges may face unprecedented changes in their administrative requirements which can be very disruptive to their business model. Changes required by the instability of contracts increase administrative expenses which are ultimately borne by the plan beneficiaries, adding to costs when the intent was to decrease costs. These disruptions apply not only to the private insurers but also to the physicians and hospitals who are included in the networks. Since active purchasing reduces the number of plans available, any change in plans covered would have a greater impact on the contracted providers thereby threatening insolvency.

To no surprise, the private insurers are not enthusiastic about either standardization of the plans or active purchasing. With standardization, the plans are less able to hide their innovations that improve the profits and competitiveness of the plans (i.e., the plans can be more competitive when the consumers do not know what they are buying). Active purchasing drives plan revenues down and exposes them to greater risk since the contract may not be renewed.

Clare Krusing of the insurance lobby organization, AHIP, says, “Where there is competition and choice is where consumers benefit and where health plans benefit.” Instead of plans competing for contracts with the ACA exchanges, they want to compete for individual patients. But the patients lose because there is less plan oversight when there is no active purchasing, and there is less transparency when the plans do not have to comply with standardized cost-sharing.

Cost-sharing standardization and active purchasing are the types of incremental reforms we can expect from those who say that we must build on what we have. These will do almost nothing for the problems that face us such as the 29 million uninsured, the tens of millions underinsured, the loss of choice of health care providers, and the interminable increase in health care spending.

We do have a better choice. Join the forces who are advocating for a single payer national health program. With single payer, we would no longer have to direct our health policies to maintaining a lucrative private health insurance infrastructure. Instead we could direct our health policies to taking care of patients, and that, of course, is what reform should be all about.

Will Healthcare.gov Get A California Makeover?

By Pauline Bartolone
Kaiser Health News, February 9, 2016

Experts say the California exchange uses more of its powers as an “active purchaser” than the vast majority of other states. That means it can decide which insurers can join the exchange, what plans and benefits are available and at what price.

The federal government — in pending proposed rules for 2017 — has signaled it too wants to have more of a hand in crafting plans. Healthcare.gov would be forging ahead on a path California already paved, swapping variety for simplicity in plan design.

“Not letting [health] plans define what’s right for consumers, but defining it on behalf of consumers … is a better model for the market,” said Peter Lee, executive director of Covered California.

“We want to make sure every consumer has good choice but not infinite choice,” said Lee.

Most other states, including those in the federal exchange, haven’t subscribed to that idea so far. They have a clearinghouse model, in which all health insurers and plan designs are accepted as long they comply with the Affordable Care Act. That can mean the same insurer offers multiple plans with slightly different premiums, deductibles and copays. Even within one metal tier, say silver, the same insurer might offer half a dozen slightly different plans.

Now, the federal government proposes to create standard cost-sharing designs in various metal tiers and make them easily accessible on healthcare.gov. And it’s considering how to improve “value” by being more selective about plans.

Covered California holds insurers to a higher bar than what’s required under the Affordable Care Act.

Covered California says it’s the only exchange in the country that requires all plans to be standardized (not just some, which the federal government is proposing).

But one of two health insurance regulators in California, the state Department of Insurance, said Covered California’s strict guidelines may not benefit consumers.

It has created a situation in which the exchange “has fewer carriers than would otherwise be the case,” said Janice Rocco, deputy commissioner of the California Department of Insurance.

Health insurers on a national level are “strongly” opposed to an active purchaser model for states served by healthcare.gov, including standardized benefits.

“It could discourage many from enrolling if they can’t find a policy that works best for them,” said Clare Krusing from America’s Health Insurance Plans.

“Where there is competition and choice is where consumers benefit and where health plans benefit,” said Krusing.

http://khn.org/news/will-healthcare-gov-get-a-california-makeover/

Covered California – one of the more successful state-operated ACA insurance exchanges – has two features that are currently being considered for the federally-operated ACA exchanges: standardized cost-sharing designs and active purchasing of plans.

By creating standards for deductibles and other cost sharing, it makes it easier for plan shoppers to compare plans since the out-of-pocket expenses theoretically would be the same. After checking provider lists to see if their physicians are in-network, and checking formularies to see if their drugs are covered, shoppers can then select their plans based on the premiums.

Of course there are still some uncertainties. It is not uncommon to obtain care out of network, so another plan’s network may have turned out to be preferable. Also medical conditions change which might require drugs that are not in the plan’s formulary but may be covered by other plans.

In contracting with plans for the exchanges, Covered California decided to use active purchasing. In a non-transparent process, Covered California negotiates with the plans in an attempt to gain the best value for the plan beneficiaries. Under this process, not all plans are accepted, thus the insurers are motivated to offer better value than they might otherwise.

Active purchasing introduces more instability into the process. Plans moving into or out of the exchanges may face unprecedented changes in their administrative requirements which can be very disruptive to their business model. Changes required by the instability of contracts increase administrative expenses which are ultimately borne by the plan beneficiaries, adding to costs when the intent was to decrease costs. These disruptions apply not only to the private insurers but also to the physicians and hospitals who are included in the networks. Since active purchasing reduces the number of plans available, any change in plans covered would have a greater impact on the contracted providers thereby threatening insolvency.

To no surprise, the private insurers are not enthusiastic about either standardization of the plans or active purchasing. With standardization, the plans are less able to hide their innovations that improve the profits and competitiveness of the plans (i.e., the plans can be more competitive when the consumers do not know what they are buying). Active purchasing drives plan revenues down and exposes them to greater risk since the contract may not be renewed.

Clare Krusing of the insurance lobby organization, AHIP, says, “Where there is competition and choice is where consumers benefit and where health plans benefit.” Instead of plans competing for contracts with the ACA exchanges, they want to compete for individual patients. But the patients lose because there is less plan oversight when there is no active purchasing, and there is less transparency when the plans do not have to comply with standardized cost-sharing.

Cost-sharing standardization and active purchasing are the types of incremental reforms we can expect from those who say that we must build on what we have. These will do almost nothing for the problems that face us such as the 29 million uninsured, the tens of millions underinsured, the loss of choice of health care providers, and the interminable increase in health care spending.

We do have a better choice. Join the forces who are advocating for a single payer national health program. With single payer, we would no longer have to direct our health policies to maintaining a lucrative private health insurance infrastructure. Instead we could direct our health policies to taking care of patients, and that, of course, is what reform should be all about.

State health coverage innovation and Section 1332 waivers: Implications for states

By Anne Phelps
Deloitte Health Policy Brief

Executive summary

Although states and the federal government have implemented most Affordable Care Act (ACA) provisions, a few are scheduled to go into effect in the coming years. One such provision is Section 1332 State Innovation Waivers, (1332) which allows states to pursue alternative and innovative strategies for ensuring that residents have access to high-quality, affordable health insurance as long as they meet certain requirements. Within the constraints of Section 1332, states have numerous options for revamping their current approaches to providing health coverage to individuals and families. If approved, the waivers can go into effect beginning January 1, 2017. To implement reforms next year and take advantage of realizing innovative alternatives for health care coverage, states should consider acting now.

New guidance from the US Departments of Health and Human Services (HHS) and Treasury released at the end of 2015 indicates that waiver proposals from states using the federally facilitated health insurance exchange might not be considered feasible at this time because “the Federal platform cannot accommodate different rules for different states.” Instead, these states may want to consider establishing their own exchange platform and then apply for a 1332 waiver.

This health policy brief presents a number of potential waiver-associated coverage alternatives, including those being discussed by some states. While some options are mutually exclusive, states may include multiple innovative concepts in their applications. It is important to note that, even with the new HHS and Treasury guidance, the analysis required to support a 1332 waiver application may require states to leverage actuarial, policy, technology, and data expertise.

A final consideration

As the United States moves closer to the next presidential election, the health care landscape will continue to shift and evolve. Beginning in 2017, an Administration other than the Obama Administration will have stewardship over the ACA and its various provisions, including Section 1332 State Innovation Waivers, for the first time. States should be aware that – depending on where they are in the application process at the start of 2017 – approvals may depend on the goals of the new Administration.

http://www2.deloitte.com/us/state-innovation-and-waivers

PDF of report (8 pages):
http://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-dchs-state-health-innovation.pdf

***

Comment:

By Don McCanne, M.D.

Section 1332 of the Affordable Care Act allows states to pursue waivers allowing alternative approaches to implementation of the Act as long as they comply with certain minimal requirements. In December, HHS released an advisory which gives guidance to what sort of innovations might be approved. This Deloitte health policy brief includes this guidance in updating the description of Section 1332 waivers and how the states may use them.

A few points:

*  Section 1332 does allow innovations that can improve access and equity and thus should be considered by state activists who wish to improve their health care systems, though the innovations are quite limited.

*  Section 1332 does allow innovations that might rely more heavily on market dynamics and thus could threaten the social insurance gains of ACA, though those innovations are also quite limited, but state activists should be on guard to help protect what gains have been made.

*  States with federally facilitated health insurance exchanges will not be able to receive waivers because of the administrative complexity: “the Federal platform cannot accommodate different rules for different states.”

*  States that have not accepted federal funds to expand their Medicaid programs may find that the political climate may inhibit any efforts to improve their systems through waivers.

*  The December 2015 advisory indicates that HHS will be quite rigid in the interpretation of what innovations would be allowed. This will protect states from efforts to dismantle the gains of ACA, but it will also prevent states from using Section 1332 to establish a state-based single payer system. Nevertheless, improvements such as all-payer systems may be allowed, although the administrative requirements may be overwhelming.

*  The Deloitte report emphasizes the importance of politics: “Beginning in 2017, an Administration other than the Obama Administration will have stewardship over the ACA and its various provisions, including Section 1332 State Innovation Waivers, for the first time. States should be aware that – depending on where they are in the application process at the start of 2017 – approvals may depend on the goals of the new Administration.”

So this report does further confirm the fact that states can improve their health systems through Section 1332 waivers. Until we can enact a single payer national health program, state efforts should be pursued.

This report also confirms that state efforts alone are grossly inadequate and that federal legislation for a national health program is an imperative.

This year, single payer is back in the political arena. Although state reform efforts are encouraged, we cannot allow these efforts to displace or even dilute the drive for national single payer. Even if it is difficult to see the political path to immediate enactment, at a minimum, through education, grassroots and coalition efforts we can move much closer to the political threshold required to make single payer inevitable.

Read the Deloitte policy brief, give thought as to how far short Section 1332 waivers will leave us, and then join the national political movement that will finally bring health care justice to all.

State health coverage innovation and Section 1332 waivers: Implications for states

By Anne Phelps
Deloitte Health Policy Brief

Executive summary

Although states and the federal government have implemented most Affordable Care Act (ACA) provisions, a few are scheduled to go into effect in the coming years. One such provision is Section 1332 State Innovation Waivers, (1332) which allows states to pursue alternative and innovative strategies for ensuring that residents have access to high-quality, affordable health insurance as long as they meet certain requirements. Within the constraints of Section 1332, states have numerous options for revamping their current approaches to providing health coverage to individuals and families. If approved, the waivers can go into effect beginning January 1, 2017. To implement reforms next year and take advantage of realizing innovative alternatives for health care coverage, states should consider acting now.

New guidance from the US Departments of Health and Human Services (HHS) and Treasury released at the end of 2015 indicates that waiver proposals from states using the federally facilitated health insurance exchange might not be considered feasible at this time because “the Federal platform cannot accommodate different rules for different states.” Instead, these states may want to consider establishing their own exchange platform and then apply for a 1332 waiver.

This health policy brief presents a number of potential waiver-associated coverage alternatives, including those being discussed by some states. While some options are mutually exclusive, states may include multiple innovative concepts in their applications. It is important to note that, even with the new HHS and Treasury guidance, the analysis required to support a 1332 waiver application may require states to leverage actuarial, policy, technology, and data expertise.

A final consideration

As the United States moves closer to the next presidential election, the health care landscape will continue to shift and evolve. Beginning in 2017, an Administration other than the Obama Administration will have stewardship over the ACA and its various provisions, including Section 1332 State Innovation Waivers, for the first time. States should be aware that – depending on where they are in the application process at the start of 2017 – approvals may depend on the goals of the new Administration.

http://www2.deloitte.com/us/state-innovation-and-waivers

PDF of report (8 pages):
http://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-dchs-state-health-innovation.pdf

Section 1332 of the Affordable Care Act allows states to pursue waivers allowing alternative approaches to implementation of the Act as long as they comply with certain minimal requirements. In December, HHS released an advisory which gives guidance to what sort of innovations might be approved. This Deloitte health policy brief includes this guidance in updating the description of Section 1332 waivers and how the states may use them.

A few points:

*  Section 1332 does allow innovations that can improve access and equity and thus should be considered by state activists who wish to improve their health care systems, though the innovations are quite limited.

*  Section 1332 does allow innovations that might rely more heavily on market dynamics and thus could threaten the social insurance gains of ACA, though those innovations are also quite limited, but state activists should be on guard to help protect what gains have been made.

*  States with federally facilitated health insurance exchanges will not be able to receive waivers because of the administrative complexity: “the Federal platform cannot accommodate different rules for different states.”

*  States that have not accepted federal funds to expand their Medicaid programs may find that the political climate may inhibit any efforts to improve their systems through waivers.

*  The December 2015 advisory indicates that HHS will be quite rigid in the interpretation of what innovations would be allowed. This will protect states from efforts to dismantle the gains of ACA, but it will also prevent states from using Section 1332 to establish a state-based single payer system. Nevertheless, improvements such as all-payer systems may be allowed, although the administrative requirements may be overwhelming.

*  The Deloitte report emphasizes the importance of politics: “Beginning in 2017, an Administration other than the Obama Administration will have stewardship over the ACA and its various provisions, including Section 1332 State Innovation Waivers, for the first time. States should be aware that – depending on where they are in the application process at the start of 2017 – approvals may depend on the goals of the new Administration.”

So this report does further confirm the fact that states can improve their health systems through Section 1332 waivers. Until we can enact a single payer national health program, state efforts should be pursued.

This report also confirms that state efforts alone are grossly inadequate and that federal legislation for a national health program is an imperative.

This year, single payer is back in the political arena. Although state reform efforts are encouraged, we cannot allow these efforts to displace or even dilute the drive for national single payer. Even if it is difficult to see the political path to immediate enactment, at a minimum, through education, grassroots and coalition efforts we can move much closer to the political threshold required to make single payer inevitable.

Read the Deloitte policy brief, give thought as to how far short Section 1332 waivers will leave us, and then join the national political movement that will finally bring health care justice to all.