Value Based Benefit Design: It's a Break Even Proposition

Here is the link to a major research study of a value based benefit design, specifically reduced RX copays for a major employer group: http://content.healthaffairs.org/cgi/content/full/29/3/530.
The study reveals it is a break even result though it does not take into account the benefits from reduced absenteeism and higher productivity among employees.

ACOs: Some Thoughts

I have blogged in the past about how ACOs might be a good answer to lowering health care costs and increasing quality at the same time. However there might be two factors that get in the way of this. First is that there are no penalties for missing quality targets. Given this, one could see how FFS payment would continue to be more appealing to providers. Second is that spending targets are calculated on past spending patterns so previous inefficiencies are "baked" into the calculations. Thus prospective ACOs even have an incentive to spend more before onset of the program to build up their historical spending base. Theoretically, a program that offers shared savings without any financial downside provides weak incentives for providers to change behavior.

And it looks like health insurance companies are concerned about being cut out of the picture (http://www.healthleadersmedia.com/page-2/HEP-258288/Could-Health-Plans-Derail-ACOs).
Key excerpt:

But the reality is that everyone will protect their own interests, which has health plans knocking on doors not only at the Centers for Medicare & Medicaid Services (CMS), but also at the Federal Trade Commission (FTC) and Department of Justice (DOJ), making sure they're aware that collaboration among already powerful healthcare providers under the ACO model also includes the risk collusion.

As I have said in the past, health plans owned by a provider group have the best chance of partnering to form an ACO.

The Quest for Cost Data Continues

Interesting article on California hospital costs disparity in Kaiser Health News (http://www.kaiserhealthnews.org/stories/2010/october/17/california-hospital-costs.aspx) A critical excerpt:

The hospitals haven’t made it easy for consumers to comparison shop. State law requires hospitals to reveal their charges for specific services. But those charges don’t reflect the lower negotiated rates insurers actually pay – rates hospitals usually insist be kept secret. The California Hospital Association has opposed legislation to ban such "gag clauses"; the most recent of these bills died in the state Assembly in August.

Hospitals have also resisted a four-year campaign by the Pacific Business Group on Health, a large employer coalition, and CalPERS to create a "hospital value initiative" that would allow hospital comparison based on and quality of care.

Rarely able to evaluate hospital costs and quality, patients often defer to their physicians when deciding on a hospital. Rochelle N. Doble had a seriously infected toe amputated at Sutter Delta Hospital in Antioch in 2007. Her doctor told her the bill would be about $1,400, but when she arrived at the hospital, Doble says Sutter told her it didn’t contract with her insurer and that she would be billed for the full amount—more than $5,400.

Doble, 54, says the only reason she went to Sutter was because her doctor chose it for its convenience. "His practice is in Antioch," she says. "He did it five minutes from his office."

Doble refused to pay and her account was sent to collections. In July, Sutter agreed to lower the bill to $1,400 after JustHealth, a Santa Rosa-based advocacy group, helped her protest it, according to correspondence from Sutter provided by Doble.

Stacey Wells, a Sutter spokeswoman, said the hospital couldn’t discuss Doble’s case. She said the bill for this kind of procedure would be determined by the number of hours spent in the operating room and recovery areas and charges for all supplies.

John Metz, JustHealth’s executive director, says few people bother to challenge their bills as Doble did. "Most people trust hospitals are going to treat them right," he says. "When they get these bills, they are literally impossible to understand, and people just accept them."

Given this difficulty on obtaining good info on price and quality, I think it is nearly impossible to expect consumers to make informed decisions when it comes to their health care. So what is the answer? Push subscribers to use providers in designated high performing networks.

Provider Pricing: The Elephant in the Room

Most everyone agrees we spend too much on health care in this country with poor results. One of the main reasons for this high cost is what we pay providers for their services. And this may just get worse in the future as more and more providers consolidate and exert hteir power when negotiating fees. From the Health Affairs blog:

A growing imbalance between payers and providers. As MacGillis notes, the market imbalance between payers and providers may be getting worse due to increasing provider market and consolidation, a phenomenon that has been discussed by other Health Affairs authors. For example, in an April 2010 Health Affairs article focusing on market conditions in California, Robert Berenson, Paul Ginsburg, and Nicole Kemper wrote that “providers’ growing market power to negotiate higher payment rates from private insurers is the ‘elephant in the room’ that is rarely mentioned.” The authors warned that, unless precautions are taken, the Affordable Care Act’s push toward “accountable care organizations” and other integrated care models could increase prices:

If accountable care organizations lead to more integrated provider groups that are able to exert market power in negotiations—both by encouraging providers to join organizations and by expanding the proportion of patients for whom provider groups can negotiate rates—private insurers could wind up paying more, even if care is delivered more efficiently.

Republicans, who seem poised to make big gains in next week’s elections, have argued for shifting more power in health care decision making, and more risk, to consumers. That would “only make the fundamental imbalance of information, power, and expertise” in favor of providers even worse, Vladeck said in his presentation at the Health Affairs event.

Berenson, Ginsburg, and Kemper concluded: “Unless market mechanisms can be found to discipline providers’ use of their growing market power, it seems inevitable that policy makers will need to turn to regulatory approaches, such as putting price caps on negotiated private-sector rates and adopting all-payer rate setting.” In the September-October 2009 Health Affairs issue, Robert Murray, executive director of the Maryland Health Services Cost Review Commission, wrote that had the state’s all-payer rate-setting system for hospitals been adopted nationwide, it might have saved $1.8 trillion over three decades.

The Polls and Health Care Reform

From the New Republic:

Polling on health care reform remains as reliable as ever, which means that you shouldn't consider it particularly reliable. Voters have mixed feelings and few actually understand what it's in the law, which means answers depend a lot on how the survey firms word their questions.

But the polls do provide some insights. And they've consistently undermined the claim that Americans are clamoring to scrap the Affordable Care Act because it tries to do too much.

The latest evidence comes from the new Associated Press-GfK poll, which Greg Sargent flagged on Friday. In the survey, 32 percent of registered voters responding said they wanted to repeal the law completely while another 9 percent said they wanted to revise the law so it did less. But 39 percent said they wanted to revise the law so it did more and 18 percent said they wanted to leave it as is. Opinion tips more towards scaling the law back if you consider only likely voters, but even then only 37 percent want repeal and less than 50 percent want to scale the law back at all.

Put it together with polling that shows Americans overwhelmingly favor the individual elements of health care reform--like guarantees of coverage for people with pre-existing conditions--and it's hard to make a credible argument that most Americans want repeal. As Steve Benen, who also noticed these new results, says

I wonder what the discourse would be like if equal attention were paid to those who want even more ambitious health care reforms as compared to those who think the Affordable Care Act some sort of secret communist plot.

Good Series of Posts on HC Quality

Defining quality is the "holy grail" in health care. Here is a series of posts looking at it in the US:

http://theincidentaleconomist.com/how-do-we-rate-the-quality-of-the-us-health-care-system-introduction/

Two surprising findings: Japan is more CT and MRI crazy than we are. Also the US does not have an inordinate amount of specialists.

Anthem Premium Increases in Connecticut

CT regulators have come under criticism from HHS for approving premium increases of up to 39% by Anthem for their various individual plans. In response the CT regulators said they thoroughly reviewed the requests and said that the increases were justified as Anthem made benefit changes to comply with the PPACA. Specifically:

In his letter, Sullivan noted that because of some provisions of the federal reform law, insurers had to raise several of their benefits to be in compliance. This, he wrote, was a contributing factor to the premium increases. He cited as an example one of Anthem’s prescription drug benefits that previously had a maximum limit of $500 annually and now has been raised to $750,000 to be in compliance with the reform law. According to Sullivan, this hike alone will result in a nearly 23% cost increase for that plan.

Another Call for Pricing Transparency

The leader of the St. Louis Business Group on Health makes yet another plea for pricing transparency: http://www.commonwealthfund.org/Content/Blog/2010/Oct/Time-to-Unmask-the-Price-Differences-in-Health-Care.aspx

While pricing transparency would help consumers make better choices, what is really needed is for health insurers to identify high performing providers and then through benefit incentives "push" their members to use them. Expecting consumers to make cost and quality decisions on their own is not just realistic.

Subrogation: Health Insurers Need to Give It More Attention

Good article on the latest developments in subrogation that could lead to increased recoveries:

http://www.aishealth.com/Bnow/hbd102510.html

Great Idea for Malpractice Reform

Peter Orszag's proposal for medical-malpractice reform is pretty clever. As I read it, in fact, it's not primarily a malpractice-reform proposal at all. It's a proposal for spreading evidence-based medicine through a vehicle that conservatives and doctors find congenial.

Quick background here: "Right now, health care is more evidence-free than you might think," Orszag writes. "And even where evidence-based clinical guidelines exist, research suggests that doctors follow them only about half of the time. One estimate suggests that it takes 17 years on average to incorporate new research findings into widespread practice." And that gets to Orszag's broader take on controlling costs in health care: If we can get doctors to stop doing the stuff we don't need, we can control costs without rationing in a way that harms anybody's care.

Of course, defining the stuff we don't need is more difficult than it sounds. And when evidence-based medicine became something Democrats wanted to do, Republicans decided it was something they opposed. Using research to decide what works and what doesn't is rationing, you know.

Orszag sees medical-malpractice reform as a way to get around this debate. Instead of protecting doctors from lawsuits by capping damages or limiting the ability of plaintiffs to sue, you could protect them by charging the American Medical Association or the Institute of Medicine with creating standard lists of best practices and then providing immunity to doctors who can show they followed them. That's easier said than done, but if you could manage it, it would give doctors a reason to follow the best practices and, in theory, drive down overall health-care costs. That would be much more effective than just attacking malpractice suits, which aren't a large contributor to spending and are often quite warranted.

Personal Responsibility for Health

During the debate over health care reform much of the focus was on how we needed to reduce the amount of unnecessary care in this country. Estimates of this "wasted" care are has high as 33% which comes out to over $800B! To reduce this waste a major recommendation has been to change the way providers are reimbursed, that is to shift away from fee for service structure to a global payment one. While I agree this is necessary, there also needs to be a focus on an individual's own responsibility for taking care of him or herself.

Is it right for someone who exercises five days a week, eats right, doesn’t drink or smoke to pay the same health insurance premium or pay taxes in universal health care for someone who can afford to chain smoke, eat out, drink a six-pack every other day yet can’t afford to pay for health insurance?

Of course, this is an example of two extremes. Unhealthy lifestyles receive little to no scrutiny but are detrimental when speaking about health care reform. In an ideal world, health care would be used for those with unpreventable conditions such as age, genetic conditions, etc. Health care reform cannot supplant the personal responsibility to care for ones self.

I’m not advocating a “no” vote for universal health care coverage. I’m saying that for it to work and be cost effective, we need to simply re-examine our life choices to decrease our hospital visits from costly preventable conditions.

During this tough economy, where many people cannot afford health insurance, universal health care is necessary to fulfill our basic ethical promise to help our fellow man, but we must first take personal responsibility in caring for our own bodies.

Study: HC Costs for Insurers Increasing Faster than for Medicare

For the 12-month period ending in August, the average per-capita cost of health care services covered by commercial health insurance plans, which include self-funded employer plans, climbed 8.66%. That compares with an average increase of 5.08% for patients covered by the traditional Medicare program, according to S&P Healthcare Indices, which Standard & Poor’s Corp. developed in consultation with Health Index Advisors, a joint Aon Hewitt Inc. and Milliman Inc. venture.

The biggest difference in cost increases between patients covered by Medicare and commercial health care plans were for hospital services. In that same 12-month measuring period, hospital costs for patients enrolled in commercial health care plans rose an average of 9.66%, nearly double the 4.48% increase for Medicare patients.

NCQA Study of Health Care Plan Spending: More is Not Better

The NCQA released results from a study of health care plan spending and found that you "don't get what you pay for." his conclusion emerged from the organization's 2010 State of Health Care Quality report that analyzed performance measures from more than 1,000 plans providing coverage to nearly 120 million Americans to determine the overall quality of American healthcare.

By comparing quality measures with what NCQA calls Relative Resource Use data—an evaluation of how extensively plans within a certain region leverage healthcare resources relative to the populations they serve—NCQA was ultimately afforded a glimpse into the value a health plan offers. In fact, it determined that more use of resources, such as inpatient bed days or procedures, is actually often associated with poorer quality, translating into a bad value for consumers and employers.

The report also had advice for health plans on what they can do to create better value for their members. Among other measures, improvements in the following areas will affect RRU scores:

1. Plan design and copays: Are copays set at levels that encourage preventive care? How does the plan design encourage employees to select cost-effective providers?

2. Appropriate levels of care: What are the recommended care standards for the most frequent chronic conditions? How is compliance monitored, and how well do providers meet expectations?

3. Overall utilization management: Are utilization trends monitored by provider and by patient details such as age, gender and chronic condition? What happens when outliers are identified?

4. Local practice patterns: How does the health plan monitor providers' practice patterns and encourage providers to adopt cost-effective techniques?

5. Use of technology: What are the standards of use, and how are they monitored? How does the plan instruct providers about appropriate use?

RRU improvements also could be facilitated by encouraging high-volume providers to enhance continuity of care by creating incentives to adopt patient centered medical home (PCMH) and accountability care organization (ACO) care delivery models.

ACOs in Massachusetts: An Update

As I have said frequently, tracking the latest developments in Massachusetts is very likely a good bell weather on how how health care reform will play out in the rest of the country. Here is the latest from the medical director of Health Integrated on his company's plans to become an ACO in the next five years:

The strategic plan includes centralization of the full range of medical services. This goal was to be accomplished by:

• Increasing provider accountability and consumer education
• Rewarding physicians for delivering high quality care
• Providing incentives for efficient, appropriate care
• Structuring the care continuum to align incentives for all participants
• Integrating existing CHA ACO elements

In order to drive this kind of change, a new payment model was required. This new model had several priorities regarding payment and incentives, many of which are aligned with our previous discussions concerning successful ACOs. These have included:

• Alignment of all stakeholder financial interests including improved outcomes in patient health and expenses
• Creation of a global payment structure
• Preparation to accommodate an all-payor system

The development of strategic partnerships will be important. These could be with other private payors, like NH for example. Massachusetts has already adopted and implemented this innovative healthcare reform model. In doing so, they are leading the nation in healthcare reform. As you may have also experienced, consolidation of the industry is already beginning and relationships with providers, particularly the tertiary care institutions in the state, are necessary. Additionally, the development of select provider networks is desirable and possible. As the state of Massachusetts is already moving toward global payments, this must continue to be a priority.

Within the managed care plan, Network Health brings specific competencies to the partnership including:

• Data
• Care management
• Cultural transformation support
• Existing provider network

The Patient Centered Medical Home (PCMH), is expected to be a strategic tool for both care delivery and effectiveness. The PCMH is expected to be the vehicle to accomplish many tasks including the improvement in:

• Preventive care
• Primary care
• Care coordination and management
• Access
• Patient/care team relationships
• Patient experience
• Consumer involvement
• Identification and management of high risk populations
• Payment structures

In conclusion, Dr. Yeracaris summarizes that although the journey to becoming a high-performance ACO is complex, health plans, specifically those that are provider-sponsored can play an important role in assisting providers with the transition. It is encouraging to see that global payment arrangements and primary care medical homes offer significant theoretical opportunities to improve care and truly “bend the cost curve”, but the thesis has yet to be proven.

On a closing note, it should be noted that the prediction of 5 yrs. for the complete formation of this ACO shows how difficult and complex this task is and makes one wonder if their formation will take as long in other parts of the country.

Update on Health Insurance Exchanges: Oregon's Strategy

Oregon has decided that its exchange will not be an arm of the state but independent:

http://health.newamerica.net/blogmain

Health Insurers: We Need More Time to Meet MLR Requirements

AHIP is asking for more time through a transition period (perhaps up to 2014) to enable many of its member carriers to meet the 80 and 85 MLR ratios required by the ACA. Those who do not meet these requirements will have to issue rebates to their members (see my earlier posts about the Blues Plan in NC). Implementation of this requirement can also be problematic because as many as 17 state insurance commissioners may be new to their offices come January 1st.

The NAIC meets in Orlando this week to approve the regulations for the new MLRs. For more details please click on this link: http://money.cnn.com/2010/10/15/news/economy/health_care_MLR_vote_impact/

The large carriers will have no problem meeting these new standards. It will be the smaller ones that have the issues. If these carriers leave the market Like Principal did it will mean that the big carriers have less competition. On the other hand the new MLR requirements will force the carriers to be more efficient which is a good thing.

UHC Proposes Joint Medicare/Medicaid Program

This makes senses:

UnitedHealth Group Inc. is proposing a managed-care plan for dual recipients of Medicare and Medicaid. The insurer said the plan would "save as much as $1.62 trillion in the U.S. over 25 years," Bloomberg reports. "Almost 9 million Americans receive coverage from both Medicare, the U.S. health plan for the elderly and disabled, and the Medicaid program for the poor. UnitedHealth proposed in a report today to combine benefits of the programs into a single plan to better coordinate patient care. ... Such a change would increase the number of government beneficiaries on UnitedHealth's rolls, [Simon Stevens, executive vice president of UnitedHealth] said, without providing a specific estimate. ... The current payment structure creates a 'tangled web of responsibilities between Medicaid and Medicare' because each program covers different expenses, medical providers must bill separate programs, and no one is accountable for tracking the care patients receive or how much is spent, UnitedHealth said in its report. Providing Medicare and Medicaid benefits through a single insurance plan would simplify coordination of care among doctors, hospitals, nursing homes and other providers and would save money by eliminating inefficiencies, the report says"

Tax Credits Act as Disincentive for Costs

Interesting take on the tax credits that will be issued to help individuals afford coverage under the ACA:

http://www.healthleadersmedia.com/page-1/LED-257781/Tax-Credit-Hides-True-Cost-of-Healthcare

New Federal Board on Compartive Effectiveness

From the Washington Post:

Reports on a new entity: the Board of Governors of the Patient Centered Outcomes Research Institute. "If you're not familiar with the board, you're not alone. Created by the health-care overhaul law, it's one of the newest and least known panels in government. But the work of its 21 members, if successful, could increase the public's knowledge of medical treatments for everything from attention deficit and hyperactivity disorder to cancer. And it could dramatically change how you discuss treatments with your doctor when the law is fully implemented in 2014." Tasked with helping patients, doctors and purchasers make informed decisions on quality and health care effectiveness, the board will "direct the institute's researchers to examine mounds of comparative effective research undertaken by schools, hospitals and medical companies to study the benefits and detriments of medical treatments".

This Board is one of the major tools in reducing the cost of health care. It amazes me that we still really do not know what the best ways to treat certain diseases are. And when we learn what is, that it takes 18 yrs for it to become stand practice. This Board shouls really move things along hopefully.

Commonwealth Fund Report:: ACA Will Improve Health Access

A new report says that by 2014 as many as 12.1 million now-uninsured young adults — of an estimated 14.8 million – may get some kind of subsidized coverage under provisions of the new health-care overhaul law.

The Commonwealth Fund issue brief says 7.2 million young adults could gain health coverage under Medicaid, which is expanding under the health law, and that 4.9 million may receive subsidized private coverage under the new insurance exchanges. Those provisions don’t kick in until 2014.

Another million young adults are expected to be covered by their parents’ health policies between now and 2014, as a result of the now-in-effect provision requiring plans to cover adult children up to age 26.

About 30% of the 32 million additional people expected to come into the insurance fold as a result of various health-law provisions are between the ages of 19 and 29, the brief says.

Congressional Study: Big 4 HIs Denied 1 in 7 Applicants

From the WSJ:

The four largest for-profit health insurers in the U.S. -- Aetna Inc., Humana Inc., UnitedHealth Group Inc., and WellPoint Inc. -- "on average denied policies to one out of every seven applicants based on their prior medical history," according to a congressional investigative report released yesterday by Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, and Rep. Bart Stupak (D-Mich.). The carriers collectively denied coverage to more than 651,000 people from 2007 to 2009 due to pre-existing conditions. "While most Americans have coverage through their employer or Medicare, an estimated 15.7 million adults under age 65 received coverage through an individual policy as of 2008, the congressional report said. Those are the customers who can be denied coverage because they have a past illness." Under the new healthcare reform law, insurers will no longer be able to deny coverage on the basis of pre-existing conditions beginning in 2014 (Adamy, 10/13). Bloomberg: "Insurers agreed to end denials for pre-existing conditions early in the health-care debate last year, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the industry's trade group in Washington. Until all consumers are required to buy health insurance, the coverage restrictions are needed to keep people from gaming the system, he said. 'In the current individual market, applicants undergo an underwriting process to discourage people from purchasing coverage only after they need medical services, which drives up costs for all policyholders,' Zirkelbach said.

I thought the ratio was surprisingly low.

Blues Plans and Reform

In an earlier post I mentioned that the Blues Plan in NC had to refund $156 M to its members that have individual coverage based on the new MER requirements for such coverage. What about other Plans and reform? Here is a summary:

• Meanwhile, some Blues plans and other insurers have withdrawn from child-only coverage, citing issues with reform provisions related to pre-existing condition exclusions. The insurers said they no long would sell such policies as of Sept. 23, when they may no longer reject applicants up to age 19 based on pre-existing conditions. In Colorado, for example, WellPoint, Inc.’s Anthem unit and several other carriers, including Aetna Inc., CIGNA Corp., Humana Inc. and UnitedHealth Group’s Golden Rule Insurance Co. subsidiary, said they would drop new sales of child-only policies while continuing to cover current child-only enrollees and to accept children with pre-existing conditions in new family policies. Insurers in several other states also reported that they would withdraw child-only products.Under rules issued in June that take effect for plan years beginning on or after Sept. 23, 2010, insurers may no longer exclude pre-existing conditions from coverage for enrollees under the age of 19. In an effort to address concerns regarding adverse selection, HHS issued guidance July 27 authorizing insurers to restrict enrollment of children under age 19 “to specific open-enrollment periods,” if permitted by state law. But the open-enrollment period must apply to healthy as well as sick children, while the insurers — and some state insurance commissioners, preferred to allow acceptance of healthy children year-round. HHS signaled that it would try to adjust open-enrollment periods to address the risk of adverse selection, but no deal had been reached by press time.
  

• Meanwhile, insurers in several states blamed reform for premium rate hikes. The Rhode Island Blues plan, for example, reportedly told customers it would raise premiums by a few percentage points on top of already approved rate hikes to account for additional benefits mandated by the reform law. BCBSRI and other Rhode Island insurers that planned to impose similar rate hikes came under fire from Insurance Commissioner Christopher Koller. In a Sept. 9 letter to chief executives at the state’s three largest insurers, Koller said that any changes to approved premium rates “as a result of PPACA [i.e., the reform law] will be considered material and an exception to the OHIC’s previous decision….They may not to be applied in quotes to customers unless and until approved by this office.” The insurers also must submit “analysis supporting the additional premium rate charge anticipated for each contemplated change and why it should cause average rates to increase by more than the amount approved.” BCBSRI spokesperson Kimberly Reingold told The AIS Report that “the guidelines under federal health care reform will add cost to employers and we currently are working with them to understand the specific impact to premiums, which will vary based upon benefits selected by each employer. Every time an employer changes their coverage, or we are mandated to cover new services…rates are adjusted.” She added that “those rates could be anywhere from 1.8% to 3% more depending upon plan design.”

NY VNA Study: Home Visits Reduce Hospitilaztion Rates

Well you have to consider the source here but this study(http://www.healthleadersmedia.com/page-2/TEC-257573/Predictive-Modeling-May-Reduce-Hospitalizations) seems very positive. Key article takeaway:

Preliminary analyses from their investigation revealed that patients who received physical therapy were 37% less likely to be hospitalized compared with patients who did not receive physical therapy services."

What Employees Will Find at OE This Year

This is a good article (http://www.kaiserhealthnews.org/Features/Insuring-Your-Health/open-insurance-season.aspx) on open enrollment issues this year. It notes that family coverage has increase 12% over last year and with employees picking up more and more of the cost of their coverage, paychecks will be smaller for many next year.

It also notes how more and more employers will offer incentives for healthy activities such as an health assessment.

Despite Patient Interest Few Doctors Use Email

The Center for Studying Health System Change released a report (http://www.hschange.org/CONTENT/1159/)that showed less than 7% of physicians use email to communicate with their patients. Why is this figure so low? Lack of reimbursement was cited as one of the issues. What a surprise

Aetna Study: Account Funded Plans Save Money

Aetna just released a five year study that showed customers who replaced their previous plan options with an Aetna HealthFund (AHF) Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA) experienced lower annual cost trends over five years, producing savings of nearly $18 million per 10,000 members.

While this obviously is positive news for supporters of this kind of coverage, this article (http://www.sacbee.com/2010/10/04/3077647/price-comparisons-nearly-impossible.html) does a good job of showing how difficult it still is for consumers to obtain medical procedure cost information. Until easy to understand and easy to obtain medical cost and quality information is available, it will be hard for these types of plan to dominate the marketplace.

Good Article on Mini Med Plans

The NY Times (http://www.nytimes.com/2010/10/06/business/economy/06leonhardt.html?_r=1&ref=business) has a good overview of mini-med plans and how they do not fit in the future of health insurance once the Affordable Care Act kicks. Last week it was major news that McDonald's was ready to drop such coverage for their employees. The benefit limits for these plans was either $2,000 or $10,000/yr. The article noted this really was not coverage since a major procedure would easily pass either amount.

Mini med plans really are not a good alternative to standard HC insurance. However as the article notes, standard HC coverage is too expensive for most people to afford. In 2014 both the mandate for HC coverage and subsidies to help pay for the premiums kick in. Until then, people will have to muddle through with either no coverage or mini med coverage which is really not a good scenario.

More Updates on Health Insurance Exchanges.

From various sources:

NAIC publishes draft legislation for comment
Monday, the National Association of Insurance Commissioners (NAIC) published its draft model legislation to assist states in establishing insurance exchanges by January, 2014. Under PPACA and the NAIC draft legislation, a state may establish an exchange within or outside of state government or a combination of the two. NAIC will accept comments until October 6.

HHS awards grants to assess data requirements
Thursday, HHS awarded $1 million grants to 48 states and DC to assist in preparation for health exchanges infrastructure. The initial funds will be used to assess information and data requirements in each state.

California accelerates exchange timetable
Thursday, Gov. Arnold Schwarzenegger (R) signed two bills that will make California the first state to establish a health insurance exchange per PPACA (Utah, Massachusetts had exchanges pre-PPACA). The exchange will create a web-based insurance plan marketplace for residents, offering standardized and detailed information about available plans, as well as a toll-free hotline to help consumers understand their options. Approximately 8.3 million Californians are expected to be eligible for coverage through the exchange. The program is expected to bring as much as $10 billion in subsidies for the state over ten years. An independent, five-member board will oversee the California exchange with responsibility for naming insurers that will participate, eligibility, and enrollment processes.

Congressional Research Service report: Can state exchanges prohibit plan participation?
According to the Congressional Research Service (CRS) analysis of PPACA, a state exchange could deny participation by every plan submitting certification if the exchange were to determine that every plan is not in the “interest of plan participation.” However, CRS analysts concluded the HHS Secretary could use her authority to prevent such a scenario.