The Health Insurance Gadfly

Ford Developing a Car that Can Check Your Health

2012-02-08T08:11:00.000-08:00

I think this is pretty cool and useful given how much time we spend in our cars:

http://www.healthleadersmedia.com/print/TEC-276275/What-If-Your-Car-Cared-About-Your-Health

Wellpoint and Primary Care Reimbursement

2012-02-06T08:24:00.001-08:00

$1B in increased reimbursement to primary care physicians hopefully will make a difference:
http://www.fiercehealthpayer.com/story/interview-behind-wellpoints-1b-primary-care-initiative/2012-02-06?utm_medium=nl&utm_source=internal

Should Medicare Move to Premium Supports?

2012-02-02T05:26:00.000-08:00

Medicare premium supports are the mainstay of the recently proposed legislation sponsored by Sen. Ron Wyden and Rep. Paul Ryan. Is it a good idea? Read on:

http://www.nejm.org/doi/full/10.1056/NEJMp1200448

ACOs to Bring the End of Health Insurance Companies?

2012-02-01T12:07:00.000-08:00

Well by 2020 this is what Ezekiel Emanuel predicts and I think he he is right, at least in their present form.

http://opinionator.blogs.nytimes.com/2012/01/30/the-end-of-health-insurance-companies/

Positive Impact of the ACA

2012-02-01T04:49:00.000-08:00

So why did Obama not mention any of these achievements to date in his SOTU address from the passage of the Affordable Care Act? Good question:

http://www.washingtonmonthly.com/ten-miles-square/2012/01/a_quiet_triumph_of_obama_care035079.php

US Health Care System Is Already Socialized

2012-01-31T05:08:00.001-08:00

Good article noting the way costs are shifted in our present system between public and private payors and high cost and low cost providers:

http://www.slate.com/articles/health_and_science/medical_examiner/2012/01/american_health_care_is_already_socialized_.html

Feds Being Tough on Individual MLR Waivers

2012-01-30T07:19:00.000-08:00

With the rejection of Texas' MLR waiver request, nine states now have been denied:

http://www.modernhealthcare.com/article/20120127/NEWS/301279985/texas-bid-for-mlr-waiver-is-rejected

Will the States Be Exchange ready?

2012-01-26T16:02:00.000-08:00

This report from the Urban Institute is not nearly as "sunny" as the one released the other day by the White House. What a surprise!

http://thehill.com/blogs/healthwatch/health-reform-implementation/205869-report-many-states-lag-in-implementing-healthcare-law

SOTU hardly Mentions Health Care Reform

2012-01-25T12:28:00.000-08:00

2.5M young adults now with health care coverage? Risk pools available in states to those who can't get coverage elsewhere? Why did Obama not reference any of these things due to the ACA? Excellent question.

http://www.healthleadersmedia.com/page-1/HEP-275807/SOTU-Light-on-Healthcare-Industry-Reacts

Aetna Partners w/ Wellness Company to Offer Group Coverage

2012-01-19T14:55:00.000-08:00

I would be curious to know if these are multi-yr. contracts since it takes more than a year to see the positive results of health promotion efforts.

http://www.businesswire.com/news/home/20120119006616/en/Aetna-Heartland-Health-Roll-Health-Plan

Will the Feds Be Ready to Step In?

2012-01-19T13:01:00.000-08:00

States that do not have the capability to provide their own health insurance exchange by 1/1/14 will have to cede that responsibility to HHS. But will HHS be ready to do the job? This blogger soes not think so:

http://healthpolicyandmarket.blogspot.com/2012/01/will-feds-be-ready-with-fallback.html

Gov't Takeover of Health Care: Not At All

2012-01-19T11:16:00.000-08:00

Good blog post from the Kaiser Foundation noting how private insurers through their Medicare Advantage and Medicaid managed care contracts are becoming MORE involved in health care:

http://healthreform.kff.org/notes-on-health-insurance-and-reform/2012/january/betting-on-private-insurers.aspx

Problem W/Tiered Networks

2012-01-18T08:04:00.000-08:00

Good article on the problems with the movement towards tiered networks in MA. The biggest issue: different quality standards for docs used by the 3 major insurers:

http://www.kaiserhealthnews.org/Stories/2012/January/17/Mass-Tiered-Insurance.aspx

Top 15 HC Systems according to Thompson Reuters

2012-01-18T07:01:00.000-08:00

Interesting that Mayo, Cleveland Clinic and UPMC on not on this list but Gesinger is.

Large Health Systems
More than $1.5 billion total operating expenses:

Banner Health, Phoenix, AZ
CareGroup Healthcare System, Boston, MA
Jefferson Health System, Radnor, PA
Memorial Hermann Healthcare System, Houston, TX
St. Vincent Health, Indianapolis, IN

Medium Health Systems
Between $750 million-$1.5 billion total operating expenses:

Baystate Health, Springfield, MA
Geisinger Health System, Danville, PA
HCA Central and West Texas Division, Austin, TX
Mission Health System, Asheville, NC
Prime Healthcare Services, Ontario, CA

Small Health Systems
Less than $750 million in total operating expenses:

Baptist Health, Montgomery, AL
Maury Regional Healthcare System, Columbia, TN
Poudre Valley Health System, Fort Collins, CO
Saint Joseph Regional Health System, Mishawaka, IN
Tanner Health System, Carrolton, GA

http://www.healthleadersmedia.com/page-2/MAR-275452/Thomson-Reuters-IDs-15-Top-Health-Systems

CO High Risk Pool Experience Shows Why Mandate Is Needed

2012-01-17T07:44:00.000-08:00

From the Denver Post:

Colorado's troubled high-risk health-insurance pool has asked the federal government for nearly $15 million more than planned after running up early claims that are twice the national average.

http://www.denverpost.com/news/ci_19750414

HBR Blog on the Downsides of Being an Informed Consumer

2012-01-17T07:37:00.000-08:00

Good post on the problems w/putting consumers in the driver's seat. The real goal should be providing enough info so consumers can have an intelligent discussion w/their provider about the best course of action:

http://blogs.hbr.org/cs/2012/01/the_trouble_with_treating_pati.html?utm_source=twitterfeed&utm_medium=twitter

Technology Key to Being an Informed Consumer

2012-01-17T07:26:00.000-08:00

Good report from CES on the latest apps to keep consumers informed and connected. But while having an app on your smartphone is nice, the content it provides is more critical. Until easily accessible and understandable data on cost and quality is out there, the dream of the informed medical consumer will continue to be just that.

http://www.fiercehealthit.com/story/technology-key-growing-consumerism-trend-healthcare/2012-01-12#disqus_thread

Update on Cigna's Venture into India

2012-01-17T06:54:00.000-08:00

Entering a market of 1.2B makes sense to me. So where are the other major carriers?

Cigna and TTK said their joint venture will offer a new and innovative approach to India’s health service marketplace by offering consumers a portfolio of innovative products that help support and improve health and well being with high-quality care. “We have proven expertise in offering solutions that seek to improve customers’ health while managing cost,” said Cigna Chief Executive Officer David Cordani.

http://newsroom.cigna.com/NewsReleases/Cigna-and-TTK-Leaders-Outline-Details-of-New-Joint-Venture-to-Sell-Health-Insurance-Across-India.htm?view_id=3897

More Good Stuff from PWC Consumer Survey

2012-01-11T13:00:00.000-08:00

These are the results of a consumer survey of 1,000 people.

http://www.pwc.com/us/en/health-industries/publications/change-the-channel.jhtml

Consumers to Health Insurers: We're Flexible But Still Not Perfect

2012-01-11T12:33:00.000-08:00

From a PWC survey the six key results are:

Consumers want their health plans to link cost and effectiveness
Consumers put off care
Consumers think integrated healthcare is a good idea
Consumers are willing to share their medical data
Consumers are looking forward to health insurance exchanges
Consumers want to "friend" you.

http://www.healthleadersmedia.com/content/HEP-275227/6-Things-Customers-Want-Health-Plans-to-Know##

VA Dem View On Exchange Makes Sense

2012-01-11T07:15:00.000-08:00

I have never understood why those opposed to the ACA think it is better for the Feds to come in an run the exchange vs. having control over it at the state level:

http://www.washingtonpost.com/blogs/virginia-politics/post/health-insurance-bill-would-keep-feds-at-bay-va-democrats-say/2012/01/10/gIQAHmPmoP_blog.html

Essential Benefits Update

2011-12-22T14:19:00.000-08:00

I do not like the HHS decision to "punt" the issue of essential benefits to the states since I think it would have been important to set a national standard. Here is a good summary of the issue:
http://www.commonwealthfund.org/Blog/2011/Dec/Essential-Health-Benefits.aspx

HHS Issues Bulletin on Essential Benefits

2011-12-19T07:38:00.000-08:00

On December 16, 2011, HHS released a “bulletin” describing the approach that it intends to take to establishing the “essential health benefits” under the Affordable Care Act. A bulletin is a form of guidance that lacks the legal stature of a rule. HHS believed, however, that the states, insurers, consumer advocates, and the public needed some indication as to the direction HHS was intending to take in defining the EHB, and the Bulletin was intended to serve this purpose until an actual rule is issued.

It is likely that the intent of those who drafted the ACA was to establish a uniform national EHB standard. This is not what the Bulletin proposes, however, at least for 2014 and 2015. Rather the Bulletin proposes that each state define its own EHB within federal guidelines. States will do this by choosing among federally-defined “benchmark” plans. This is the approach that the Children’s Health Insurance Program (CHIP) has used since 1997 and that states may use for some Medicaid populations. The Bulletin signals that HHS intends to extend this approach to those groups guaranteed the EHB under the ACA.

For 2014 and 2015, states may pick a benchmark plan from one of the following four categories:

(1) the largest plan by enrollment in any of the three largest small group insurance products in the State’s small group market (a product being a package of services and riders offered by an insurer and a plan being a specific selection of benefits and cost-sharing) ;

(2) any of the largest three State employee health benefit plans by enrollment;

(3) any of the largest three national Federal Employee Health Benefit Plan plan options by enrollment; or

(4) the largest insured commercial non-Medicaid Health Maintenance Organization (HMO) operating in the State.

If a state fails to pick a benchmark plan, the largest plan in any of the three largest small group products will be the default. Under the Bulletin, exchange plans and plans offered in the individual and small group market must cover the services included in the benchmark plan.

Personally I am disappointed that a national standard benefit plan was not created. Stay tuned for more comments on this in future posts.

Docs Do Not Like the ACA

2011-12-15T10:54:00.000-08:00

Threaten someone's income and you won't very likely find that they support you:

http://www.healthcarefinancenews.com/news/deloitte-physicians-skeptical-health-reform-can-deliver-it-promises

Employers Would Save 40% If They Drop Coverage

2011-12-10T08:37:00.001-08:00

According to this analysis, employers win big but their employees lose if employers decide to drop HI coverage and send employees to the state exchange:

http://www.washingtonpost.com/blogs/ezra-klein/post/the-cost-of-dropping-health-insurance/2011/12/07/gIQAzTSYcO_blog.html

How Payers Should Prepare for State Exchanges

2011-12-10T08:32:00.000-08:00

I think this article offers a nice summary of how payers should prepare for state exchange participation:

http://www.fiercehealthpayer.com/special-reports/health-insurance-exchanges-3-steps-prepare-payers

Most Insureres Would Meet New MLR Requirements

2011-12-07T17:23:00.000-08:00

While brokers are not happy about the final regs HHS issued last week that logically excluded commissions from being included in MLR calculations, the insurance industry for the most part already meets the 85% group standard. the 80% individual MLR rewquirement is somewhat more problematic:

http://www.healthleadersmedia.com/page-2/HEP-274068/Good-News-Many-Insurers-Already-Meet-MLR-Requirements

Defined Contribution Health Plans Will Be the Wave of the Future

2011-12-07T09:03:00.000-08:00

I totally agree with this. With the rise of private exchanges, it is already happening and will become more and more popular.

http://www.bloomberg.com/news/2011-12-07/defined-contributions-define-health-care-ahead-commentary-by-peter-orszag.html

VT: Single Payor Will Save Money

2011-11-02T11:30:00.000-07:00

Most of the savings will be on the clinical side through a reduction in unnecessary care.
But if ACOs take-off, will these savings be realized anyway?

http://www.businessinsurance.com/article/20111102/NEWS03/111109965?tags=58|278|87|74|62#

IOM Releases Recommendations on Essential Health Benefits

2011-10-07T08:34:00.001-07:00

One of the key tasks to come out of the ACA was the definition of essential health benefits which was assigned to the Institute of Medicine. Yesterday it released its report and its key recommendations:

Key Recommendations of the IOM Committee on Defining and Revising an Essential Health Benefits Package for Qualified Health Plans.*

1. The secretary of health and human services should establish an essential health benefits (EHB) package including the 10 categories contained in the Affordable Care Act and as guided by a national average premium target. Once developed, the package should be adjusted so that the expected national average premium for a “silver” (second-lowest-price) plan is actuarially equivalent to the average premium small employers would have paid in 2014 for a typical plan. A public deliberative process should be used to make adjustments to the initial EHB package.

2. By January 2013, the secretary should establish a framework for monitoring EHB implementation and updating that accounts for changes in provider payment rates, financial incentives, practice organizations, and other relevant matters. The secretary should implement this framework and coordinate federal efforts to produce and make the data accessible for public use.

3. Beginning in 2015, the secretary should update the EHB package to make it more fully evidence-based, specific, and value-promoting — explicitly incorporating costs. A public deliberative process should be used to inform choices about what to include in or exclude from the updated package.

4. The secretary should permit states administering their own exchanges to adopt variants of the federal EHB package, provided that modifications are consistent with the federal package, not significantly more or less generous, and are subject to public input.

5. The secretary should establish a National Benefits Advisory Council, with members appointed through a nonpartisan process, which should make recommendations annually stemming from its oversight of the EHB package.

6. To ensure that the EHB-defined packages remain affordable and sustainable, the secretary should develop a strategy, in collaboration with others, for aligning the growth rate of health care spending in all sectors with that of the economy.

Below is a link to the entire report:

http://www.iom.edu/

Health Insurers Disliked!

2011-10-03T07:32:00.000-07:00

This is just shocking:

Seventy percent of social media comments about major health insurers were negative during the past year, according to a new report released by Amplicate, a social media analytics service. The company analyzed public tweets, Facebook posts and comments on its own website between September 2010 and August 2011. Social media users made 2,311 comments total about 18 insurers, and those opinions were shared more than 632,000 times. Insurers aren’t alone, and they aren’t the most talked about: In the past year, U.S airlines generated over 34,000 comments and U.S. banks had nearly 22,000 comments.

http://capsules.kaiserhealthnews.org/index.php/2011/10/report-americans-give-online-thumbs-down-to-healthinsurers/

VT and Single Payor Moves Forward

2011-10-03T07:15:00.000-07:00

Lots of questions the biggest one being how it will be financed but this is just fascinating to follow:

http://www.kaiserhealthnews.org/Stories/2011/October/02/Vermont-single-payer-health-care.aspx

Best Healthcare System in the World?

2011-09-27T05:55:00.001-07:00

Another health care-related badge of shame for the United States: A new study finds that we lead among 16 high-income nations in preventable deaths.

New York, NY, September 23, 2011—The United States placed last among 16 high-income, industrialized nations when it comes to deaths that could potentially have been prevented by timely access to effective health care, according to a Commonwealth Fund–supported study that appeared online in the journal Health Policy this week and will be available in print on October 25th as part of the November issue. According to the study, other nations lowered their preventable death rates an average of 31 percent between 1997–98 and 2006–07, while the U.S. rate declined by only 20 percent, from 120 to 96 per 100,000. At the end of the decade, the preventable mortality rate in the U.S. was almost twice that in France, which had the lowest rate—55 per 100,000.[...]
"This study points to substantial opportunity to prevent premature death in the United States. We spend far more than any of the comparison countries—up to twice as much—yet are improving less rapidly," said Commonwealth Fund Senior Vice President Cathy Schoen. "The good news is we know lower death rates are achievable if we enhance access and ensure high-quality care regardless of where you live. Looking forward, reforms under the Affordable Care Act have the potential to reduce the number of preventable deaths in the U.S. We have the potential to join the leaders among high-income countries."

The authors concluded that the poor performance and relatively slow improvement of the United States is because of "the lack of universal coverage and high costs of care." That, of course, goes beyond the specific issue of our health care system and is also a factor of income inequality in this country. While the survey's latest data comes from 2007, the numbers have probably not improved in the last three and a half years, compounded by things like continued high unemployment.

The Affordable Care Act will help to drastically shrink the number of Americans who are uninsured and provide affordable insurance coverage. The next fight will be providing not just near-universal coverage, but universal access to actual health care. There's certainly no reason this country doesn't have the capacity of other highly developed nations. And there is certainly no reason for this country to have a higher infant mortality rate than Malaysia, Cuba and Poland.

Great IOM Chart on the Rising Cost of Healthcare since 1945

2011-09-22T11:57:00.001-07:00

Check this out. If milk prices had risen as fast as health care ones since 1945, a gallon of it would cost $44 today. Click the link for other examples.

http://resources.iom.edu/widgets/vsrt/healthcare-waste.html?utm_medium=etmail&utm_source=Institute%20of%20Medicine&utm_campaign=09.11+IOM+News&utm_content=IOM%20Newsletter&utm_term=Commercial

Instead of High Performing Networks...

2011-09-22T07:46:00.000-07:00

Here is a company that gives its employees a cap on what to spend for various procedures such as a colonoscopy. But quality is also a concern:

http://www.kaiserhealthnews.org/Stories/2011/September/21/companies-steering-workers-to-lower-priced-medical-care.aspx

10 Challenges for HI Exchanges--AIS Newsletter

2011-09-22T05:41:00.000-07:00

I think this is a fairly daunting list. The biggest one however is eligibility which I think really should be handled by the Feds.

(1) Adverse selection: Coverage options available within the exchanges “have to be vibrant and able to attract a sufficient number of covered lives to make it economically worthwhile,” says former Illinois Insurance Commissioner Mike McRaith. Elizabeth Sammis, Ph.D., Maryland’s assistant insurance commissioner, agrees and says it will be important that individuals and small employers are enthusiastic about the exchanges and see them as a place they “can buy coverage they want at a price they can afford.” According to McRaith, regulation of insurers — both on and off the exchanges — ultimately will be the deciding factor for every state in determining whether their exchange becomes a viable marketplace. If an exchange is left with too many potentially expensive enrollees, “then we could see two parallel markets develop without any intersection,” he tells HEX. McRaith left his commissioner post May 31 to lead the Treasury Dept.’s new Federal Insurance Office in Washington, D.C.

(2) Eligibility: Most states will need to develop and implement an eligibility system for their exchanges as well as for their Medicaid program. “If we were only doing this for exchange customers, it would be easier, but since we also have to determine eligibility for Medicaid, and coordinate with older, legacy systems that are not as flexible as what we want for the exchange, it means we have a lot of planning and work to do,” says Joan Henneberry, director of the Colorado Health Insurance Exchange. HHS last month proposed regulations on eligibility (see story, p. 1).

(3) Legacy Medicaid systems: Not only will technology be needed to enroll members in an exchange, it also will have to allow members to easily switch between Medicaid and subsidized coverage as eligibility status changes. Moreover, it will need to transmit and receive data from HHS regarding subsidies and citizenship status, and collect and remit premiums, Sammis explains. While Kentucky’s 17-year-old legacy system integrates eligibility determinations for the state’s income maintenance programs, Special Needs Adoption Program and Medicaid, the IT needed for the exchange requires the ability to determine eligibility and administer health benefits beyond Medicaid, says Jill Midkiff, a spokesperson for Kentucky’s Cabinet for Health and Family Services. Kentucky, she tells HEX, might pursue the enhanced Medicaid match rate that allows states to claim a 90/10 rate for the design, development and installation of a new Medicaid eligibility system. She says the state is considering the State Exchange Establishment Cooperative Agreement as an additional source of funding for developing an IT exchange infrastructure. Kansas Insurance Commissioner Sandy Praeger (R) agrees that there will need to be a “great IT effort” between Medicaid and private insurers that participate in the exchange. “Within that concept we will need to have in place safeguards to keep [enrollees] in a medical home and not have them moving from plan to plan because of income eligibility changes,” she tells HEX.

(4) Federal deadlines: While the exchanges must be operational by Jan. 1, 2014, they must be set up and tested well before that. Carrie Haughawout, assistant director for health policy at the Ohio Dept. of Insurance, calls the federal timeline “extremely aggressive” and says it will be a challenge for every state. “We’re chasing a moving target. I’m sure we can get to where we need to be once we know the parameters, but we’re operating inside of a box without them.” Praeger agrees that moving forward without federal guidance, or governance in place for the exchange, is close to impossible. “Even by compressing these preliminary stages, we will have little time for pilot implementations to test exchange rules and functionality.” Christina Urias, director of Arizona’s Dept. of Insurance, says a team of consultants has been hired to help her state meet the deadlines. The need to meet timelines established by the reform law — and figure out how to coordinate efforts between state agencies — has created a “monumental task” for states, she says. Cindi Jones, director of the Virginia Health Reform Initiative, says the design and implementation of the exchange within the federal deadlines is difficult because of the eligibility and enrollment requirements. And political consensus must be built among all stakeholders, she says. While Maryland’s Sammis agrees that the deadlines can be crushing, she says a tight timeframe can ensure forward momentum. “Sometimes we work better when we have deadlines,” she says.

(5) Momentum: Because Nevada’s legislature meets only every other year, it’s critical that legislation is enacted this session “to demonstrate to the federal government that we are serious and we are moving forward with the exchange,” says Nevada Insurance Commissioner Brett Barratt. He says he has been meeting every other week with a committee of state agency directors to discuss the framework needed to govern the exchanges. Maintaining forward momentum, he explains, is necessary to ensure that the state is eligible for the next round of federal grants that will be used to build out the exchange. Merle Scheiber, director of insurance for South Dakota, echoes that thought and says demonstrating a sufficient amount of progress in time to achieve HHS approval is among his top challenges.

(6) Governance: “The best thing any state can do is to get working as soon as possible,” says Sammis. In April, Maryland Gov. Martin O’Malley (D) signed a bill to establish the state’s exchange as a quasi-public agency. The state recently assembled a nine-member insurance exchange board, which held its first meeting in June. “This is the foundation needed to move ahead,” says Sammis. On Aug. 5, Maryland’s exchange board issued several RFPs to find consultants to conduct studies and make recommendations on a number of issues including the operating model, public relations and advertising strategies, and financing for the exchange.

(7) State mandates: Colorado’s Henneberry says the basic benefit package is an area where there needs to be consistency across states. “Once we know what the mandatory package looks like, then we will have extensive conversations about whether or not we should have additional state-mandated benefits. It will be important for everyone to remember that everything we add will drive up the cost of the premiums, and that anything beyond federal requirements will be paid for by the state or the consumers.”

(8) Business model: Before the framework can be developed, Rhode Island Insurance Commissioner Christopher Koller says the state must first identify the “unmet needs” among individuals and small employers and determine how the exchange can meet those needs. “To overcome this we are using planning funds to develop and test business models, we have tightly integrated planning between our Medicaid agency and my office, and we have a public stakeholder process to vet the ideas.”

(9) Brokers: Participation in an exchange could depend on the role that agents and brokers play. Consumers and small employers will need help navigating the exchanges. “In my mind, the exchanges will not be successful without the brokers,” says Barrett. “They will need to be an integral part and they will need to be paid for their services so it’s worthwhile for them to assist consumers and employers.”

(10) Care delivery: It will be important that the exchanges do more than just enroll members in coverage, says Jeannette DeJesús, special advisor to the governor on health care reform and deputy commissioner of Connecticut’s Dept. of Public Health. “We need to make sure that we’re not just providing insurance but that we have an adequate provider work force available to address people’s health needs…[and] that we’re taking advantage of opportunities to make the delivery of care more efficient,” she says. “In the midst of the huge task of setting up the exchange, it is easy to lose sight of the public health and prevention component of health reform, but we won’t succeed at our core goals without an integrated approach.”

Formation of the Health Care Cost Institute (HCCI)

2011-09-20T13:42:00.000-07:00

Trying to gain an understanding of why HC costs have increased so much has been hampered by lack of access to claims data for the general population. But today Aetna, United Health Care, Kaiser and Humana announced that they will share their claims data with the HCCI to help better understand the factors behind HC cost increases. To say this is great news is an understatement! Here is a link to HCCI's website:

http://healthcostinstitute.org/

Cigna Starts to Get Serious in Individual Market

2011-09-20T09:22:00.000-07:00

Cigna begins a $25M ad campaign that focuses on the individual market. With the impending changes coming because of the ACA (no more health screening and premium subsidies) major growth (26M!) is expected in the coming years. According to this article Cigna is not alone in this interest:

http://www.washingtonpost.com/blogs/ezra-klein/post/the-insurance-industry-gets-bullish-on-health-care-reform/2011/09/19/gIQA0HNJgK_blog.html

Will Employers Drop Coverage in 2014?

2011-09-20T07:53:00.000-07:00

Good review of this issue by CF. Focus though is on large employers not small ones. Major points to ponder include:

Early adopters' experiences. Whenever a new survey on the subject comes out Fronstin tends to look at the small numbers first. "There's never a zero," he says, meaning that no survey thus far has found that zero percent of employers are considering dropping coverage. That, he says, is significant. "Employers that actually do drop coverage will be watched carefully and they'll talk to other employers. If they save money, don't lose or alienate employees, and otherwise have a seamless transition, others will certainly follow." At least three different surveys conducted since June 2010 have found that if some employers drop coverage, a great many more will at least consider following suit.⁵
Cost. There is no simple or standard way to calculate the cost to employers of dropping coverage and encouraging employees to seek it on their own through the exchanges, but the bottom line will certainly weigh heavily on many employers. At first glance, dropping coverage might seem like a reasonable cost-cutting strategy. After all, the penalty for not providing coverage is only $2,000 per employee and the average cost of providing coverage is almost $10,000. That $8,000 differential is quickly eaten up, however, by the costs associated with increasing the salaries of employees (especially those not eligible for premium subsidies) so they could afford to purchase coverage on their own. The higher salaries alone would tip the balance in favor of maintaining coverage for some employers; on top of that, employers that drop coverage would also face higher Federal Insurance Contributions Act (FICA) taxes, which fund Social Security and Medicare.
Recruitment and retention. The state of the economy in 2014 will be a major factor in how health benefits might affect recruitment and retention of key employees, says Fronstin. Even at the present 9 percent unemployment rate, there's still tough competition for talented workers, and workers consistently rank health benefits as the most important employer-based benefit.⁶ "No employer will want to be the outlier that doesn't offer good benefits, unless the economy takes a turn for the worse," he says. If the economy slows down and unemployment ticks up significantly, though, all bets are off.
Concerns about productivity. Also on employers' list of factors to consider is whether moving employees to the exchanges will have an adverse impact on productivity. Large employers have embraced the idea that healthier workers are more productive workers and many will be loathe to cede responsibility for keeping workers healthy to an untested, government-run exchange. "Quality-conscious employers would need to feel comfortable that exchanges have the same focus on wellness that they do before they could really feel comfortable moving employees to the exchanges," said Fronstin.
Viability of the exchanges. Many key aspects of the exchanges remain unknown at this point. How much will they cost? Will adverse selection make them unstable? Will enrollees be satisfied with the plans? Employers will look at these and other factors to determine their comfort level with a given exchange. But because states are being given a high degree of flexibility in terms of designing and managing their exchanges, employer reaction can be expected to vary considerably from state to state.

http://www.commonwealthfund.org/Newsletters/Purchasing-High-Performance/2011/September-19-2011/Perspectives-on-Policy/Will-Employers-Drop-Health-Coverage-in-2014.aspx

Health Affairs Article on Reducing Health Care Costs

2011-09-12T12:07:00.000-07:00

I thought this was of note (bold is mine):

Drivers of Health Care Costs
One of many factors driving up health care spending is the increase in cost per case:

Charles Roehrig, director of the Center for Sustainable Health Spending at the Altarum Institute and David Rousseau of the Kaiser Family Foundation, conclude that growth in cost per case explains far more of the rise in U.S. health spending than does higher disease prevalence. Roehrig and Rousseau examined the number of people with a given disease--treated or not--and cost per case across medical conditions between 1996 and 2006. They found that during this time, three-fourths of the increase in real per capita health spending was attributable to growth in cost per case, while treated prevalence contributed to one-fourth of spending growth. As a result, they suggest that efforts to reduce future growth in disease prevalence--such as through disease prevention--will not be sufficient to hold down spending growth. This analysis suggests that reducing the growth in how much is spent per case will be essential if we are to tame overall health care spending.

ACOs In MA; Cutting into Hospital Profits?

2011-09-12T08:21:00.000-07:00

ACOs are supposed to improve patient care while reducing the amount of unnecessary care. There are estimates than one-third of health care in the U.S. is unnecessary ($800B). But one person's unnecessary care is another person's profit. This report from Health Affairs show what is happening in MA, focusing in on the Blues Plan's effort to work w/physician groups to contain cost.

http://docs.google.com/a/rta-inc.com/viewer?a=v&pid=explorer&chrome=true&srcid=1UpQbBuqGtjK7_xszq31cRkTXeQBEe5M_oq54RHKYA4o3tvCrEMQ8A-3yb6tv&hl=en

Towers Perrin Survey: Mid Sized Employers Debate Offering HI Coverage Come 2014

2011-08-31T13:38:00.000-07:00

This is a good summary of a recent TP survey:

http://www.healthleadersmedia.com/page-1/HEP-270273/Midsized-Businesses-Grapple-with-Healthcare-Coverage-Options

ACOs Are Alive and Well in the Private Sector

2011-08-31T13:12:00.000-07:00

HHS's regs for Medicarew ACOs have been roundly criticized and many major players say they have no intention of participating. But the concept of the ACO is alive and well among health insurers and providers looking to improving quality; reducing care and improving health:

http://www.healthleadersmedia.com/page-1/HEP-270395/Commercial-ACOs-May-Find-Footing-Where-CMS-Slips

Wellmark BC Unsure of Participation in HI Exchange

2011-08-31T08:18:00.000-07:00

CEO is concerned about losing money but the details for the exchange have not even been worked out yet according to the Insurance Commissioner so perhaps this speculation is premature:

http://www.desmoinesregister.com/article/20110831/NEWS/308310048/Wellmark-undecided-on-insurance-exchange?odyssey=tab|topnews|text|Frontpage

GAO Report; MLR Regs Cut Broker Commissions

2011-08-30T09:10:00.001-07:00

According to the report it will also reduce the number of options available:

http://www.gao.gov/new.items/d11711.pdf

Good Review of Just Post HI Regs by HHS

2011-08-15T12:38:00.000-07:00

Jost from Health Affairs does a good job here:

http://healthaffairs.org/blog/2011/08/13/implementing-health-reform-premium-tax-credits/

HHS Releases Additional HI Exchange Regs

2011-08-15T07:46:00.000-07:00

These focus on seamless enrollment and application of tax credits:

http://www.commonwealthfund.org/Newsletters/Washington-Health-Policy-in-Review/2011/Aug/August-15-2011/Exchange-Construction.aspx

HHS Awards More Funding for HI Exchanges

2011-08-15T07:36:00.000-07:00

HHS gave out $185M in grants to 13 states on Friday. Alas my state of PA was not among them:

http://www.commonwealthfund.org/Newsletters/Washington-Health-Policy-in-Review/2011/Aug/August-15-2011/HHS-Awards-13-States-Grants-to-Build-Exchanges.aspx

Seniors Overuse Healthcare Because of Medigap Coverage

2011-08-15T07:25:00.000-07:00

Senators Coburn and Lieberman think seniors need "more skin in the game" even if they are low income:

http://www.ctmirror.org/story/13574/medigap

How to Cut Medicare's Cost

2011-08-14T09:19:00.000-07:00

Some great suggestions here from the Incidental Economist:

Competitive bidding, also known as competitive pricing. This idea really puts the market to work to buy Medicare benefits for the lowest possible price on a market-by-market basis. Participants can be public and private entities. It piggybacks on the exiting, hybrid structure of Medicare (FFS Medicare + Medicare Advantage) and makes all participating plans compete directly in a way they never have. Scholars have estimated the savings to be 8% of Medicare spending. I’ve written a lot about this elsewhere. Perhaps this post is the best place to start.
Competitive bidding can be put to work for durable medical equipment too. See the work of Peter Crampton.
Part D formulary design and drug pricing. Did you know the VA buys drugs for 40% less than Medicare? True! That alone suggests Medicare could spend a lot less on drugs. There are many possible Part D reforms that would lower program spending. Kevin Outterson wrote about some. For more about what it would take and mean to make Medicare’s drug benefit more like the VA’s see my post, which links to my paper with Steve Pizer and Roger Feldman.
Reference pricing. This idea came to me via David Leonhardt and Peter Orszag (smart guys, by the way; you should talk to them). The basic idea is that Medicare should only spend an amount on therapy for a condition equal to the lowest cost, effective one (that’s the “reference price”). If individuals want more costly therapies that are no more effective, they should pay the difference out of pocket. There’s more to this. See this prior post and related links therein.
There are lots of things Medicare shouldn’t even be paying for at all because they don’t work. See Rita Redberg’s NY Times op-ed on this.
Support comparative effectiveness research so we can learn more about which therapies are most effective. There is too much we don’t know and it is costing us.
Let ACOs be tested. We don’t know if they’ll work, but they’re worth a try.
Support the IPAB. Isn’t it obvious by now that Congress itself can’t control Medicare costs?
Consider all-payer rate setting. More on that here. Perhaps this post is a good starting point.

Excellent Post on Medicare's Cost Pressures

2011-08-14T08:16:00.000-07:00

This is really worth reading. Major point is that the Medicare payroll tax covers only 33% of the program's costs.

http://www.dailykos.com/story/2011/08/14/1005951/-Medicare:-Why-is-it-on-the-table?via=blog_1

Health Insurance Exchanges and Adverse Risk Selection

2011-08-12T05:20:00.000-07:00

If employers drop coverage and their high risk employees then seek coverage through their state's HI exchange, adverse selection could be a problem:

http://aishealth.com/archive/nhex0811-02

Kansas Joins Oklahoma and Returns Exchange Money to HHS

2011-08-12T04:57:00.001-07:00

First OK returned over $54M and now KS returns $31,5M to HHS. This makes little sense to me:
http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20110810/NEWS03/110819992/1233

Humana ACO Shows Initial Cost Savings

2011-08-12T04:56:00.001-07:00

So far so good:

http://www.healthleadersmedia.com/content/LED-269502/Norton-Humana-Commercial-ACO-Notches-Cost-Savings.html

Good Thoughts on How We Reimburse Docs Needs to Change

2011-08-05T05:17:00.000-07:00

This is a good review on the disparity in Medicare reimbursement between primary docs and specialists:

http://healthpolicyandmarket.blogspot.com/2011/08/rethinking-value-of-medical-services.html

Sterling Offers New Self-Funding Package

2011-08-05T04:55:00.000-07:00

The interesting feature of this package are the rebates the PBM will share w/employers to fund its health incentives program:

http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20110804/NEWS05/110809947/1250

Employees Need Benefit Decision Help

2011-08-04T13:38:00.000-07:00

This is just incredible to me. 96% of HR professional recently surveyed said employees need guidance in making benefit decisions. Not surprising. But only 23% of these same professional said that their companies were doing a good job in providing this guidance. Are you kidding me? Isn't this one of their responsibilities?

http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20110804/NEWS05/110809946/1234

Questions and Answers on HI Exchange Regultions

2011-07-31T04:19:00.001-07:00

From the 7/18/11 issue of Health Plan Weekly:

HHS on July 11 released its proposed regulations for the development and operation of insurance exchanges (see story, p. 1). HHS has made it clear that it wants stakeholders to weigh in on the proposals by providing a 75-day comment period. Industry observers interviewed by HPW say HHS might be flooded with comments given the number of unresolved issues and questions that haven’t been fully answered.

Here’s a look at questions, answers…and more questions based on the proposed regs, and how they could impact health insurers, brokers and the states:

(1) Which insurers will participate? While some states might opt to allow all qualified health plans (QHPs) to participate, the reg also suggests that exchanges could undertake a competitive bidding or selective contracting process, which would limit participation similar to a state contract with Medicaid managed care companies. “The reference to Medicaid managed care was a bit surprising because that signals that there could be a degree of competitive bidding with a potentially limited number of winners,” says Caroline Pearson, senior manager at the Washington, D.C., advisory services company Avalere Health. “Medicaid managed care frequently results in only one or two plans being available in a market. I think [states] will have to question the feasibility of having just one plan in the market.” She adds that while Massachusetts has been “fairly aggressive” in its criteria for participation in its Connector exchanges, Vermont might be the state most likely to limit participation as it moves toward a single-payer system. Deborah Chollet, a senior fellow at Mathematica Policy Research, says it’s unlikely that an exchange will exclude qualified carriers, at least initially.

(2) How much influence will health insurers have? Advocacy groups lobbied against allowing health insurers to participate on governing boards. While HHS would allow health plan representatives to participate, they would not be allowed to have a voting majority on governance boards. Instead, the majority would need to come from consumer representatives. Health plans, brokers and other related professions will likely be counted together. Most states that have made some governance decisions already have included one or two health plan representatives. But six states already have explicitly prohibited health plan representation. “I think insurers will have a voice on most governance boards, but I don’t think they will be driving the decision making,” says Pearson. Still, consumer groups likely will push HHS to curb health insurer influence even more, says Manny Munson-Regala, vice president of strategy and partnerships at Ceridian Corp., a technology firm that provides back-office services for exchanges. Some exchanges, he adds, might opt to use insurance company representatives only as advisors and restrict them from any policy decisions. Prior to joining Ceridian this year, Munson Regala was deputy commissioner of the Minnesota Department of Commerce’s Market Assurance Division.

(3) Will brokers have a role? The reform law allows agents or brokers to help individuals and employers enroll in coverage offered through an exchange. But brokers aren’t likely to operate as “Navigators,” who would perform a similar function but are not able to accept payment from a health plan. While states have the ability to exclude brokers from an exchange, it’s unlikely that will happen, particularly during the first few years. “Drawing from the experience in Massachusetts, we expect that agents and brokers will have more of an ongoing role in the SHOP [i.e., Small Business Health Options Program] exchanges than in the individual exchanges. SHOP exchanges are more administratively complex [for employers] who are buying for a group,” Pearson explains. The proposed regulation “seems to assume that agents and brokers will be a part of the process,” adds Munson-Regala. “Any smart exchange will have a big red button at the bottom of the website that says ‘still confused? Press here to be connected to a broker.’” The exchange also could provide brokers with an opportunity to talk with consumers about other products such as long-term care or life insurance, he adds.

(4) What will the federal exchange look like? The reform law requires the federal government to operate an exchange for any state that is not able to build its own by the deadline. But it’s unclear exactly what a federal exchange will look like, who will pay for it and whether it will need to be financially self-sufficient, as required of state-operated exchanges. “Until you know how the feds will create and run an exchange, there’s no way for states to know how they can take control back,” says Cindy Gillespie, a managing director at McKenna Long & Aldridge, where she leads the law firm’s health insurance exchange group.

(5) Who will collect premiums? It’s still unclear who will collect premiums from those who purchase coverage through an exchange particularly in the individual market. Requiring the state to do this is a big overhead cost, but insurers might not be set up to do it either, says Gillespie, who notes that some Medicaid managed care plans have no experience collecting premiums from individuals. More importantly, HHS hasn’t laid out how subsidies and tax credits will flow through the exchanges, she adds.

(6) How much of a role will HHS have? Some states have expressed a preference for a “flexible state partnership model” that would combine state and federal business functions. The reg suggests that functions such as eligibility and enrollment could be shared. A federally run exchange also might operate a web portal that could be used by multiple states. Munson-Regala suggests that some states might operate the SHOP exchange on their own, but look for federal assistance on the individual exchange, which will be complicated by the individual mandate and subsidies.

(7) How will adverse selection be addressed? While the proposed regulation didn’t discuss products offered outside of the exchanges, it did suggest fixed annual enrollment periods, which could help prevent people from enrolling in coverage only when they need care. It also outlines several special enrollment periods that could be made available if, for example, a participant wants to move to a different coverage tier after a change in income status. “There is a need to limit adverse selection, but there also needs to be freedom for consumers to change plans based on their circumstances,” says Pearson.

More Thoughts on the Future of Employee Sponsored Insurance

2011-07-28T03:09:00.000-07:00

While I do not see a wholesale move away from ESI due to the ACA in the large group market, the economic advantages make it almost impossible for small employers not to drop their coverage, offer a defined contribution through an HRA and have their employees shop its state's health insurance exchange for coverage. This move would save them both money and headaches.

We are going to see the ongoing move to defined contribution and many other changes like HSA etc but the workplace will continue to be a major source of access to coverage even if payment mechanisms and coverage options like Exchanges are now part of the mix. Good overview below:
http://www.huffingtonpost.com/wendell-potter/got-health-insurance-thro_b_878050.html

As for the McKinsey study, as I noted yesterday it has come under major criticism and was called out by the Senate Finance Committee.
http://tpmdc.talkingpointsmemo.com/2011/06/max-baucus-issues-public-call-to-mckinsey-to-come-clean-about-controversial-hcr-survey.php

Also IFEBP's study didn't support their conclusions:
http://www.plansponsor.com/Despite_Anticipated_Costs_Most_Employers_to_Keep_Health_Care_Benefits.aspx

Nor did the Urban Institute study (1/2011) co authored by the head of McKinsey's healthcare practice.
http://www.urban.org/uploadedpdf/412295-Employer-Sponsored-Insurance.pdf

Also the MA experience is indeed relevant as it is the only one to compare to other than UT which also has declined a point or 2 since their limited exchange went into effect. Here is a total review of MA by the BCBS of MA that is quite interesting:
https://c.na7.content.force.com/servlet/servlet.FileDownload?file=015A0000001ZOSL

With nearly 3 years until ACA becomes fully implemented many things will evolve, and I do not believe a SCOTUS strike down will occur of the individual mandate.

The option of doing nothing or simply trying to leave it "to the market" is a non-starter because there is no real market or incentive for the insurers to change and become more consumer friendly and transparent.

It will be interesting to watch this all evolve esp. with the MLR limits and total transparency for health plan exec comp. and for rate increase requests, rebates etc. Aetna and BS of CA are already showing that the MLR's can reduce premiums.

As I have said many times before, health care insurance is a truly dynamic field with more and more changes and shifts to come.

Revisiting trhe McKinnsey Employer Survey

2011-07-26T10:08:00.000-07:00

McKinnsey has come under heavy criticism for its survey results that said 30% of employers would drop coverage once the ACA was fully implemented in 2014. But my experience in health care insurance makes me think the number is not that far off. Here is another take on the survey that I agree with:

However, based on what I’ve learned in my not-entirely-random walk through the health insurance market, McKinsey’s findings accurately reflect current employer thinking. The ACA’s incentives to move toward a consumer market and away from employer-provided health insurance could prove to be far stronger than its drafters intended. I was surprised that only 37 percent of employers under fifty employees “probably or definitely” intended to drop coverage, since there are no penalties for doing so and the subsidies for their workers to get Exchange-based coverage are so compelling. If anything, McKinsey’s survey understates the likely employer abandonment of the small group market.

According to Urban Institute’s Eugene Steuerle, a family of four with cash income of $30,000 a year is almost $14,000 to the good by going through the Exchange and picking up the premium subsidies rather than getting coverage from their employer. Even at $42,000 in family income, the Exchange advantage is close to $7000 a year. On this point, my employee benefit friends are virtually unanimous: except for high wage employers like law firms or consultants, it doesn’t make sense, for small employers or their workers, for small employers to continue offering coverage given these incentives.

How large employers will respond is a conundrum. The angry reaction to the McKinsey study was clearly intended to tamp down a stampede for the exits (as well as to deter further studies which reached a similar conclusion). There is no consensus among the employee benefits community about what large employers should do. Some analysts rightly point to corporate inertia, the “malign paternalism” of corporate human resources managers, and collective bargaining agreements as supporting continued provision of employer sponsored health benefits. There is also the “what is my competitor doing?” factor. McKinsey’s study findings probably significantly overstate, (in the mid 20 percent range) the number of large employers that will ultimately drop coverage. Far more likely is a shift to some type of defined contribution model.

From Health Affairs blog

Health Insurers' Concerns About Exchange Participation

2011-07-21T11:46:00.000-07:00

From Price Waterhouse Coopers:

Insurers’ Concerns About Participating in a Health Insurance Exchange (HIX)

Adverse selection (46%)
Ability to integrate technology with the exchange (40%)
Ability to charge enough to make a profit (37%)
Effectiveness of the risk adjustment process (36%)
Administrative costs of our business will rise disproportionately to the profits gained (36%)
Managing the movement of consumers between Medicaid and the exchanges (35%)
Ability to customize plans (33%)
Understanding the behavior and buying preferences of newly eligible consumers (25%)

Notes: Respondents were able to select up to three answers
Source: PwC Health Research Institute Health Insurer Survey, 2011
Source URL: http://www.pwc.com/us/HIX

Regs Posted on CO-OPs

2011-07-20T11:05:00.000-07:00

HHS released regs on an alternative to health insurers--CO-OPs. According to the regs these entities must:

Be non-profit,
Use an integrated care model,
Be member-run, and
Be approved by the state insurance department

I think some ACOs are natural candies for this alternative since they will already have an integrated care model in place. HHS wants at least on CO-OP in every state and will make over $3,5B in loans available.

States Are Behind in HI Exchange Development

2011-06-27T08:14:00.000-07:00

This is not surprising:

http://www.kaiserhealthnews.org/Stories/2011/June/24/Leavitt-Says-States-Not-On-Track-On-Exchanges-Deadline.aspx

At the same time Leavitt is now a consultant helping states form exchanges so his "concern" should be taken with a grain of salt.

MA AG Report: Global Payments NOT Saving Money

2011-06-23T05:45:00.000-07:00

1 yr. into the new payment plan finds that doc costs are still up 10% vs. 1.9% for docs not participating in global payments. I really can't believe the 1.9% figure:

http://www.boston.com/lifestyle/health/articles/2011/06/23/mass_finds_new_payment_system_not_cutting_health_care_costs/?p1=Well_MostPop_Emailed2

Health Insurance Exchanges Just Too Complicated

2011-06-16T08:18:00.000-07:00

This article reviews all the issues involved in setting up an HI exchange:

http://www.kaiserhealthnews.org/Columns/2011/June/061511howardparente.aspx

BS of CA 2% Profit Cap: " A Good PR Gimmick"

2011-06-15T11:40:00.000-07:00

BS of CA has garnered a great deal of good press for its voluntary move to limit profitd to 2% of revenue. But is this positive publicity deserved? Not according to this interview:

http://www.healthleadersmedia.com/page-1/HEP-267432/Behind-BSCAs-2-Solution##

Costs in MA Continue to Outpace the Nation

2011-06-15T06:44:00.000-07:00

Providers continue to drive costs in our country's health care laboratory:

http://commonhealth.wbur.org/2011/06/state-health-spending-outpaces-nation/

Messing w/Medicare and Medicaid

2011-06-10T10:25:00.000-07:00

As this article points out, more than just the recipients of the two programs are involved:

http://www.kff.org/pullingittogether/medicaid_medicare_multiplier.cfm

Oregon Ready to Establish HI Exchange

2011-06-10T10:21:00.000-07:00

I looks like OR is moving forward. The more a state stalls, the more under the gun it will be.

Oregon's legislature this week passed bipartisan exchange legislation and the governor is expected to sign it. "I look forward to signing this key piece of our health care improvement agenda," Gov. John Kitzhaber, a Democrat, said in a statement. The Oregonian newspaper reported that the bill gained a large majority in the state's House despite opposition from the left and the right. Conservatives in the tea party movement viewed any action on the health care law implementation as an endorsement of the overhaul, while unions protested that the setup of the exchange gives too much clout to the insurance industry. The exchange won't have the power to extract lower rates from insurance plans.

Care Management: We Have a Long Way to Go

2011-06-09T07:46:00.000-07:00

PCPs just are not yet set up to handle this new role:

http://blog.healthintegrated.com/index.php/2011/06/09/care-management-a-patients-view/?utm_content=0000-00-00%2000%3A00%3A00&utm_source=VerticalResponse&utm_medium=Email&utm_term=&utm_campaign=Care%20Management%20%E2%80%93%20A%20Patient%E2%80%99s%20Viewcontent

ACO Regs Not Attracting Many Takers

2011-06-09T07:25:00.000-07:00

Why? The financial incentives are just not there:

http://www.kaiserhealthnews.org/Columns/2011/June/060311cannon.aspx?utm_source=khn&utm_medium=internal&utm_campaign=viewed

BS of CA Agrees to Cap Profits

2011-06-09T07:21:00.001-07:00

This is a major advantage of being a non-profit vs. a publicly traded company:
http://www.kaiserhealthnews.org/Stories/2011/June/09/blue-shield-california-profit-cap.aspx

Broler Commissions Issue Find Friends in Congress

2011-06-07T07:45:00.000-07:00

Proposed federal legislation removes commissions from admin costs. So where would they go?

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/Jun/June-6-2011/Brokers-Push-for-Review-of-Broker-Rule.aspx

Update on State Health Insurance Exchange Activity

2011-06-06T07:15:00.000-07:00

Surprisingly Alabama is moving forward while my home state of PA sits on its hands:

http://www.washingtonpost.com/politics/health-care/states-slow-to-adopt-health-care-transition/2011/06/03/AGbZbjJH_story.html

Agents Do Not Want Commissions to be part of MLR Calculations

2011-06-04T07:18:00.001-07:00

So they want it to be part of admin expenses?

http://www.kaiserhealthnews.org/Columns/2011/May/052611Besesparis.aspx

Agents Still Not Liking MLR Requirements

2011-06-03T07:47:00.000-07:00

From Capitol Hill testimony:

The cost and quality of healthcare will get worse because of healthcare reform rules that let the federal government review rates and set limits on how insurance companies spend their money, small businesses and insurance agents said Thursday.

Employers and agents are particularly concerned about rules that say insurers can only put 20 percent of their revenues toward profit and administrative expenses. Agents and brokers want their commissions to be carved out of the definition of administrative costs. Without that change, they fear insurers will squeeze broker commissions in order to free up money for other uses.

Agents and brokers are facing a “desperate economic situation” because of the requirements, said Janet Trautwein, chief executive of the National Association of Health Underwriters. She testified Thursday before the House Energy and Commerce Health Subcommittee.

Witnesses said the restrictions on spending — known as the medical loss ratio — will ultimately raise costs and reduce options for consumers. The MLR represents a “significant move toward government micromanagement of health insurance,” University of Pennsylvania professor Scott Harrington said.

ACA's Impact in Oregon

2011-06-02T10:13:00.000-07:00

This is a good summary of what two major players in OR's health care market see where things are going in the next few years:

http://www.thelundreport.org/resource/health_reform_should_drive_down_insurance_rate_increases

Commonwealth Fund Report on CA HI Exchange

2011-06-02T08:25:00.000-07:00

This is a good review of what CA has been up to:

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/May/1507_Weinberg_california_hlt_benefit_exchange_ib.pdf

Wake Up Call to Hospitals: Medicaid No Long to Pay for Never Events

2011-06-02T07:47:00.000-07:00

Given Medicaid's budget problems this new policy makes total sense:

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/WHCC2011.aspx

Employee Incentives Gaining Popularity

2011-06-02T07:23:00.000-07:00

Employee incentives for healthier behaviors and high performing networks are becoming more popular:

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/WHCC2011.aspx

State Health Insurance Exchange Updates

2011-05-31T14:34:00.000-07:00

Things are moving forward in Washington, Rhode Island and surprisingly Indiana:

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/May/May-31-2011/Indiana-Washington-Rhode-Island-Lead-on-Exchanges.aspx

Trade Groups React to Proposed ACO Regs

2011-05-31T12:28:00.000-07:00

The accountable care organizations (ACO) rule published March 31 has drawn comments from key industry groups:

The Academy Advisors: Tuesday, its 17 health system CEOs sent a letter to the Centers for Medicare & Medicaid Services (CMS) Administrator Don Berwick recommending five changes to the rule to simplify and lower the costs of participation in the ACA Section 3022 Shared Savings Program.
College of Healthcare Information Management Executives (CHIME): in its May 10 letter, CHIME urged CMS to disallow Medicare enrollee opt-out for sharing of their data because it would undermine efforts to coordinate care for seniors. In the current rule, an ACO is required to provide a form to enrollees allowing them to opt out.
American Medical Association (AMA): in its letter to CMS May 26, the primary concerns are the methodology for determining the Primary Service Area (PSA) and enforcement of the anti-trust oversight provisions. It encouraged increasing the safety zone threshold from 30 to 40 percent. It also seeks clarification of financial integration issues involving physicians and hospitals, and assurance that physicians are not at a disadvantage in forming ACOs in communities where hospitals are consolidating physicians: “Physicians should not have to become employed by a hospital or sell their practice to a hospital in order to participate in ACOs or other innovative delivery models.”
America’s Health Insurance Plans (AHIP): in its letter, AHIP requested the safety zone be decreased from 30 to 20 percent so as to preclude provider consolidation and anti-competitive behaviors. And in its letter, it requested that regulations be created that preclude an ACO from cost shifting operating costs for the ACO to commercial plans.

But reactions to the Pioneer ACO are more positive to date: announced May 16, Pioneer ACOs allow prospective assignment of Medicare enrollees to the ACO, partial capitation and bigger shared savings bonuses than the two-sided ACO model, and do not carry a downside risk associated with cost benchmarks. Provider organizations with more experience in risk-based contracting might be attracted to the Pioneer ACO model which has a minimum savings rate of one percent (vs. 2 to 3.9 percent for ACOs) and upside of between 50 and 75 percent of savings (vs. 50 to 60 percent for ACOs).

Selling Insurance Across State Lines: Excerpts from a Congressional Hearing

2011-05-31T12:26:00.001-07:00

Wednesday, the House Energy and Commerce Subcommittee on Health held a hearing on the Health Care Choice Act of 2011 (H.R. 371), which would allow the purchase of health insurance across state lines. The hearing featured testimony from Steve Larsen, Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS and from health financing experts, the American Cancer Society and the American Legislative Exchange Council (ALEC). A summary of the arguments is below.

Proponents
“States have imposed over 2,100 benefit mandates on health coverage. Estimates show that these requirements increase premiums anywhere from 10 to 50 percent.” – Representative Fred Upton (R-MI)

“The best scenario to reduce the uninsured, numerically, is competition among all 50 states where one or more states emerge as dominant players. This scenario would yield a reduction in the uninsured by 8.1 million people.” – Steve Parente, Ph.D., health financing expert, University of Minnesota, who recently completed a peer-reviewed study on purchasing insurance across state lines that will be published in the Journal of Risk and Insurance

Opponents
“Selling insurance across State lines has long been proposed as an option to increase competition and choices in health insurance, but there are serious pitfalls with this approach when it is not coupled with adequate consumer protections. The Affordable Care Act allows health care to be sold across State lines when both States agree and consumer protections are maintained. Without the consumer protections included in the Affordable Care Act, we run the risk of creating an environment where there is a `race to the bottom’ in which insurers have an incentive to sell plans from the State with fewest consumer protections.” – Steve Larsen, Director of CCIIO

“It allows them [insurers] to choose to operate under the laws of states with weaker consumer protection and risk-pooling standards. By doing so, plans will be allowed to cherry-pick the best risk, leaving older, sicker individuals isolated in pools without healthier individuals to offset their medical costs. The result will be insurance markets in disarray, without any real pooling of risk.” – Representative Frank Pallone, (D-NJ)

High Deductible Plans Gain in Popularity But:

2011-05-31T08:31:00.000-07:00

http://www.usatoday.com/news/washington/2011-05-30-health-care-deductibles-hospital-bills-doctors_n.htm

Early Implementor States Running Behind

2011-05-31T08:28:00.000-07:00

The Early Innovator grants, awarded in February, total $241 million, and are meant to support states for the next two years as they develop "exchange IT models that can be adopted and tailored by other states." Many of the seven states awarded Early Innovator grants, while still meeting HHS benchmarks, are struggling to move forward on other key aspects of implementation, especially passing legislation to set up the new online marketplaces for insurance .

Pat Boone to the Rescue of the Ryan Medicare Plan

2011-05-31T08:25:00.000-07:00

This is unbelievable:
http://www.kaiserhealthnews.org/Stories/2011/May/27/pat-boone-medicare-factcheck.aspx

Will Providers Be Able to Say No to Patients?

2011-05-24T08:06:00.000-07:00

Many of the impending reforms in health care will involve docs and hospitals steering members towards more effective and efficient treatment. How will this be received by patients? It depends on ell it is communicated:

http://www.healthleadersmedia.com/page-1/MAG-266122/Telling-the-Patient-No

HHS Grant More States Money to Set Up HI Exchanges

2011-05-24T07:56:00.000-07:00

Indiana and Washington were among three states the federal government rewarded with money Monday for being in the forefront of setting up health insurance exchanges. This, even though both are among 26 states trying to kill the law in court. The Department of Health and Human Services on Monday announced a significant step forward in the development of the exchanges -- grant awards totaling nearly $35 million to Indiana, Washington and Rhode Island, which is not challenging the health law. Indiana will receive $6.8 million, Rhode Island $5.2 million and Washington $22.9 million.

States and Medicaid Budgets

2011-05-24T07:52:00.000-07:00

Is the request for more flexibility just a cover to reduce Medicaidlls when the program is most needed?

http://www.kaiserhealthnews.org/Stories/2011/May/24/medicaid-maintenance-of-effort-republicans.aspx

Health Insurance Premium Review Rule Published

2011-05-23T08:41:00.000-07:00

On May 19th, HHS published a final rule regarding the disclosure and review of “unreasonable premium increases” required by Section 2794 of the Public Health Service Act, added by ACA Section 1003. The rule stipulates:

Beginning September 1, 2011, insurers seeking rate increases of ten percent or more for non-grandfathered plans in the individual and small group markets will be required to publicly disclose and justify the proposed increases.
Beginning September 1, 2012, a state-specific threshold will be set for disclosure of rate increases. HHS will work with states to develop the thresholds using state-specific cost data and trends.
States with effective rate review systems will analyze proposed increases to determine if they are reasonable. HHS will conduct the reviews for states that lack the resources or authority to do thorough actuarial reviews. HHS expects the majority of states to be able to conduct reviews.
HHS will publish consumer-friendly forms that insurers must use to propose rate increases and to inform consumers about the proposed rate increases.
Information on the outcome of all reviews, including the justification provided by insurers for rate increases determined to be unreasonable, will be posted on the HHS website. Health plans will also have to justify increases on their own websites.

The Role of Producers vs. Navigators

2011-05-23T08:16:00.000-07:00

The NAIC has said that agents/producers will have a strong role in the success of a state's health insurance exchange. But what about the navigators who will act independently and not receive any compensation form health insurers? Should they also be licensed?

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/May/May-23-2011/State-Legislators-Tussle.aspx

States Having Difficulty Creating Exchanges

2011-05-23T08:12:00.000-07:00

Given the politics arising in each of the 50 states, I guess this is not surprising:

http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2011/May/May-23-2011/State-Legislators-Tussle.aspx

Basic Health Program: Another Option for Low Income State Residents

2011-05-18T12:47:00.001-07:00

Much of the focus has been on states establishing health insurance exchanges to comply with the ACA requirements by January of 2014. But an alternative to the HIEs for lower income residents is the basic health program. Here are some details:

http://www.healthleadersmedia.com/page-3/HEP-266339/5-Ways-Basic-Health-Programs-Benefit-States

New ACO Alternatives Announced

2011-05-18T07:33:00.000-07:00

Given all the criticisms about the proposed ACO regs (see previous posts) this announcement by CMS head Berwick is not surprising:

http://www.kaiserhealthnews.org/Stories/2011/May/17/ACO-initiatives.aspx

MN Health Exchange Legislation in Limbo

2011-05-17T08:14:00.000-07:00

Minnesota leads the country in health and innovative health practices. So it is surprising that legislation to create a health exchange as mandated by the ACA is in limbo. Reps in the state legislature think that the creation of such an exchange is the "first step to gov't healthcare" though there is no requirement to offer a public option. Here is a good review of the issue:

http://www.kaiserhealthnews.org/Stories/2011/May/17/minnesota-health-exchange.aspx

Docs Don't Like ACO Concept

2011-05-16T11:42:00.000-07:00

According the the AMGA, their members will not be lining up to participate in an ACO:

The American Medical Group Association (AMGA) notified CMS that 93 percent of its members would not participate in the ACO demonstration project. Separately, on Thursday, ten of the nation's biggest multispecialty groups notified CMS administrator Don Berwick they will not take part in the ACO program. Concerns noted by both groups:

Financial risk: downside risk for shared savings compounded by high investment costs required for ACO start-up and operation
Severity adjustment for complex patients: limits on accounting for beneficiary acuity level dilutive to savings and potentially compromising proper patient management
Excessive quality measurement requirements: too many quality measures in the first year (65 measures in five domains)
Patient attribution: retrospective attribution will limit efforts to reduce costs
Patient opt-out: an impractical opt-out system for Medicare beneficiaries

The same groups participated in the Physician Group Demonstration Project (circa 2005), considered the predecessor to the ACO. Only two were able to attain better than a two percent savings in the first year, and two were able to achieve the threshold after three years. Per CMS, the minimum savings threshold ranges from 3.9 percent for an ACO managing 5,000 Medicare fee-for-service (FFS) enrollees to two percent for an ACO with 60,000 enrollees.

How Much will ACO Creation Cost?

2011-05-16T11:40:00.000-07:00

It seems that CMS and the AHA have quite disparate numbers:

The American Hospital Association (AHA) released an estimate of costs for establishing an accountable care organization (ACO) per Section of 3022 of the Affordable Care Act (ACA). In its 429-page guidance issued April 30, Centers for Medicare and Medicaid Services (CMS) estimated start-up costs and one-year operating costs at $1.755 million. The AHA analysis said costs would range between $11.6 million and $26.1 million.

Top Challenges of ACO Creation

2011-05-16T11:21:00.000-07:00

Number One is finding the cost closely followed by staff buy-in:

http://hin.com/chartoftheweek/ACO_creation_challenges.html

How VT Will Finance its Single Payer System

2011-05-13T13:15:00.000-07:00

From the just signed legislation:

The current model is a payroll tax, on both employers and employees, with exemptions for low-income workers. In fundamental design, this is similar to Social Security or Medicare. The tax rate numbers are not set in stone, but one estimate is 11% for employers and 3% for employees. If Vermont can pay for health care with just 14% of wages, that will be a remarkable bargain. The tax applies whether or not the employee accepts GMC. This is a “pay whether or not you play” tax – quite different from the “pay or play” laws in Maryland or SF. As a prominent Vermont employer said, no one wants to pay for health care twice, so this structure encourages the self-insured ERISA plans to voluntarily join GMC.

States Asking for Exemption

2011-05-13T12:00:00.000-07:00

Nine states fearing that insurers will leave their markets are asking for relief from the 80% MLR requirement for individual coverage. Consumer groups are not happy:

http://www.kaiserhealthnews.org/Stories/2011/May/10/medical-loss-ratio-rebates.aspx?utm_source=khn&utm_medium=internal&utm_campaign=viewed