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One Academic’s Take on Aetna Leaving The Exchanges

I know, I know. I haven’t written a blog post in forever. Life’s been tied up with writing grant proposals and sending manuscripts out for peer-review. You know, the things people actually pay me to do. But every once in a while, something pretty big happens in the world of healthcare, and I feel compelled to dust off my keyboard and draft a quick post. After all, what would a few dozen of you do without my thoughts on the matter?

The event in question is Aetna’s announcement that it will no longer be participating in 11 of the 15 state insurance exchanges it currently serves come next year. And Aetna’s not the only one–just the most recent. UnitedHealth and Humana have also announced plans to pull back substantially. In fact, right now Anthem is the only one of the four largest insurers in the country that hasn’t said it will be exiting the exchanges. From the insurers’ point of view, the logic is straightforward: They’re losing a lot of money on the exchanges–hundreds of millions of dollars each–even as they continue to make billions of dollars in profits overall as this Bloomberg article reports.

Why are they losing money? The short answer is that the people who are signing up for insurance coverage are sicker than expected, while healthier individuals have opted to forego coverage or have obtained it outside of the exchanges. In response, the insurers have raised the cost of their products, and that has further served to keep the sickest individuals enrolled, while healthier individuals seek other options or drop their coverage. It is what health economists call a “death spiral.”

Whoa. A death spiral?! Sounds serious. Yeah, it is. Potentially. While a recent editorial from The New York Times expressed confidence that Obamacare will be just fine, that’s only true if somebody does something to fix this. Otherwise, the price of insurance on the exchange will continue to climb until it reaches a point that it becomes unsustainable for the people purchasing it or the government subsidizing it, and the insurance market will collapse.

So how can we fix it? Well, first, that assumes you want to fix it. If you’re the GOP, you hope that this doom and gloom culminates in Trump winning the White House, and Republicans keeping control of Congress, leading to repeal of the ACA. However, if you’re more interested to practical solutions to problems, there are a few things that can be done. One is to increase the penalties for not having insurance, making that a much less palatable choice for healthy individuals to make. Similarly, the federal government can increase the size of exchange subsidies. Together, these two steps would probably go a long way in getting healthier individuals to sign up for an exchange-based insurance plan, which would even out the risk pool and steady the market. Alternatively, the government could provide some sort of stop-loss or reinsurance to insurers offering plans on the exchanges who encounter higher-than-expected utilization among their beneficiaries. Finally, there’s the notion of reintroducing the public option. Yeah, you remember, that thing that Joe Lieberman pretty much singlehandedly removed from the ACA? Proponents suggest that a public option plan would work by creating more competition in the exchanges, which could keep costs down and encourage healthier individuals to sign up. I’m not terribly optimistic here, because as much as I love the notion of the public option and competition, there is a very real sense in which the public option would have the ability to artificially lower prices, meaning insurers would still be hemorrhaging cash and would likely exit the exchanges anyway. Besides, I’m not at all convinced that the political will exists to enact the public option. That said, if we had a public option and insurers still wanted to exit the exchanges, we’d be much closer to the possibility of a single-payer system than we are today.

Of course, this may all be a bit overblown. Sure, Aetna and others are losing money on the exchanges, but they can afford to. They’re still making billions of dollars every year. And Jonathan Cohn and Jeffrey Young did some sleuthing to discover that Aetna’s withdrawal from the exchanges may have less to do with losing a few hundred million dollars, and more to do with trying to manipulate the federal government. In a letter to the Department of Justice, the CEO of Aetna essentially said “Approve our merger with Humana, or we’ll leave the exchanges.” The DOJ didn’t approve the merger, calling Aetna’s bluff, and Aetna proved it wasn’t bluffing. If that’s the case, it tells you an awful lot about the motives of private insurers in the United States. But sure, if it makes you feel better, go ahead and blame Obamacare. Meanwhile, I just hope our policymakers have enough common sense to take action when it is so clearly warranted.

 
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Posted by on August 19, 2016 in Uncategorized

 

Latest Health Wonk Review

Tinker Ready hosts the most recent Health Wonk Review. She keeps the non-edition edition alive with a roundup of excellent but diverse submissions from the last two weeks. Read it here.

 

Health Wonk Review: Pivoting Towards the General Edition

For a long time, it seemed like the lead story on the Today show was the weather. More recently, it has been politics, and this week, things got even more interesting (if that was possible). On Tuesday, Bernie Sanders pulled off a surprise victory over Hillary Clinton in Indiana extending the Democratic primary season a while longer (although Clinton’s camp is quick to point out she leads by about 3 million votes), while Donald Trump won Indiana by double digits and became the presumptive nominee as Ted Cruz and John Kasich both suspended their campaigns. In short, it’s looking more and more like the country faces a choice between Clinton and Trump as our next president. Now, all the talking heads are pontificating about what we can expect from both candidates as they pivot towards the general election, which is wonkspeak for making an appeal to more moderate voters than they courted during the primaries. As I looked over the submissions for this edition of the Health Wonk Review, I was struck by the tremendous amount of variety being presented. Sure, there was some focused attention on a couple of prominent developments, but overall, it felt like a miscellany of health policy writing. There is something in here for everyone. It appeals to the middle. A month ago, Jaan Sidorov gave us a politics-free edition, and two weeks ago Peggy Salvatore went with a theme based on the order in which things hit her email inbox. So, why don’t we just tell it like it is? The Health Wonk Review is moving away from the extreme themes and pivoting towards the general edition.

Like a good politician, let me contradict myself about this being a general edition right out of the gate with a bunch of posts about the exit of UnitedHealthcare from the ACA marketplaces. On this topic, we have Andrew Sprung at the healthinsurance.org blog asking why some carriers appear to be thriving in the ACA’s marketplaces and why some – like UnitedHealthcare – are taking a dive. You can read what he proposes are the elements of marketplace success for an insurer here. At HealthReformExplained.com, Sean McGuire also takes a look at “the big insurer marketplace exodus” and examines what this will mean for people’s ability to obtain coverage and the costs of that coverage. David Williams of the Health Business Blog places the blame on UnitedHealthcare. As he puts it, United exiting the marketplace says more about United’s shortcomings than it says about problems with the marketplace. Read more here.

In other marketplace related news, Louise of the Colorado Health Insurance Insider discusses the passage of SB2 by the Colorado Senate, which she says is a waste of time. According to her, “if Connect for Health Colorado couldn’t gain access to the funding needed to be sustainable, the worst case scenario would be the dissolution of the exchange, and a switch to Healthcare.gov. And the federally-run exchange would charge 3.5% of premiums – the same as Connect for Health Colorado’s administrative fee that triggered SB2. And under ACA guidelines, every carrier that sells plans both on and off the exchange would have to spread their total exchange fees across their full book of business…which is the exact problem that SB2 is attempting to address.”

The other topic with multiple submissions is MACRA–the Medicare Access and CHIP Reauthorization Act of 2015. CMS just released their proposed MACRA regulations, and as you could expect, according to Brad Flansbaum of the Hospital Medicine blog, every specialty society and interested party dug in and found something to critique. Yet, Flansbaum writes, the AMA is unbeloved and overvilified in the whole MACRA process. And, according to Peggy Salvatore of Health System Ed, it’s time to prepare for legal challenges. Without the solid data, clear benchmarking and reasonable outcomes that account for the reality of caregiving in widely diverse regions with wildly diverse patient populations, quality- and outcomes-based payment just isn’t ready for prime time.

What has been happening with the job market thanks to the ACA? Joe Paduda of Managed Care Matters writes, “There’s been a lot of blather about the impact of ACA on employers’ decisions on work hours – most of it anecdotal at best, and lots ideologically driven.” Joe’s latest post is here to tell you what is really happening, and why it’s too early to tell much.

Before we shift gears from the political, Anthony Wright of Health Access California offers a suggestion for moving the country towards single payer. He writes, “The great primary debate on health reform had some missed opportunities, but as Senator Sanders seeks to influence the party platform, he could spell out concrete steps—some that California has implemented or is considering–that would improve the health system and bring us closer to the Medicare for All system he advocates.”

As usual, Roy Poses is on the hunt for a scandal of unethical proportions. In his latest post at Health Care Renewal, he examines comments from Fox commentator John Stossel who lamented his recent experience at New York Presbyterian Hospital–an unpleasant stay he chalked up to the hospital’s “socialist bureaucracy.” Poses wonders how, exactly, this private non-profit hospital with a board of trustees dominated by corporate CEOs of large financial firms like AIG, Merrill Lynch, and Citigroup, warrants a socialist label. He has a good point! By contrast, Hank Stern of the InsureBlog underscores that there was a great deal of truth to some of Stossel’s other comments about his experience, which are reflective of issues throughout the U.S. healthcare system. And speaking of hospital boards, Dr. Jaan Sidorov of the Population Health Blog reviews a recent JAMA article on how hospital boards should provide governance oversight of population health programs.

While recent news reports find that medical errors are now the 3rd leading cause of death, Julie Ferguson of the Workers Comp Insider shares a post about the opioid crisis and the fentanyl factor, at a time when prescription drug overdoses have outpaced auto crashes and gunshots in annual fatalities.

Putting the health in health policy, we have a trio of posts from the Medical Care Blog, the Health Affairs Blog, and the Healthcare Economist. At the Medical Care Blog, Lisa Lines suggests that death is not always an adverse event. She writes, “In a high-quality health care system, a patient’s preferences for less intensive end-of-life care must be respected. In those cases, the predictable end result of less intensive end-of-life care – mortality – must also be accepted as the preferred outcome and not count against a healthcare provider’s quality record.” Very true. What about readmissions? The Healthcare Economist, Jason Shafrin, investigates whether Medicare managed care decreases hospital readmissions. I’m not going to tell you the answer. You need to go here to find out.

And then there’s the Zika virus. On the Health Affairs Blog, Alexandra Phelan and Lawrence O. Gostin examine the implications of a potential Zika virus outbreak this summer and whether the U.S. is prepared to handle it. With alarming imagery, the authors write: “It is one thing to fail to prepare for an emerging infectious disease if the risks are uncertain. But it is quite another to fail to act when the facts are clear: we know that Zika is coming to the US, that it harms newborns, and will disproportionately affect poor women and their children. Failure to prepare for a storm that is spreading rapidly in our region, heading for our shores, and which could affect the next generation is unconscionable. It is also a major political mistake. Imagine if nine months following a Zika virus outbreak this summer babies are born with severe birth defects, and poor women testify in Congress holding their babies. It would, and should, result in a public moral outrage.” The authors specifically discuss the Obama Administration’s supplemental funding request of $1.86 billion to Congress to respond to the Zika virus domestically and internationally.

Finally, David Harlow of the HealthBlawg reports back from the MIT Hacking Medicine Grand Hack 2016. The final presentations gave him a terrific glimpse of digital health innovation at the bleeding edge. Read his take here.

Well, that’s it for this edition of the Health Wonk Review. By the time I host again, the election should be close to over. Hopefully, you can take some solace in that.

 
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Posted by on May 4, 2016 in Uncategorized

 

Latest Health Wonk Review

Peggy Salvatore hosts the most recent Health Wonk Review at the Health System Ed Blog. It’s entitled: The Early Bird Catches the Worm Spring Edition. It hasn’t been an especially cold winter in Iowa this year, but I’m still happy to have longer days, chirping birds, and flowering trees, and I’ll bet you are too. But just stay inside a few minutes and read all the good stuff she’s pulled together from the wonk crowd.

 
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Posted by on April 21, 2016 in Uncategorized

 

Latest Health Wonk Review

Hosted by David Williams at the Health Business Blog, the latest edition of the Health Wonk Review provides a nice escape from the cesspool that is the presidential election primary season. Oh, well, except for all those references to America’s favorite orange candidate for the republican nomination. Read it here.

 
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Posted by on March 10, 2016 in Uncategorized

 

April Fool’s Day For Iowa Medicaid

Well, it’s official. The Centers for Medicare and Medicaid Services (CMS) has approved Iowa’s plans to “modernize” Medicaid by moving everyone into managed care. A guest post from April 2015 laid out the details of what was being proposed, and now it’s soon to be upon us. CMS has given the thumbs up for an April 1st start to the process, which is actually already well underway. In fact, the state originally planned for modernization to occur on January 1st. But, thanks to some serious opposition from key stakeholders and members of the public, CMS put the brakes on things for a while and required the state to at least give the appearance of addressing some concerns. The state then said things would roll out March 1–today–but CMS still wasn’t convinced that the state was ready, so the final date was set for April 1, 2016.

People are concerned that the state’s attempt to control costs will come at the expense of some of the most vulnerable Iowans and, as this recent report from KCRG-TV9 out of Cedar Rapids highlights, if the results of similar efforts in Kansas are any indication of what to expect, those concerns are more than legitimate. There’s little question that things are going to be disruptive during the transition. The biggest open-ended questions that remain are how effective oversight of the program will be, to what extent the private managed care organizations will provide the state (and health services researchers) with individual-level (rather than aggregated) claims data, and what actually happens in terms of utilization and spending.

Evaluating those outcomes may play a key role in shaping the future politics of the state. Iowa Governor Terry Branstad, already the longest serving governor in American history, is now contemplating running for a 7th term, and the move to Medicaid managed care in Iowa has taken a central place in the political narrative between Branstad and his possible challenger former Governor Chet Culver. So says this column in The Des Moines Register by Kathie Obradovich. It might actually be nice if Iowans elected a new governor. Someone who hadn’t ever held the office before. Ironically, it seems the more things change for the worse in Medicaid, the more they stay the same in Des Moines. It all feels a little bit like a nightmare. The kind of thing someone says to you on April 1st to get a reaction out of you before exclaiming “April Fool’s!” Only this time, it’s not a joke, and try as they might, I don’t think that the state or the managed care organizations are fooling anyone.

 
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Posted by on March 1, 2016 in Uncategorized

 

Questions About The New ObamaCare Health Insurance Tax Form?

I’m proud to say that I filed my federal and state taxes over the weekend. It wasn’t fun, but Turbotax made it painless. The hardest part was gathering all of the various documents I needed to fill in the boxes as the software walked me through everything. You know, the W-2s from employers, the various 1099 forms for miscellaneous income, dividends, and interest, and the statements from various non-profit organizations with records of charitable contributions. These are the standard things most people have. But this year there was a new form. A 1095 form with information about my health insurance coverage. Mine was a 1095-C, because I happen to work for a large employer, but there also 1095-A and 1095-B forms. So, what are these forms about?

The first thing you’re probably thinking, if you’re like some of the anti-ObamaCare (and, well, just plain anti-Obama) folks I know is that this means you’re going to have pay taxes on your health insurance. Let me stop you right there. That’s NOT what any of these forms, be they A, B, or C, are about. However, there IS a chance that you’ll have to pay more taxes depending on what the forms say, so now is the time to pay close attention: The forms are simply documentation of your (and your family’s) health insurance coverage for 2015.

Form 1095-A has actually been around for a year, corresponding with the roll out of the health insurance Marketplace established nationwide by ObamaCare. So, if you had coverage through either the Marketplace operated in your state, this year is likely the second year you’ve seen this “new” form. Forms 1095-B and 1095-C are new this year though. They are sent to individuals with employer-sponsored health insurance. The B forms go to employees of small employers, while, as I mentioned already, the C forms go to employees of large employers.

And you’re not the only one who receives a copy of the form. A copy is also furnished to the IRS. However, you don’t have to submit the form with your taxes. Just keep a copy for your records in case you get audited. If you had insurance in 2015, you check a box on your tax return that attests to that, and you’re done. No taxes on your health insurance coverage and nothing else to do.

On the other hand, if you DIDN’T have health insurance in 2015, you’re going to have to ante up. Remember the individual mandate? Yeah, that one. If you have affordable insurance options available to you and you do not obtain coverage, you are subject to paying a penalty. The penalty was in effect last year, too, so this isn’t necessarily news. What may be news to those who haven’t been paying close attention is that the penalty is getting steeper. This was done by design–phased in to soften the blow for folks as they got accustomed to the requirements of the new law. If you (or your family) didn’t have insurance in 2015, you’ll pay the higher of 2.5% of household income or $695 per adult and $347.50 per child up to a maximum household cap of $2,085. That’s more than double the penalties from last year in some cases, and that’s the idea. Uncle Sam assumes that maybe if it stings enough, you’ll give in and decide to get covered.

And there’s one more thing: If you didn’t have health insurance coverage for some or all of 2015, you may still qualify for an exemption from the penalty. Healthcare.gov has a nifty little tool that can show you any exemptions for which you qualify. Access it here.

To read more, I recommend the sources I used to compile this post from Jeff Reeves at USA Today and Michelle Andrews of Kaiser Health News.

 
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Posted by on February 23, 2016 in Uncategorized

 
 
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