Latest Health Wonk Review Up

Hank Stern of InsureBlog hosts the latest edition of the Health Wonk Review. This one’s really good folks. Read it today, because you won’t get another one like this for at least the next 78,000 years.

 

Understanding Obama’s Attempt to Get Cancelled Policies Reinstated

The President, by his own admission, did “fumble the ball” on the rollout of the major elements of health reform implementation. Not only is healthcare.gov not functioning as it should, but people in the individual market are having their health insurance coverage cancelled–despite repeated assurances that if they liked their current coverage, they could keep it.

While that is absolutely a problem, it needs to be put into perspective. For each person in this country who is in the individual market and therefore at risk of having their insurance plan cancelled on them, there are three people who are–and have been–uninsured. It strikes me as somewhat ironic that while we are rightly upset about the broken promises of the Obama administration, we are not three times as outraged by the reality that has confronted the uninsured for decades.

Moving beyond that, it is important to understand that this outcome has been foreseeable ever since the ACA was passed. The law specifically grandfathered plans that were in existence at the time the law was enacted and that did not make significant changes to benefits. Well, that was in March 2010, and there have been quite a few changes between then and now, including the offering of entirely new plans, many of which do not meet the requirements of the ACA. The insurance companies knew that at the time they offered those plans, but they certainly didn’t point it out. Although they are making it clear now.

PBS Newshour ran a wonderful piece on a women who twice voted for Obama, but had her coverage cancelled. She’s a smart lady–an attorney in the DC area–and she is none too pleased. You can watch the video here. One of the things that struck me is her displeasure that the only difference between her plan and the new requirements is that her old plan didn’t cover maternity care or pediatric care. She is nearly 60 years old, she says, so why should she need insurance that covers either of these things? Well, there’s an easy answer, but it isn’t likely to change her opinion. The answer is that we are moving away from a world based on experience rating of insurance premiums and towards a world based on community rating of premiums. That means that we put everybody into the same risk pool, and a lot of those people probably do have kids or may need maternity care. Consequently, everyone shares in the expense. By similar logic, men should never have to pay for maternity care as part of their insurance premiums, even though they are required–in some capacity–to create a pregnancy.

But even though there are very understandable–if not wholly anticipated–issues with the law, the White House is right to fix them. Specifically, the President has now said that insurance companies that were cancelling plans that didn’t comply with the ACA’s minimum benefit standards may now be permitted to renew those plans–in some cases lasting into 2015. The caveat: Insurers have to explain to enrollees what specific benefits they will lose if they revert back to a formerly cancelled plan. Buying one of these plans is only an option if you had your plan cancelled on you. That’s to be sure that people don’t flock to substandard plans in lieu of moving into an ACA-compliant plan. And there’s one more catch: whether or not a cancelled plan gets reinstated will ultimately be at the discretion of both the insurer and the respective state department of insurance. In other words, the Obama administration is allowing an exception to permit renewal of cancelled plans, not requiring it, which would take Congressional action.

Right now, states like California, Georgia, and Iowa aren’t sure how to proceed, and many of the insurance companies aren’t happy about this new wrinkle at all. Meanwhile, Congress is mulling its own course of action, with even Congressional Democrats uncertain of whether or not the President’s proposal is sufficient.

What does this mean for you? Well, for about 95% of Americans, it doesn’t mean anything. You weren’t having your insurance coverage cancelled, and you can’t buy one of the non-compliant plans even if insurers and state regulatory agencies decide to permit them back on the market. But, for the 5% of Americans who do find themselves affected or potentially affected by this aspect of the ACA, it is important to pay attention. If a non-compliant plan once again becomes available to you in your state, carefully consider if the benefits you’ll lose are worth the savings you’ll gain.

 

If You Like the Health Wonk Review You Currently Have, You Can Keep It

UPDATE: Many of the links to the great posts contained here were originally broken. I have updated them and they should now be working. This technical hiccup is simply in keeping with the theme of this edition of HWR.

For health wonks, the month of October has been the stuff of legend. Love it or hate it, the implementation of key insurance-related provisions of the Affordable Care Act has been riddled with controversy. First, the health insurance exchange website healthcare.gov encountered a glitch–much in the same way that Apollo 13 encountered a glitch on its trip to the moon. Then, news trickled out that only 6 people signed up for coverage on day one. Meanwhile, reports rolled in of people obtaining inexpensive coverage through the mostly-successful state operated exchanges. Only to be followed by the news that some 3.5 million people got notified that their current insurance policies were being cancelled and that they would be required to purchase a new policy on the exchange. Consequently, the President got called out for breaking a promise to the American people, giving this edition of the Health Wonk Review it’s theme.

Just in case you’ve somehow managed to miss the criticisms being hurled at the Obama administration during the most recent botching of ACA implementation, I offer you the words of John Goodman, who writes a post entitled “The Selling of Obamacare” on his NCPA Health Policy Blog:

“As for the president himself, he is a complete enigma to me. I’ve never felt that I understood him. He appears to have looked directly into the TV camera and said something that was blatantly untrue (in the words of Joe Scarborough) “over and over and over and over again.” You have to go all the way back to Richard Nixon to find something comparable.”

That’s one way of looking at things, but it’s certainly not the only way. Over at the Colorado Health Insurance Insider, Louise Norris counters with these words:

“Much has been said recently about how the ACA is causing a tidal wave of policy cancellations, and resulting in people losing coverage that they would prefer to keep.  The frustrating part about this – as has generally been the case with every big uproar about the ACA – is that we’re not really getting a complete picture of what’s going on, and it’s hard to see the reality through all the hype and hysteria.”

Similarly, over at the Health Insurance Resource Center Blog, Maggie Mahar writes about the good news, explaining that while the media is spending lots of time focusing on Healthcare.gov‘s technical issues and warning of disaster or train wreck, they’re overlooking successes in 14 states where “the marketplaces were humming.”

Beyond the world of the exchanges, we still need to be concerned about Accountable Care Organizations (ACOs) and the Medicaid expansion–two major efforts designed to shift the system from volume to value and expand coverage, respectively. On the subject of ACOs, David Muhlestein writes a “Contributing Voices” post on the Health Affairs blog. David offers three potential reasons for the slowdown in ACO growth and concludes that the primary explanation is that there is yet no proven model to follow. He says that a crucial metric for future growth will be the renewal rate for existing ACO contracts: “If organizations are able to realize enough savings that they can remain with their ACO contract, then that is a strong indication to potential ACOs that a viable model exists that can be emulated.”

Meanwhile, Joe Paduda gives a quick update on what states are where with the decision to expand Medicaid, and predicts most will eventually expand Medicaid, because the financials are just too compelling. I tend to agree, but I think the timing of that decision will remain a political issue. As soon as the coast is clear for red states to take the money without looking like they are flip-flopping, they’ll opt-in.

And, before we shift gears, Kelley Beloff writes “You’ve Sold It, Now What Happens” over at the InsureBlog. Kelley is a Certified Medical Office Manager, and she explains the interrelationship between co-pays and EMR, and how patients can be their own best advocates.

But not everything in health policy involves health insurance. There are other issues with access to care that need to be seriously considered, and that the ACA does very little to address. At the Health Business Blog, David Williams asks whether or not veterans have timely access to mental health care. According to David, lots of veterans are not getting mental health appointments within 2 weeks according to data from the VA. No one  knows how this compares to the access available to the general population, because there is no systematic tracking of appointment wait times. That’s in contrast to socialistic systems like the UK, where a great deal of data is published on wait times.

There’s also confusion in Medicare according to David Wilson of Innovative Health Media. Wilson writes about how Medicare’s Annual Wellness Visit (AWV) is confusing patients all around the country. He discusses what to expect from an AWV, and how you and your physician can use it to maximize your health.

On the supply side, Peggy Salvatore writes about the Challenges of Healthcare Training in an Uncertain World over at the Healthcare Talent Transformation blog. According to her, virtually every executive in a hospital system, a pharmaceutical, biotech or device manufacturer, or a health insurance company is trying to read the tea leaves and come up with a plan for staffing, purchasing, customer demand, vendor pricing, building and maintenance and long-term infrastructure. But all of this planning is occurring within the framework of an uncertain regulatory and reimbursement climate.

Also on the supply side, Roy Poses, who writes at Health Care Renewal, takes a look at the University of Pittsburgh Medical Center’s attempt to, in his words, “Make its employees disappear.” In his post, Roy asserts that “true health care reform would require both more leadership accountability and less power concentrated in large health care organizations.” I think he might be onto something…

Sometimes we also do things like get excited about health information technology and the potential to revolutionize the way we deliver care. In that arena, both David Harlow and Jaan Sidorov delve into health apps. Harlow writes about how mobile health apps will not realize their potential unless they can reliably engage patients. He asserts that developers should enlist patients in the effort and patients should be able to share data about their experiences as freely as they like. Sidorov reviews a recent peer-reviewed JAMA articles on health apps and goes a few steps further with some interesting insights of his own.

For the really big picture, we turn to Jason Shafrin, the Healthcare Economist, who provides a nice post on physician visits in Germany. In his post, Jason answers questions like: “How does the German government pay physicians to care for patients?” “Will a recent reform reduce access?” “And what does this tell us about the future of the Affordable Care Act in the U.S.?”

Lastly, in worker’s comp, controlling medical costs is critically important, but is a single-minded focus drowning out some of the management basics and letting employers off the hook? In Back to the Future, Tom Lynch of Workers’ Comp Insider reminds employers that they need to be in the driver’s seat to truly manage their workers comp program.

 

Sometimes, Even If You Like Your Insurance, You Can’t Keep It

Perhaps one of the most frustrating parts of being President is that your every waking moment is documented. Consequently, when you say something, and it subsequently turns out not to be quite true, you can expect that your opposition will take advantage of the opportunity to make you look like the American people can’t trust you. That’s precisely what has happened in the last week or two as some 3.5 million individuals report receiving cancellation notices from their insurance company, despite President Obama’s assurance early in the health reform debate that if you like your coverage, you can keep it.

There’s no disputing that the President overstated things and that his words are being used against him, but the issue is a bit more complex than that, and that’s what I’m going to address here. In particular, I want to move past the idea of broken Presidential promises and focus instead on the details of why insurance companies have been cancelling policies and what it means for the individuals affected.

The simple explanation is that the plans that were cancelled did not meet federal requirements under the ACA. This could happen for a number of reasons, but the primary one is that the plans did not meet the minimum actuarial value of 60% and/or did not cover all of the essential health benefits outlined in the law. That means, to put it even more simply, that individuals covered by these plans would be underinsured. But to people who were fortunate enough not to have to test the limits of their coverage, the inadequacy of their benefits isn’t apparent. In fact, one might argue that the coverage was perfectly adequate in practice, if not in theory.

So what’s happening now? The ACA is making these less than adequate plans illegal, and requiring individuals to obtain more robust coverage. Of course, the big concern among consumers is that this may be more expensive. Whether or not that’s the case will depend on numerous factors like where the individuals live, how much money they earn, and whether affordable coverage is available to them through an employer. Depending on the answers to those questions, individuals may find that they are eligible for Medicaid at no cost to them, eligible to purchase heavily subsidized private coverage through the health insurance exchange, or able to obtain affordable coverage through their employer. For many individuals, the price they’ll pay for insurance will go down. Of course, for others it will increase. But in all cases, the individuals will have substantially better coverage that will be there for them in the event that they ever need it, and that’s the true purpose of having insurance.

For those who want a more detailed understanding of the issue, I highly recommend two pieces by Jonathan Cohn. The first will provide you an overview. The second will give you some anecdotal insight into the complexities of the issue.