Exclusive: States quietly consider ObamaCare exchange mergers | TheHill

A number of states are quietly considering merging their healthcare exchanges under ObamaCare amid big questions about their cost and viability.Many of the 13 state-run ObamaCare exchanges are worried about how they’ll survive once federal dollars supporting them run dry next year.Others are contemplating creating multi-state exchanges as a contingency plan for a looming Supreme Court ruling expected next month that could prevent people from getting subsidies to buy ObamaCare on the federal exchange.The idea is still only in the infancy stage. It’s unclear whether a California-Oregon or New York-Connecticut health exchange is on the horizon.But a shared marketplace — an option buried in a little-known clause of the Affordable Care Act — has become an increasingly attractive option for states desperate to slash costs. If state exchanges are not financially self-sufficient by 2016, they will be forced to join the federal system, HealthCare.gov.

Source: Exclusive: States quietly consider ObamaCare exchange mergers | TheHill

The Patient Protection and Affordable Care Act provision referenced in this story is at Section 1311(f), which allows state exchanges to combine into “regional or other interstate exchanges,” subject to approval by the participating states and HHS. Another provision, Section 1333(a), would facilitate interstate exchanges by providing a mechanism for health plan issuers to pool risk and sell across state lines via “health care choice compacts” starting in January, 2016. Two or more states could enter into an agreement under which health plans could be offered in state individual markets, subject to regulation by the state in which the plan was written or issued, provided plans comply with the other states’ rules regarding market conduct, unfair trade practices, network adequacy, and consumer protection standards including standards relating to rating and handling of disputed claims.

While complex in and of itself, this might be easier to accomplish if state health benefit exchanges conducted eligibility and enrollment solely for commercial individual plans. A major complicating factor is Section 1413(c)(1) of the Affordable Care Act requiring each state to “develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data …that allows a determination of eligibility for all such programs based on a single application.”

This “no wrong door” policy requires the exchanges to screen households applying for coverage for income and household size eligibility criteria for both commercial Qualified Health Plans or QHPs) as well as state insurance programs such as Medicaid and the Children’s Health Insurance Program (CHIP). States have separate eligibility guidelines for these programs that won’t easily translate across state lines, especially considering a lack of uniformity among states on the Affordable Care Act’s expanded Medicaid eligibility. In addition, state operated exchanges as well as the federal marketplace have had difficulty integrating their IT systems to perform eligibility and enrollment functions fulfilling the Affordable Care Act’s “no wrong door” requirement.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Why high deductible individual plans rated a poor value

A Kaiser Family Foundation survey published Thursday of people who buy insurance in the non-group market found that while many people may choose higher-deductible plans so they can pay a lower premium, they aren’t all that happy about it. It may just be the only way they can get a premium they feel they can afford.As the chart above shows, 37% of people with high-deductible plans described their plan as an “excellent” or “good” value for what they pay, compared with 68% of people with lower-deductible plans saying the same. A high deductible was defined as $1,500 or more for an individual and $3,000 or more for a family. Sixty percent of those with higher-deductible plans rated the value of their plan as “fair” or “poor.”

Source: The ‘Value’ Trade-Off in High-Deductible Health Plans – Washington Wire – WSJ

A couple of observations re this item by Drew Altman, president and CEO of the Kaiser Family Foundation:

1. The U.S. is moving back to the future and toward the “major medical” model of the 1950s and 1960s. Those plans were high deductible plans by design because they covered large and unexpected medical expenses. Routine care was paid out of pocket. Since the advent of all inclusive, HMO-style plans in the 1970s and 1980s, people have become accustomed to not paying for this level of care directly out of pocket. Hence, today’s high deductible plans are likely to be seen as providing poor value for the premium dollar spent.

2. For generally healthy people age 50 and older who ensure their health by maintaining healthy lifestyle habits, the amount of the premium they are asked to pay for high deductible plans seems like a poor value. Since they are effectively self insuring for the first several thousand dollars of medical care they might use in a calendar year, the relatively high premium charged for a high deductible plan doesn’t seem like a fair tradeoff that takes into account their efforts to reduce their likelihood of utilizing medical care. This is particularly likely to be the case for healthy over 50s who earn too much to qualify for advance tax credit premium subsidies for high deductible plans sold on state health benefit exchanges.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Companies Look to Transition Retirees to Health Exchanges – May 20, 2015

May 20, 2015 1 comment

LINCOLNSHIRE, Ill., May 20, 2015 /PRNewswire/ — Challenges and opportunities created by the Affordable Care Act are prompting two-thirds of companies to consider altering their pre-65 retiree health strategies over the next few years, according to a new Aon Hewitt survey. Of those, 35 percent are favoring sourcing health coverage through the public exchanges under a defined contribution approach. Twenty-eight percent are considering eliminating pre-65 retiree coverage and subsidies altogether. Aon Hewitt’s 2015 Retiree Health Care survey of 349 companies covering 3.2 million retirees found that few companies have already taken action with respect to their pre-65 strategies. Just six percent of companies have already decided to move some portion of their pre-65 retirees to the public exchanges to secure health coverage, and another nine percent are offering retirees a choice between the group program and the public exchanges.

Source: Companies Look to Transition Retirees to Health Exchanges – May 20, 2015

If this survey portends a trend among large private sector employers, state health benefit exchanges could see a rise in enrollment among retirees under age 65 not yet eligible for Medicare. In addition, new federal regulations issued in March 2015 could also support such a trend. The new rules, Amendments to Excepted Benefits, allow employers offer retirees (and part time employees) and their dependents a richer level of benefits through a widened range of excepted benefits that wrap around qualified health plans sold on the exchanges. The arrangement would operate on a trial basis under a two-year pilot program beginning January 1, 2016. The new rules took effect this week.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Massachusetts seeks federal OK to keep small group at 50 or fewer employees in 2016

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Massachusetts has asked the federal Department of Health and Human Services to continue to allow the state to define its small group market as employers with 50 or fewer employees in 2016 as the state prepares to request a state innovation waiver application for an alternative plan for individual and small group health coverage under Section 1332 of the Patient Protection and Affordable Care Act. The law defines small employers as those employers with 100 or fewer full time equivalent (FTE) employees. However, Section 1304(b)(3) of the Affordable Care Act affords states the option – which all exercised – to set the metric at 50 or fewer employees for plan years 2014 and 2015.

Massachusetts Gov. Charles D. Baker made the request in an April 27, 2015 letter to Health and Human Services Secretary Sylvia Burwell. Baker cited the need to maintain stability in its merged individual and small group markets, citing premium rate increases for small employers under Affordable Care Act rules barring medical underwriting of small groups and the increased likelihood employers of 51 to 100 employees would opt to self insure in 2016. Both developments “will further exaggerate” instability in the state’s merged individual and small group markets and prompt Massachusetts to reconsider the continued operation of a merged market, Baker wrote.

(H/T to Elizabeth Elizabeth Osius of Manatt, Phelps & Phillips, LLP for the heads up on this development).

Baker’s letter follows a letter to Burwell earlier this year by 17 business groups and the National Association of Health Underwriters requesting the Affordable Care Act’s 2016 expansion of states’ small group health insurance market to employers of up to 100 employees be delayed until 2018. The groups warn broadening the scope of the small group market will lead to market disruption among health insurers that could limit employer coverage options as well as potentially result in premium increases.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Amid slower growth, California’s Obamacare exchange cuts proposed spending – LA Times

Many Californians who signed up in 2014 were closer to the federal poverty line and often paid just a few dollars a month for health insurance, thanks to generous federal subsidies.The remaining uninsured were closer to the cutoff for those federal dollars, meaning they had to pay more of the premium themselves.”Those people may just be doing the math, and they simply cannot afford the premiums,” (Caroline) Pearson, senior vice president at Avalere said. (Covered California Executive Director Peter) Lee said the exchange is planning to survey consumers who have left the exchange to get a clearer picture of what’s happening in the market.

Source: Amid slower growth, California’s Obamacare exchange cuts proposed spending – LA Times

Lee told The Times his organization’s impression is few people are shunning exchange plans due to cost concerns. The survey should scrutinize a potential financial pain point: those in 50+ age rating bands who pay higher premiums and who earn more than 250 percent of federal poverty level (FPL) and particularly those earning between 300 and 400 percent of FPL.

Under Section 1401(b)(3) of the Patient Protection and Affordable Care Act, these households must pay between 8.05 and 9.5 percent of their incomes toward the premium cost of the index plan (second lowest silver-rated plan for a given plan year) compared to between 3.0 and 8.05 percent at lower income levels. The subsidies may be working well for those earning 250 percent or less of FPL but not as well for older Californians earning between 250 and 400 percent of FPL. Nearly half of Covered California enrollees for plan years 2014 and 2015 were age 45 and older. Also, some older Californians near the 400 percent FPL cut off for advance premium tax credit subsidies might have been offered subsidies too small to keep them in a Covered California plan and opted to purchase plans sold in the off-exchange market.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas could be leader state on ACA Section 1332 waiver — but must act quickly

If Arkansas wishes to opt out of Patient Protection and Affordable Care Act requirements governing individual and small group health insurance market reforms and propose an alternative plan under Section 1332 of the law, it must act quickly in order to have such a plan in place by January 1, 2017 as allowed under Section 1332, a consultant’s report recommends. On that date, Arkansas’s existing federal waiver allowing it to use expanded Medicaid eligibility funding to subsidize the purchase of qualified health plans on its health benefit exchange expires at the same time it plans to launch a state-based exchange. The 1332 waiver could also be combined with a new Medicaid Section 1115 waiver as part of an omnibus reform plan as permitted by federal rules, depending on how the state chooses to provide medical coverage to its low income and medically frail residents.

Section 1332 provides for state innovation giving states the flexibility to opt out of most Affordable Care Act individual and small group health insurance market reforms including the requirements to have a health benefit exchange, that plans provide specified essential health benefits as well as advance tax credit premium subsidies and reduced cost sharing for those households meeting income criteria. Also waivable are the individual and employed shared responsibility provisions.

To qualify for a waiver from the federal government, states must demonstrate their programs would ensure individual and small group plans would offer coverage at least on a par with plans providing the 10 essential health benefits prescribed by the ACA. State programs would also have to ensure individuals and small employers would have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs (such as annual maximums) like those for ACA plans and cover a comparable number of residents as existing ACA plans.

States granted Section 1332 waivers are eligible for “pass through” federal funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise receive under ACA rules for premium tax credits, cost-sharing reductions and small business credits.

Given the complexity of assessing various policy and waiver options and preparing and vetting the application, the report prepared by Public Consulting Group recommends Arkansas enact the required authorizing legislation to seek the waiver by June 2015 and to submit the waiver application to the federal government by October 2015. (H/T to Elizabeth Elizabeth Osius of Manatt, Phelps & Phillips, LLP for writing about the report).

“Section 1332 Waivers are new territory in state and federal healthcare policy. No such waiver has been applied for, denied, or approved as of the date of this writing,” the April 6, 2015 Public Consulting Group report notes. “Interpreting and negotiating what is permissible under Section 1332 will gain its first precedents in the months ahead. This paper serves to help assess options and plan activities should Arkansas wish to be the first, or among the first, to submit an application.”

According to the report, some of the policy options Arkansas could implement under a Section 1332 waiver include:

  • Continuous enrollment for individual plans instead of annual open enrollment periods;
  • Offering Medicaid plans on the state health benefit exchange;
  • Allowing employers to issue tax exempt vouchers to employees to purchase individual coverage;
  • Reduced penalties for large employers offering “skinny” plans that do not meet ACA employer shared responsibility requirements for minimum affordable coverage;
  • Liberalized eligibility requirements for those wishing to purchase catastrophic plans with less than 60 percent actuarial value.
 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Obama administration concerned over QHP provider network volatility

“The impact of inaccurate provider directories on consumers can be devastating, especially on those consumers who need to carefully examine networks for specific subspecialists, cancer centers or children’s hospitals,” the American Medical Association told state insurance officials in a recent letter endorsed by dozens of health care provider and patient groups.But insurers say that the problems might not be easy to fix, and that doctors are partly to blame for the directory errors. Insurers “are unable to guarantee the accuracy of the provider’s status” in a directory because doctors often “stop accepting particular health plans’ members off and on throughout the year and fail to notify the plan in a timely manner,” America’s Health Insurance Plans, the chief lobby for the industry, said in a letter to the Obama administration.

Source: White House Moves to Fix 2 Key Consumer Complaints About Health Care Law – NYTimes.com

I previously wrote about the volatility within provider networks serving qualified health plans (QHPs) sold on the state health benefit exchanges and how it generates uncertainty that undermines the value of these plans. This New York Times story points to a potential underlying cause: providers exercising discretion at the point of service on whether to accept QHP coverage. Beneath that are likely tensions between health plan issuers and providers over reimbursement rates. Accepting QHPs — which employ narrow provider networks to hold down premium rates — could mean more patients but less income overall for providers relative to the increased patient workload.

As The Times reports, the Obama administration is concerned the uncertainty over the accuracy of provider networks calls into question their adequacy and plans to pressure QHPs in the federal marketplace to update their provider directories at least once a month under the pain of $100 a day penalties for each plan member adversely affected by directory inaccuracies. Pending California legislation, SB 137, would require provider directories be updated weekly.

If plan issuers begin feeling the heat of fines from federal and state regulators, the matter could up in the courts as they seek redress from contracted providers who refuse to honor QHPs. The plan-provider relationship in the post Affordable Care Act environment is shaping up to be major point of friction in the implementation of the law that bears watching closely.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

An Early Look At SHOP Marketplaces: Low Premiums, Adequate Plan Choice In Many, But Not All, States

This study compared the numbers of carriers and plans and premium levels in 2014 for plans offered through SHOP Marketplaces with those of plans offered only outside of the Marketplaces. An average of 4.3 carriers participated in each state’s Marketplace, offering a total of forty-seven plans. Premiums for plans offered through SHOP Marketplaces were, on average, 7 percent less than those in the same metal tier offered only outside of the Marketplaces. Lower premiums and the participation of multiple carriers in most states are a source of optimism for future enrollment growth in SHOP Marketplaces. Lack of broker buy-in in many states and burdensome enrollment processes are major impediments to success.

Source: An Early Look At SHOP Marketplaces: Low Premiums, Adequate Plan Choice In Many, But Not All, States

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

ER Visits Continue to Rise Since Implementation of Affordable Care Act – May 4, 2015

WASHINGTON, May 4, 2015 /PRNewswire-USNewswire/ — Three-quarters of emergency physicians report that emergency visits are going up, according to a new poll.  This represents a significant increase from just one year ago when less than half reported increases.  Rather than trying to keep people out of emergency departments, policymakers need to recognize the value of this model of medicine that people want and clearly need, according to the American College of Emergency Physicians (ACEP).

Most of the respondents to the poll report little or no reductions in the volume of emergency visits due to the availability of urgent care centers, retail clinics and telephone triage lines.  About 90 percent of more than 2,000 respondents also say the severity of illness or injury among emergency patients has either increased (44 percent) or remained the same (42 percent).

*  *  *

These data correlate with another new report issued by Health Policy Alternatives, which found that efforts by policymakers and health insurance plans to drive Medicaid patients out of emergency departments and into primary care are not working.  More than half of providers listed by Medicaid managed care plans could not offer appointments to enrollees, despite a provision in the ACA boosting pay to primary care physicians treating Medicaid patients.  The median wait times was 2 weeks but over one-quarter of providers had wait times of more than a month for an appointment.

“There is strong evidence that Medicaid access to primary care and specialty care is not timely, leaving Medicaid patients with few options other than the emergency department,” said Orlee Panitch, MD, FACEP, chair of EMAF and emergency physician for MEPHealth in Germantown, Maryland.

The report — commissioned by the Emergency Medicine Action Fund  (EMAF) — is titled “Review of the Evidence on the Use of the Emergency Department by Medicaid Patients and the Evolving Role of Emergency Medicine Physicians.”

Source: ER Visits Continue to Rise Since Implementation of Affordable Care Act – May 4, 2015

The increase in non emergent ED visits correlates with the experience in Massachusetts after that state expanded access to private and Medicaid coverage in 2006, serving as a template for the federal Patient Protection and Affordable Care Act that became law four years later. According to state data, emergency room visits rose by 9 percent from 2004 to 2008, to about 3 million visits a year. Both the ACA’s and Massachusetts’ reforms on the payor side postulated more access to coverage would translate to fewer people turning to the ER for non emergent care.

But Nancy Turnbull, a senior lecturer at the Harvard School of Public Health, told the Boston Globe the increase in Massachusetts was due to lack of access to primary care — not coverage. “I don’t think the increase has anything to do with health care reform,’’ she said. “It’s much more reflective of [primary care] access problems.”

The ACEP poll notes Medicaid patients aren’t benefiting from the growth in channels providing convenient access to primary care such as retail clinics and telemedicine aimed at those covered under commercial insurance plans who want to consult with a provider outside usual office hours. Instead, it points to a population health basis, suggesting Medicaid patients are in poorer health and suffering from chronic conditions that flare up and require urgent attention that is most readily available at hospital EDs. The poll results also point up a need for community health clinics to play a larger role in serving Medicaid patients and in the management of their chronic conditions and helping improve their overall health status, particularly given that many private providers don’t accept Medicaid patients.

Separately, California Healthline reports ED visits by California Medicaid beneficiaries increased by 50 percent between 2013 and 2014 when that state’s Medicaid expansion took effect.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

ACA small group market changes for 2016 could potentially benefit SHOP

The Patient Protection and Affordable Care Act holds two significant changes for the small group market taking effect for plan year 2016:

  • A mandatory definition of “small employer” as those employers with 100 or fewer full time equivalent (FTE) employees. Section 1304(b)(3) of the Affordable Care Act afforded states the option – which all exercised – to set the metric at 50 or fewer employees for plan years 2014 and 2015.
  • The delayed phase in under 2014 federal transition relief guidance of the large employer shared responsibility mandate. Under the guidance, the requirement that employers offer most employees health coverage meeting minimum benefit and affordability standards encompasses employers with 50-99 FTE employees starting in 2016.

Both alter the post-Affordable Care Act landscape of the small group market starting next year by expanding its parameters and providing greater incentive for small employers to offer health coverage. What remains to be seen is whether they will operate to expand small employer participation in the Small Business Health Options Program (SHOP) that all state health benefit exchanges must have in place unless they opt to combine their individual and small group exchanges as authorized by ACA Section 1311(b)(2). SHOP enrollment has been very weak in nearly all states relative to small group market as a whole.

A larger and more compulsory small group market could potentially boost SHOP’s prospects. But it won’t address the lack of strong economic inventive for small employers and their brokers to engage with the SHOP. The SHOP is predicated on pooling the purchasing power of small employers to drive down premiums that many small employers perceive as unaffordable. Gaining that purchasing clout with small group health plan issuers requires SHOPs first bring a lot more covered lives to the bargaining table – the classic chicken and egg conundrum.

Meanwhile, 17 business groups and the National Association of Health Underwriters have asked the U.S. Department of Health and Human Services in a February 18, 2015 letter to postpone implementation the 2016 mandatory definition of small employer to 100 or less employees to 2018, warning it would produce market disruption among health insurers that could limit employer coverage options as well as potentially lead to premium increases.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

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