Monthly Archive: February 2014

Federal government liberalizes ACA definition of QHP to boost enrollment in troubled state exchanges

The U.S. Department of Health and Human Services’ Center for Consumer Information & Insurance Oversight issued guidance (.pdf) this week aimed at boosting enrollments in six state health benefit exchange marketplaces hobbled by glitches in their online enrollment web portals. The guidance issued February 27, 2014 allows the marketplaces to deem individuals eligible for retroactive coverage back to January 1, 2014 if they meet eligibility requirements but were unable to enroll in a plan by the upcoming March 31 plan year 2014 enrollment deadline due to the technical problems with the portals – described as an “exceptional circumstance” in the guidance.

The federal guidance uses the exceptional circumstance declaration to get around the definition of a qualified health plan (QHP) at Section 1301 of the Patient Protection and Affordable Care Act as one certified by an exchange exclusively for sale on the exchange marketplace. The guidance does so by including those who enrolled in non-QHPs – plans sold outside the exchange marketplace. Those enrollees would then be potentially eligible for subsidies in the form of advance premium tax credits and cost sharing reductions that would not otherwise be available to them. According to The New York Times, Oregon Gov. John Kitzhaber requested the federal government to allow the premium tax credits for people buying insurance outside that state’s troubled exchange.

This limited relief from the March 31 deadline for plan year 2014 enrollment and the extension of premium tax credit and cost sharing subsidies to non-QHPs will take pressure off the six troubled state exchange marketplaces that due to enrollment shortfalls may be unable to support themselves financially starting in 2015 when federal establishment grant assistance ceases as required by the Affordable Care Act. For more on this, click here.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Troubled state-based exchanges face critical decision

A half dozen troubled state-based health benefit exchange marketplaces (Maryland, Massachusetts, Oregon, Hawaii, Minnesota and Nevada) have been clobbered by IT glitches that have hamstrung their eligibility and enrollment functions. This circumstance calls into question the exchanges’ viability going forward since under the Patient Protection and Affordable Care Act, they must be able to financially support themselves starting in 2015 based on fees paid by health plan issuers collected for individuals and small employer groups enrolling in coverage. Getting too few people enrolled in 2014 suppresses that fee revenue and produces a knock on effect of reducing fees that could have been generated by 2014 plan renewals this fall for plan year 2015.

Each of the states must now consider their plan year 2015 options since too little time remains to recover sufficient enrollments with the close of the 2014 open enrollment period only about a month away.

The default option is to allow the federal government to take over exchange operations – the course chosen by nearly three dozen states for 2014. The federal government could also designate a non-profit organization to run the exchange marketplace in the affected states. In addition, the states have the option under Section 1311(f) of the Affordable Care Act that permits states to form “regional or other interstate exchanges,” subject to federal approval. That raises the possibility that the affected states – three of them are in the West – could opt to form a western regional marketplace, possibly with the federal government acting as a partner at least initially.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

California doctors, insurers face off over reimbursement rates – San Jose Mercury News

California doctors, insurers face off over reimbursement rates – San Jose Mercury News.

An informative article from San Jose Mercury News providing some background on why individuals in Covered California plans have experienced difficulties finding providers willing to accept them.

The takeaway: Scaling up via the health benefit exchanges benefits the insurance market but not necessarily the provider side where payers have pushed higher patient volume to drive down reimbursement rates. The economics of supply and demand are pushing back with limited numbers of providers to service the increased demand, putting the providers in the drivers seat.

An insurance company spokesperson quoted in the story warns that economic reality could result in higher insurance rates — just as Covered California prepares to negotiate plan year 2015 rates with participating health plans.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Exchange executives, IT vendors held accountable for flawed launches

The health benefit exchange marketplace is essentially one that exists in cyberspace. As such, it is very dependent on a well-functioning IT platform. If that platform fails to work properly, the marketplace falters. And when that happens, those in charge look for someone to hold accountable.

So far, the list of those being called to account includes the primary IT contractor for the federally operated web portal, healthcare.gov, after last fall’s problematic rollout that stymied enrollments on the front end for consumers and the back end for health plan issuers. Its contract was not renewed.

The list also includes the executive directors of five state-run exchanges (Maryland, Oregon, Hawaii, Minnesota and most recently this week, Nevada) where enrollment problems can threaten the continued existence of the exchanges since they must under the Patient Protection and Affordable Care Act be financially self-sustaining starting next year on enrollment-based fees paid by participating plan issuers. Some of the IT contractors could also be called to account in the courts, where they face potential litigation claiming they didn’t deliver a functioning web portal per their contracts.

The take away for the health benefit exchange marketplace: it stands or falls on IT implementation.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Media coverage of ACA insurance market reforms stereotypes entire demographic as chronically “sick”

In the recent past, the word “sick” used as an adjective in the medical context referred to the temporary state of an individual. Someone got sick such as with the common cold or influenza. Then they recovered. Less fortunately, they died.

Now the term “sick” is being used in media accounts in a much broader sense to refer to a permanent state of an entire demographic group. As in “sick and older” in the public dialogue over the Patient Protection and Affordable Care Act, aka Obamacare, and its individual health insurance market reforms. A recent example:

Robert Zirkelbach, spokesman for America’s Health Insurance Plans, said the industry plans to fight a tax on full-coverage plans that, while intended to pay to expand coverage and bring in more customers, may cause premiums to go up, according to insurers. They’ve also argued against more comprehensive coverage, as well as more relaxed rules about charging sick and older more money for insurance than they do young people. (Emphasis added)

Not all older people are “sick” all of the time or even most of the time. Like younger folks, they sometimes get sick and then get better. Many are quite healthy and are very aware that their bodies require more diligent maintenance in the form of health promoting and preserving lifestyles than in their more forgiving youth. Reading many media accounts, one might think everyone age 50-65 is “sick” and thus creating a major actuarial burden on individual health insurers.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Iowa governor exploring interstate health benefit exchange with 3 adjacent states

Iowa Governor Terry Branstad wants to confer with governors of three neighboring states about setting up an interstate health benefit exchange marketplace. Iowa and the other states –South Dakota, Nebraska and Kansas — have opted to have the U.S. Department of Health and Human Services initially operate their exchanges.

Branstad reportedly cited the fiscal benefit of sharing exchange operating costs and the presence of Iowa health plan issuers Wellmark Blue Cross and Blue Shield and CoOportunity Health in the other three nearby states.

Section 1311(f) of the Patient Protection and Affordable Care Act authorizes the operation of “Regional or Other Interstate Exchanges” operating in more than one state, subject to the approval of the involved states and the federal Department of Health and Human Services.

The Quad City Times has the full story here.

See also this analysis of Affordable Care Act provisions that would enable less populous states like Iowa to join with other states to form larger pools of potential individual enrollees, generating better spread of risk for health plans and increasing the purchasing power of exchange member states with plan issuers.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Budget Model Uncertain for State Health Exchanges – ABC News

Budget Model Uncertain for State Health Exchanges – ABC News.

The Associated Press assesses the state-based health benefit exchange marketplace operating in 14 states and the financial challenges the exchanges face going forward in the post launch period.

Exchanges that struggled out of the gate and got off to a slow start could have trouble getting enough individuals and small businesses enrolled in order to be financially self-sustaining in 2015 and later years as required by the Patient Protection and Affordable Care Act.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

For some areas, Affordable Care Act’s goal of enhanced competition proves elusive

The individual and small group insurance market reforms of the Patient Protection and Affordable Care Act are based on a principle known as managed competition. As the term implies, managed competition attempts to bolster market competition by imposing market rules governing what is sold in a given market segment and under what conditions. (The role of managed competition in health care was first described in the late 1970s by economist Alain Enthoven).

The Affordable Care Act’s brand of managed competition is designed to improve choice and value for individuals and small employers when it comes to buying health plans. For insurers, the reforms are also aimed at restoring functionality to these insurance market segments by enhancing the risk spreading function of insurance by mandating they lump together individuals and small employers, respectively, into single statewide risk pools.

The Affordable Care Act gives health plan issuers — including those of multi-state plans created under the law aimed at boosting plan competition and choice — the option to determine whether to offer plans in a given state rating region and at what price. It also doesn’t affect the number of health care providers in a given region, which can vary widely across the United States and particularly between urban and rural areas. Consequently, the Affordable Care Act’s goal to enhance competition and value in individual and small group health coverage can be difficult to achieve in some areas of the nation as Jordan Rau of Kaiser Health News reports. Click here for Rau’s piece published in The Washington Post.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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