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Arkansas State Health Exchange Paused by Governor

September 25th, 2015 Comments off

LITTLE ROCK, Ark. — During an afternoon meeting at the capitol Thursday, Governor Asa Hutchinson — explaining why he’s pushing pause on a key tenant of health care reform in the state. Under the Private Option, passed in 2013, Arkansas received a $90 million federal grant to establish a state based, online health insurance marketplace where individuals can shop and compare plans.

“We’re not as a state convinced that’s going to be needed in the direction that we go,” Hutchinson said.

The state is currently using a federal version of the exchange through which 62,000 Arkansans are getting coverage.

“There’s less risk going with the exchange that we know rather than an exchange we don’t know,” he said.

Still, the governor says the state will continue working on an online marketplace for businesses which set to be functional next year.

Source: Arkansas State Health Exchange Paused by Governor

Arkansas’s move would put the state in a category with Utah. Utah operates its own Small Business Health Options Program, Avenue H, with the federal government operating the state’s exchange for individual 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. 

Consolidation among health plan issuers can benefit consumers, California exchange chief, economist argue

September 9th, 2015 1 comment

The rise of proposed mergers in the health insurance industry in 2015 has stoked the usual antitrust concerns that arise over consolidation in an oligopolistic market such as recently witnessed in telecommunications with the unconsummated marriage of Comcast and Time Warner Cable.

However, the executive director of California’s health benefit exchange and a health economist write in The Wall Street Journal that consolidation in the health insurance market helps offset consolidation that’s also taking place among health care providers. A balance of market power between payers and providers will benefit buyers of health insurance, explain Peter V. Lee, executive director of Covered California and Victor R. Fuchs, emeritus professor of health economics at Stanford University. (Disclosure: I served on the policy staff of Covered California in its startup phase). That’s because the payers write the checks to providers and can use their leverage to demand better value for their dollars through value-based reimbursement schemes like accountable care organizations, according to Lee and Fuchs:

Anthem’s proposed merger with Cigna following Aetna ’s acquisition of Humana has set off alarms about lack of competition in the health-insurance industry. But policy makers should consider the potential benefits of industry consolidation. The greater efficiency and market power of larger insurance plans could lower prices for consumers by offsetting the bargaining power of health-care providers.

Lee and Fuchs argue that the economic benefit of higher value care will be passed through to health insurance buyers because the Patient Protection and Affordable Care Act by statutorily defining minimum loss ratios (80 percent individual and small group segments, 85 percent for large group coverage) acts to limit the amount of any savings generated for boosting administrative overhead and profits. They note the average annual profit margin for health plans offered by Covered California is currently a skinny 1.1 percent.

 


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. 

Individual premium increases point to worse than expected statewide risk pool profiles, medical utilization

September 2nd, 2015 Comments off

The chart below appeared in a Wall Street Journal article updating plan year 2016 individual health insurance premium rate filings across several states. What’s noteworthy is the upper half of the states listed indicate rate increases in excess of the seven percent “trend” of recent years. While the Patient Protection and Affordable Care Act restored the risk spreading function of insurance to the individual health insurance market by mandating statewide risk pools for plans established after the law was enacted in March 2010, the article suggests the risk profile of some statewide pools is poorer and the rate of medical services utilization higher than expected. Also consider the law’s premium stabilization programs (reinsurance, risk corridors and risk adjustment). They are designed to moderate loss experience among health plan issuers so that any one issuer won’t experience adverse selection requiring large rate increases of the magnitude shown 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. 

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