Monthly Archive: April 2017

GOP shuts out doctors, experts, Democrats — pretty much everybody — as they work on Obamacare repeal – LA Times

President Trump and House Republicans, in their rush to resuscitate a bill rolling back the Affordable Care Act, are increasingly isolating themselves from outside input and rejecting entreaties to work collaboratively, according to multiple healthcare officials who have tried to engage GOP leaders. The White House and its House GOP allies are hoping to reschedule a vote on their overhaul plan in the coming days, following last month’s embarrassing retreat when the bill was pulled shortly before a vote. But they continue to refuse to reach out to Democrats. Even Senate Republicans have been largely sidelined, though their support will be crucial to putting a measure on Trump’s desk. And senior House Republicans and White House officials have almost completely shut out doctors, hospitals, patient advocates and others who work in the healthcare system, industry officials say, despite pleas from many healthcare leaders to seek an alternative path that doesn’t threaten protections for tens of millions of Americans.

Source: GOP shuts out doctors, experts, Democrats — pretty much everybody — as they work on Obamacare repeal – LA Times

Politicians are naturally inclined to craft these reforms behind closed doors given the fact that medical care in the United States — and particularly who pays for it — is a textbook example of a wicked problem. Soliciting input from stakeholder groups is likely to lead back to square one: everyone agrees there’s a problem, but no one can agree on how to solve it and there’s little common ground. So policymakers say to themselves, “OK, we’ll decide for them.”

Given the nature of the challenge when it comes to health care reform, Hillary Clinton went behind closed doors in 1993, convening an assortment of 100 policy wonks and experts as the Task Force on National Health Care Reform to forge the Clinton administration’s ill fated Health Security Act. However meritorious the legislation was, it was dead on arrival in Congress due to the perception it was drafted in secret without sufficient stakeholder input and strong opposition from health plans and small business.

 


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. 

Non-group market faces decidedly mixed outlook for plan year 2018 — and possible demise in 2019.

Several recent positive developments point toward plan issuers staying in the non-group or individual market next year.

  • The Trump administration finalized its Market Stabilization rulemaking intended to build confidence among plans by affording them more predictability and reducing the possibility of consumer gaming that plans say have increased their loss exposure.
  • On April 7, Standard & Poor’s opined that the individual market is showing signs of stabilizing in its fourth year based on its analysis of Blue Cross Blue Shield plans that found loss ratios declined from 106 and 102 percent for 2015 and 2014, respectively, to 92 percent for 2016.
  • This week in a closely watched move, Anthem tentatively committed to the individual market in 2018, but warned it could change its mind or raise premium rates by 20 percent or more depending on the outcome of pending litigation over cost sharing reduction subsidies that the Patient Protection and Affordable Care Act makes available to households earning between 100 and 250 of federal poverty levels for silver actuarial value plans sold on state health benefit exchanges.

Which brings us to the negatives. If the litigation, House v. Price, is not resolved by early June, Anthem could execute the aforementioned steep rate increases and possible state market withdrawals. The likelihood is high. The reason is neither the House of Representatives nor the Trump administration has sufficient motivation to resolve the case. The House prevailed when the U.S. District Court where the case was brought issued a ruling one year ago agreeing with the House that the Obama administration unconstitutionally infringed on the House’s appropriation powers by funding the cost sharing reductions administratively.

The district court held the ruling in abeyance pending appeal by the administration. That decision is likely to become final and go into effect following a status conference with the parties late next month. The Trump administration isn’t likely to appeal the decision and would be happy to see a final ruling “blow up” the Affordable Care Act’s individual insurance market reforms in President Trump’s words. The House for its part isn’t likely to dismiss the case because it sees the ruling in its favor as an important precedent to check executive branch authority from impinging on its powers of appropriation.

In addition, Congress and the Trump administration are unlikely to moot the case by enacting their own health care reform legislation in place of the Affordable Care Act’s insurance market reforms in the current congressional term due to heavy reliance on the limited scope budget reconciliation process, intra-party squabbling, lack of bi-partisan support and the inability or unwillingness of the Trump administration to articulate clear guiding policy principles.

The loss of the cost sharing subsidies would blow a hole estimated at $10 billion in exchange finances. That could well prompt Anthem and other plan issuers to head for the exits just as their plans must be finalized for 2018. That could effectively end the exchanges and the individual market as a whole next year. The more likely scenario is the plans as Anthem indicated it would price in the loss of the cost sharing subsidies in their final premium rates.

That would keep the individual market alive and on life support for 2018. But it would face a possible demise in 2019, with shrunken statewide risk pools and increased risk of the dreaded death spiral of adverse selection. The number of covered lives would decline both inside and outside of the exchanges. Outside the exchanges, the 401 percenters – households earning more than 400 percent of federal poverty levels and ineligible for premium tax credit subsidies for qualified health plans sold on the state exchanges – would likely bolt from the individual market after getting notice of another 20 plus percent premium increase for the second consecutive year. (California’s exchange, Covered California, estimates the loss of reduced cost sharing subsidies would boost premiums for silver level plans double that amount, 42 percent on average and as many as 340,000 Californians would drop out of the individual market in 2018.) They will file for exemptions from the individual mandate based on unaffordable premiums, seek alternatives such as health sharing ministries or simply go bare in the hope the Internal Revenue Service under the Trump administration won’t enforce the individual mandate penalties for not having coverage.

 


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 single payer could include “24-hour care”

Lara and Atkins said they are working to address concerns that have killed past single-payer proposals. A wide-ranging financial analysis is under way.Atkins has floated an idea to offset steep costs by dissolving workers’ compensation insurance. Under that change, people with work-related illness or injuries could use their regular doctors, eliminating those costs for employers.“In the past I’ve said it wasn’t possible,” Atkins said. “What makes us different now is the experience with the Affordable Care Act…I’m hearing and seeing an appetite to do more.”

Source: Single-payer health care up for debate in California | The Sacramento Bee

This adds a new wrinkle to California’s consideration of single payer medical care that could help overcome opposition due to the entrenched dominance of employer-sponsored group health coverage for the majority of working age people. The apparent idea here is make a payroll tax to finance single payer more politically palatable to business and employer organizations by eliminating the medical treatment component of state mandated workers’ compensation insurance.

This isn’t the first time the idea of providing medical coverage for both vocational and non-vocational injuries and illnesses through an integrated care system has come up in California. In the 1980s and 1990s, the idea was termed “24-hour care.” California Congressman John Garamendi, who served as the state’s first elected insurance commissioner in the 1990s, was a big proponent of the concept, saying it was wasteful to pay for separate forms of insurance for medical care. Garamendi served on Hillary Clinton’s health care reform task force and influenced it to include 24-hour care in the Clinton administration’s health care reform proposal.

 


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. 

Loss of ACA cost sharing reduction subsidies means higher spending on premium assistance, California exchange analysis finds

SACRAMENTO, Calif. — Covered California on Friday shared with the Congressional Budget Office (CBO) an analysis that shows that a decision not to provide ongoing direct federal funding for cost-sharing reductions would have immediate and dramatic effects on rates, federal spending and the viability of exchanges across the nation.“The impact of not providing direct federal funding of cost-sharing reductions is enormous, and not only puts the viability of the individual market in many states in peril, but would be a bad deal for the federal budget — costing more than $47 billion over the next 10 years,” said Peter V. Lee, executive director of Covered California.“Without the direct federal support for cost-sharing reductions, some health plans will leave the individual market entirely, and those who stay will raise rates significantly,” Lee said. “While the market in California is likely to be relatively stable, for other states there is grave uncertainty. But what is certain is that not funding cost-sharing reductions would actually cost the federal government billions more because of the interplay between rising premiums and subsidies.”

Source: Covered California Daily News: Options to Stabilize the Individual Market Can Reduce Federal Spending and Lower Premiums

 


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. 

Congress holds trump card on exchange cost sharing reduction subsidies (pun intended)

In the coming weeks, the Trump administration will need to say clearly whether they plan to fund cost-sharing reductions — payments that reimburse insurers for providing discounted deductibles to low-income ObamaCare enrollees. In an interview with The Wall Street Journal Wednesday, Trump said he was considering withholding the payments to force Democrats to work with him on healthcare.

Source: Trump faces risky ObamaCare choice | TheHill

Actually Congress — and not the Trump administration — holds far more power to resolve the outstanding issue of funding for cost sharing reduction subsidies for plans sold on state health benefit exchanges that’s giving non-group health plan issuers heartburn as they prepare for plan year 2018.

First because the House of Representatives brought the underlying litigation over the constitutionality of the Obama administration’s funding of the subsidies. It as petitioner — and not the executive branch as respondent — can make the litigation go away by dropping it. A federal district court that decided the case in favor of the House last May put its ruling on hold, giving the House the option to drop the case.

Second because Congress holds the power of the purse. It ultimately decides whether funds for the subsidies are appropriated, not the administration.

 


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. 

Employer group coverage stumbling block for single payer

The bill’s authors haven’t announced how the program would be funded. And that’s where the biggest obstacle lies, said Oberlander: It would largely uproot California’s present system, in which roughly half of coverage is sponsored by employers. If “you’re going to take health insurance largely out of the market, you’re going to disconnect it from employers,” he said. “Then you have to make up all the financing that you’re going to lose.”There’s no way to make up for those lost employer contributions other than to introduce “very visible taxes,” Oberlander said. And that’s not the only reason why a single payer plan would be controversial. “A lot of people are satisfied with what they have,” he said.

Source: While Washington Fiddles, California Leaders Forge Ideas For Universal Health Care | California Healthline

As this article points out, the largest obstacle to creating a single payer health care financing system is the seven decade history of employer group health coverage covering the majority of American adults and their families. The fundamental conflict boils down to how health care is paid for: as an employee benefit or as a government service.

Even though large states like California might have the fiscal and political economies of scale to make single payer pencil out — particularly if it is able to negotiate better value for health care dollars spent — rethinking the financing scheme requires a big conceptual, out of the box leap that makes U.S. health care reform a wicked problem.

 


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. 

Ongoing uncertainty over cost sharing subsidies hangs over state health benefit exchange marketplace

Insurers are worried the payments could be discontinued, which could throw things into chaos and cause insurers to pull out of the marketplaces. However, Kristine Grow, a spokeswoman for America’s Health Insurance Plans (AHIP), said Thursday that it is not enough for the payments to simply continue during the lawsuit. She said insurers need certainty that the payments will be there throughout 2018, or else they might need to raise premiums for next year to factor in the uncertainty. She said AHIP would like to see Congress appropriate the money for 2018 or provide some other guarantee that the money will be there throughout next year.

Source: Trump administration to continue ObamaCare insurer payments during House lawsuit | TheHill

Litigation over the constitutionality of federal funding of out of pocket cost sharing subsidies for individual plans offered on state health benefit exchanges continues with no clear direction on its ultimate resolution. While the Trump administration states funding for the subsidies available to households earning between 100 and 250 percent of federal poverty levels will continue in the meantime, given the volatile policy situation with a new administration and Congress taking office this year, health plan issuers aren’t taking that assurance at face value. They want more policy certainty given that funding stream will need to be available through 2018 as they develop and price products over the next several weeks.

 


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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