Author Archive: Frederick Pilot

Trump administration adopts market-based statement of health care policy

Nearly nine months into his administration after many months of policy debate in Washington, President Donald Trump has issued an official statement of his administration’s health care policy in an October 12, 2017 Executive Order.

Trump’s policy is essentially not much different than that of his predecessor, Barack Obama, insofar as it retains one of the nation’s largest private sector financing mechanisms: employee benefit medical care plans. Like the managed competition principle of Obama’s Patient Protection and Affordable Care Act, Trump’s policy is market-based and aspires to harness competitive market forces to reduce medical costs and increase access to coverage.

It also mirrors the Affordable Care Act insurance market reforms by concentrating on the small employer group and individual (non-group) market segments where medical care cost pressures hit hardest. The order suggests (not orders) his administration explore allowing small employers to participate in association health plans traditionally used by large employer groups. In addition, Trump suggested his administration consider proposing regulations or revising guidance to increase the use of Health Reimbursement Accounts (HRAs) and expand employers’ ability to offer HRAs to their employees and allow HRAs to be used in conjunction with non-group coverage for employees.

The latter element closely aligns with recent legislation signed into law late in the Obama administration that enables employers to use a new type of HRA to subsidize premiums on a pre-tax basis for employees obtaining coverage in the non-group market. Effective January 1, 2017, employers of 49 or fewer employees that do not offer group coverage can fund up to $4,950 annually for single employees and $10,000 for an individual plan covering an employee and their family members.

Various observers expressed concern at the executive order’s suggestion (once again couched as a request, not a directive) that the administration consider reversing an Obama administration restriction limiting short term individual medical insurance policies to a maximum term of three months and expanding the limit to 12 months or even longer. The concern is well placed because doing so would put short term plans in competition with non-group and small group plans sold with the standard 12 month coverage term.

The Affordable Care Act established ten essential benefit categories with the goal to put small group and non-group coverage on a par with large group plans. But the tradeoff for these more generous plans is high and rapidly rising premium rates and deductibles, particularly painful for households earning too much to qualify for premium and cost sharing subsidies for individual plans sold on state health benefit exchanges. However, short term plans offering skimpier coverage for lower cost won’t comply with the Affordable Care Act’s minimum coverage mandate for individual taxpayers, subjecting them to a tax penalty.

Finally, Trump’s executive order reinforces market-based approach to mediate medical care costs by requiring the Health and Human Services Department in consultation with the departments of Treasury and Labor as well as the Federal Trade Commission to produce a report by April 12, 2018 and every two years following outlining where existing state and federal policy hinders market competition. The report must also identify policy actions to reduce barriers to market entry, limit excessive consolidation and prevent abuses of market power.


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 or call 530-295-1473. 

Back to the future for Nevada’s Silver State Health Insurance Exchange

Nevada’s Silver State Health Insurance Exchange (SSHIX) is asking the federal government to revert from a federally supported health benefit exchange back to an independent state-based exchange. The Nevada exchange began using the federal government’s online enrollment platform soon after its own platform faltered amid technical glitches in the first open enrollment for plan year 2014.

Prompting the move is concern over service quality and rising costs. “The Nevada Exchange is set to spend an estimated $7.2 million dollars to lease’s eligibility and enrollment platform in 2018; this number represents a fee increase from the estimated $5.5 million that will be spent in 2017,” SSHIX Executive Director Heather Korbulic wrote in an October 12, 2017 report to the exchange’s board of directors. “The decrease in service and increase in cost is unacceptable.”

Following a September meeting with federal officials, Korbulic reported the exchange received approval to move forward with a “blueprint” application – a business plan to make the case to the feds that the exchange can sustain itself financially and fulfill core functions of plan selection and consumer outreach and enrollment. “This is the first step in getting the Exchange on a sustainable pathway whereby we will have our own technology with sustainable cost structures and regular access to consumer information,” Korbulic wrote.


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 or call 530-295-1473. 

Final 2017 bid to temporarily stabilize non-group market includes reinsurance revival — and public option

In what is likely to be a final, last minute effort this year to temporarily bolster the challenging market that is non-group or individual medical coverage, two elements involved in the crafting of the Patient Protection and Affordable Care Act are being revived. One – reinsurance — was enacted as part of the law’s insurance market reforms but expired in 2017. Another – the so-called “public option” – wasn’t.

On August 30, a group of eight state governors called on Congress among other measures to restore reinsurance to protect health plan issuers wary of high cost claims and worse than expected statewide risk pools as part of a federal stability fund that would help states fund reinsurance programs in 2018 and 2019. Additionally, seven states have applied to the Trump administration for state innovation waivers under Section 1332 of the Affordable Care Act to establish reinsurance programs in 2018 to help stabilize their non-group markets. Two other states enacted authorizing legislation for such a waiver, according to a chart prepared by the law firm Faegre Baker Daniels LLP.

The proposal by the eight state governors – notably both Republicans and Democrats – would fortify the non-group coverage by allowing individuals to buy coverage via the Federal Employee Health Benefit Program in counties where only one commercial non-group plan is offered. This in effect would provide a “public option” in the form of a government-run plan that was considered but rejected in the development of the Affordable Care Act. It also is in line with a suggestion by former President Barack Obama during his final year in office to create a public plan to address constrained choice among plans in some parts of the nation. Using the FEHBP for the public option could raise objections that as a large employer group plan, it’s not actuarially and administratively suitable for covering non-employees.

Those objections as well as declining affordability for plans sold off the state exchanges jeopardizing the non-group risk pool could help fuel a proposal expected this month by Vermont Senator Bernie Sanders to extend Medicare to those under age 65. Look for this proposed Medicare expansion to serve as a starting point for debate on a possible successor to the Affordable Care Act’s individual and possibly small group market reforms going into 2018-20. In the meantime, both Congress and the Trump administration will likely go along with some of the proposals to help stabilize non-group including extending — at least for 2018 — out of pocket cost sharing subsidies for low income households purchasing silver level plans on state health benefit exchanges. Uncertainty surrounding that funding has drawn widespread concern from states, the exchanges and plan issuers, and consumer interests with no one standing to gain politically if they are not continued.

A key element of the Medicare expansion proposal will likely be some form of presumptive eligibility and/or automatic continuous enrollment, accompanied by payroll and self-employment taxes to help fund the expansion for those under 65 and ineligible for other private or public coverage – along with a possible opt in for those eligible for employer sponsored plans. Policymakers on both sides of the aisle with the support of states, plan issuers and consumer groups will likely conclude the Affordable Care Act’s annual enrollment period used for employer group plans does not translate well to the non-group market. Annual enrollment is a very well established and administratively supported process for employer group plans. But it has proven challenging to implement in non-group due to the market segment’s characteristic high churn and part year enrollment by consumers that makes it difficult to risk rate.

Conventional political wisdom would hold expanded Medicare might be a non-starter among majority Republicans in Congress. But it stands a chance of advancing since it would with automatic enrollment potentially reduce the need for the Affordable Care Act’s individual and employer shared responsibility mandates that have proven among the most unpopular provisions of the statute. A Medicare expansion might well include statutory authority allowing the federal government to negotiate prescription drug prices for the program, addressing concerns shared across the political spectrum over high medication costs.


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 or call 530-295-1473. 

State intervenors granted standing in House v. Price by federal appellate court

The U.S. Court of Appeals for the District of Columbia Circuit ruled Tuesday that Democratic state attorneys general can defend crucial ObamaCare payments to insurers, as President Trump has indicated he may cut them off. The court granted a motion that a coalition of 16 attorneys general — led by California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman — filed, according to a court order uploaded by Reuters. It’s possible this decision could make it harder for the appeal to be dropped, healthcare experts suggested.

Source: Court rules allowing Dem states to defend Obamacare payments | TheHill

This development comes just as the Trump administration is about to make a determination on whether to pay the next installment of cost sharing reduction (CSR) subsidies at issue in the case, House v. Price. The subsidies increase the generosity of silver tier plans sold on state health benefit exchanges to households earning less than 250 percent of federal poverty levels to make out of pocket costs more affordable to low income households. President Trump signaled following the failure of the Senate last week to pass legislation amending the Patient Protection and Affordable Care Act that he would withhold authorization for the subsidies, calling them a “bailout” of health plan issuers.

A federal district court ruled in May 2016 the subsidies would have to be specifically appropriated by Congress. The lower court put the ruling on hold to allow the Trump administration and the House of Representatives — which challenged the constitutionality of funding the subsidies by the executive branch — to determine how to proceed. Now with 16 states granted standing in the case, the litigation could take a different turn and potentially limit the Trump administration’s ability to take unilateral action to end funding of the CSR subsidies.


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 or call 530-295-1473. 

Anthem cites market uncertainty in reducing non-group presence in California

Anthem explains its decision to withdraw from 16 of 19 of the state’s rating regions in an email sent today to individual plan members, with proviso it could boost California plan offerings in future:

Unfortunately, uncertainty in the health insurance market does not provide the clarity and confidence we need to offer affordable coverage to our members in 2018. Anthem is committed to affordable health care coverage and we’re truly sorry we can’t continue offering these plans. We hope to increase our plan offerings in California very soon.


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 or call 530-295-1473. 

Health in the U.S. and other rich countries: We pay more in health care but are sicker.

Our health depends on much more than just medical care. Behaviors such as diet, physical activity, and even how fast we drive all have profound effects. So do the environments that expose us to health risks or discourage healthy living, as well as social determinants of health, such as education, income, and poverty.

Source: Health in the U.S. and other rich countries: We pay more in health care but are sicker.

It’s unfortunate that “health care” has been equated with medical care. Health care isn’t medical care. As this article notes, health is what we give to ourselves and support each other in obtaining in order to avoid medical care and to ensure optimal population health status. Good health care makes for less medical care utilization– a big cost driver as the United States grapples with the growing tab of paying for medical care.


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 or call 530-295-1473. 

Majority Republicans lack votes, time to reform ACA, Medicaid via reconciliation bill

The dispute within the Republican Party over health care widened further Friday as President Trump joined with two conservative senators in calling for an outright repeal of the Affordable Care Act if the party fails to agree on an alternative plan by the end of the July Fourth recess. The reemergence of what has for much of the year been a fringe idea within the GOP revealed not only the party’s philosophical divide over how to revise Obamacare, but also senators’ growing anxiety that they are headed home to see their constituents with little to show them.

Source: Republicans grow increasingly anxious about heading home without a health plan – The Washington Post

The Republicans are back to square one of their years long challenge of repealing the Patient Protection and Affordable Care Act without any Democratic votes. It’s an exercise in the Einsteinian definition of insanity as doing the same thing over and over and expecting a different result. For example, see this article Republicans Divided on Replacement Legislation for Health Reform Law  — from May 1, 2012.

Majority Republicans must understand the limits of their policymaking power. Repeal or a rewrite of the enormous 10 title Affordable Care Act will require bipartisan cooperation and far more time than the remaining three months of the current fiscal year via a budget reconciliation measure that constrains major policy changes under the Byrd Rule. They also are facing strong blowback from constituents worried that attempting rapid and far reaching reform using the budget reconciliation process — including overhauling the five-decade-old Medicaid program — will disrupt their access to medical care.


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 or call 530-295-1473. 

Deficient economies of scale challenge Nevada non-group market

The scarcity of doctors and medical facilities in vast, thinly populated areas can mean higher costs to insurers. But Nye County, which borders Las Vegas’ Clark County, is one of the state’s largest rural counties — and all four companies will participate there. “It is puzzling to me how carriers are ensuring full county coverage to Nevada’s neighboring states, yet are at a potential loss about how to offer insurance for all but three of Nevada’s counties,” Sandoval wrote the same executives earlier this week. He told them that leaving the exchange vacant in 14 counties will set back years of work to nearly halve Nevada’s uninsured rate.

Source: Governor insists execs work to keep rural Nevadans insured | Charlotte Observer

Nevada Gov. Brian Sandoval is confronting a challenge facing the non-group medical insurance market in states where there are too few patients and providers to make for a viable insurance market. Coverage goes hand in hand with provider networks since without enough providers, coverage isn’t useful. Factoring in overhead, it’s no wonder plan issuers aren’t interested in playing, particularly facing the possible loss of cost sharing subsidies for exchange silver plans.

Even though the Patient Protection and Affordable Care Act pooled entire state non-group populations into a single statewide risk pool, provider networks are by definition local. In less populous areas, it’s possible only statewide integrated payer and provider plans are going to work. Federally Qualified Health Centers may also have to play a larger role in providing primary care in these areas, with the plans covering costlier services provided in more populated parts of a state.

Telemedicine can also play a role in access to consultations with distant specialists and post hospital discharge patient monitoring. But it requires robust advanced telecommunications infrastructure that is typically lacking in less densely populated areas. Here too, the federal government can play a constructive role in financing its construction in areas passed over by private sector providers.


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 or call 530-295-1473. 

Medicaid politics imperil Senate Better Care Reconciliation Act

Senate Republicans’ Obamacare repeal effort is on track to blow up before it even gets started.The GOP is well short of the votes needed to bring its bill to the floor, and party leaders and President Donald Trump are kicking into overdrive to save their imperiled health care overhaul.At least four Republican senators, Susan Collins of Maine, Rand Paul of Kentucky, Dean Heller of Nevada and Ron Johnson of Wisconsin, have signaled they could oppose a key procedural vote that will occur either Tuesday afternoon or Wednesday. A number of other senators, like Shelley Moore Capito of West Virginia and Marco Rubio of Florida, are undecided.

Source: Senate Obamacare repeal on brink of defeat – POLITICO

Imperiling the Better Care Reconciliation Act of 2017 is the politics of Medicaid. In the House, majority Republicans faced an uphill but less steep task in passing their version of the reconciliation bill because proposing to reform Medicaid into a federal block grant program affected far fewer constituents. Because members of the Senate represent their entire states, scaling back Medicaid affects a lot more people and consequently has far greater repercussions and political peril. Since the federal share of Medicaid makes up a large percentage of state budgets, governors are also understandably concerned over the loss of federal share funds.

The backers of the House and Senate bills have bitten off more than they can chew by proposing wholesale reform of the five-decade-old Medicaid program. They’ve made their job even harder by trying to substantially overhaul Medicaid funding at the same time as the Patient Protection and Affordable Care Act’s insurance market reforms — all within the narrow procedural confines of a budget reconciliation bill that make it questionable it would pass parliamentary muster.


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 or call 530-295-1473. 

Nevada governor vetoes “Medicaid for All” measure

Nevada Gov. Brian Sandoval rejected proposed legislation that would have allowed Nevadans to purchase Medicaid managed care plans on the state’s health benefit exchange regardless of household income if they are not otherwise Medicaid eligible.

In a June 16 veto message, Sandoval wrote that due to tight legislative deadlines, there was too little time to thoroughly vet the proposal to establish the Nevada Care Plan within the state’s Medicaid program, noting he had approved legislation authorizing a study of the concept. Sandoval also raised concerns that there would be sufficient providers willing to accept the relatively low Medicaid reimbursements and the possibility of households choosing to purchase Medicaid managed care plans to replace commercial 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 or call 530-295-1473. 

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