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Posts Tagged ‘Affordable Care Act’

Study: Single-payer plan would save California $37 billion per year

June 1st, 2017 Comments off

The new study estimates it would cost California $331 billion to provide health care to everyone living in the state — less than the $368.5 billion spent today in a system that leaves millions without coverage. To pay for it, they say, the state needs to find $106 billion in annual tax revenue — far less than the Senate committee’s estimate of $200 billion. The figures are probably on the optimistic side, said Laurence Baker, a professor of health research and policy at Stanford, because they hinge upon California’s ability to negotiate lower costs with the powerful pharmaceutical industry and other key players, such as hospitals and doctors. “It may be that they could do that,” Baker said, “but getting from where we are now to there would be a tricky, difficult proposition.”

Source: Study: Single-payer plan would save California $37 billion per year

California’s proposed single payer legislation would create a state monopsony that could flex considerable market power with providers of medical services as Baker suggests. But in order to obtain the potential savings it could bargain, the Golden State would have to blow up the current payment pie (illustrated in this post) that carves out slices for different populations and bake a whole new one covering everyone. That’s nothing short of reshaping the entire payer side of the state’s medical care system — a heavy lift considering most people are happy with their slice of the pie with the possible exception of those in the non-group market ineligible for meaningful premium subsidies under the Affordable Care Act.

Then as others have pointed out, there’s the obstacle of getting the Trump administration to approve federal waivers allowing California to redirect those subsidies and Medicare and Medicaid funding to the proposed Healthy California program. The administration is quite favorable to states devising their own schemes for covering those not eligible for group plans and Medicare. But it’s not clear if would go so far as to approve combining all federal medical dollars into a single pot in one state.

 


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. 

To “401 percenters” Affordable Care Act isn’t

February 21st, 2017 Comments off

WASHINGTON (AP) — Michael Schwarz is a self-employed business owner who buys his own health insurance. The subsidized coverage “Obamacare” offers protection from life’s unpredictable changes and freedom to pursue his vocation, he says.Brett Dorsch is also self-employed and buys his own health insurance. But he gets no financial break from the Affordable Care Act. “To me, it’s just been a big lie,” Dorsch says, forcing him to pay more for less coverage.Schwarz and Dorsch represent two Americas, pulling farther apart over former President Barack Obama’s health care law. Known as the ACA, the law rewrote the rules for people buying their own health insurance, creating winners and losers.Those with financial subsidies now fear being harmed by President Donald Trump and Republicans intent on repealing and replacing the ACA. But other consumers who also buy their own insurance and don’t qualify for financial help feel short-changed by Obama’s law. They’re hoping repeal will mean relief from rising premiums.

Source: News from The Associated Press

This is one of the major weaknesses of the Affordable Care Act’s reforms of the individual medical insurance market. Naturally, households earning in excess of 400 percent of federal poverty and who don’t qualify for subsidies are going to be unhappy since they bear the full brunt of premium increases as health plan issuers try to stabilize the market segment under the the law’s provisions by raising premiums. It’s no surprise these 401 percenters as I dubbed them aren’t in favor of keeping those rules in place since from their perspective, they’ve gotten a raw deal other than appreciating the rule requiring plans to accept them regardless of medical history.

The situation also points up the problem of a means-tested scenario of providing medical coverage to those not covered by employer-sponsored plans or Medicare. It’s far from seamless under the Affordable Care Act. The law created multiple categories of benefits and costs for this cohort keyed to household income: 1) Medicaid; 2) Qualified Health Plans offered on state health benefit exchanges with subsidies based on multiple income tranches; and 3) Unsubsidized plans, typically sold outside of the exchanges.

A more elegant, unified scenario is sorely needed, particularly given more households now rely on earnings outside of formal employment arrangements that come with medical benefits or are employed by small employers offering little or minimal 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. 

Individual health insurance segment will continue to face existential crisis post-election

November 18th, 2016 Comments off

Source: Health Affairs Blog. http://healthaffairs.org/blog/2017/02/08/the-marketplace-premiums-increase-underwriting-cycle-or-death-spiral/

 

Regardless of what the incoming Trump administration and Congress opt to do with the Patient Protection and Affordable Care Act’s reforms of the individual health insurance market, the segment will continue to face an existential crisis. The individual market remains the problem stepchild of health coverage, playing an important but relatively minor role in a siloed scheme dominated by employer sponsored coverage for a solid majority of those under age 65 and the big government entitlement programs of Medicare and Medicaid for most of the rest. Not to mention the other integrated government run care systems for active duty military members and their dependents and military veterans.

Given its place in the overall scheme of things, individual health insurance is the remainder market of last resort for those not covered by the dominant private and public systems. It functions as a high turnover, temporary segment that’s inherently unstable. People move in and out of coverage due to changing life circumstances or obtaining eligibility for coverage under one of the dominant systems. Others possess a deeply ingrained “culture of coping” as some have termed it to get medical care where it’s the most easily accessible and affordable such as hospital emergency departments, community clinics and free care events. That coping culture includes avoiding paying for individual health insurance, a pattern in place decades before the Affordable Care Act’s individual market reforms went into effect in 2014. It’s not going to be changed quickly even as health plan issuers are required to accept all applicants without regard to medical history and the law provides subsidies for premiums and out of pocket expenses to low and moderate income households.

That instability makes it very challenging for the basic insurance principle of risk spreading since the risk being insured against is highly dynamic. Actuaries base their projections on relatively stable risk pools and flows of premium dollars into the pool. As long as “covered lives” are moving in and out of the individual market, that desired actuarial predictability will remain elusive, the Affordable Care Act’s carrots and sticks aimed at stabilizing the pool notwithstanding.

As policymakers reassess the Affordable Care Act health insurance market reforms in the post-election period, they might well reexamine an assumption of the law that small group coverage would be eclipsed by the reformed individual market. It was expected that by making individual market coverage more like small group coverage by establishing small group plans as benchmark plans, that along with the individual market reforms would drive more people into individual coverage.

It hasn’t quite worked out that way. Even though the Affordable Care Act does not mandate they do so, small employers are continuing to offer group coverage, albeit less generous than the recent past and more akin to major medical, catastrophic plans with high deductibles. If they are offered coverage under them, employees have little incentive to enroll in individual coverage since they would not qualify for subsidized coverage sold on state health benefit exchanges.

That circumstance reduces the potential size of the individual segment and in so doing, degrades the individual market risk pool. While the Obama administration’s health insurance reforms are based on keeping employer-sponsored health benefits as the bedrock of coverage for most pre-retirement Americans, they also were aimed at revitalizing the struggling individual market. Given that employer-sponsored coverage cuts against a robust individual health insurance space, it may not be possible to have both.

 


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. 

Bill Clinton criticizes ACA gaps

October 5th, 2016 Comments off

At a campaign event for his wife in Flint, Mich., Bill Clinton had praised the law for insuring millions of Americans, but noted that many middle-class Americans were still unable to afford coverage and talked up his wife’s plan to allow those close to retirement age to buy into Medicare.

“The people who are getting killed on this deal are small business people and individuals who make just a little too much to get any of these subsidies because they’re not organized,” he said. “They don’t have any bargaining power with insurance companies so they’re getting whacked.

“So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.

Source: Bill Clinton’s Obamacare remarks put Hillary on the hot seat

The former president’s talking about shortcomings in the Patient Protection and Affordable Care Act relative to making health coverage more accessible and affordable for individuals and small employers. Regarding the former, I’ve referred to them as the “401 percenters” — those who exceed the household income cutoff of 400 percent of federal poverty for advance premium tax credits for individual qualified heath plans sold on state health benefit exchanges. There have been numerous accounts that even those with household incomes between 300 and 400 percent of federal poverty levels get too little in the way of subsidies to make coverage affordable or even worthwhile, federal income tax penalties for going bare notwithstanding.

As for Bill Clinton’s reference to small business, the Affordable Care Act envisioned small businesses organizing to gain some degree of bargaining power in the health benefit exchange’s Small Business Health Options Program known as SHOP. In theory, the SHOP was to enable small business to aggregate their market power, aided by the law’s creation of a single statewide risk pool for the small group market segment. In reality, it didn’t work out that way. SHOP turned out to be a flop, with little interest among small employers and insurance brokers in participating in the program.

 


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. 

Sorry, We Don’t Take Obamacare – The New York Times

May 16th, 2016 Comments off

The goal of the Affordable Care Act, which took effect in 2013, was to provide insurance to tens of millions of uninsured or under-insured Americans, through online state and federal marketplaces offering an array of policies. By many measures, the law has been a success: The number of uninsured Americans has dropped by about half, with 20 million more people gaining coverage. It has also created a host of new policies for self-employed people like Ms. Moses, who previously had insurance but whose old plans were no longer offered.Yet even as many beneficiaries acknowledge that they might not have insurance today without the law, there remains a strong undercurrent of discontent. Though their insurance cards look the same as everyone else’s — with names like Liberty and Freedom from insurers like Anthem or United Health — the plans are often very different from those provided to most Americans by their employers. Many say they feel as if they have become second-class patients.

Source: Sorry, We Don’t Take Obamacare – The New York Times

A primary goal of the Affordable Care Act when enacted was to tame the “Wild West” landscape of individual health coverage and put it more on a par with employer-sponsored coverage. And to provide more peace of mind to those having individual coverage.

It did so by defining essential health benefits and minimum actuarial value of individual plans. According to this New York Times story, that hoped for relative degree of parity has yet to be achieved, with employer-sponsored plans that cover the majority of working age adults remaining preferred by 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 fpilot@pilothealthstrategies.com or call 530-295-1473. 

Medicaid drove NY State of Health exchange enrollment to double in 2015 – Business – The Buffalo News

July 30th, 2015 Comments off

Enrollment in New York’s health insurance exchange more than doubled between 2014 and 2015, across the state and in Western New York, driven by soaring enrollment in Medicaid, the state Health Department reported Wednesday.

About 2.1 million New Yorkers were enrolled in coverage through the NY State of Health marketplace at the end of February, a sharp increase from the 961,000 enrolled at the end of the 2014 period, with 80 percent of them enrolled in Medicaid or Child Health Plus, according to the department’s first detailed breakdown of exchange enrollment through the end of the 2015 sign-up period. In the eight counties of Western New York, enrollment more than doubled from 55,844 to 117,330 between last year and this year.

Source: Medicaid drove NY State of Health exchange enrollment to double in 2015 – Business – The Buffalo News

This item comes as state health benefit exchange officials convene with their federal government partners this week in McLean, Virginia to discuss meeting the challenge of keeping the exchanges financially self sustaining. As I discussed in a recent post, states like New York that established their own exchanges and expanded Medicaid eligibility criteria are finding Medicaid enrollment far outpacing that of commercial qualified health plans (QHPs) offered on the exchanges. That’s a big financial sustainability issue for the exchanges since they obtain no ongoing income for Medicaid eligibility and enrollment processing but are required to perform that function under the Affordable Care Act’s “no wrong door” provision mandating a single integrated application process for both QHPs and Medicaid.

Now that the federal Department of Health and Human Services has issued a proposed rulemaking that would subject Medicaid managed care plans to regulatory requirements like those for commercial QHPs, I expect allowing health benefit exchanges to assess fees on Medicaid managed care plans will be one of the financial sustainability ideas discussed at the McLean meeting.

 


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. 

SCOTUS should issue ruling in King v. Burwell ASAP

March 9th, 2015 Comments off

The U.S. Supreme Court should issue its ruling in King v. Burwell regarding the availability of advance premium tax credits in the nearly three dozen states where the federal government operates state health benefit exchanges as soon as possible. Waiting to issue its decision at or near the expiration of its current term at the end of June will produce months of needless uncertainty adversely impacting the policy planning of the states with federally facilitated exchanges (FFEs), particularly given that many of their legislatures are in session now and considering contingencies including establishing state-based exchanges should the subsidies be ruled illegal in those states.

If the subsidies are found to be contrary to the Patient Protection and Affordable Care Act — even though there’s at least an even chance they will not — states will need sufficient time to authorize and set up their own exchanges and select exchange qualified health plans prior to the start of plan year 2015 open enrollment on November 1. Health plan issuers also need to know if the subsidies will be available in order to make decisions as to what if any plans they will offer in the affected FFE states. Finally, with Congress trapped in partisan gridlock, there is little likelihood of a quick fix from the legislative branch of the federal government if the subsidies are cut off in the FFEs. It’s up the the judiciary to end the uncertainty. A rapid ruling would also be consistent with the high court’s expedited decision to hear the case before a full split could develop among the U.S. circuit courts of appeal.

 


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. 

Contradictory exchange language in Affordable Care Act causes latest uncertainty over law

July 22nd, 2014 Comments off

Today’s 2-1 ruling by the District Of Columbia Circuit U.S Court of Appeals in Halbig, et al v. Burwell holding that the Internal Revenue Service incorrectly interpreted Patient Protection and Affordable Care Act provisions governing advance tax credits for individual health plans purchased though state health benefit exchanges — regardless of whether a state has opted to operate its own exchange or defaulted to having the federal government do so — stems from two contradictory provisions in the law.

Section 1311(b)(1) of the law requires all states to establish an exchange, stating that “Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘‘Exchange’’) for the State…” (Emphasis added)

When the word “shall” appears in a statute, it’s a mandate or obligatory requirement. It’s not an option or a suggestion.

However, the Court of Appeal also reviewed another section of the Affordable Care Act at Part 3 that gives the states flexibility in implementing the exchange mandate. This is where the trouble lies. Section 1321(b) states:

 (b) STATE ACTION.—Each State that elects, at such time and in such manner as the Secretary may prescribe, to apply the requirements described in subsection (a) shall, not later than January 1, 2014, adopt and have in effect—

(1) the Federal standards established under subsection (a);
or
(2) a State law or regulation that the Secretary determines implements the standards within the State. (Emphasis added)

Among the federal standards established under subsection (a) is the establishment and operation of exchanges.

Note the use of the word “elects.” Elect means to choose or opt to take (or not take) an action. It is not a requirement unlike the clear “shall” of a mandate. That implies that despite the clear mandate of Section 1311(b)(1), a state could theoretically opt not to establish an exchange under Section 1321(b).

The Court of Appeal apparently picked up on this distinction in its ruling:

The crux of this case is whether an Exchange established by the federal government is an exchange established by the State under section 1311 of the [ACA].” We therefore begin with the provisions authorizing states and the federal government to establish Exchanges. Section 1311 provides that states “shall” establish Exchanges. 42 U.S.C. § 18031(b)(1). But, as the parties agree, despite its seemingly mandatory language, section 1311 more cajoles than commands. A state is not literally required to establish an Exchange; the ACA merely encourages it to do so. And if a state elects not to (or is unable to), such that it “will not have any required Exchange operational by January 1, 2014,” section 1321 directs the federal government, through the Secretary of Health and Human Services, to “establish and operate such Exchange within the State.” Id. § 18041(c)(1).

This is likely to be a critical analysis determining the fate of the subsidies in the three dozen states that have elected not to operate their own exchanges as the case moves forward to a potential en banc review by the District Of Columbia Circuit U.S Court of Appeals. The matter could end up before the U.S. Supreme Court after another circuit of the Court of Appeals panel today unanimously upheld the IRS’s interpretation of the advance tax credit subsidies as applying to all states, regardless of whether they elected to establish their own exchanges. That ruling was in King et al v. Burwell. The conflicting rulings leave a cloud of uncertainty hanging over the federally operated exchanges that is unlikely to be resolved in the less than four months remaining to plan year 2015 enrollment that opens November 15.

The potential for the Supreme Court to intervene increases in light of this analysis by the law firm of Epstein Becker Green noting similar cases pending before other federal appellate courts that could leave the issue unresolved:

The Obama administration has already indicated it will seek en banc review of the Halbig decision by the entire D.C. Circuit. If the full D.C. Circuit reverses the Halbig panel decision, the existing “circuit split” would be resolved, potentially making Supreme Court review less likely. It should be noted that there are similar cases pending in district courts in the 10th and 7th Circuits, that if decided in favor of the challengers could create a circuit split even if the full D.C. Circuit reverses Halbig.

If issue comes before the Supreme Court and it upholds Halbig, it would throw the individual health insurance market in the majority of states with federally-operated exchanges back into market failure since without the advance tax credit subsidies that are propping it up, low and moderate income earners would once again be priced out of the market, especially those in the highest age rating bands. It could also severely erode the Affordable Care Act’s shared responsibility provisions by exempting individuals from the coverage mandate based on unaffordable premiums and mooting fines levied on large employers that don’t offer minimum affordable coverage and an employee obtains subsidized individual coverage in a state health benefit exchange since the subsidies would no longer be available in the federally-operated exchanges.

 


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. 

Shift away from employer coverage would provide triple fiscal benefit to federal government

May 12th, 2014 Comments off

As a candidate in the 2008 presidential election, President Obama initially favored shifting to a single payer (government paid) system of universal health coverage but later altered his stance. Instead, Obama favored what he described as a less disruptive brand of health care reform that retains the current system of private insurance sponsored by employers that covers the vast majority of working age Americans.

Ironically, Obama’s Patient Protection and Affordable Care Act could have the opposite effect, according to one of the chief drafters of the law. Ezekiel Emanuel, former Obama administration official, foresees a shift away from employer-based coverage over the next decade, with few private employers offering health coverage by 2025. Amplifying Emanuel’s prediction was a Kaiser Health News report last week on a new paper by the Urban Institute strongly suggesting that one of the linchpins of the ACA to ensure the continuance of employer-sponsored coverage – the mandate that employers of 50 or more offer coverage to most of their workers – ultimately won’t have much of an impact in terms of expanding coverage and keeping people medically insured.

The reason: Adam Smith’s law of rational economic self-interest could trump any penalties these employers will face starting in 2015 if they don’t offer coverage. Some large employers could conclude it will cost them less to pay the penalty than provide coverage through a group health plan or self-insuring employee medical costs. Not only that, the Affordable Care Act ironically cuts against employer sponsored coverage by imposing a large excise tax beginning in 2018 on employers who sponsor overly generous plans.

Even without this tax on so-called “Cadillac” plans, the federal government stands to reap a triple fiscal benefit from increased revenues from any major shift away from employer-sponsored coverage. First, employers not offering coverage would of course be unable to take an income tax deduction for offering coverage. Second, any additional amount of money they provide employees as higher compensation or stipends to purchase individual coverage would generate higher individual tax revenues since they would be taxable to employees. Third, the large employer mandate penalties plus increased individual employee tax liability could also benefit the federal government by offsetting advance tax credit subsidies for plans sold in the public exchange marketplace to workers with household incomes below 400 percent of federal poverty.

 


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. 

Eight Senate measures amend, build on ACA insurance reforms

March 31st, 2014 Comments off

Democratic senators have new ideas for health care law | Washington Watch | McClatchy DC.

 


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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