Tag Archive: Colorado

Colorado becomes second state to consider ACA Section 1332 waiver to fund single payer health insurance

A recently approved ballot measure will give Coloradans the final say on whether to scrap the state exchange in favor of a single-payer system.

Source: Colorado voters set to decide the fate of health exchange – StateScoop

Colorado becomes the second state where the Patient Protection and Affordable Act’s Section 1332 waiver could be used to fund a single payer system starting in 2017. In this case, it would take the form of a proposed state-sponsored health insurance cooperative funded by a 6.67 percent employer payroll tax that’s up for voter ratification in November 2016.

According to the story, the tax would raise $25 billion per year. If the federal government approves the Section 1332 waiver — which allows states to opt out of public health benefit exchanges and the shared responsibility mandates on individuals and employers if the state can provide coverage that’s as accessible and affordable as under the Affordable Care Act — another $11.6 billion in federal funding could be provided annually to fund ColoradoCare.

Vermont was the first state that planned four years ago to transition from the exchange to a single payer system in 2017 under the 1332 waiver. That plan was abandoned early this year due to concerns over its financial viability and burden on the small New England state’s budget. In more populous Colorado and its larger tax base, it could be easier for the numbers to pencil out.

For a state-based single payer system, a key determinant of its actuarial viability is likely to be the health status of its residents. The numbers look propitious in the Rocky Mountain State, which has a strong outdoor exercise activities culture and ranks high on health status indicators nationally.

 


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. 

Growing Medicaid enrollment poses potential fiscal threat to state health benefit exchanges

The biggest threat to the future financial sustainability of the state health benefit exchange marketplace may be declining economic prosperity and the resulting polarization of household income strata, particularly in the states that have elected to expand Medicaid eligibility to households earning up to 138 percent of federal poverty and to single adults.

The reason? Low income households that qualify for Medicaid generally cannot purchase qualified health plans (QHPs) offered on state health benefit exchanges. If the growing Medicaid eligible population isn’t able to purchase QHPs, the exchanges don’t derive fees assessed on health plan issuers – their main source of revenue as federal establishment grant funds dwindle — that are based on a percentage of premium or set amount for each “effectuated” enrollee. (In states that have opted not to expand Medicaid eligibility, households earning at least 100 percent of federal poverty are eligible to purchase exchange QHPs.)

A Rand Corporation analysis of 2013-15 health coverage enrollment trends issued in June 2015 reported 6.5 million newly enrolled in Medicaid as of February 2015, outpacing by 58 percent the 4.1 million that enrolled in exchange QHPs. According to federal data, 71.1 million Americans were enrolled in Medicaid and the Children’s Health Insurance Program as of April 2015, 12.3 million more than the average for July to September 2013.

While exchanges realize no revenue from Medicaid enrollments, they do incur expense in handling them. Under the Patient Protection and Affordable Care Act’s “no wrong door” policy, exchanges are required to process eligibility and enrollment for both state insurance programs like Medicaid as well as QHPs. It’s also easier to enroll in Medicaid coverage. Unlike exchange QHPs that limit enrollment to part of the year during open enrollment periods, those eligible for Medicaid can enroll at any time of the year.

In California, an expansion state with the nation’s largest Medicaid program serving 12.2 million or about 1 in 3 Californians, enrollment grew by 41.4 percent between December 2013 and January 2015, according to the state’s Medicaid administrator, the Department of Health Care Services. Before that, a severe economic downturn added about 1 million new eligibles to the Golden State’s Medicaid rolls between 2007 and 2010.

Enrollment in California’s Medicaid program – known as Medi-Cal – far outstrips that of QHPs sold through the state’s health benefit exchange, Covered California. According to the federal Department of Health and Human Services, there were 1.4 million enrolled in Covered California plans as of February 2015 — about the same number for plan year 2014. To put that in perspective, there are roughly 61 Medi-Cal enrollees for every 7 enrolled in a Covered California QHP.

Colorado, a Medicaid expansion state that operates a state-based exchange, has seen burgeoning Medicaid enrollment tax the finances of its exchange. The state enrolled 1.2 million in Medicaid — an increase of 433,172 or 55 percent — between late 2013 and February 2015. For 2015, the state’s exchange, Connect for Health, enrolled 27,465 people in Medicaid or CHIP. That’s nearly twice the 15,566 enrolled in commercial plans, blowing a $7 million hole in its budget for increased call center costs handling complex Medicaid enrollments and prompting the exchange to seek reimbursement from the federal government, according to The Denver 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. 

Higher than expected Medicaid enrollment strains IT infrastructure, finances of Colorado health benefit exchange

Medicaid patients enrolling through the state health insurance exchange are taking too much of its resources, exchange board members said Monday, but state officials propose an even tighter partnership with a single technology vendor.

The federal policy of “no wrong door” was meant to be a single online portal for the uninsured that would seamlessly determine their eligibility for either Medicaid or private insurance with tax subsidies they purchased on the exchange.

But system and user errors have created problems for thousands of Colorado customers seeking financial assistance under the Affordable Care Act.

via Colorado health insurance exchange officials clash over Medicaid role – The Denver 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. 

Risky Health Insurance Bets Could Backfire for Small Employers – Businessweek

Risky Health Insurance Bets Could Backfire for Small Employers – Businessweek

Small employers lacking bargaining power with insurers have in recent years fled the small group health insurance market to escape rising premium costs by opting to self insure their workforces’ medical costs.  That trend is colliding with Affordable Care Act reforms designed to make small group coverage more accessible and affordable, in turn reducing the number of medically uninsured small business employees.  The two primary ACA reforms aimed at boosting the health and viability of the small group market: 1)Mandating insurers underwrite all small employers as a single risk pool and; 2) Requiring states to create separate small business marketplaces within their health benefit exchange marketplaces in order to aggregate small employers’ purchasing power.

Insurance market reforms such as these won’t be as effective if small employers don’t participate in the small group insurance market.  Less participation reduces the size of the small group pool — and potentially the ability of the Small Business Health Options Program (SHOP) in state exchanges to concentrate sizable numbers of small employers to drive a better deal with insurers on premium rates.

There’s another even more worrisome risk facing policymakers as this Businessweek article points out.  Small employers playing in both the insurance and self-insured markets and moving in and out of each depending on the health status and claims experience of their employees.  Doing so would provide them a means to create adverse selection against the insurance market by opting to insure when their medical claims costs rise and self insuring when claims costs are low.

State policymakers are addressing this concern by making self insurance a less palatable option for small employers based on model law adopted by the National Association of Insurance Commissioners limiting the use of stop loss coverage that covers self insured employers once medical costs reach a specified amount such as the Colorado measure mentioned in the Businessweek story and SB 161 pending before the California Legislature.

 


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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