Tag Archive: Vermont

One year after jettisoning single payer, Vermont now looks to control medical costs via expanded “all payer” ACO

One year after Vermont abandoned its plan to move to a single payer health finance framework amid concerns over the ability of tax revenues to cover rising medical utilization costs under that payment model, the state is rolling out an alternative aimed at reining in those costs. It would do so through a proposed “all payer model.” The model builds on the Patient Protection and Affordable Care Act’s Medicare Shared Savings Program Accountable Care Organizations (ACO) model in which providers share risk with reimbursements tied to the overall cost and quality of care provided rather than discrete medical procedures under the traditional fee for service model. Reflecting the pervasiveness of costly, chronic health conditions no longer largely confined to the Medicaid eligible population, the Vermont proposal would expand that model to all forms of reimbursement, including Medicaid and commercial plans:

The State would agree to coordinate with Medicaid and commercial insurers, and in return the federal government would allow Medicare to participate in the ACO value-based payment model. As is true today, health care providers’ participation in ACOs is voluntary; the ACO must be attractive to providers and offer an alternative health care delivery model that is appealing enough to join.

The goal of the proposed all payer model is to limit the annual growth of statewide medical spending to 3.5 percent with a maximum spending growth of 4.3 percent:

The goal of this financial target is to bring health care spending closer to economic growth. When health care costs grow faster than Vermont’s economy, Vermont families find their premiums rising faster than wages. This is also true in the state’s Medicaid budget, which grows faster than the revenue sources used to fund it.

The board’s authority to regulate reimbursement rates exists under current state law, according to a term sheet outlining the proposal. Vermont will seek any necessary waivers from the federal government to operate the all payer model, noting the state has jointly developed a policy framework and the needed waivers in consultation with the federal Health and Human Services Department’s Center for Medicare & Medicaid Services.

The fee for service reimbursement model is no longer suitable and is “antiquated” according to the Vermont proposal:

When the fee-for-service health care payment model was devised over 50 years ago, the average life expectancy of Americans was significantly shorter than it is today, and the burden of chronic disease was smaller. The Centers for Disease Control and Prevention (CDC) reports that treating people with chronic diseases accounts for 86 percent of our nation’s health care costs. Health care reimbursement was designed to pay for acute medical conditions that required a single visit to the doctor or a single hospitalization. By contrast, persons with chronic conditions require regular, ongoing care across the continuum of traditional medical services and community-based services and supports. Fee-for-service reimbursement makes it difficult for innovative health care providers to adapt to the changing needs of the population that they serve. The antiquated system provides clear financial incentives to order additional tests and procedures, yet it does not reward doctors and other health care professionals for providing individualized and coordinated care for complex chronic conditions. In the end, patients may receive care that is expensive, fragmented, and disorganized.

 


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. 

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. 

Vermont mulls working with nearby states on health benefit exchange enrollment, call center

Lt. Gov. Phil Scott, senators explore alternative to Vermont Health Exchange – VTDigger.

The VTDigger reports Vermont officials are considering partnering with adjacent states or sharing vendor resources for its health benefit exchange eligibility and enrollment and call center functions as an alternative to partnering with the federal government to support its state-based exchange as have Oregon, Nevada and New Mexico.

 


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. 

Maryland mulls high risk pool fallback for individuals with exchange enrollment problems

Maryland Health Exchange Emergency Bill to be Submitted Next Week « CBS DC.

The proposed legislation would enable individuals seeking coverage through the Maryland’s health benefit exchange but whose enrollments encountered processing glitches to obtain coverage through the state’s high risk pool. According to the story, the coverage would be retroactive to January 1, 2014, when state high risk pools were to end operations under new Patient Protection and Affordable Care Act market rules barring medical underwriting for individual health plans effective that date or later.

Several other states operating their own health benefit exchanges that experienced severe problems with the launch of their web portals face a similar predicament as Maryland including Hawaii, Oregon, Minnesota, Vermont and Massachusetts.

The account also quotes Maryland Gov. Martin O’Malley as stating Maryland is considering the possibility of switching from a state-based to federal exchange either completely or in part, as well as partnering with other states.

Section 1311(f) of the Affordable Care Act authorizes the operation of “Regional or Other Interstate Exchanges” operating in more than one state, subject to the approval of the involved states and the federal Department of Health and Human Services.

 


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. 

Congressmen call on feds to look into exchange participation mandates in Vermont, DC

This item today from the California HealthCare Foundation’s California Healthline reports on the effort by some members of Congress to call out two small jurisdictions – Vermont and the District of Columbia – for mandating participation in their health benefit exchange marketplaces.  In so doing, the lawmakers have spotlighted a point of tension between the letter of the Affordable Care Act and its policy intent in requiring states to set up exchanges.  In asking the federal government to crack down on the two jurisdictions, they correctly note that the ACA does not compel participation in the exchange marketplaces for neither health plans nor individuals and small businesses.

On the other hand, the exchanges are intended to aggregate the market – particularly on the buyer side – in order to restore functionality to the distressed individual and small group health insurance market segments.  In small jurisdictions like Vermont and the District of Columbia, attracting the market into their exchanges is harder because there are fewer residents to draw from.  And with fewer residents, statistically speaking there are smaller numbers of individuals and small employers to potentially participate in the exchange marketplaces.  Which makes them less attractive to health plans since with fewer insureds, they can less easily spread the risk of high cost “covered lives.”  That in turn increases the risk of adverse selection, which can leave the individual and small group markets at least as dysfunctional and unaffordable as they were before the exchanges opened for business.

To some degree or another, smaller state exchanges are likely to face the challenge of attracting and retaining sufficient numbers of individuals and small employers – particularly the latter.  The problem is particularly acute in the least populous states, a point made in this previous blog post where I discuss ACA provisions that allow smaller states to create bigger risk pools to help ward off the specter of adverse selection.

 


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. 

New England is nation’s health care reform laboratory

New England is proving to be the nation’s health care finance reform laboratory.  In 2006, Massachusetts set up a state-run health insurance exchange and required all residents to have public or private coverage for medical expenses.  Those two essential elements of the Massachusetts legislation became the template for the federal Patient Protection and Affordable Care Act (PPACA) signed into law last year.  Barring intervention by the U.S. Supreme Court, those basic components of the Massachusetts plan will become the law of the land in 2014.

The latest New England health care finance experiment was launched this week with the signing of legislation that will put the state on a path to becoming the sole payer of all medical bills, known as “single payer.” The legislation creates Vermont’s state run insurance exchange, Green Mountain Care that opens for business on Jan. 1, 2014.  Under the legislation, three years later the state — and not private insurers and health plans — would cover health care costs of all state residents.

The legislation calls for Vermont to obtain a waiver from federal officials under a PPACA provision allowing states to offer “innovative” health plans starting Jan. 1, 2017 provided the plans provide coverage that is at least as comprehensive as required for plans offered through health benefit exchanges and provide coverage to a comparable number of state residents.

In California, legislation to create a single payer system called the California Healthcare System is stalled for the rest of this year, having failed to meet a deadline this week to pass out of a legislative committee charged with estimating the bill’s cost.

 


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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