Monday, June 17, 2019

ACA Medicaid expansion: Lien on me?

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I think it's fairly widely understood (at least by me) that Medicaid picks up the tab for long-term care only when the beneficiary has spent down her assets (if she had any), and that when the spouse of such a beneficiary passes the state can claim remaining assets, such as a house.

What I didn't know, and just learned via  New Jersey-based elder lawyer Lauren Marinaro, is that most states can recover assets from any Medicaid recipient over age 55 upon that person's death or the death of his spouse (or any children passing age 21 or blind or disabled). In most states, that's true whether or not the Medicaid enrollee obtained long-term care.

A 1993 federal law required states to recover assets from the estates of recipients of long-term care services under Medicaid. States also have the option of recovering for other Medicaid benefits obtained above age 55. As of 2014, 35 states and D.C. were recovering for other benefits.

The ACA Medicaid expansion complicated the picture. Pre-ACA, Medicaid eligibility generally included an asset test -- as it still does for Aged, Blind and Disabled (ABD) Medicaid. In states that have accepted the ACA expansion, however, Medicaid eligibility is extended to anyone* whose household income is below 139% of the Federal Poverty Level (FPL) -- or $17,236 for a single person in 2019.

There is no asset test for Medicaid eligibility under ACA expansion criteria.  But in many states (including New Jersey) anyone over age 55 who qualifies as an "expansion" enrollee (as well as any other Medicaid enrollee) is potentially subject to lien on assets and state recovery after death. In New Jersey, the tab would include total capitated premium paid to a Medicaid managed care organization (MCO) for enrollment in a managed Medicaid health plan.

Friday, June 14, 2019

Now they really are a dream team

Congratulations to the Toronto Raptors, a team that everyone seems to admire and wish well, including Golden State. The last time I considered this team's existence, the city of Toronto was holding a contest to name their new expansion team This triggered a happy half hour with my then 11 year-old son Ben, spent dreaming up ever more preposterous names, memorialized some weeks (months?) later in the Globe and Mail...full text below the screenshot, minus a couple of editorial intrusions in the opening lines...nice graphic, isn't it?


Dream Teams

The mayor  said, "Citizens! Dare to dream!
Invent a tag for our basketball team.
Season tickets for the right name:
A reserved seat in history--ten minutes of fame."
     We got right to it with dreams of glory,
Choosing animals fierce and gory:

Tuesday, June 11, 2019

Just how much does Medicaid expansion lighten the silver load?

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Picking up on a premise explored last week...
Actuaries Greg Fann and Daniel Cruz have pointed out that the effects of silver loading [see note at bottom*] in the ACA marketplace should intensify over time (as CBO forecast), with silver plan premiums rising relative to those of other metal levels, increasing discounts in gold and bronze. Fann and Cruz argue that regulators should help the process along by stipulating that insurers must price plans proportionate to actuarial value, with only limited adjustment for their estimates of "induced demand," the higher usage prompted by lower out-of-pocket costs.
...and on a complicating factor: silver plan AV is substantially lower in states that have expanded Medicaid, because those states have far fewer low income enrollees for whom CSR has boosted silver plan AV to 94%:
In states that have refused to expand Medicaid, silver loads are larger, because eligibility for marketplace subsidies begins at an income of 100% of the Federal Poverty Level (FPL), as opposed to 139% FPL in expansion states. More than one third of enrollees in nonexpansion states have incomes below 139%, which qualifies them the for highest level of CSR -- and close to 90% in this income range select silver plans. Hence the estimated cost of CSR, priced into silver plans, should be higher, rendering bronze and gold plans relatively cheaper.
Most recently I noted that in New Jersey in 2019, silver plan enrollees obtained an average actuarial value of 80%, compared to  87% for the 39 HealthCare.gov states taken together. Today I want to sharpen that contrast with a measure of just how much more silver load the nonexpansion states have to work with generally than the expansion states.

Sunday, June 09, 2019

The problem with silver loading in New Jersey

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New Jersey's ACA marketplace disappointed in 2019. Prior to open enrollment, the state passed an individual mandate to replace the zeroed-out federal mandate and also stood up a reinsurance program. Together, these measures dropped premiums 22% below where they would otherwise have  and 9% net compared to 2018. Governor Murphy also directed all state agencies to encourage enrollment outreach and devoted a small sum of state funds to partly offset massive federal cuts to advertising and enrollment assistance.  

Nonetheless enrollment dropped 7% from 2018 levels -- higher than the overall 4% drop in the 39  states using the federal exchange, HealthCare.gov, though right at the median for states on the platform that had expanded Medicaid.

Silver loading* effects pretty clearly explain a wide performance gap between expansion and nonexpansion states on HealthCare.gov in 2019. In states on the platform that have not expanded Medicaid, 2019 enrollment was 99% of the 2018 total and 95% of 2017. In expansion states, enrollment in 2019 was 93% of 2018 and 87% of 2017. Why? As I outlined in January (with a hat tip to Dave Anderson):
In states that have refused to expand Medicaid, silver loads are larger, because eligibility for marketplace subsidies begins at an income of 100% of the Federal Poverty Level (FPL), as opposed to 139% FPL in expansion states. More than one third of enrollees in nonexpansion states have incomes below 139%, which qualifies them the for highest level of CSR [94% AV]  -- and close to 90% in this income range select silver plans. Hence the estimated cost of CSR, priced into silver plans, should be higher, rendering bronze and gold plans relatively cheaper.
In New Jersey, the silver loading gap is particularly acute; the practice has yielded essentially no discounts at all for subsidized buyers, though in 2019 it did generate discounted off-exchange silver for unsubsidized enrollees.

Saturday, June 08, 2019

Silver loading and 2019 enrollment: A compendium

Well, we've had a few months to digest how open enrollment for 2019 went down in the ACA marketplace. Recently, it's been borne in on me that silver loading effects intensified in 2019; that they should intensify further; that this process should continue to improve marketplace offerings, all other conditions remaining stable (quite an if...)'; and that regulators can help this process along.

Chewing over the data has sent me back to my own posts about 2019 enrollment; as usual, I'd forgotten much of what I'd written. For my own sake if no one else's, here's an index of posts about 2019 enrollment data and/or silver loading worth returning to, for me at least. I'll update as more are added.

A couple of takeaways (or spoilers): 1) nonexpansion states on HealthCare.gov had smaller enrollment losses than expansion states on the platform -- almost certainly a silver loading effect; 2) silver loading intensified in 2019; 3) silver loading has quite a ways to go. especially in New Jersey.

The posts:

Friday, June 07, 2019

Silver is platinum. Insurers should treat it as such. Regulators should make them.

Actuaries Greg Fann and Daniel Cruz have pointed out that the effects of silver loading in the ACA marketplace should intensify over time (as CBO forecast), with silver plan premiums rising relative to those of other metal levels, increasing discounts in gold and bronze. Fann and Cruz argue that regulators should help the process along by stipulating that insurers must price plans proportionate to actuarial value, with only limited adjustment for their estimates of "induced demand," the higher usage prompted by lower out-of-pocket costs.

In my last post, I cited evidence that the self-perpetuating engine that should increase silver loading effects over time worked in 2019, the second year that the practice was in effect. The average actuarial value of silver plans sold on HealthCare.gov rose measurably in 2019 as higher income enrollees switched to bronze and gold. Here I want to bring further evidence that this process advanced in 2019, and that silver premiums should accordingly rise more in 2020 than gold or bronze (or now-rare platinum) premiums.

Wednesday, June 05, 2019

Silver loading is just getting started

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A bit more than a year ago, I calculated that silver loading, a disruption that Trump accidentally injected into the ACA marketplace just in time for 2018 Open Enrollment, had boosted enrollment by several hundred thousand, perhaps in the 350,000-700,000 range.

Silver loading was prompted by Trump's cutoff in October 2017 of direct reimbursement to marketplace insurers for the Cost Sharing Reduction (CSR) subsidies that reduce out-of-pocket costs for low income enrollees who select silver-level plans. State regulators responded by allowing or encouraging insurers to price CSR into the premiums of silver plans only.* Since premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver plan benchmark , inflated silver premiums create discounts for subsidized buyers in bronze and gold plans.

These discounts are often dramatic. As Stan Dorn notes in Health Affairs this week, "By 2019, 15 states had average gold premiums lower than average benchmark silver premiums, and in 15 other states gold premiums exceeded benchmark silver by less than 10 percent."  In 2018, zero-premium  coverage (usually but not always in bronze plans) was available to more than half of marketplace participants, thanks to silver loading.

Monday, June 03, 2019

What state laws ratifying ACA marketplace rules can and can't accomplish

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On May 31, New Jersey legislators introduced, with Governor Murphy's support, a raft of bills* that  codify in state law the ACA's coverage rules in the individual and small group health insurance markets, including protections for people with pre-existing conditions

Separate bills maintain a ban on medical underwriting or exclusion of pre-existing conditions (S626), mandate coverage of the ACA's Essential Health Benefits (S562) and a set of preventive services (S3803), and limit age rating -- the degree to which the oldest enrollees can be charged more than the youngest adult enrollees -- to the ACA's 3-to-1 ratio (S3810).**

Many other states with Democratic governors and legislatures have passed or have in progress similar laws that duplicate the ACA's federal standards. Such laws are redundant by definition; they are designed as protection against future further Republican action to undermine the ACA.

I can imagine these laws serving a useful function under two circumstances:

Friday, May 31, 2019

Michael Bennet misrepresented his Medicare-X bill on CNN

Colorado Senator Michael Bennet, who entered the presidential race on May 2, made headlines yesterday for taking on Bernie Sanders' Medicare for All plan in a CNN Town Hall yesterday. Bennet claimed that it's impracticable to take employer-sponsored insurance away from "180 million people" currently insured through their employers ( a high estimate), especially from millions whose unions have negotiated good benefits.

It's a familiar line of attack. More noteworthy was the fact that Bennet misrepresented his own ACA reform bill, the Medicare-X Choice Act, which introduces a national public option into the ACA exchanges. Here's what Bennet said (my transcript and emphasis):
What we would be much better off doing to get to universal healthcare quickly is to finish the job we started with the Affordable Care Act and have a true public option...The one that I have designed would be administered by Medicare and it would give all of you the chance to choose what's right for you and your family. If you want a public option then you can have it. Basically it's Medicare for all if you want it. But if you to keep the insurance you have, which many people do, you'd be able to do that as well.
This is not literally untrue. As of the fifth year after enactment, anyone could buy into Medicare-X, which would be offered in all counties nationwide alongside private plans in the ACA marketplace. But only a limited number of people could buy in on a subsidized basis. Most people whose employers offer insurance would not be subsidy-eligible.

Monday, May 27, 2019

Medicare for all who want it: Potential and pitfalls

I have suspected for some time that the longest-lasting Democratic presidential candidates may converge on health care reform plans that enable any American to buy into a strong public option (probably deemed "Medicare") at an affordable price. That would include people whose employers offer coverage -- they would be subsidy-eligible if they opt into the public plan.

The existing bill that fits this description is the Medicare for America Act -- a bill that takes such an open-to-all public plan to its logical conclusion by phasing out Medicaid and revamping the Medicare currently available to seniors and the disabled -- and, crucially, adding long-term care insurance. The bill is rich in promise and not free from pitfalls, which I've been more or less live-blogging over the past couple of weeks. I thought I'd take some space here to index those post, a step toward making something of a coherent whole of them (including some earlier posts). Here goes, then.

The plan that lets anyone buy into Medicare (3/21/19)
This overview at healthinsurance.org starts with my core question: Can Democrats bite off as much healthcare reform as Medicare for America encompasses? Might they pare it back to its core -- a public option buy-in for anyone who wants/needs it?

Medicare for America might let private insurance thrive (3/22/19)
The key condition is that healthcare providers would have to accept "Medicare" payment rates from commercial insurers.

Thursday, May 23, 2019

"Medicare for all who want it" raises the kludge question

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Given the "triple veto" imposed on legislators by the U.S. Constitution, U.S. policy is doomed to kludge. Policy design that's logical and internally coherent often can't survive the legislative process.

On the healthcare front, it's been evident since the early aughts that the logical, feasible, appropriately incremental way to improve access and control costs without throwing multiple healthcare industries into chaos and swiftly transitioning 150 million people out of employer-sponsored insurance is to offer a public plan on affordable terms to both employers and employees -- leaving employer insurance to either compete effectively or die on the vine.

Early iterations of such a "public option" included Helen Halpin's CHOICE program (2003), Rep Peter Stark's Americare bill (2006),and Jacob Hacker's Health Care for America plan (2007). All of these enabled any individual to buy in on an income-adjusted basis regardless of whether her employer offered insurance, and gave employers the option of paying into the public plan (e.g., via a payroll tax) rather than offering their own plans.  Instead we got the ACA -- with subsidy eligibility limited to those without access to employer insurance deemed "affordable" (by dubious standards), inadequate subsidies, and dependence on the whims, pricing, negotiated provider payment rates and plan designs of private insurers.

Now we're back to the future with the Medicare for America Act, introduced in late 2018 by Reps Rosa DeLauro and Jan Schakowsky and reintroduced last month. Medicare for America offers a revamped "Medicare" on affordable terms to any citizen or legally present noncitizen who opts in.

The kludge question: Does offering a truly comprehensive and affordable plan on affordable terms to anyone who wants it necessarily entail ending our existing mammoth and Byzantine public health insurance programs, Medicaid and as-currently-structured Medicare? Medicare for America's creators answered "yes."

Tuesday, May 21, 2019

Folding Medicaid into Medicare for America: Will states pay their share?

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One of the many sweeping transformations of U.S. healthcare mandated by the Medicare for America Act is the absorption of all Medicaid programs -- currently serving some 72 million Americans -- into a revamped Medicare serving all ages. That would occur six years after enactment.

Medicare for America would be available to Americans of all ages and incomes -- and free to everyone in a household with an income below 200% of the Federal Poverty Level (FPL). That's far above the eligibility threshold for Medicaid programs -- with the exception CHIP in some states, for which children in families with incomes as high as 400% FPL may be eligible. Families with incomes between 200% and 400% FPL would have to pay a percentage of income -- probably not higher than 4% -- to insure the whole family. The new program would include comprehensive disability services and 100% coverage for the medically frail and for chronic disease treatment, as well as dental, vision and hearing services.

State governments -- many of them sure to be deeply hostile -- would be subject to two major requirements: 1)  cede control of service for their Medicaid populations, and 2) reimburse the federal government with "maintenance of effort" payments equivalent to their current Medicaid responsibilities, adjusted annually for inflation. Those requirements are certain to be challenged in court, as was the ACA Medicaid expansion.

Sunday, May 19, 2019

Seniors' costs under Medicare for America, continued

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In my last post I noted that while the revamped and expanded Medicare available to all under the Medicare for America Act of 2019 would serve most Americans very well, some people who turn 65 after full enactment would pay more in premium than they would today for traditional Medicare Parts B and D, or comparably priced Medicare Advantage.

They would get far more for the money -- most notably, long-term care insurance, dental, visual and hearing coverage, and 100% coverage for a host of vital services like chronic disease management, addiction and mental health treatment, and care for the medically frail. Still, higher premiums for seniors with incomes above about $50,000 for an individual or $80,000 for a couple is a political problem that needs to be thought out.  Here, I have a bit more data to sketch in.

Thursday, May 16, 2019

If Medicare for America passes, some seniors would pay more (and get more) than at present

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Medicare for America,  the bill that would allow anyone at any age to buy into a revamped Medicare at an income-adjusted price (e.g., $0 for the bottom 30% of the income distribution), would be a clear benefit to anyone under 65. Even for those who continue to get insured through their employers, it would offer the true freedom from job-lock that the ACA promised and largely failed to deliver.

Most seniors who turn 65 after the new program would come into full effect (2023 were it to pass this year) would be gainers too (those enrolled in current Medicare before the new program launches would have the option of continuing to pay their then-current premiums). A fair number of new enrollees, however, would pay far more in premium than they would for existing fee-for-service Medicare or a Medicare Advantage plan. They would get more for their money. But the expectation that when you turn 65 you can get reliable insurance for under $200 per month is pretty hard-wired into Americans, I suspect. Violating that expectation for a substantial subset of the 3-4 million people who age into Medicare in year one (and every year following) is a political problem to be reckoned with.

Wednesday, May 15, 2019

Would Medicare for America phase out employer-sponsored insurance?

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It's often regarded as an open question whether the Medicare for America Act, were it to become law, would lead to a phase-out of private insurance. The bill makes a revamped Medicare available to anyone of any age who wants or needs it, with premiums adjusted by income even if the enrollee has access to employer-sponsored insurance.

The revamped "Medicare" is free to anyone whose household income is below 200% of the Federal Poverty Level (FPL) -- about 30% of the population. For those with incomes over 600% FPL, the premium is 8% of income. Those in the 200-600% FPL range will pay a sliding scale, topping out at 8%. Newborns are auto-enrolled, as are the uninsured. Employers can either pay an 8% payroll tax and direct their employees to the public program, or continue to offer their own health plans. Medicare Advantage continues alongside the public program.

I do not think the bill would kill of employer-sponsored insurance, though it would likely shrink the market to a kind of blue-chip perk for well compensated employees. ESI is likely to persist for several reasons:
  • The bill stipulates that medical providers have to accept "Medicare" payment rates (not identical to current rates, but based on them) from private insurers.

  • The employer tax exemption for health benefits persists. In fact, the ACA's "Cadillac Tax" on especially generous plan (long postponed) is repealed.

  • Most importantly, the 8% of income that affluent people would pay for the revamped "Medicare" is considerably more than many pay out-of-pocket for employer-sponsored insurance.
The average premium for family coverage in ESI was $19,616 in 2018, according the Kaiser Family Foundation's Employer Health Benefits Survey, with the employee footing $5,547, or 28%.  For a couple with one child earning $125,000 -- a shade over 600% FPL -- that's 4% of income.

Tuesday, May 14, 2019

A major fix in Medicare for America 2.0

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Medicare for America, the sweeping healthcare reform bill that allows anyone to buy into a revamped Medicare at an income-adjusted premium, has the potential to transform U.S. healthcare into either an all-payer or a single-payer system.

The bill, first introduced by Reps Rosa DeLauro and Jean Schakowsky in December 2018 and reintroduced on May 1 this year, allows both Medicare Advantage and employer-sponsored insurance to continue, and stipulates that healthcare providers must accept (revised) Medicare payment rates from those private programs.  But because employees can opt into "Medicare" on an income-adjusted basis even if their employers offer compliant private insurance, private insurance will have to establish a real competitive advantage if it's to survive alongside the generous public program.

The headline change in the reintroduced bill is elimination of deductibles, which were modest enough in the original bill (topping out at $350 individual/$500 family). But a more significant change improves the bill's financing and provides ballast for the competition between public and private sectors.

Monday, May 13, 2019

Benefit cliffs in the ACA marketplace

Dave Anderson highlights an important weakness in the subsidy structure for the ACA marketplace. As income rises, the enrollee's share of the premium for a benchmark silver plan is subject to sudden and irregular bump-ups, which Anderson compares to jolts in marginal tax rates.  Take the case of a couple looking to buy a benchmark silver plan:
From $17,000 to$20,000 this couple pays an extra $2 per month for every thousand dollars more they earn a year.  Annually this is about a 2% marginal tax rate on the additional income.  And then there is a huge bump from $20,000 to $21,000.  The benchmark premium suddenly becomes $256 more expensive.  This is a 25% marginal rate...

And then the marginal rate drops again when the family increases their earnings from $21,000 to $22,000.  The marginal rate for this slice is now about 11%.  The marginal rate for couples earning under 300% FPL is in the mid-teens, and then there is a drop in the marginal rate to just under 10% for 300% to 400% FPL and then a potential massive spike as soon as someone earns over 400% FPL.
The spikes in out-of-pocket (OOP) costs this couple is exposed to as income rises are even more sudden -- and, I think, potentially damaging to family finances -- than the premium spikes. The main benefit cliff is formed by the sudden fadeaway of Cost Sharing Reduction (CSR) subsidies at 201% FPL, where the actuarial value of a silver plan drops from 87% to 73%.  CSR disappears entirely at 251% FPL, and the coverage offered by a benchmark silver plan with no CSR, which has an AV of 70%, is clearly underinsurance for those without significant financial resources.

Thursday, May 09, 2019

Take a hike, xpost

I neglected to mention that I'm on vacation this week. I'll be back early next. I've been reluctant to spoil my frame of mind with news of our latest spasms toward oligarchy, authoritarianism and/or war, so I'm pretty out of it.  I gather Trump has taken a stand against balance billing. Does he know what it is?  I have long suspected that balance billing is the one healthcare abuse so egregious that even Americans won't tolerate it indefinitely. But watch our pols bipartisanly give away the store to providers.

Tuesday, April 30, 2019

What if a candidate took voters' stated healthcare priorities literally?

In its low-key way, the Kaiser Family Foundation has been warning Democrats for some time that the electorate is not strongly demanding Medicare for All, or sweeping healthcare system change generally.

With about 90% of the population insured (and perhaps a third underinsured), Drew Altman noted a month ago that voters' main overall healthcare priority is lowering their own out-of-pocket costs. The latest Kaiser tracking poll, conducted this month, fleshes this out:


Drug costs. Surprise bills. Access to affordable insurance if you get sick (e.g., if you lose your job). Underlying these concerns, Altman pointed out, is the poll finding that half of people who are sick have trouble paying their medical bills. With deductibles soaring, 43% said it was hard to pay their medical bills before the deductible kicks in.

Secondarily, there is broad support for expanding financial help to more people who need to buy health insurance in the individual market. There's majority support, in theory, for Medicare for All, but Kaiser's January tracking poll found that that support collapses collapses from 56% to 37% when people are asked if they would support a program that raises most people's taxes or eliminates private health insurance companies.

Meeting voters where they are on healthcare

These responses raise the question: what would a healthcare platform that aims to give voters what they say they want look like?  Addressing voters' stated wishes piecemeal may not be optimal policy: systemic change might be needed to address core concerns. Most fundamentally, reducing individuals' out-of-pocket costs requires bringing down the underlying cost of care, if the cost is not simply to be shifted to the tax burden.

At the same time, a candidate who floats a plan that would leave the current core elements of our health insurance sources intact -- preserving employer-sponsored insurance, existing Medicare, Medicaid and the ACA marketplace -- might have some running room to impose reforms that pinch healthcare industry revenues.

Providers would fight a strong balance billing ban and a strong public option in the ACA marketplace -- but they might ultimately  settle for these reforms that don't radically shrink the employer insurance cash cow. Ditto for insurers. They will fight a public option in the ACA marketplace -- but it's less of a threat than Medicare for All, or a public option that's affordably open to pretty much anyone. As for pharma...let's assume for the sake of argument here that it's possible to take on one healthcare industry head-on if you're not taking on all at once.

So, here's the hypothetical platform:

Strong balance billing protection. Balance billing is the one form of abuse in the U.S. healthcare system that's so egregious, even Americans may not stand for it much longer -- hence the bipartisan draft legislation introduced in the Senate to provide relief. Vox and Kaiser Health News have been doing God's work exposing shocking-but-routine instances of price-gouging. As cited in a Brookings analysis, some 20% of emergency room episodes, 9% of scheduled procedures and 50% of ambulance services result in out-of-network bills for patients

A strong solution would ban balance billing for a) people brought to an out-of-network ED in an emergency, b) people who get emergency care at an in-network facility, and c) people who schedule a procedure with an in-network primary provider at an in-network facility. A viable solution should also not drive up the cost of care by requiring insurers to pay billed costs at huge multiples of Medicare rates, as do some proposals and state bills that mandate arbitration, or use billed costs as a benchmark..

A strong solution put forward in the Brookings analysis would a) cap all out-of-network billing at 125% Medicare and b)  ban independent billing for targeted specialties, e.g.,  emergency, ancillary clinician, hospitalist, and neonatology services delivered at an in-network facility.  That puts the onus on hospitals to negotiate rates acceptable to those specialists.

Prescription drug relief. Medicare should negotiate rates not only for Medicare Part D but for the whole nation -- joining virtually every other wealthy country in having the national government negotiate uniform rates for prescription drugs for all payers. Medicare should also be empowered to create a formulary, i.e. not cover every drug, i.e. have the power to walk away when there's a viable alternative.  This is not going to happen. But in the proposal phase, go big here to balance the moderation of the overall package. Fallbacks might include a) empowering Medicare to negotiate for Part D plans only; b) creation of a drug oversight board empowered to flag and punish or roll back price-gouging as defined by statute; and c) various current bipartisan initiatives to encourage generic production and competition.

Augmented ACA.  Improvements to the ACA should a) make individual market coverage affordable, including via affordable out-of-pocket costs, for anyone at any income level who lacks affordable access to other insurance (e.g., affordable employer insurance or Medicaid); and b) control underlying costs, so that the improved subsidies required by a) are affordable to the Treasury.

A bill that might fit the, um, bill would

a) Raise the benchmark plan in the ACA marketplace, for which enrollees pay a fixed/sliding percentage of income, from 70% actuarial value to 80% AV, i.e. from silver level to gold in the current marketplace scheme. 80% AV is near the average for employer-sponsored insurance.

b) Erase the current subsidy cliff, which renders coverage extremely expensive for many who are just beyond the income threshold for subsidies (400% of the Federal Poverty Level, or roughly $49,000 for an individual/$100,000 for a family of four). Cap premiums for the benchmark plan at 8.5% of income for anyone otherwise eligible with an income over 400% FPL.

c) Improve premium and cost sharing subsidies at incomes below 400% FPL, requiring a lower percentage of income to pay the benchmark premium and providing higher AV for benchmark plans.

d) Create a strong public option, paying Medicare rates to providers (with some adjustments for rural hospitals and primary care) and requiring providers who accept Medicare to accept the public plan. This would also push down the rates that commercial marketplace insurers pay providers, and remove providers' incentive to refuse to accept the commercial marketplace plans, most of which would probably pay more than the public option.

e) Enable people whose employers offer insurance to access subsidies for marketplace coverage if the employer plan a) costs more than 8.5% of income, including for family coverage if the employee has a family, and/or b) offers less than 80% AV coverage.

Point e) does not open the sluice gates to the public plan as wide as does the Medicare for America bill, soon to be reintroduced by Reps Rosa De Lauro and Jan Schakowsky, which allows anyone to buy into the public plan at no more than 10% of income (and much less at lower incomes, including $0 for people with incomes up to 200% FPL).  Because the public option in Medicare for America is free to people with incomes up  200% FPL (with zero out-of-pocket costs as well), it also entails folding Medicaid into the new public plan -- and existing Medicare, with long-term-care added. It also auto-enrolls newborns as of 2022 (or probably 2023 in the upcoming update).

Medicare for America opens a plausible path either to Medicare for All (albeit with out-of-pocket costs for most enrollees) or to a de facto all-payer system, since the bill stipulates that providers must accept the public plan's payment rates from commercial insurers (in employer insurance and Medicare Advantage). It's a coherent set of measures for major system transformation.

The plan above is much more limited. It's also a much lighter lift. But it does cram an awful lot of systemic reform into the Overton Window  opened by Medicare for All and Medicare for America -- while leaving a candidate like Elizabeth Warren free to propose spending trillions on education, childcare and other priorities .

Saturday, April 27, 2019

Let's call it 160% Medicare...Washington state public option

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[Updates at bottom: bill is on the Governor's desk]

A few days back, I noted that the state public option bill working its way through the Washington legislature provides an object lesson in how hard it is to expand the pool of people in health plans paying Medicare rates.  An early iteration of the bill had the public plan paying Medicare rates, but a version that passed the House on April 10 had upped the maximum aggregate payment rate to 150% Medicare. The Senate declined to pass this bill, and it went to conference.

Now a new version (ESSB 5526) has emerged from Senate-House conference (kindly flagged for me by Amy Lotven of Inside Health Policy, who will have a story up about it later today). And guess what -- the maximum aggregate payment rate* is up to 160% Medicare.  For reference, commercial payment rates to hospitals average 188% Medicare nationally, according to a 2017 CBO report, and about 128% Medicare for physicians, according to MEDPAC.

Further, the director of the state Health Care Authority can waive the rate cap if she "determines that selective contracting will result in actuarially sound premium rates that are no greater than the qualified health plan's previous plan year rates adjusted for inflation." The director can also waive the rate cap if a carrier contracted to provide the public option can't form a provider network that meets the stipulated network adequacy standards, or if the carrier can offer premiums 10% lower than those of the previous plan year without conforming to the rate cap.

100% Medicare, 150%, 160%.... I am reminded* of the accounting approach of Rabbit, Winnie the Pooh's friend:

Wednesday, April 24, 2019

Medicare-X 2.0 deserves a second look

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As originally introduced by Senators Bennet and Kain in October 2017, the Medicare-X Choice Act (summary here) placed a big fish --  a strong public option -- in a small pond, the ACA marketplace.

The "Medicare-X" public option would first be introduced into low-competition areas in the ACA marketplace, and then into all rating areas. The public plan would pay Medicare rates to providers, and providers who accept Medicare would be required to accept it. But in the first iteration, eligibility for subsidies adhered to ACA criteria, and the subsidies themselves were not improved. While it might improve affordability for the unsubsidized, its appeal to subsidized enrollees might be more limited, though the full Medicare provider network might be a powerful draw. As to premium, however,  I noted recently
By conforming to current ACA subsidy structure, Medicare-X runs afoul of the ACA paradox: measures that reduce unsubsidized premiums do not improve affordability for the two thirds of current individual market enrollees who receive subsidies. In fact, premium reductions often reduce discounts by compressing price spread between benchmark plans, against which subsidies are set, and cheaper plans, to which the subsidy can be applied.
The bill did phase in a small business buy-in, and that might be attractive, as the unsubsidized price might be a relative bargain for small businesses, and the provider network would be unbeatable. It might thus expand the small group market,  which enrolled an estimated 13.6 million people in 2016.

The update introduced this month (bill here, summary here) widens the pool of potential beneficiaries, combining measures that expand subsidy eligibility and reduce unsubsidized premiums -- potentially offsetting the cost of subsidizing more enrollees. It's a limited and cost-conscious expansion of benefits that might make the ACA work more as designed.

Toward universal coverage: A bestiary of Democratic healthcare bills

I have a post up at BlueWaveNJ that offers a framework for assessing more than a half dozen Democratic bills that would build on or replace the ACA to move the U.S. closer to universal healthcare. Here's the premise:
The extent to which these various bills address the demand for affordability can be viewed in two dimensions.

First is the degree to which they make coverage more affordable and reduce out-of-pocket costs for the ACA's original intended beneficiaries: those who lack access to other affordable insurance, mainly employer-sponsored insurance. Second is the degree to which they impact affordability for the 150-plus million current enrollees in employer plans.

A third question is the degree to which each bill reduces healthcare costs on a per person basis, including costs paid by government. Most (not all) Medicare expansion/public option bills increase the population enrolled in plans paying Medicare rates to healthcare providers, as opposed to much higher commercial rates. Most also establish some kind of drug pricing commission enabling Medicare to negotiate or regulate prescription drug prices.
The post, an updated and somewhat streamlined version of this one, overviews seven bills.  Hope you'll take a look.

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Monday, April 22, 2019

Medicare at Will

I have posited repeatedly (here, here, here) that the gateway to real healthcare system transformation (and cost control) is a buy-in to a strong public option that's open to employees as well as employers. A strong public option is one that pays providers at Medicare rates or some adjusted variation, and that all providers who accept Medicare are required to accept.

The public plan must set premiums and out-of-pocket costs at affordable levels for all comers and must be truly available to all, including those whose employers offer private insurance. It should be the baseline against which private coverage must compete, setting a de facto all-payer rate (unless those offering and buying top-drawer coverage want to pay above that baseline).

The Medicare for America bill does all this and also a great deal more -- transforming existing Medicare, including long-term care, folding in Medicaid, auto-enrolling all newborns four years after enactment. I'm not sure the U.S. political system can handle all that mandated transformation at once: in my view the buy-in for employers and employees is the essential core.

This kind of public option, which dates back to the early 2000s in basic concept, has a branding problem. "Medicare for All" has been a dominant watchword and battlecry since 2016, courtesy of Bernie Sanders. "Medicare for America" does not differentiate itself conceptually.  "Medicare for All Who Want or Need It" is...ugh.  Articles such as this one put the buy-in concept under the rubric of Medicare for All, where it doesn't fit.

So I'm here today just to float a name and creed: Medicare at Will. The public plan should  be an affordable option that anyone can choose, with premiums and OOP adjusted to income even if other insurance is available.  Medicare at will is in syllabic balance with Medicare for All. It incorporates the "if you like your plan you can keep it" meme without making any unsustainable promises. In fact it's all about a promise kept: Medicare is always there if you want it or need it.

#MedicareAtWill, friends.

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Sunday, April 21, 2019

Expanding the footprint of Medicare payment rates is hard: Washington State edition

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It's ironic that the path for healthcare reform preferred by allied U.S. healthcare industries is embodied in a bill introduced by Elizabeth Warren.

The Partnership For America's Health Care Future, a coalition of major hospital, health insurance, physician and pharma trade groups formed to preemptively nuke any expansion of pubic insurance, would like government to spend more to insure more people and lower their out-of-pocket costs. But they want government to do this while paying commercial rates to providers. Robert Pear summarizes:
The coalition, like President Trump, attacks any proposals that smack of socialized medicine. But it also has a positive agenda. It wants to expand Medicaid under the Affordable Care Act in Texas, Florida and other states that have yet to do so. It wants to expand federal subsidies under the health law so insurance will be affordable to more people. And it wants to stabilize premiums by persuading states to set up reinsurance programs, using a combination of federal and state funds to help pay the largest claims.
While preserving the core ACA structure, Warren's bill removes the ACA's income cap on eligibility for premium subsidies and gives a major boost to ACA premium and cost sharing subsidies at all income levels. While it would tighten insurers' margins a bit, and impose stricter standards on their provider networks, it would boost enrollment and the federal government's share of premiums paid. Insurers should be happy with it,  notwithstanding the rhetorical broadside against insurers with which Warren introduced the bill. It should also be attractive to providers, since it does not impose caps on provider payment rates. .

Should Democrats gain control of the presidency and both houses of Congress, boosting ACA marketplace subsidies -- and, to a certain extent -- eligibility -- should be relatively easy. What won't be easy: expanding the footprint of public insurance that pays Medicare rates (or less) to providers (an exception is Medicaid expansion, for which the target population generally lacks access to commercial insurance).

Monday, April 15, 2019

Cold comfort for low income workers insured through their employers

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The Kaiser Family Foundation and the Peterson Center on Health Care released a report yesterday showing that low income families enrolled in employer-sponsored health insurance (ESI) pay a much higher percentage of their income on premiums and out-of-pocket expenses than do higher income employees. That isn't surprising, though the percentage of income eaten up by healthcare is disturbing. Families in ESI earning up to 199% of the Federal Poverty Level (FPL) spend an average of 14% of income on healthcare, according to Kaiser's analysis of Census data. Families with at least one member in poor or fair health spend an average of 18.5% of income on healthcare.

What is somewhat surprising -- to me, anyway -- is that lower income families with ESI do not spend more in absolute terms than better-paid employees. I was under the impression that low income workers are often offered much skimpier insurance than higher income workers. That impression was at least partly derived from Kaiser's annual Employee Health Benefits Survey. Here's the contrast between employers with mainly low- vs. high-income employees from the 2018 survey:

Friday, April 12, 2019

Latinx enrollment continues to *rise* in HealthCare.gov states

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In 2019, an anomaly in ACA marketplace enrollment continues: for the third straight year, Latinx enrollment has risen in HealthCare.gov states, while overall enrollment has fallen.

Caveats abound. Ethnic data is self-reported, and about a quarter of enrollees don't report ethnicity -- which CMS has broken out separately from race since 2017*. But still, the steady rise in the percentage of enrollees who self-report as "Hispanic/Latino" is striking.

Latinx enrollment, 2016-2019, HealthCare.gov states
Self-reported ethnicity 

Enrollee group
2016*
2017
2018
2019
Latinx
   918,626
   956,516
1,033,699
1,037,306
All enrollees
9,719,648
9,201,805
8,743,642
8,411,614
Percent Latinx
9.5%
10.4%
11.8%
13.3%

* Because Kentucky switched to the HealthCare.gov platform in 2017, I have added the state's totals to the 2016 totals for HealthCare.gov states. Because there is no 2016 breakout of Hispanic enrollment in KY in  2016 (as it was an state-based-exchange), I have estimated the total (1656) by adding 14.8% to the 2017 total (1442), as that's the degree to which 2016 enrollment exceeds 2017 in the state.

Wednesday, April 10, 2019

BlueWaveNJ on the cost of ACA nullification

Here's what BlueWaveNJ thinks of Donald Trump's now-total support for the ridiculous suit seeking to nullify the entire ACA:
The Trump administration's recent shift to full support of a lawsuit filed by 20 Republican attorneys general and governors seeking to have the entire Affordable Care Act declared unconstitutional is a legal absurdity and a wantonly cruel and reckless policy decision. The plaintiffs argue, and the Trump administration now agrees, that the entire ACA became unconstitutional when Congress reduced the individual mandate penalty to zero in late 2017, because the Supreme Court in 2012 held that the mandate was Constitutional only as an exercise of Congress's taxing power. That is rank sophistry rejected by attorneys and legal scholars across the political spectrum -- suggesting in effect that the Republican Congress repealed the ACA by accident when it zeroed out the mandate penalty as part of the tax package passed in December 2017 after failing in multiple attempts to repeal the law's core programs earlier that year.
There's more...  

Monday, April 08, 2019

CSR takeup bends slightly under silver load at incomes up to 200% FPL

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For ACA marketplace enrollees with incomes up to 200% of the Federal Poverty Level (FPL), silver-level plans are almost always the wisest choice. Through 2017, silver plans were priced as if they had an actuarial value of 70%, compared to 60% for bronze plans and 80% for gold. The Cost Sharing Reduction (CSR) subsidy, however, raises the AV of a silver plan to 94% for those with incomes up to 150% FPL, and to 87% for those with incomes in the 151-200% FPL range. Insurers were reimbursed separately for CSR, and it wasn't priced into premiums.

That changed when Trump cut off direct CSR reimbursement in October 2017. In 2018, CSR was priced into premiums -- in most states, into silver premiums alone. By 2019, almost all states allowed this "silver loading." Since ACA premium subsidies are designed so that the enrollee pays a fixed percentage of income for a silver benchmark plan, inflated silver premiums boost subsidies and so create discounts for subsidized buyers in bronze and gold plans. But these discounts are not enough to offset the value of the CSR that's available up to 200% FPL.

The story is quite different at 201-250% FPL, where CSR is weak, raising the AV for silver plans to just 73%. In that income range, gold and bronze plan discounts often do outstrip the value of CSR -- almost as strongly as they do at incomes above 250% FPL, where the silver AV is 70%.

Friday, April 05, 2019

The ACA as recession insurance

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The ACA private plan marketplace was always and obviously under-subsidized. A healthy young adult earning, say, $31,000 per year is not likely to feel enthusiastic about paying $220 per month for a benchmark silver health plan with a deductible averaging just over $4000 (albeit often with many services not subject to the deductible).  It's true that if this person were insured through her employer, her premium for somewhat better insurance would average $575 per month and consume 22% of her pre-tax compensation. But with the employer contributing 83% of that premium on average, most people don't recognize how much of their compensation is eaten up by premiums.

Costs in excess of what many people consider affordable is a principle reason that enrollment in the exchanges, averaging about 10 million per month, is less than half what the Congressional Budget Office forecast in 2009.  That said, the ACA marketplace has always faced other headwinds. One is the well-documented one of Republican sabotage (through Congress, from 2010 forward, and via Trump's HHS as well since 2017).  A second is unbroken job growth since mid-year 2009, reducing the number of people who need to look to the individual market for health insurance. From March 2010 through January 2019, the economy added just shy of 21 million jobs.

Conversely, the marketplace -- along with the ACA Medicaid expansion -- stands in reserve as a shock absorber when the next recession or financial crisis hits.

Wednesday, April 03, 2019

Which Democratic healthcare reform bills offer the most affordable coverage to the most people?

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Drew Altman, president and CEO of the Kaiser Family Foundation, has a message for elected officials and candidates. With regard to healthcare policy
it’s the candidates who can connect their plans and messages to voters’ worries about out of pocket costs who will reach beyond the activists in their base. And the candidates aren’t speaking to that much, at least so far.   
That claim is based mainly on Kaiser polling, which finds that 48 percent of voters worry about paying their health care bills, and half of people who are sick have trouble paying their medical bills.

The extent to which various Democratic bills to improve or replace the ACA address the demand for affordability can be viewed in two dimensions. First is the degree to which they make coverage more affordable and reduce out-of-pocket costs for the ACA's original intended beneficiaries: those who lack access to other affordable insurance, mainly employer-sponsored insurance (ESI). Second is the degree to which they impact affordability for the 150-plus million current ESI enrollees (roughly 56% of the population under age 65).

The bills affect the affordability of ESI in three ways.

Monday, April 01, 2019

Trump healthcare reruns: Graham-Cassidy and the Sundowning Kid

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April Fool! Trump is once again promising an ACA replacement with low premiums and low out-of-pocket costs.
It's coming along great:
The president brought up healthcare again on Friday, claiming he would have a “much better” plan than Obamacare. “The health care’s going very well,” he told reporters in Florida.
Takes a person back...to, say, Jan. 15, 2017
President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody"...

Trump said his plan for replacing most aspects of Obama’s health-care law is all but finished. Although he was coy about its details — “lower numbers, much lower deductibles” — he said he is ready to unveil it alongside Ryan and Senate Majority Leader Mitch McConnell (R-Ky.).

“It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump said.

Tuesday, March 26, 2019

Why were CSR improvements cut from Frank Pallone's ACA 2.0 bill?

There's one glaring omission in Frank Pallone's newly introduced "ACA 2.0" bill*, which sweetens ACA marketplace subsidies, funds reinsurance and advertising/outreach, fixes the family glitch and adds sundry other repairs. The new version cuts out the enhancement and extension of Cost Sharing Reduction (CSR).  The bill introduced last March would have extended 94% AV CSR to 250% FPL, and offered 87% AV CSR all the way up to 400% FPL.

In conjunction with lowering the percentage of income required to buy a benchmark silver plan  at all income levels, the CSR enhancements would radically reduce out-of-pocket costs at incomes ranging from 201-400% FPL, where ACA takeup has been poor. Why the cut?

One possibility occurs to me, though I'm not sure of the logic behind it (so it may be wrong, of course).  ACA 2.0 is a showcase bill, with no chance of passing the Senate. Improved CSR, on the other hand, may be negotiable separately -- because the Trump administration is over a barrel with respect to CSR funding.

Monday, March 25, 2019

2019 ACA Enrollment: More silver loading effects, CSR enrollment down in SBEs

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CMS released a final enrollment report for the ACA marketplace today, along with the public use files that provide extensive enrollment breakdowns.

The top lines we already knew: Enrollment in was down 3.8% in 39 HealthCare.gov states, up .09% in 12 state-based exchanges (SBEs), and down 2.7% overall.

CMS adds that the percentage of subsidized enrollees rose from 85% to 87%. Translation: unsubsidized on-exchange enrollment was down 12.8%; subsidized enrollment was down just 0.5%. Off-exchange enrollment in ACA-compliant plans was in meltdown in 2017 and 2018; it remains to be seen whether the contraction continued, in the first year in which the Trump administration was actively promoting lightly regulated, medically underwritten short-term plans.

A few more factoids derived from a first look:

1. Enrollment in plans with Cost Sharing Reduction dropped sharply as a percentage of overall enrollment -- but the drop was concentrated in state-based exchanges for some reason. In all states taken together, CSR enrollment dropped from 53.6% to 50.3% of total enrollment -- but it dropped from 51.3% to 41.2% in SBEs, just downticking from 54.4% to 53.6% in HealthCare.gov states.

Friday, March 22, 2019

Medicare for America might let private insurance thrive

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The Medicare for America Act, soon to be updated and reintroduced by Reps Rosa DeLauro and Jean Schakowsky, is a true "Medicare for anyone" bill. Any employer can buy in* by paying 8% of payroll, and any individual can opt in and pay between $0 and 9.69% of income (on a siding scale) for a plan to be accepted by all providers who accept current Medicare -- i.e. virtually all providers.

While the bill allows employers to keep providing insurance and preserves Medicare Advantage in the individual market, some people appear to read the bill as a phase-out of private insurance.   Kirsten Gillibrand, for example, in a town hall earlier this week, touted a Medicare buy-in for anyone at "4-5% of income" and suggested, "Those insurers -- I don't think they're going to compete...over a couple of years, you're going to transition into single payer."

That would not likely be the case if Medicare for America were to become law, at least not in its current iteration. While low income workers would probably mostly end up in the public program, the bill creates conditions under which employers might still find a competitive advantage in offering top-drawer coverage to higher-paid workers. It also creates conditions under which Medicare Advantage and Medigap policies might compete.

Thursday, March 21, 2019

Medicare for America...for how many candidates?

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Two months after the Kaiser Family Foundation found 74% support for a "plan similar to Medicare open to anyone" that would "allow people to keep the coverage they have," several Democratic presidential candidates appear to have abruptly converged on the idea. The only bill out there that meets this criteria is the Medicare for America Act, introduced last December by Reps  Rosa DeLauro (CT-03) and Rep. Jan Schakowsky (IL-09), and soon to be reintroduced. 

Medicare for America does much more than create a strong public option that both employers and employees can buy into. It also absorbs Medicaid, transforms existing Medicare, and creates universal long term care insurance.  At healthinsurance.org , I ask whether candidates who have embraced the core concept, or some whisper or echo of it, will go for the whole package:
Perhaps it’s pusillanimous to balk at healthcare system transformation because of the certain all-out opposition of all major segments of the healthcare industry, not to say the Republican party and Fox News. But the question remains how much to bite off. The beating heart of Medicare for America, the transformative engine, is employer/employee buy-in to a strong public option, paying Medicare-plus rates and accepted by virtually all providers.

Whether that public option drains out a quarter of the employer-sponsored insurance market, half of it, or all of it, it renders public insurance – and public insurance payment rates – dominant. Candidates who embrace that core element – which harks back to the earliest iterations of the public option concept – may opt to carve it out of the near-total system transformation mandated in Medicare for America. Or they may not. Each candidate needs to think hard about how much mandated transformation within a decade or less they think the system can bear.
I hope you'll read the whole thing

Sunday, March 17, 2019

Would a public option mean fewer claims denials?

Here I'm going to pose a question for which I don't yet have good answers.

One strong appeal of the public option in various Medicare expansion bills -- e.g.,  Medicare X, Choose Medicare, Medicare at 50, Medicare for America -- is access to an all-but-unlimited provider network (effectively eliminating balance billing as well as limited choice of provider). My question To what extent does a national public option also promise to strongly reduce the agony inflicted on patients by coverage denials? And secondarily, to what extent would minimizing denials weaken legitimate cost control?

Pieces of the puzzle are provided by studies of denial rates in various markets and public programs. These studies are based on partial or not-so-partial data sets and may be measuring different things. One question that's often unclear to me when reading them is how many or what kinds of denials directly affect patients, and which are eaten by providers or represent (or trigger) a de facto negotiation between provider and payer. Not to mention how many are justified...

With that caveat, a few data points:

Wednesday, March 13, 2019

Hospital industry will brook no Medicare expansions

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The American Hospital Association has commissioned a study by KNG Health Consulting that fires a warning shot against any expansion of public coverage that draws people out of the private market.

The report purports to show that the Medicare-X Choice Act introduced in 2017 by Senators Bennet and Kaine, establishing a strong national public option in the ACA marketplace, would cut healthcare spending by $1.2 trillion over ten years. Hospital spending would account for $774 billion of the total.  The study also forecasts that 5.5 million uninsured people would gain coverage.

As U.S. per capita healthcare spending is more than double the OECD average, one might think that cutting costs while increasing coverage would be cause for celebration. Of course the AHA doesn't see it that way, and warns of dire results for hospitals resulting from some 35 million people* shifting from private to a public plan that pays Medicare rates for services.  Leaving aside assumptions about hospitals' adaptability, and the study's calculations with respect to hospital revenue, its assumptions about the impact of Medicare-X on enrollment in private insurance strike me as dubious.

Monday, March 11, 2019

New enrollment drops in ACA marketplace have decelerated since 2017

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In my last post, I noted that new enrollment in HealthCare.gov states in 2019 was barely half the 2016 total.  Here I want to spotlight an important point that I noticed late and had to add via update: The sharpest drop in new enrollment was in 2017. Reduced new enrollment, though still quite steep, is a decelerating trend. Conversely, improved retention after first payments are due has accelerated since 2016, though we don't yet have numbers for 2019.

Here's how new enrollment and first-quarter retention have played out since 2016, the year of peak enrollment so far:

New enrollment, HealthCare.gov states, 2016-2019
As of the end of Open Enrollment

2016*
2017
2018
2019
Change, 2016-17
Change, 2017-18
Change, 2018-19
Change, 2016-19
4,044,370
3,013,107
2,460,431
2,072,115
-25.5%
-18.4%
-15.8%
-48.8%

Kentucky retired its SBE and joined HealthCare.gov in 2017. Kentucky new enrollment for 2016 (18,733) is added to the 2016 total above.


Friday, March 08, 2019

The shrinking but retentive ACA marketplace

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n.b. the next post constitutes an update.

One feature of the ACA marketplace under Trump administration: as new enrollment contracts, retention has improved. With enrollment down 10% overall since 2016, the market has apparently contracted to its core: those who are renewing know they need or may need care.

Zeroing out the individual mandate for 2019 cannot have helped new enrollment, though new enrollment shrank just as much in 2018 as in 2019, when the mandate repeal went into effect. As the mandate repeal was pending through the fall of 2017 and became law in December 2017, many may have thought the mandate had been repealed as of 2018 -- if not the whole ACA, as Trump kept screaming. At the same time, discounts generated by silver loading (cheap gold and often-free bronze plans*) have probably improved retention. A higher percentage of enrollees are now subsidized, and the 87% of enrollees who are subsidized are paying lower premiums on average, as Charles Gaba has noted. Attrition has for years been much steeper among unsubsidized enrollees.

Better retention is reflected both in year-over-year renewals and in the level of attrition after first payments are due and throughout the year. In the 39 HealthCare.gov states, renewals were up slightly in 2019, while new enrollment shrank 16% (see CMS final snapshots 2019 vs. 2018). In California, the largest state-based exchange (SBE),  renewals were up 7.5% while new enrollment contracted 24%. Overall enrollment was down 4% in HealthCare.gov states and virtually flat (down 0.5%) in California.

Wednesday, March 06, 2019

Blue states willing to invest in ACA marketplace: Help those over 400% FPL or under?

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From the beginning, the ACA's apparent Achilles heel has been the plight of those who must look to the individual market for coverage but earn too much to qualify for subsidies.

I say "apparent" because the marketplace is not exactly a roaring success among those eligible for subsidies. But bear with me through a short history of the highly visible plight of the unsubsidized.

Saturday, March 02, 2019

The public option we really need

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I have argued, recently and also over time, that a public option introduced into the current ACA marketplace without a change in marketplace structure can only do so much good

The marketplace's dominant flaw is that it's under-subsidized, and a public option won't make coverage more affordable for subsidized buyers. If you're a solo person earning $31,000 per year and have to pay $220/month for a public plan with an actuarial value of 70% -- likely with a $3000 deductible --that's not going to look much more attractive than comparable private plans. The public plan may drive down base premiums and so help unsubsidized buyers.

Tuesday, February 26, 2019

A public option to get claims paid

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The top line in a new Kaiser Family Foundation analysis of claims data collected by CMS from insurers selling plans on HealthCare.gov is startling:
We find that, across issuers with complete data, 19% of in-network claims were denied by issuers in 2017, with denial rates for specific issuers varying significantly around this average, from less than 1% to more than 40%.
Caveats abound. Of 180 insurers selling plans on HealthCare.gov, only 130 submitted complete data enabling analysis by Kaiser.  The data does not include standardized "reason codes" and lumps together all denials, "including denials due to ineligibility, denials due to incorrect submission or billing, duplicate claims, and denials based on medical necessity." Most important, perhaps, there is no comparative data for employer-sponsored plans, which insure 15 times as many people as the marketplace (nor for off-exchange ACA-compliant plans).

There is, however, one useful point of comparison. Medicare Advantage plans deny 8% of claims, according to a September 2018 report from the Office of the Inspector General for HHS. That seems high in itself, but it's less than half the ACA marketplace rate, at least in the 39 HealthCare.gov states.

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