Partial protection against balance billing? More on the NAIC model law

I have an article up at healthinsurance.org that assesses (in more detail than the previous post here) the consumer protections against balance billing in the model law recently adopted by the National Association of Insurance Commissioners. 

A key question is what happens after a patient forwards a balance bill to her insurer for negotiation or mediation. Can it come back to bite her?  There's some precedent in Texas law. Here's the gist:

If adopted as is,  how fully will the model act protect a balanced-billed patient who exercises her option to send the bill to her insurer? "If it goes to mediation, the intention is that the patient will be held harmless," say Stephanie Mohl of the American Heart Association, who served as a consumer liaison to the NAIC and advocated for balance billing protections.

The model act does not explicitly guarantee, however,  that once the insurer settles the bill with the provider, it won't hold the patient responsible for a portion larger than he would pay for in-network care.  The Texas law, upon which this provision is most closely modeled, does not provide such a guarantee, according to Stacey Pogue of the Texas-based Center for Public Policy Priorities.

In practice, however, Pogue says that when patients do initiate mediation, the system seems to be "working really well." Anecdotally, she has heard (mainly from insurers)  that the bill is usually resolved with a brief phone call, and insurers usually cover the whole.

The NAIC takes on balance billing

Of all the dysfunctions of the U.S. healthcare system, perhaps the most egregious (besides leaving tens of millions uninsured) is the "balance billing" of insured patients at in-network hospitals by out-of-network providers.

Elisabeth Rosenthal has documented some particularly extreme examples -- e.g.,  a man who arranged with his orthopedist for neck surgery at an agreed price -- and was billed $117,000 by an out-of-network assisting surgeon. Sarah Kliff found a particularly sharp illustration of the roulette-like character of hospital care, in which two women working for the same employer and having the same insurance gave birth within weeks of each other at the same hospital. One was billed $1600 for an epidural by an out-of-network anesthesiologist who happened to be at work that day; the other (who also had an epidural) was billed nothing.  A Consumers Union survey conducted this past March indicated that 30% of  privately insured Americans received a surprise medical bill in the past two years, with their health plan paying less than expected.

This week, the National Association of Insurance Commissioners (NAIC) adopted a model act for health plan network adequacy that includes some protections for patients faced with balance billing. Such model acts are meant to serve as templates for state legislatures to adapt to local needs and political propensities.

I plan to write about the balance billing section of the model rule in some depth next week. This post is a sketchboard -- and an invitation for anyone with expertise in the area or a personal experience to relate to comment or contact me.

Republican conundrum: Can the federal government subsidize private health insurance without regulating it?

Two moderate conservatives, neither of them averse to a federal effort to make health insurance affordable for all Americans, walk into a conference session and disagree about likely Republican behavior should the Supreme Court rule for the plaintiffs in King v. Burwell, thus cutting off subsidies for some eight million Americans who bought their health plans on healthcare.gov.

This happened earlier this month at the Health Insurance Exchange Summit in Washington, D.C. The disagreement was between Stuart Butler, a longtime Heritage Foundation scholar now at the Brookings Institute, and Christopher Condeluci, who was tax and benefits counsel to the Senate Finance Committee while the ACA was being drafted.

Butler, generally considered the father of the individual mandate (though he has renounced his brainchild and its bastard stepchild, the ACA), kicked off the session by sketching out a post-King settlement that he hoped might lead to a "kumbaya moment" and win 400 votes in the House.  That settlement would build on the ACA's existing "innovation waivers," provided in Section 1332, which empower states to propose alternative schemes that meet the ACA's coverage and affordability goals by different means.

Section 1332 puts everything up for grabs -- the individual and employer mandates, health plan coverage rules, exchange structure, and subsidy allocations. Since alternative schemes must meet ACA standards for coverage and affordability, however, Republicans complain that Section 1332 takes away with the left hand the freedom it proffers with the right. Butler proposed that in a post-King negotiation Republicans and Democrats might negotiate a "superwaiver" process that would loosen the ACA standards and lighten HHS oversight while also moving up the timeline -- at present, approved state proposals can't take effect until 2017.

Condeluci, who has said that Republicans on the Senate Finance Committee had signed off on 80% of the bill that eventually became the ACA, agreed that Republicans post-King would look to "1332-like" alterations to the ACA. But he said that Republicans would not accept the waiver structure as a framework. Instead they would invite states to opt into a Republican alternative that would include repeal of the individual and employer mandates as well as of the essential health benefits that every plan qualified under the ACA must provide.

Afterward, I asked Condeluci whether the plan he envisioned would give states free reign to take federal subsidy money and reorder their insurance markets as they saw fit, or rather to opt into a prepackaged Republican scheme that would lay out new coverage rules. He said, in effect, either/or. His answer spotlights an important...let's call it tension in Republican thinking about healthcare reform.

For state GOP officials, a manual for undermining Obamacare

In 2011, the National Association of Insurance Commissioners (NAIC) produced a report cataloging risks of adverse selection in the ACA state insurance exchanges and provisions in the ACA designed to avoid or mitigate those risks. (Adverse selection occurs in plans that chiefly attract less health and more expensive customers, e.g. when younger, healthier customers have other options more attractive to them, including remaining uninsured.)

One key ACA measure to mitigate adverse selection is as follows. Those who offer insurance on the exchanges must treat all their customers in that state as one risk pool and must offer silver and gold plans -- the middle options in a spectrum that runs from bronze to platinum. If "young invincibles" choose bronze plans, their choices won't affect pricing in more expensive plans, which may be more attractive to older and sicker customers.

A continued risk is posed, however, by the ongoing existence of an individual market outside the exchanges, where insurers may still sell cheap high-deductible plans that appeal to healthy young people, albeit subject to many if not all of the same rules governing plans offered in the exchanges. In yesterday's New York Times, Eduardo Porter outlined that risk: