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6 posts categorized "Health Insurance Exchange"

November 20, 2014

Health Wonk Review: The Turkey Edition

Turkey-palace.png Welcome to Health Wonk Review, the bi-weekly blog carnival featuring the latest and greatest blogging by a staggeringly wonkish agglomeration of health care policy nerds. The last edition of Health Wonk Review was hosted at Wing of Zock. The story behind the name of that blog seems (to this health wonk, at least) oddly relevant to this edition's theme, given the recent news that the construction costs of the new presidential palace in Turkey seem to have doubled ... again.

Well, our frame this week is the other turkey, the turkey that will lull many of us into a stupor late next week, and the health care policy decisions (and decisionmakers) that sometimes make us wish we were in more of a stupor ... so as to lessen the pain. Top of mind in that department this week is #GruberGate:

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March 12, 2014

How do you get Young Invincibles to buy health insurance?

C480x270_48President Barack Obama is pushing his signature domestic program, enrollment in a health insurance plan via by March 31, by shilling for it on the "Funny or Die" Zach Galfianakis mini talk show satire, "Between Two Ferns." I think it's hilarious, though not everyone thinks the humor involved befits a sitting president. Whether or not you appreciate the humor, I think you have to doff your cap to the Commander in Chief, because he is living by the maxim that you've got to fish where the fish are -- and choosing this website over network television, over White House-hosted online media, using video, using authority-subverting humor, has gotten the message out (including a clickable link) to the Young Invincibles in a way that other media just could not have done. The video was posted yesterday; it has already been viewed over 13 million times, and was associated with tens of thousands of click-throughs to the exchange website by the close of business yesterday.

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November 12, 2013

Health Exchange Enrollment: Speed of Light or . . . Molasses





















Much has been said and written about the dearth of new commercial health insurance plan enrollees on the federal and state exchanges and, by contrast, the excessive numbers of Medicaid expansion enrollees, the death spiral signified by the absence of Young Invincibles from the exchanges, etc.

The HealthBlawger suggests: Cool your jets.

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August 27, 2013

Health Insurance Company Member Engagement Index: The EveryMove 100

There's a new index in town. Today's entrant is the EveryMove 100, a ranking of health plans across the US "based on how they engage with and empower consumers to manage their own health." according to the presser. (EveryMove is a health rewards based marketing and incentives company that provides opportunities to consumers to earn benefits by engaging in healthy behaviors.)

Consumer engagement and empowerment in the health care sphere are a good thing, so I asked EveryMove CEO Russell Benaroya for a little more information on these rankings, as the website was short on detail. He filled me on on the initial metrics, and suggested that the metrics will be revisited on a quarterly basis by the team and advisory board (which at present includes Matthew Holt, Aman Bhandari and Garrison Bliss).

At the outset, health plans are ranked by these five categories of consumer engagement and interaction:

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September 05, 2012

CO-OPs - The Stealth Public Option Under the ACA?

362px-Minute_Man_Statue_Lexington_Massachusetts_croppedLast week, the Massachusetts CO-OP was approved by the federales under a provision of the Affordable Care Act that was key to the Act's passage, yet not widely known. The Consumer Operated and Oriented Plan, known as the Minuteman Health Initiative, secured a startup loan as part of the approval, intended to cover operational expenses as well as state-mandated reserves. Here's an excerpt from the Minuteman presser, as published by CommonHealth:

Tufts Medical Center, its New England Quality Care Alliance (NEQCA) physicians network and Vanguard Health Systems (NYSE: VHS) are proud to sponsor the Minuteman Health Initiative, which has received an $88.5 million loan from the Centers for Medicare and Medicaid Services (CMS). This new member-governed, non-profit health insurance option for Massachusetts residents intends to offer consumers and employers lower-cost, high-quality care with unprecedented transparency, as well as increased efficiency and satisfaction for physicians, patients and employers alike. Plan members will ultimately govern this health plan via Minuteman’s unique ownership structure.

Congressional proponents of "Medicare for All" (aka the public option) took their lumps when the ACA did not include such an animal -- in part, because it did include the CO-OP requirement: one CO-OP per state, to be a nonprofit founded by providers and run by consumers, whose margins are to be plowed back into premium reductions, improving benefits and improving quality of care. (Don't confuse the CO-OPs with co-ops, which are simply group purchasing cooperatives for health insurance that manage to eke out tiny group discounts. In Massachusetts, co-ops are limited in total enrollment to 85,000, a fraction of the small group and individual market population.) CO-OPs are supposed to be operational in every state, ready to enroll members (and therefore with provider networks already in place) by 2014, so they can get started on an equal footing with other health plans on state exchanges, on offer both to individuals and to employers (though 2/3 of enrollees must be from the individual and small group markets).  Founded by providers, they are required to transition to member control within a year of beginning member enrollment.

Did that political horse trade make sense? Do CO-OPs make sense?

The CO-OP in any state has the potential to become a serious competitor to existing health plans. Since there is a limit of one per state, the potential enrollment is high, and the attractiveness to providers and provider networks -- including a willingness to enter into pricing and contracting arrangements favorable to the CO-OP, such as global caps and ACOs -- is also high. In the Massachusetts example, seventeen non-founder hospitals have expressed interest in participating. (That's about 20% of the state's acute care hospitals interested in the CO-OP before it's even off the ground.) The only other insurance plan on offer statewide is Blue Cross Blue Shield, so if the CO-OP can build or rent a provider network quickly, and differentiate itself in the various markets statewide, it has the potential to become a real powerhouse.

On the downside, a CO-OP has to price its products without having historical claims data, which could be tricky, and it needs to scale up its administrative infrastructure before it has the membership base to support it (of course, it could contract for those services, and the loan from the federales is intended to cover such up-front costs). It's a big gamble: trying to break into a market dominated by a small handful of players is never easy, and trying to do so as a nonprofit that can have no ties to existing insurance companies may make it harder.  

The potential difficulties ahead of the CO-OPs explain why CMS reportedly anticipates a 35-40% default rate on the startup loans and may raise an eyebrow (after all, a billion here, and a billion there, and soon we're talking serious money).  Do we need CO-OPs to make the ACA work, or is this one of the throw-it-against-the-wall-and-see-what-sticks provisions?

The CO-OPs may well play out as the Medicare for All / Accountable Care Organizations for All sleeper cell of the ACA. A well-managed CO-OP in a state with the right market conditions could end up as a significant player. In Massacusetts, if Minuteman picked off half of the individual and small-group subscribers through its likely more attractive pricing, and the maximum number of larger-group subscribers to go along with them, it could be looking at 375,000 subscribers (and some multiple of that for covered lives) in not too long from now. Let's say, for argument's sake, 1 million covered lives in a state with a population of around 6.5 million. Not too shabby for a startup. While some may say that Massachusetts is a bad example as a poster child for this initiative, because the "big three" health insurers here are all nonprofits and we don't have a significant uninsurance problem thanks to state health reform, there is still room for improvement here -- nonprofits still have highly-paid execs and other elements of high-cost structures that may be different in a member-controlled CO-OP, and there are rural parts of the state that would benefit from the innovations that could be brought to bear by a high-functioning CO-OP partnering with ACOs and PCMHs. And if there's room for improvement here, I think there's room for improvement in most states.

The CO-OPs have the potential to be the tail that wags the dog -- larger insurance companies may well adopt the commercial market pricing and provider network contracting and benefits strategies of the CO-OPs in order to remain competetive. And in an era of legislated medical loss ratios (and the CEO of Aetna saying that he sees his company as a health information company rather than as an insurance company), that dog seems ready to be wagged.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

March 18, 2012

Health Insurance Exchange Regulations and the Health Reform Challenge

Health insuranceThe federal Health Insurance Exchange regulations were released in final form last week.  (See Timothy Jost's prĂ©cis on the Health Affairs blog and HHS presser.)  

I had the opportunity to hear Pennsylvania Insurance Commissioner Michael Consedine speak in Philadelphia about his state's progress towards building an exchange the very next day (I was speaking later on the program). Pennsylvania is one of the 26 states challenging the federal health reform law (and even has a state constitutional amendment afoot that would bar implementation of the individual mandate in PA), but that hasn't stopped the Keystone State from spending a $1 million planning grant and getting a $33.8 million implementation grant to kick their state health insurance exchange into high gear. (Nothing like playing both sides, eh?)  

Now that the regs are final, Pennsylvania and the rest of the states had better get cracking, because they are all supposed to have functioning exchanges by January 1, 2014.  The next step would for the federales to give the high sign that they are on track by January 1, 2013 by confirming that they meet the requirements of the "Exchange Blueprint" (which seems less prescriptive than "Plan"); if they don't, or Uncle Sam says their plans aren't up to snuff, then the feds are to step in and run the state exchange. Interestingly, state-level exchanges may be run by the feds (i.e., HHS) "directly or through agreement with a not-for-profit entity." 45 CFR 155.105(f). While some detail is offered about state-chartered not-for-profits that may run exchanges on behalf of states, regions within states, or groups of states (though given current insurance marketing rules and practices that are state-specific, multistate exchanges seem yet to be a pipe dream), no detail is offered about this potentially very important not-for-profit -- after all, there could theoretically be a single not-for-profit entity operating most state-level exchanges come January 2014.  Furthermore, a state-run exchange may contract out its operations in whole or in part to a private entity "that has demonstrated experience on a State or regional basis in the individual and small group health insurance markets and in benefits coverage" and is not a health insurance issuer. 45 CFR 155.110.  It will be interesting to see which of the usual suspects move into this new market opportunity.

Given the late date of the final regs relative to the January 1, 2014 compliance date (which is statutory), I'm thinking that Uncle Sam will be running a whole bunch of state health insurance exchanges, at least for a while.  On the one hand, January 2014 isn't exactly around the corner; on the other hand, we're talking about state bureaucracies that will either have to make or buy exchanges, and both state procurement and state hiring systems may well be described as byzantine.  Not to mention the fact that many states haven't even passed the legislation necessary to establish this new state function.  Or that many are hanging back pending the Supreme Court review of the health reform law. 

Massachusetts won't be one of those making or buying this time around, of course, since it already has an exchange (we call it the Connector) up and running under the Massachusetts health reform law. The grandfathering language in the draft regs has survived (45 CFR 155.150), so folks here in Boston won't have to tweak the Connector to comply with federal requirements, at least initially. A state with an exchange up and running since January 1, 2010, and having at least the percentage of its population covered as CBO estimated in March 2011 will be covered nationally under the ACA in 2016 (95%) may continue to run its own exchange, but will need to work with HHS to determine whether there are any areas onf noncompliance with the federal exchange regs, and work to rectify them.       

As I wrote when the draft health insurance exchange regulations were released in July:

Stepping back from the details, the naysayers will say that the state subsidies built into the exchange for eligible residents will break the camel's back -- universal coverage is a pipe dream we can't afford.  The counter-argument, of course, is that we can't afford widespread uninsurance.  

A question that remains is whether we can afford widespread underinsurance. While this set of regs is certainly long, it is not comprehensive.  About half of the reg is dedicated to matters of eligibility and enrollment.  A couple of key issues have been deferred, including the definition of the "essential health benefits" that must be offered by a "qualified health plan" or QHP -- i.e., any health plan that hopes to be listed on a state exchange. The idea is to have that set of benefits determined by reference to the local (i.e., state-level) "typical plan," which may mean the plan with the most subscribers. Carried to a logical extreme, this approach to defining QHP, while certainly respectful of market differences state to state, could end up undercutting the goals of the ACA by establishing what may be a very low threshold for coverage. This sort of state discretion runs through other aspects of the rule as well; it is not all command-and-control.

As insurers prepare themselves for working with exchanges, they must also prepare themselves for the realities of guaranteed-issue policies based on community rating and no pre-existing condition exclusions. The final regs addressing these issues for the transition period of 2014-2106 and beyond were also issued last week -- the three "R"s: Reinsurance, Risk Corridors and Risk Adjustment; read more about them here. One note on the final reg: calculation of plans' risk scores will be handled by the plans and not by the federales (thanks to comments by Congressional Republicans concerned about government holding the private health data needed for these calculations), which may introduce opportunities for disputes, and certainly reduces opportunities for some big-picture, big data trend analysis in the future.

As January 2013 approaches, some states will be working hard to demonstrate their readiness to comply with the Exchange Blueprint, while others hold back, with one eye on the Supreme Court and one eye on the Congress to be elected this fall. While the regulations allow for a varied patchwork of state exchanges, it seems likely that we will see greater uniformity across the country, with many, if not most, exchanges run -- at least initially -- by the federales or a federal contractor.      

David Harlow
The Harlow Group LLC
Health Care Law and Consulting