On Episode 62 of Health in 2 Point 00, Jess and I are reporting from Nashville—while enjoying some delicious barbecue. We’re in town for AHIP’s Consumer Experience & Digital Health Forum, where Jess did an amazing job as a moderator and I was on a panel. In this episode, Jess asks me about my key takeaways from the forum, what the deal is with Tivity Health acquiring Nutrisystem, and how I managed to get into a fight on Twitter while at AHIP. —Matthew Holt
“I don’t know that what they’re doing is going to be as transformative as maybe the potential of it is – and it’s going to take time. I don’t know that they’re going to ‘all-of-a-sudden’ leap frog over all the things that health plans have been doing for decades. I think they’re going to learn that this is really complicated stuff…”
Health plan innovation got a makeover this year. What used to look like value-based care models and telehealth visits has transformed. Health plan innovation is sexier – with big-dollar M&A deals like CVS-Aetna and Cigna-ExpressScripts looking to flatten the industry. Meanwhile, brand name collaborations like Amazon-Berkshire Hathaway-JP Morgan may prove that payment model innovation is unexpectedly ‘label-conscious.’
So, how are health plans dealing with this startling new look? And what should health tech startups who want their innovation investment dollars do now??
Facing a revolt by Democratic lawmakers unhappy with the rollout of the health law, the Obama administration announced this morning that it will allow insurers to renew cancelled health plans that fail to meet the standards set by the Affordable Care Act.
Insurers will be required to notify customers with cancelled plans that they have the option of upgrading to an ACA-compliant plan. Plans can be extended through the end of 2014.
The decision does not impact new customers who will still be required to buy coverage that meets the stricter standards set by the new health law – either on the exchanges or directly from an insurer.
The move is likely to add additional confusion and uncertainty to an already chaotic marketplace shaken by the widely publicized problems at HealthCare.gov.
It is unclear, for example, how the customers of specific health plans who have already had their coverage cancelled will be impacted. The decision of whether or not to reinstate individual plans is being left up to individual insurers.
Exactly why they’d want to reinstate the cancelled plans isn’t obvious. Five million people have received cancellation letters according to one recent estimate.
Health plan insiders have argued for months that reversing course will be difficult, if not impossible, for plans that have built their actuarial models on the assumption that certain numbers of healthy people will enroll by certain dates. Industry representatives immediately warned that the impact would likely be higher premiums.
In a letter sent to state health insurance commissioners this morning, Center for Consumer Information and Insurance Oversight (CCIIO) director Gary Cohn spelled out the details of the fix. A plan must have been in effect on October 1st, 2013. Health plans must notify consumers in writing of their eligibility for an ACA-compliant plan. And they must explain what they’re not getting. A request that, in effect, asks insurers to advertise the Obamacare plans, something they haven’t exactly been enthusiastic about doing in the past. That may or may not turn out to be a smart move.
Health plan consultant Robert Laszewski – a frequent THCB contributor – warned:
This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision — and give them a reasonable time to make that decision — and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes. This puts the insurance companies, who have successfully complied with the law, in a hell of a mess.
The Supreme Court’s imminent decision on the Affordable Care Act will trigger a political firestorm whether they accept the legislation in its entirety, throw out every page of the 906-page bill or do something in between, which is the most likely outcome.
If the high court follows the polls, it probably will rule the requirement that individuals purchase insurance – the mandate – is unconstitutional but leave the rest of “Obamacare” intact. A CBS/New York Times poll released earlier this month showed that 41 percent wanted the entire law overturned, 24 percent supported it fully and 27 percent supported it but wanted the mandate eliminated.
Pooling the latter two groups suggests there is majority support for the coverage expansion, insurance protections and delivery system reforms contained in the bill – as long as there is no mandate. It was only the Obama administration’s decision to include the requirement that individuals purchase health coverage – something done to win insurance industry backing for the law – that gave opponents the cudgel they needed to stoke widespread opposition to reform.
The insurance industry, recognizing many of the reforms are popular, is already preparing for a thumbs-down ruling on the mandate. Three major carriers, UnitedHealth, Aetna and Cigna, said last week they would continue to allow young adults to stay on their parents’ plans until age 26, pay for 100 percent of preventive services and eliminate lifetime caps on coverage, reforms from the ACA that are already in place.
Employer health insurance premiums went up on average about 9 percent in 2011, and you can expect a lot more where that came from. Only a fool didn’t see this coming, which is to say the White House, every member of Congress who voted for the health care legislation, and all of their liberal enablers who have dreamed so long for the day when the government would take control of the health care system.
I was in the middle of the fight against ObamaCare. Trying to explain to Democrats and their staffs why the legislation would make health insurance premiums explode was like banging your head against the Berlin Wall.
They would mindlessly—almost zombie-like—regurgitate the liberal talking points, asserting that if we could just get everyone in the health insurance pool, premiums would go down, not up. Didn’t President Obama repeatedly promise that premiums would fall $2,500 for a family by the end of his first term?
So the government:
• Provides coverage to an additional 45 million to 50 million uninsured Americans—note that the uninsured spend less than half of what the insured spend on health care, so their spending will rise significantly;
• Requires insurance to cover lots of additional treatments and services, in many cases free of charge to the patient; and
• Guarantees that people will spend very little out of pocket, which insulates them from the cost of their decisions;
Continuing with our AHIP video series, THCB and Health 2.0 had the chance to catch Sam Muppalla, CSO of Portico Systems. Portico is a supplier of Integrated Provider Management (IPM) solutions for payers. In this video, we get a chance to hear about Portico 9.0 which aims to optimize payer-provider relations and enable robust design, management and reimbursement of provider networks. Muppalla also discusses, Portico’s goal of significantly reducing medical, administrative and IT costs while delivering quality care to patients.