With concern rising that a Republican alternative to Obamacare could fail to adequately cover pre-existing conditions (“Eight billion won’t even begin to cover it,” one Washington insider told THCB late this week) and will likely sharply cut benefits for Medicaid recipients, a number of states are preparing contingency plans. Some are preparing legal challenges. In California, progressives are once again laying the groundwork for a single payer system.
Could it happen? And could California serve as a model for other states?
California, the largest state in the union by population and the world’s sixth-largest economy, has good reason to push public policy in the opposite direction.
MICRA was passed in 1978 by a Democratic-dominated legislature and signed into law by then-governor Jerry Brown in response to the collapse of the state’s medical professional liability insurance market. MICRA didn’t change the right of injured patients to obtain unlimited economic damages for all medical costs, lost wages and lifetime earnings. What it did was limit was non-economic “pain and suffering” damages to $250,000. Up until 1978, California’s trial attorneys had used this highly speculative class of damages to rake in a third of the multi-million jackpot jury awards. That made California physicians’ malpractice insurance unavailable at any price, leading many doctors to close their practices and leave the state.
States in more than half the nation have reported individual market premium rate requests for 2015, making this an opportune time to assess how the second year of the ACA’s new marketplaces is shaping up.
With rate filings in for 27 states plus the District of Columbia, the early word on 2015 appears to be expansion. At least 15 of the 28 jurisdictions in 2015 will offer new individual plans this year. Thirty-seven of the 176 health plan filings are new, according to analysis by PwC’s Health Research Institute (HRI).
Major national insurers such as UnitedHealth Group, as well as newbie Consumer Operated and Oriented Plans (Co-Ops), plan to add both products and states when exchange open enrollment begins in the fall. In Virginia, five new plan bids have been submitted to the state; Washington, Arkansas and Tennessee show three new plans each.
UnitedHealth’s CEO Stephen J. Helmsley estimates that UnitedHealth will sell on public exchanges in about two dozen states. In short, the ACA’s subsidized exchange markets represent growth opportunities for the health sector.
At the same time at least three non-profit health Co-Ops will move into additional markets. As of late April, Co-Ops operating in 23 states had 400,000 members, according to the National Alliance of State Health Co-Ops. Not every Co-Op drew big numbers, especially those in states such as Maryland, where the online marketplace never really got off the ground. And it’s far too early to say how many new entrants will be left standing as plans are forced to pay back $2 billion in federal loans over the next several years.
This week the California insurance commissioner reported that the average unsubsidized 2014 rate increase carriers charged going into Obamacare was between 22% and 88%. That was a pretty healthy bump (I’ll call it a bump because “Rate Shock” didn’t happen) to get everyone into Obamacare in the first place. And remember, many of these consumers are now in narrow networks in California to boot.
California voters will go to the polls this fall to vote on Proposition 45. That ballot initiative would regulate health insurance rates in California for the first time––something the carriers are dead set against. Big rate increases on part of the carriers would do a lot to get that proposition passed and very low increases would do a lot toward defeating it. The state’s largest carriers have so far made $25 million in political contributions to defeat Prop 45.
The California insurance commissioner has said that consumers saw individual health insurance rate increases of 22% to 88% to get into Obamacare in the first place.
There is a highly contentious November ballot initiative facing the health plans they absolutely do not want to see passed, that would put the government in charge of their rate setting in future years, giving the carriers every incentive to low-ball the 2015 rates so voters don’t have any more incentive to vote for it.
Among the American public and even some policymakers, it has become conventional wisdom that poverty, a dearth of supermarkets, reduced leisure time, and insufficient exercise are key forces behind the U.S. obesity epidemic.
Conventional wisdom is an unreliable guide, however, and in this case, much of it is wrong: The epidemic actually coincides with a falling share of income spent on food, wider availability of fruits and vegetables, increased leisure time, and more exercise among the general population.
Of course, there are differences between individuals, but we need to explain the change in obesity over time, not why people differ. Some differences in body mass index (BMI) are associated with genetic makeup. But genes haven’t changed in the past 50 years, so differences between individuals don’t explain trends.
Data from a new analysis of this issue indicates that the same argument applies to other characteristics, such as geography. Southern hospitality’s heavy food hasn’t caused the obesity epidemic any more than an active Colorado lifestyle has prevented it. There are differences at a given point in time, but the trend is the same, as shown in the figure below.
Percentage of Population with a BMI Over 25 in California, Colorado, and Mississippi
SOURCE: Calculations based on Behavioral Risk Factor Surveillance Survey; smooth trend adjusted for 2010 demographics.
Increases in obesity have also been surprisingly similar by level of education and by racial/ethnic group, as the following figures show.
Increase in Average BMI Nationwide, by Highest Education Level Achieved
SOURCE: Calculations based on Behavioral Risk Factor Surveillance Survey; smooth trend adjusted for 2010 demographics.Continue reading…
Shifting Millennial Attitudes on Obamacare December 2013.
Harvard Institute of Politics. Dec 4th, 2013. Poll
A few observations after 10 weeks of Obamacare implementation.
The Obama administration released the first two months enrollment figures this week. With HealthCare.gov still struggling in November, the enrollment of 137,000 people in the 36 states was expected. The main event for the federal exchanges will play out in December now that most people can navigate it
What I found notable in the report was the lack of robust enrollment in the states. In states where the exchange has been running at least adequately for many weeks now, the enrollment numbers are far from what I would have expected.
California enrolled 107,000 people in private plans in the first two months. But California has cancelled 800,000 current individual health plans effective January 1––all of whom have to buy a new plan by January 1 or become uninsured. The only place those who are subsidy eligible can get a subsidized plan is in the California exchange.
Healthcare.gov appears to be working much better, at least in enabling individuals to select plans. And some of the state exchange web sites appear to be improving their functionality too. Some have heralded these advances as providing hope that the Exchanges will be able to meet the enrollment projections on which the economics of insurance without medical underwriting in part depend. But do these claims stand up to the cold light of mathematics? Not very well.
Here’s the headline:
A close look at the numbers shows that the pace of enrollments from here to the close of open enrollment needed to meet projections is high in every state, even those touted as successful, and almost impossibly high in many. Given the incredibly slow start in most jurisdictions, it will not just take a little pickup over the next few months to achieve the projected and needed number of persons in the Exchanges. It will take a miraculous last minute stampede. Since miracles seldom occur, the result may be two different stories of the Affordable Care Act: a few states in which the Exchanges proved from the start to be a somewhat stable mechanism for providing health insurance without medical underwriting but a significant number of other states in which the results for at least the first year represent a large failure.
News appears to be breaking out that the federal exchanges enrolled about 100,000 in November. This is being heralded as somewhat of a success compared to the 26,000 who enrolled in October. And, of course, enrollment figures from healthcare.gov are difficult to assess due to the actual and feared dysfunctionality of the web site. But one way to look at this is to consider what has to happen between December 1, 2013, and March 23, 2014, the close of open enrollment to make projections. The states that are dependent on healthcare.gov need about 4.84 million enrollees by the end of that period if the nation is to meet the goal of having 7 million enrolled in the Exchanges by the close of open enrollment. If, right now, there are about 126,000 enrollees in those states, we are just 2.5% of the way there.
The pace of enrollment on healthcare.gov will need to increase by a factor of about 20 in order to meet goal. In absolute terms, healthcare.gov needs to be enrolling about 42,000 people per day. And while perhaps not every single one of those people need to enroll for the system to succeed, the 7 million enrollment goal isn’t just a mere wish. There are, as I and many others have noted potentially serious consequences to the stability of insurance markets if the figures fall well short, even in several states.
“Well, Facebook Wasn’t Built In a Day.” – Unnamed Exchange Developer.
More than 4.8 million users visited Healthcare.gov for the grand opening of the federal health insurance marketplace on Tuesday, according to officials.
It didn’t go quite as planners had hoped. In fact, if there was an unofficial word of the day, it was glitch.
Many users of Healthcare.gov reported long delays and difficulty accessing the federal insurance marketplace, experiencing “glitches” ranging from error messages to blank pages. The problems were repeated at state-run exchanges around the country to varying degree, from California to New York.
Pundits like Wonkblog’s Ezra Klein were quick to point out that the political victory the GOP might have gained from the uncertain start was largely lost in the uproar in Washington over the government shutdown, which dominated news reports.
Users of the federal exchange reported problems including error messages (see above), funky dropdown menu behavior, page freezes, blips, broken links and long page load times — generally either a sign of high volume or inelegantly designed databases.
HHS officials declined to reveal how many people signed up for new insurance plans overall, leading some theorists to speculate that not very many people were able to make it through the process successfully. In point of fact, there were suspiciously few reports of users successfully completing the registration process at all, probably not a very good sign and possibly an indication of a disaster.Continue reading…
Back in 2010 — before two elections, before the Supreme Court ruled, before the word “crisis” stopped following the words “California budget” — Kim Belshé settled on a guiding principle: “2014 is tomorrow.”
And now, it almost is.
The Affordable Care Act’s individual mandate takes effect in less than 100 days. The nation’s health insurance exchanges go live next week.
And for nearly a year, Belshé — secretary of the Health and Human Services Agency under former Gov. Arnold Schwarzenegger — was at the center of California’s efforts to begin implementing those Obamacare provisions and many others.
I interviewed Belshé, Schwarzenegger, and nearly a dozen other ex-officials and experts about whether California’s quest to lead the nation on ACA implementation actually paid off — and what it brought the state.
Why California? Why Not?
Every expert suggested that the ACA’s rapid implementation in California could be traced back to Schwarzenegger’s efforts in 2007 and 2008 to enact universal health care.
(And in some cases, even older efforts at reform. “We learned a lot from the 1990s,” says Belshé, noting that failed attempts to create purchasing cooperatives in California helped set the foundation for designing insurance exchanges more than a decade later.)
Although the Schwarzenegger plan ultimately failed, many of its components — from big elements like the exchanges to smaller pieces like guaranteed issue — ended up in the ACA. And because state leaders had already done much of the foundational work, they were better positioned to speedily roll out the national law.
Daniel Zingale, senior vice president of the California Endowment, says that Schwarzenegger’s efforts were a preview of the national ACA battle to come — which meant that many stakeholders in California had already made peace with the law’s key provisions by 2010.
“We’d had our big fights over the individual mandate here” in 2007 and 2008, says Zingale, a former health care aide to Schwarzenegger. “Democrats and labor groups had been through it [and] were ok with it.”
“But the nation hadn’t been through that yet.”
Still, California’s support for Obamacare was hardly assured. As late as January 2010, Schwarzenegger wavered on the ACA — but by April that year, he was the first Republican governor (and one of the first governors in the nation) to throw his support behind the law and begin crafting a framework for implementation.
“It gave us a bit of a head start,” Belshé acknowledges.
As states race to implement health reform, California doesn’t want to settle for second.
“We don’t want to be a pace car state” when it comes to implementing health reform, state HHS Secretary Diana Dooley toldPolitico back in January 2011. “We want to be the lead car.”
It’s a metaphor that California leaders have returned to time and again. And to their credit, they’ve often succeeded.
While other states waffled, Golden State officials quickly embraced key Obamacare provisions like expanding Medicaid and creating insurance pools for individuals with pre-existing conditions.
At the same time, lawmakers crafted legislation intended to conform California’s health insurance plans to new standards under the Affordable Care Act.
And Covered California, the state’s health insurance exchange, also has drawn national attention for its speedy implementation. Among the 17 states that opted to run their own exchanges, California has “certainly [been] in the lead on getting their health plan information out … and getting the contracts signed,” Rachel Dolan, who monitors exchange activity for State Refor(u)m, a project of the National Academy of State Health Policy, said.
But the driving metaphor only extends so far.
“I don’t think it’s a race,” Dolan added, cautioning that each state might take unique approaches to exchange implementation — and objectively judging those individual strategies is impossible.
And a more essential issue might be getting lost, amid the growing number of questions over which state exchanges will be open for business on Oct. 1.
“Lots of people are asking about readiness,” said Caroline Pearson, who leads Avalere Health’s efforts to track health reform implementation. “But no one is asking about whether it matters.”
Where the States Stand on Readiness
The sprint to get the exchanges off the ground — which for some states didn’t really begin in earnest until after the Supreme Court’s June 2012 decision to uphold the ACA — has led to repeated delays and ongoing concerns.