Tag: The ACA

Five Reasons the Federal Insurance Exchange Glitch May Not Be That Big Of A Deal. Knock On Wood.

Sep 20, 2013• 10

By Dan Diamond

The Wall Street Journal broke the news Thursday night that a “pricing glitch” is plaguing the federal health insurance exchange software … with less than two weeks to go before the exchanges are supposed to launch.

Basically, the exchange’s calculator can’t do a pretty important piece of math: How much each consumer will need to pay for his or her specific coverage.

Glitches had been somewhat expected—there had been rumblings of technical problems, despite officials’ public vows of confidence—but it doesn’t make the Journal‘s scoop less of a story. Opponents of Obamacare will use any delay to raise fresh concerns about the law’s implementation, and even the most ardent supporters of the ACA acknowledge that having working software is crucial to a working rollout on Oct. 1.

And what happens to enrollment targets if the glitches aren’t quickly resolved and would-be customers get frustrated and turn away?

There are several potential interpretations and implications here, given that this story is bound up in both politics and policy. From my perch, I’d offer these five quick reactions to the Journal‘s scoop.

1. This news is not a surprise.
When reporting on the ACA’s rollout, especially since the Supreme Court’s ruling last June, officials and analysts kept raising the same question with me: Will the exchanges be ready in time?

Keep in mind, the exchanges are intended to combine an unprecedented mix of eligibility verification systems, subsidy calculations, and thousands of insurance products.
Add an additional factor—the pace of ACA implementation lagged between 2010 and 2012 because of the ongoing uncertainty over whether the law was even constitutional—and the level of complexity involved in getting the exchanges off the ground really is astounding.

There have been hints that these systems might not be ready. Federal officials announced over the summer that they would scale back the exchanges’ verification requirements until 2015. And the contractors charged with designing the systems might as well be working on the Siberian insurance exchange, given how they’ve ignored media requests.

2. The federal exchange isn’t the only one with glitchy software. State exchanges are having problems, too.
Oregon has already announced that it plans to delay the formal roll-out of Cover Oregon to continue beta-testing, and California (a state that has moved exceptionally quickly to implement health reform) was weighing contingency plans for Covered California, too.

As Caroline Pearson of Avalere Health told me a few weeks ago, “if California’s talking about contingency planning, then we need to acknowledge that any number of state-run exchanges may not be fully operational by Oct. 1.”

However, the federal exchange software takes on extra importance given the sheer number of states (36) and potential customers (32 million uninsured) that will be shopping through its exchange.

Get primed. This Daily Briefing primer offers a quick review of exchange operations.
Go deep. This Health Care Advisory Board webconference reviews challenges in patient enrollment; how the exchanges interact with Medicaid and employer-sponsored insurance, and implications for hospitals and health systems.

Continue reading…

A Dozen Hospitals Are Laying Off Staff and Blaming Obamacare. Don’t Believe Them.

Sep 18, 2013• 19

By DAN DIAMOND

Hospitals tend to be among the largest employers in their communities — which means that any individual decision to lay off staff can have an outsized local impact. And taken together, a dozen recent announcements seem to paint an especially dire picture for hospitals (and their communities) around the nation.

For example, NorthShore in Illinois says it will lay off 1% of its workforce. The staffing cuts “ensure NorthShore remains well positioned to deal with the unprecedented changes brought on by the Affordable Care Act,” according to a memo from the health system’s chief human resources executive.

And California’s John Muir Health is offering staff voluntary buyouts ahead of ACA implementation. “We’re being paid less, and we either stick our head in the sand or make changes for the future so patients can continue to access us for their care,” according to John Muir spokesperson Ben Drew.

When Obamacare was being debated in Congress, its opponents tried to tar it with a deadly label: “the job-killing health law.” So is the ACA finally living down to its sobriquet?

Not exactly. While the recent news makes for provocative headlines, the devil’s in the details — and the financial reports.

A Closer Look at Industry Pressures

It’s clear that something is shifting in the hospital market. After years of employment growth, hospitals’ hiring patterns have largely leveled off. Collectively, organizations shed 9,000 jobs in May — the worst single month for the hospital sector in a decade.

Some of those decisions reflect industry-wide belt-tightening, as Medicare moves to rein in health spending by moving away from fee-for-service reimbursement and penalizing hospitals that perform poorly on certain quality measures.

And uncertainty around ACA implementation is trickling down to hospital staffing decisions, economists told me. Many organizations still aren’t sure how the pending wave of newly insured patients will affect their profit margins, given that many of these individuals may be sicker and will be covered by Medicaid, which reimburses hospitals at lower rates than Medicare and private payers.

Not Quite Ready For Prime Time: The State Health Insurance Marketplaces and Google

Sep 17, 2013• 2

By Elaine K. Swift and David McCormick

All of the state health insurance marketplaces (also known as exchanges) are online, but millions of expected users may have a hard time finding them. Marketplaces will enable shopping and enrollment mainly through their websites. States are using a variety of promotional strategies, but most people will likely find marketplaces in the same way they find other websites—through common keyword searches on Google, by far the nation’s dominant search engine. Poor search engine results can create serious barriers to shopping and enrollment, the major measures of success for marketplaces and, by extension, the success of the Affordable Care Act (ACA).

We used standard methods to assess Google results for the 17 marketplaces operated by 16 states and Washington, DC that offer individuals, families, and small businesses a place to shop for health care coverage. Over three days in mid-September, we looked at results for keywords that data from Google show people are commonly using to search for health insurance. We examined both unpaid (or “organic”) and paid (or “sponsored”) results. Although research shows that unpaid results get more attention, paid results can also lead to page views.

Our preliminary findings show that marketplaces for four states—Idaho, Maryland, New Mexico, and New York—and Washington, DC did not appear on the first page of Google results, which generates 92% of all page views. In addition, both unpaid and paid search results for most of the remaining 12 states were frequently absent from page one.

With enrollment in the marketplaces opening October 1 for coverage beginning January 1, this would be a good time to focus on search engine optimization (SEO), the process of increasing the rankings of unpaid or “organic” search results. Once implemented, SEO results can be seen quickly, especially for a topic as popular and important as new health insurance options. However, it requires analysis, planning, and time to implement.

Methods for Conducting Search Engine Result Testing

To test search engine results for state-operated health insurance marketplaces, we used the five keywords most effective in producing page views of a prominent healthcare-related website produced by a federal client: Affordable Care Act, affordable health care, health care, health insurance, and Medicaid.

Reforming Health Reform

Sep 11, 2013• 16

By ROGER COLLIER

It may say something about expectations for the Affordable Care Act that the simplistic “just repeal Obamacare” cries of Congressional Republicans are starting to be supplemented by proposals for its replacement.

The most detailed so far is from the conservative American Enterprise Institute, which has published an unexpectedly non-doctrinaire study authored by Harvard professor Michael Chernew and seven other respected academics.

It’s far from perfect, but it’s worth reading.

Structural details of the AEI proposal, modestly titled “Best of Both Worlds,” aren’t always clear (page 1 lists four “principles,” page 5 lists five “priorities”, and page 16 lists three “major planks”), but it does attempt a bipartisan approach, combining ideas from left and right.

Some of these ideas have been contained in other proposals, such as those of Wyden and Bennett and Fuchs and Emanuel (which may damn the AEI proposal in right-wing eyes), and most recently in a THCB piece by Martin Gaynor. They include the elimination of the employer coverage tax preference, the provision of “premium support” subsidies for most individuals, and the establishment of a national insurance exchange. Together, they are designed to encourage individual choice and responsibility and to maximize competition between insurers, while removing some of the inequities of the present system (and of the ACA).

The AEI proposal assumes that eliminating the employer coverage tax preference will result in most individuals obtaining coverage through a national exchange, with national regulation of insurance plans. Current Medicaid eligibles will be included, with the replacement of acute care Medicaid funding by subsidies for conventional coverage. All individuals will be able to choose between fully-subsidized “basic plans” and more generous partially-subsidized options, typically with substantial deductibles tied to income and health status. Insurers will be encouraged to offer multi-year coverage and, unlike in the ACA, medical underwriting will be allowed. The only government financing will be for premium subsidies, to be funded by the additional income and payroll tax revenues resulting from elimination of the employer tax preference and by redirecting federal and state Medicaid payments.

The 9th Grade Class Does Obamacare Math (Can Journalists Do the Same?)

Sep 8, 2013• 9

By Michael L. Millenson

Welcome, students, to our special combined 9^th grade math and civics class. Today, we’re going to look at the “Cadillac tax” in the Affordable Care Act.

Yes, Mitt, you have a question already? No, no, “Cadillac tax” is just an expression. No one is going to tax your family’s cars, Mitt, I promise.

Paul, you also have a question? I’m sorry, Paul, but if you had done the reading, you would know that the “Affordable Care Act” and “Obamacare” are the same thing. And yes, it is still the law, as I must have told you and your friends 40 times. Now can we get on with the class?

As those of you who did do the reading know, most American workers get their health insurance through their employer. The company, in turn, is allowed to deduct the cost of that insurance from its taxes. If the insurance for workers is very generous, it can encourage people to use too much medical care. This not only drives up costs, but we all pay for it a second time through the tax code. The Affordable Care Act addresses that problem by placing an excise tax on rich benefit plans starting in 2018, which is informally known as the “Cadillac tax.”

Economists of all viewpoints generally agree that an open-ended tax deduction for health insurance encourages overconsumption. What do we call that kind of agreement? Michelle?

No, Michelle, I’m afraid, “liberal conspiracy” is not the answer I was looking for. “Bipartisan consensus” was the correct response.

Rand, you seem quite agitated. Yes? “Government intervention in markets is never the right answer.” OK. Well, Rand, let’s talk about that another time and move on from civics to the mathematics part of today’s lesson. We’ll start with a word problem from the New York Times.

The Times quoted a study from a health policy journal as saying that 75 percent of health plans could be affected by the Cadillac tax over the next decade. That’s a big number, isn’t it? And the tax itself is 40 percent – another big number. No wonder the story was on the first page of the Business section.

But here are a few other numbers from the same study: just 16 percent of plans are likely be affected by the tax when it starts in 2018 – a much smaller number. And the “next decade” the study is talking about starts in 2018. What the study actually says is that by 2029 the tax could reduce benefits for affected plans by 3.1 percent. That’s an even smaller number and even further away.

Class, why would the New York Times emphasize the biggest numbers they could find?

The Exchanges Won’t Be Ready in Time. And it Probably Won’t Matter.

Sep 5, 2013• 7

By Dan Diamond

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 told Politico 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.

What Keeps Me Up At Night – 2013 Edition

Sep 5, 2013• 11

By John Halamka, MD

Now that Labor Day has come and gone, I’ve thought about the months ahead and the major challenges I’ll face.

1. Mergers and Acquisitions

Healthcare in the US is not a system of care, it’s a disconnected collection of hospitals, clinics, pharmacies, labs, and imaging centers. As the Affordable Care Act rolls out, many accountable care organizations are realizing that the only way to survive is to create “systemness” through mergers, acquisitions, and affiliations. The workflow to support systemness may require different IT approaches than we’ve used in the past. We’ve been successful to date by leaving existing applications in place and building bidirectional clinical sharing interfaces via “magic button” viewing and state HIE summary exchange. Interfacing is great for many purposes. Integration is better for others, such as enterprise appointment scheduling and care management. Requirements for systemness have not yet been defined, but there could be significant future work ahead to replace existing systems with a single integrated application.

2. Regulatory uncertainty

Will ICD10 proceed on the October 1, 2014 timeline? All indications in Washington are that deadlines will not be changed. Yet, I’m concerned that payers, providers and government will not be ready to support the workflow changes required for successful ICD10 implementation. Will all aspects of the new HIPAA Omnibus rule be enforced including the “self pay” provision which restricts information flow to payers? Hospitals nationwide are not sure how to comply with the new requirements. Will Meaningful Use Stage 2 proceed on the current aggressive timeline? Products to support MU2 are still being certified yet hospitals are expected to begin attestation reporting periods as early as October 1. With Farzad Mostashari’s departure from ONC, the new national coordinator will have to address these challenging implementation questions against a backdrop of a Congress which wants to see the national HIT program move faster.

3. Meaningful Use Stage 2 challenges

Although attestation criteria are very clear (and achievable), certification is quite complex, especially for a small self development shop like mine. One of my colleagues at a healthcare institution in another state noted that 50 developers and 4 full analysts are hard at work at certification for their self built systems. I have 25 developers and a part time analyst available for the task. I’ve read every script and there are numerous areas in certification which go beyond the functionality needed for attestation. Many EHR vendors have described their certification burden to me. I am hopeful that ONC re-examines the certification process and does two things – removes those sections that add unnecessary complexity and makes certification clinically relevant by using scenarios that demonstrate a real world workflow supporting the functionality needed for attestation.

Data Points: Why Delay of the Employer Mandate May Not Actually Mean That Much

Aug 29, 2013• 9

By Carter Price & Evan Saltzman

Last month, the Obama Administration announced that it would delay enforcement of the employer mandate component of the Affordable Care Act (ACA) in part due to opposition from the business community. Opponents of the ACA cited the delay as evidence that the law was collapsing under its own weight, while ACA proponents downplayed the importance of the employer mandate in realizing the primary objective of the law – extending affordable coverage to millions of uninsured Americans.

Will delaying the employer mandate lead to the ACA’s demise?

Using economic modeling, we have found that the primary goals of the ACA will not be impacted by the delay, but the delay may impact one of the law’s key revenue sources designed to offset the costs of the coverage provisions.

Under the ACA, only firms with 50 or more full-time employees can be assessed penalties for not offering coverage under the employer mandate; small businesses with fewer than 50 employees are exempt. Furthermore, more than 95% of large firms already offer insurance, implying that only a small pool of firms would need to alter their current benefit offerings to comply with the employer mandate. Our model estimates that less than 1% of firms, employing about 2% of the workforce, would be penalized for not offering insurance to their workers if the employer mandate is enforced.

In fact, only about 300,000 workers (approximately 0.2% of the workforce) would lose their employer’s health insurance as a result of the employer mandate delay, according to our economic analysis. And many of those losing coverage would be able to get affordable coverage through a spouse, the newly created health insurance exchanges, or Medicaid. Hence, delaying the employer mandate will have only a nominal impact on the ability of workers and their dependents to obtain health coverage.

What’s Science Got to Do With It?

Aug 19, 2013• 53

By Jon Robison & Vik Khanna

Penn State University is now embroiled in a national controversy over the ham-handed launch of its coercive and intrusive wellness program, which can cost recalcitrant employees as much as $1,200 per year for not joining. That ignominy of being the most distasteful and coercive program, however, belongs to Blue Care Network of Michigan, which recently published results from their “voluntary” walking program designed exclusively for their obese enrollees. The invitation to join was extended to enrollees with a body mass index (BMI, which is an unscientific, mathematically bereft proxy for health – see Keith Devlin’s excellent article ) of 30 or greater. The program was “voluntary” as long as you were okay with paying $2,000 in added insurance premiums if you did not volunteer.

Avoiding the $2,000 price tag came with its own cost in dignity and privacy. Enrollees agreed to either: 1) wear an electronic pedometer and connect it to their computer daily to document completion of at least 5,000 steps or, 2) join Weight Watchers or some other approved “weight cycling” program. This princely sum is not irrelevant to most families. In fact, it is almost exactly equal to per capita spending on food eaten at home in the US and about four percent of median US household income in 2011. So, in a household occupied by a single adult, this will almost buy your groceries for a year, meaning that is hard to refuse, and the less money you make the more likely that resistance will prove futile.

The BCN strategy legitimizes telling people who look a certain way that they should submit to online, electronic monitoring or pay more for their insurance than people who don’t look that way. Why would an obese person submit to this when it is entirely possible that he or she is fitter and more metabolically healthy than an normal weight unfit person who would never be condescended to this way?

More disturbing is the prospect that this is only the leading edge of life-invading monitoring by the wellness industry. It is easy to envision sleep monitoring because you have bags under your eyes. Or, what about wrist-worn breathalyzers to make sure you don’t go over the one or two drink limit, or sneak cigarettes after lying on your health risk appraisal that you don’t smoke? How much electronic surveillance would you be willing to undergo on the pure guesswork that it might save someone (i.e., your employer or your health plan) money?

Talmudic-Like Studies of Republican Health Reform Ideas

Aug 18, 2013• 65

By Uwe Reinhardt

After doing Talmudic-like studies of the doctrines on health reform promulgated by Republican health-policy makers and the conservative economists who inspired them during the past two decades, I am devastated to discover that all of those studies have been for naught. We are now told, sometimes by the same prophets of yore, that these doctrines were not only wrong, but outright heretical, which in this context means un-American.

New doctrines are rumored to be in the making, but the first word on them has yet to be committed to new, sacred tablets, mainly because there have not yet emerged any new ideas worth committing to tablets.

Do not take my word for it. Newt Gingrich, one of the Grand Old Party’s aging prophets, said so himself in his recent speech to the Republican National Committee.

Comes now conservative commentator John R. Graham of the Pacific Research Institute, telling us that Republicans seem lost in the desert even in their hit-and-run insurgency against their sworn enemy, the Affordable Care Act of 2010 (ACA).

What is a befuddled immigrant to the United States like me, eagerly trying to become a right thinking American, to make of it all?

My early introduction to the texts coming from conservative thinking on health reform was the Heritage Plan of 1989, Viewed through the prism of the ACA of 2010, its language seems eerily familiar. One provision, for example, proposed a:

“[m]andate all households to obtain adequate insurance. Many states now require passengers in automobiles to wear seatbelts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement” (p.5).

The Heritage Plan also called for income-related, refundable tax credits toward the purchase of private health insurance. Although it did not call for community rated premiums, it proposed means-tested public subsidies and toward high out-of-pocket expenses of individuals and families. It did not spell out the daunting administrative apparatus that would entail. But one can imagine the required new bureaucratic apparatus, replete with auditors to prevent fraud and abuse. Presumably, income-related subsidies would have involved the Internal Revenue Service (IRS) in some ways as well.

Next came a text put forth by conservative economist Mark V. Pauly and like-minded colleagues in Health Affairs. It is worth a reading again. Here’s the core of these prophets’ proposal:

“In our scheme, every person would be required to obtain basic coverage, through either an individual or a family insurance plan. …All basic plans would be required to cover specified health services; plans could, however, offer more generous benefits or supplemental policies. The maximum out-of-pocket expense (stop-loss) permitted would be geared to income, with more complete coverage required for lower-income people, to ensure that no one faced the risk of out-of-pocket expenses that were catastrophic, given their income.” Again, lots of government intrusion into health care, along with links to the IRS.

There then followed a real life health bill based on these ideas, the late Republican John Chafee’s antidote to the emerging Clinton plan. It was called the “Health Equity and Access Reform Today Act of 1993” and had an impressively long list of Republican co-sponsors, among them Senator’s Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa), now fierce opponents of the ACA. As the folks at the Kaiser Family Foundation have shown, many of its provisions of Chafee’s bill have a striking similarity to provisions in the ACA of 2010 and comparing.