Tag: The ACA

The GOP’s Endless War on Obamacare-and the White House Delay

Jul 11, 2013• 177

By Robert Reich

The official reason given by the Administration for delaying, by one year, the Affordable Care Act’s mandate that employers with more than 50 full-time workers provide insurance coverage or face fines, is that employers need more time to implement it. The unofficial reason has more to do with the Republicans’ incessant efforts to bulldoze the law.

Soon after the GOP lost its fight against Obamacare in Congress, it began warring against the new legislation in the courts, rounding up and backstopping litigants all the way up to the Supreme Court. Meanwhile, House Republicans have refused to appropriate enough funds to implement the Act, and have held a continuing series of votes to repeal it. Republican-led states have also done what they can to undermine Obamacare, refusing to set up their own health exchanges, and turning down federal money to expand Medicaid.

The GOP’s gleeful reaction to the announced delay confirms Republicans will make repeal a campaign issue in the 2014 midterm elections, which probably contributed to the White House decision to postpone the employer mandate until after the midterms. “The fact remains that Obamacare needs to be repealed,” said Senate Republican leader Mitch McConnell, on hearing news of the delay.

Health Insurance Exchange Subsidies–Another Warning Sign???

Jul 11, 2013• 12

By Robert Laszewski

Come October millions of people will be applying for tens of billions of dollars in federal health insurance premium subsidies on the honor system.

On the Friday after the Fourth of July––when the administration apparently hoped no one would be paying attention––the Obama administration dropped 606 pages of regulations. Buried inside was the news that that insurance exchanges can ignore any personal income information they get from the Federal Data Hub during 2014 if it conflicts with “attestations” made by individuals.

That came three days after the administration announced it was putting the employer mandate on hold––and therefore not requiring detailed information from employers regarding the health plans they offer to their workers. The administration said the delay was because of the burden the reporting put on employers. But, was the administration ready to handle the data?

Because there will be no employer reporting in 2014, the administration also said in the Friday regs that the new health insurance exchanges “may accept the applicants attestation regarding enrollment in eligible employer-sponsored plan…without verification.” Given the incredibly complex “ObamaCare” 60%/9.5% employer benefit eligibility rule, that will be a challenge for most citizens.

But here’s the biggest deal in the new “ObamaCare” regulation: The exchanges are to rely upon the applicant’s statement regarding their income the vast majority of the time. Instead of requiring proof of their income, as had been expected when the Federal Data Hub couldn’t verify someone’s representation, the exchanges will only do a formal check on a “statistically valid sample” of applications.”

For those not part of this “statistically valid sample,” “the Exchange may accept the attestation of projected annual household income without any further verification.”

Apparently, millions of people will receive tens of billions of federal premium subsidy dollars “without any further verification.”

It would appear that the administration is going to rely upon subsequent 2014 tax filings, made in early 2015, to reconcile what it paid people compared to what they were actually eligible for.

That presents some big issues.

Getting Obamacare’s Messaging Right

Jul 10, 2013• 4

By Les Funtleyder

Recently, there was a bit of a dust-up over whether it was appropriate for the Secretary of Health and Human Services (HHS) to engage the National Football League (NFL) to help HHS with the process of drumming-up enrollment for health insurance exchanges. In the end, the NFL and other sports leagues decided they were not going to be involved fearing the appearance of taking political sides.

In our view HHS is better off with this outcome. To our way of thinking the exercise would not have delivered the desired results and would have left individuals confused and created a political distraction. At the heart of most public health communication plans are three main functions: create a message, deliver the message and get people to act on the message (many variations: example, example, and example). The HHS/NFL combo would likely have failed the test: What exactly does someone who catches a football for a living say that would make the uninsured purchase insurance on an exchange? While it’s easy to single out HHS and the administration, the opposition party also thinks messaging alone will solve all of its ills but that is far from correct assumption in our view.

In terms of creating a message, our first instinct would be to recommend a governmental agency like the FCC but for healthcare. We would call it something like the clinical communications clarification committee (CCCC). However, given recent concerns about “Orwellian” government information gathering, perhaps a more open-source, crowd-sourced approach to communicating may be more readily accepted. What we have in mind is a something like Pubmed meets Wikipedia where the information is readily available, credible, and based on updated facts. Inevitably something like this would need to be proctored to keep unreliable information out. Many crowd-sourced communities do a good job of self-policing but it couldn’t hurt to have an adult watching just in case.

Assuming we can create information (the message) in a way that is understandable and credible, how to transmit this information (the medium) becomes the next challenge. While we are pretty sure the “wired generation” who wear body monitoring devices are getting the “right” information via mobile devices, the web etc., we think that more important populations that are not technologically savvy may be missing out. Dual-eligibles for example, who are major drivers of cost and poor outcomes in the system, are not in our view, easily able to access useful information via high-tech gadgetry.

Hospitals Lost Jobs Last Month. Should We Be Surprised?

Jul 6, 2013• 15

By Dan Diamond

An old data series got new life, when the Brookings Institution issued a report that compared health care jobs growth versus all other industries.

It’s “a truly astonishing graph,” according to Derek Thompson at The Atlantic. “I knew health care had been the most important driver of national employment over the last few years, but I had never seen the case made so starkly.”

Thompson wasn’t alone in his surprise. (Hopefully, readers of The Health Care Blog would be less astonished.) But lost within the reaction—and even mostly overlooked within the industry—is that not all health care jobs are growing, or at least not growing at the same pace.

Take a look at the following chart. It resembles the Brookings data, with one major change: The hospital employment curve has been separated from all other health care jobs growth.

Notice how hospital employment essentially flatlined across 2009—a hard year for the sector, which was still insulated compared to the rest of the economy. But many organizations pared back on staff and sought to cut non-essential services to survive the Great Recession.

White House Delays Employer Mandate-But What About Small Employers?

Jul 3, 2013• 51

By Robert Laszewski

The administration suddenly announced last night that the requirement that all employers with 50 or more workers offer health insurance has been delayed until 2015.

If an employer with 50 or more workers did not provide health insurance to their full time workers in 2014, they would have been subject to a fine of $2,000 per worker. The employer would have also been subject to a $3,000 fine for each worker that went to the insurance exchanges if the employer package was not affordable.

Why did the administration delay the large employer mandate?

Because many employers have been in the early stages of planning to cut back the hours of workers in order to avoid having to offer insurance to those customarily considered part time, those who work at least the 30 hours per week the law established for defining a full time worker––and they haven’t been bashful in telling their employees why. In addition, there has been growing evidence that some employers were holding back on hiring in order to avoid more of the mandate costs at a time of high unemployment.

While the administration cited employer administration issues with mandate reporting as the reason for the delay, the bottom line is that the Affordable Care Act (“Obamacare”) was looking like it was about to be successfully labeled a job killer and the administration wanted to avoid that.

You also have to wonder if all of the reporting challenges were just with employers or was the administration also having trouble with the complex employer mandate information systems they will ultimately have to build?

The Pointless Search for Meaning in Exchange Prices

Jul 2, 2013• 11

By Alan Weil

With ten states and D.C. having reported preliminary information on the prices of plans in their new health insurance exchanges, partisans on both sides of the Affordable Care Act have pounced on the news to reinforce their preconceived notions.

Supporters of the law report that “rate shock is a crock” and that prices are “surprisingly low,” while opponents look at the same data and conclude that “Obamacare will increase individual health insurance premiums.” Gary Cohen of CCIIO’s recent announcement that rates on the federal exchange will be made public in September will surely raise the fevered pitch of commentary.

But what do these numbers actually represent? Carriers submitting bids start with the prices of their current products and then adjust them for the myriad changes in the insurance market that go into effect on January 1, 2014.

Those changes include: elimination of health status underwriting, compression of rates by age, partial standardization (and in most instances significant expansion) of the benefit package, expansion of the market to a largely unknown population due to premium subsidies, effects of the “three Rs” (risk adjustment, reinsurance, and risk corridors), a completely new product distribution system, and a host of other changes in the health care and health insurance environment.

Needless to say, these many changes introduce a tremendous amount of uncertainty.

What’s Changed Since the Obamacare Verdict

Jun 26, 2013• 3

By Dan Diamond

Ever since its controversial passage in 2010, the Affordable Care Act has been plastered with a range of polemic labels. Critics say Obamacare is job-killing; supporters herald it as life-saving.

Here’s another, perhaps unexpected label: personally profitable.

If you were among the true believers in the law a year ago today, there was easy money to be made. Nearly 80% of bettors on InTrade expected the law to be found unconstitutional; strategically spending about $25 in favor of the ACA could’ve netted you $800, based on how InTrade’s short-selling rules worked.

Much has changed, certainly, since Chief Justice John Roberts cast the deciding vote to uphold the law. (Beyond those bettors’ account balances, and the existence of InTrade itself, which mysteriously shut down in March.)

Here’s a look at how the Supreme Court’s decision on June 28, 2012, affected five hot-button issues related to the health law.

States’ decisions on Medicaid expansion

As of June 27, 2012: Several states with progressive governors and legislatures, like California, had moved to expand Medicaid ahead of the Supreme Court’s ruling. The Golden State’s leaders also had pledged to pursue universal coverage if the ACA was ruled unconstitutional.

But most states were waiting on the resolution of the constitutionality battle.

Since June 28, 2012: After the Court’s decision that the mandate was constitutional but that the Medicaid expansion was optional for states — which “took everyone by surprise,” said Matt Salo, executive director of the National Association of Medical Directors — governors were suddenly forced to decide whether the expansion made financial, and political, sense. Within a week, about ten states had signaled they’d expand Medicaid under the ACA.

However, many wary governors chose to wait for the November elections, and the knowledge of who would hold the White House, before announcing their plans; following President Obama’s reelection, a flurry of governors clarified their Medicaid stances throughout the winter and spring.

How Misplaced Reimbursement Incentives Drive Healthcare Costs Up

Jun 21, 2013• 7

By David Mokotoff, MD

For all of those out there anticipating the 2014 official role out of Obamacare, also known as the ACA (Affordable Care Act), here is a cautionary tale.

Many years ago, as I was growing my cardiology practice, it became evident that diagnostic services for my specialty, like stress tests, echocardiograms, etc., were done less efficiently and cost more at the local hospital, then in the office. This stimulated many groups in the 1980s and 90s to install their own “ancillary” diagnostic services. Patients loved not having to deal with the long waits and higher copay prices at the hospitals. And yes, the cardiologists did increase their revenues with these tests. However, lower costs to patients, insurance companies, Medicare, and improved patient satisfaction were just as powerful a stimulus to the explosive growth of these diagnostic tests, and later even cardiac catheterization labs, when integrated into the physicians’ offices.

As the growth in testing spiraled upward, the hospital industry saw their slice of the outpatient revenue pie nosedive. Hospital lobbyists and policy-makers cried foul and complained of greed and self-referral, which they said was spiking the rapid rise in healthcare costs.

Studies laying blame on self-referrals being the major culprit for escalating healthcare costs, have been inconclusive. However, after years of lobbying and the passage of ACA, the hospital industry finally had the weight of the Federal government on their side. It did not take long for Medicare to start dialing back the reimbursements for in-office ancillary tests and procedures, and outpatient cardiac catheterization labs were one of their main targets. Hospitals had lost millions of dollars to the burgeoning growth of these labs inside the cardiologist’s office.

Our twelve-man group had a safe and successful lab for about ten years. Then after the ACA was passed, Medicare began to cut the reimbursements for global and technical fees in this area. The cuts were so Draconian that it became impossible financially to continue the service. Never mind that we could provide the same service as the hospital more efficiently, with better patient satisfaction, and at a third of the cost.

RAND Shrugged

Jun 19, 2013• 19

By Vik Khanna & Al Lewis

The long awaited federally-mandated RAND Corporation report on workplace wellness programs is finally out, after months of anticipation. Despite an odd now-you-see-it/now-you-don’t release, both wellness proponents and critics anxiously awaited the report’s public deliverance.

Like many documents emanating from the political cauldron, the RAND report has elements in it to please both camps, although proponents will have to reach deep into the document for snippets of hope built around simulations, models, and what they term “convenience” samples of employers predisposed to support health-contingent workplace wellness programs.

For critics of health-contingent workplace wellness programs, the conclusion is much more straightforward: even using prejudicial data sources and lacking a critique of the quality of the evidence, the impact of workplace wellness on the actual health of employees and the corporate medical care cost burden, is, generously stated, negligible.

This is not worth $6BN a year, which is the purported size of the US market for health-contingent workplace wellness programs (“purported” because like everything else in wellness, the size of the industry itself is totally opaque). There are clearly better ways to spend these funds; at the very least, it must be possible to get the same dismal results for far less money and with vastly less complexity.

With the push of the Affordable Care Act, the drive to implement health-contingent workplace wellness programs is accelerating. The RAND report, rather than contributing propellant, ought to give responsible business leaders pause as they consider whether to step up the pressure (i.e., increase incentives and penalties) for employees to participate in these highly intrusive, clinically dubious, spendthrift programs that yield health in RAND’s hypothetical world of models and simulations, but perhaps not so much, as RAND notes, in a more earthbound reality.

The lesson for executive leaders is that the nearly hagiographic employer belief in the value of health-contingent wellness is completely undone by the fact that RAND says virtually no employer (2% of their sample) measures program impacts and, as we have written previously, it doesn’t look like any employer, benefits consulting firm, or vendor actually knows how to do so.

Will the Federal Health Insurance Exchanges Be Ready On Time?

Jun 19, 2013• 1

By Robert Laszewski

After months of speculation on just where the Obama administration is toward the development of the new health insurance exchanges, the Government Accountability Office (GAO) has issued a 48-page report complete with timelines and a detailed report on just where the Obama administration is––or at least was last month.

The key summary:

“Much progress has been made, but much remains to be accomplished within a relatively short amount of time. CMS’s timelines provide a roadmap to completion; however, factors such as the still-evolving scope of CMS’s required activities in each state and the many activities yet to be performed—some close to the start of enrollment—suggest a potential for challenges going forward. And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so. CMS recently completed risk assessments and plans for mitigating risks associated with the data hub, and is also working on strategies to address state preparedness contingencies. Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined. ”

Regarding the Data Hub:

“FFEs [the federal exchanges] along with the data services hub services are central to the goal under PPACA of having health insurance exchanges operating in each state by 2014, and of providing a single point of access to the health insurance market for individuals. Their development has been a complex undertaking, involving the coordinated actions of multiple federal, state, and private stakeholders, and the creation of an information system to support connectivity and near real-time data sharing between health insurance exchanges and multiple federal and state agencies. Much progress has been made in establishing the regulatory framework and guidance required for this undertaking, and CMS is currently taking steps to implement key activities of the FFEs, and developing, testing, and implementing the data hub. Nevertheless, much remains to be accomplished within a relatively short amount of time. CMS’s timelines and targeted completion dates provide a roadmap to completion of the required activities by the start of enrollment on October 1, 2013.