Wednesday, September 5, 2018

What’s a small state to do? (A health care agenda for Maine’s next governor)

Here in Maine, we’ll have a new governor come January. That combined with federal action that has undermined the Affordable Care Act (ACA) makes this a good time to ask what we, as a small, poor, mostly rural state, can do to improve health care for our residents.
In case you’ve been distracted by all the other news; in addition to the Administration’s sabotage over the past two years, there is a pending court case that puts protections for those with preexisting conditions at risk, plus Republicans are already talking about trying again to repeal the ACA if they keep control of Congress. All these events come together to heighten the need to change Maine law to guarantee the protections codified by the ACA. If the past few years has taught us anything, it’s that victory is fragile. So even if the Democrats take back the House (a result far from certain), we will still need to proceed.
While it’s important to talk about ACA protections, when we talk about a health care agenda for Maine, we need to talk about much more. We need to talk about fulfilling the ideal that every individual has “access to the health care they need when they need it.” Access implies it is affordable to the individual; health care implies it is quality care. Or to put it another way, as a state we should be talking about health care and the interrelated components of access, cost, and quality.
My message to you today is one of hope – turns out when we dive into the details, there is a lot we can do.
Let’s start with a list. Below the list, I’ll dive into varying degrees of detail about each of the components. Before we get started, a note about hubris – I have spent my career (and life) coming to grips with how much I don’t know. This list and the descriptions are just a beginning. I hope they represent a decent start at creating a health care agenda for Maine, but I’ll consider this a success if all they do is start the conversation.

Access
  • Implement Medicaid expansion
  • ACA Defense
    • Regulate short-term medical plans and association health plans
    • Provide state enrollment assistance to fill in for federal reduction
    • Codify in Maine law the ACA’s pre-existing condition exclusion prohibitions
    • Codify in Maine law that health care coverage means coverage of an essential benefits package
    • Consider a state individual mandate to purchase insurance (NJ and MA have already done so)
  • Address remaining uninsured
Cost
  • Work on an all-payer global budget proposal for the state
  • Create a Medicaid buy-in plan as a public option for the 2020 plan year
  • Revise Maine’s reinsurance program 
  • Address prescription drug cost issues 
Quality 
  • Work on social determinants of health
  • Address rural health care starting with maternal health
  • Restore public health infrastructure 

I’m sure some of you are wondering why one item did not make my list. It was a deliberate decision not to include the pursuit of a state-based single payer system. I support the principle of universal coverage – remember, single payer is just one way to achieve that goal. I have questions about single payer – I’m not convinced it is the right option for our country at this point in our history – but even if you disagree and think single payer is the way to go, it’s just not a realistic goal for Maine in 2018.
“Across the country, many Democratic candidates who made that a centerpiece of their campaigns in key districts this year lost their primaries, in some cases getting clobbered by rivals who offered vaguer health care plans or backed a more incremental approach.” (Why ‘Medicare for all’ is playing poorly in Democratic primaries).
For more information, read what is probably my favorite piece on the topic: Single Payer Is Not a Principle (The principle is universal coverage. There are several ways to get there. We need to remember this. By Harold Pollack)
“Much of the internal Democratic Party debate confuses instrumental operational questions with questions of core principle. By which I mean, to put it more simply: Single payer is not, in itself, a principle. It is one way to organize health-care financing. A regulated patchwork of private insurers undergirded by public subsidies and the individual mandate is another. In other words, these arrangements are a means to an end, not ends themselves. After all, most American progressives would be thrilled to see the Dutch or German health-care systems enacted here, though neither of these is actually single payer in the sense that Medicare is.
The end—the core principle at stake—is universality. A wealthy and humane democracy must provide decent health coverage to everyone—coverage that actually works to prevent and treat serious illness, injury, and disability. On this principle, progressives are in total agreement. We’re no longer debating the goal of universal coverage. We’re debating how to get there. And it’s important to remember that.”
Now, as promised some more details on the agenda items.

ACCESS
Regardless of what you think about the ACA, there is no denying that it provides health coverage to more people than have ever had it before. But the work is not done. 
Implement Medicaid expansion
The first task is obvious. The new governor should instruct the Maine Department of Health and Human Service to implement the Medicaid expansion already passed by the voters and confirmed by the legislature.
ACA defense
While Medicaid expansion has gotten the most attention, many actions can be taken on the state level to counteract GOP sabotage on the national level. These include (but are not limited to) regulating Association and Short-term medical plans, providing enrollment assistance to make up for the reduction in federal funds, defense of pre-existing condition exclusion limitations, essential health benefits and community rating, and finally consideration of a state-level mandate (passed in NJ, existing in MA, although I acknowledge this would be a heavy lift here in ME).
In the event, the current lawsuit arguing that with the suspension of the mandate penalty, certain provisions of the ACA are null and void, compared to other states, Maine has limited (but insufficient) protections. As you can see in this chart from The Commonwealth Fund, independent of the ACA Maine would still have guaranteed issue meaning everyone could get a policy. However, the prohibitions on preexisting condition exclusions would go away, meaning that while you would be able to get a policy, it might not cover the condition for which you most need coverage (e.g., you have a heart problem, and cardiac care would be excluded).
Address remaining uninsured
To begin to address this question, we must ask, after ACA implementation, who remains uninsured? The following is excerpted from the Kaiser Family Foundation resource pages: Key Facts about the Uninsured Population
“Most uninsured people are in low-income families and have at least one worker in the family. Reflecting the more limited availability of public coverage in some states, adults are more likely to be uninsured than children. People of color are at higher risk of being uninsured than non-Hispanic Whites.
Undocumented immigrants are ineligible for Medicaid or Marketplace coverage.14 While lawfully-present immigrants under 400% of poverty are eligible for Marketplace tax credits, only those who have passed a five-year waiting period after receiving qualified immigration status can qualify for Medicaid.”
In other words, the bulk of the uninsured are those living in states that have not expanded Medicaid, undocumented individuals and those who have concluded that despite available assistance they still cannot afford coverage. 
Implementing Medicaid expansion, as discussed above, will go a long way towards providing coverage to those currently without, but we also must find creative ways to provide care to the undocumented, and as we discuss below, find ways to address the overall cost so that the available assistance is enough to make coverage affordable.


COST
The US spends a greater percentage of its money on health care than any other nation. In the old days, some thought that was because we had better care and some thought that was because we had more care – but it turns out neither is true. The one simple reason we spend more is our prices are higher. We don’t get more tests or other care than many other countries, and we don’t have better outcomes than many other countries (remember, higher cost doesn’t mean higher quality). What we have are higher prices. As the late, great economist Uwe E. Reinhardt put it with his coauthors in their seminal 2003 paper: It’s the Prices Stupid
However, when we talk about people not being able to afford health care (we’ll get to all the myriad ways that express itself) and look to rectify the situation, addressing the fundamental issue of high prices must be at the top of the list.
Let’s start by acknowledging that it is not just the uninsured who have cost issues with medical care. From a Kaiser survey: …”That brings the total percentage of non-elderly people with insurance and affordability problems to 26.2%” (It's not just the uninsured — it's also the cost of health care).
As mentioned above, the cost issue expresses itself in different ways – for some it is high premiums (remember, with the ACA’s medical loss ratio provision insurers are limited in how much they can charge above the cost of services paid out – so the bulk of the premium is determined by the underlying cost of care), and for some it is high out-of-pocket costs such as high deductibles and high coinsurance levels. For many, these high out-of-pocket costs are exemplified by what they pay for prescription drugs (we’ll get to drug costs in a minute). 
We can see that steps to lower premiums and out-of-pocket cost would help many, but it will be by fundamentally lowering the cost of care that would be most impactful.
All-payer Global Budgets
One state has made more progress than any other in addressing the underlying cost issue – that is Maryland and their use of an all-payer global budget. Briefly: “all payers in the state set annual global budgets for hospitals to cover both inpatient and outpatient care. The idea was that the fixed, predictable revenues would give hospitals flexibility to invest in care improvements and make care more valuable for patients and payers.” (Maryland's radical all-payer model was just extended through 2023)
This model is one of, if not the most promising experiment going on in the country to get prices under control. I don’t underestimate the difficulty in bringing an equivalent system to Maine, but it would have a real impact. I believe we must work on a global budget proposal for the state
Medicaid buy-in
While we work on long-term solutions, there are steps to take that can immediately help some of the various groups impacted by affordability issues.
For those who can’t currently afford coverage, because they are either not eligible for subsidies or the subsidies they are eligible for are insufficient, I continue to encourage the introduction of a Medicaid buy-in plan as a public option for the 2020 plan year. Creating a “Medicaid buy-in” option would provide a more affordable health coverage than currently available.  The Medicaid buy-in benefits from using the government reimbursement rates instead of prices negotiated by commercial insurers. It is also worth exploring providing this option to small employers.  Over the years we’ve heard from many small employers that they would like to do more for their staff re health benefits, but they can’t afford the premiums. One of the advantages of creating a Medicaid buy-in for Maine residents is that while being a less expensive option, it can be nearly revenue neutral for the state’s budget. Recently this idea has gained popularity as being something that a state can construct without Federal action/approval, unlike a Medicare buy-in or a national public option, ('Medicaid-for-all' Rapidly Gains Interest in the States). 
Revise Maine’s Reinsurance Program
Another way to reduce premiums is by reinsurance – provided the reinsurance program brings “new money” into the system. Maine recently received approval (and funding) from the CMS to restart the MGARA (Maine Guaranteed Access Reinsurance Association) through a 1332 waiver. We saw from the two sets of proposed rates filed before the approval (rates assuming approval and rates assuming no program) the federal money, along with the assessment on all private health coverage in the state, will lower premiums. However, I propose revising the reinsurance program making it less complex and administratively burdensome. As I said when the waiver passed – some reinsurance is better than no reinsurance, but a more straightforward less complex plan would be much more efficient than the one we currently have.
Prescription Drug Costs
One of the most visible examples of health care cost problems the prescription drug cost issue. Before we can evaluate what state action can truly be impactful, we need to start by understanding that the drug pricing problem is not a single issue, it is several overlapping issues. The complexity of the issue means, sadly, there is not one silver bullet to fix it. 
Let’s start with paying for the drugs – when we do; we need to understand both out-of-pocket costs to individuals who are insured, costs to individuals who are not insured, and costs to the various elements of the system including private payers like large employers, the federal government, and state governments.
Some solutions that have been offered, such as limiting out of pocket (OOP) costs in insurance, would only shift the dollars around. We can mandate that OOP costs for insured individuals don’t exceed a certain amount per year (although as a state, we can only issue mandates for limited subsets of the covered population), but in isolation, all that does is increase costs elsewhere by driving up premiums. This is not to say that the amount spent by individuals shouldn’t be considered – it must be – but it can’t be considered in isolation.
It’s also worth thinking about the different cost issues when we look at the brand and generic dichotomy. Both types of drugs require attention, for reference note that brand drugs account for 73 percent of retail drug spending, despite comprising only 11 percent of prescriptions (http://www.gphaonline.org/media/generic-drug-savings-2016/index.html). 
Starting with generic drugs, some of the issues that need to be addressed are:
  • Biosimilar obstacles - Five of the top 10 selling drugs have biosimilars approved, but most are not on the market due to litigation
  • Generic introduction obstacles – Generic manufacturers can’t get samples from brand manufacturers; patent lawsuits slow the generic development process and pay not to play contracts exist
  • Generics with only a single source yield higher prices
On the brand side, the factors leading to high costs include:
  • Lack of competition during the patent exclusivity period – this is by far the largest issue
  • Extension of patent exclusivity period by slight changes to a formulation that may not provide clinical benefits
  • Cost-plus reimbursement for physician-administered drugs in Medicare means providers are incented to use higher-priced medications
Maine has recently passed legislation attempting to address some of these issues, the impact the measures will have remains to be seen. As mentioned above, there are no silver bullets. It is likely that any measure that impacts the cost of drugs will involve limiting the choices available in an individual’s coverage. Those who propose more negotiations should remember that the only way to effectively negotiate is by being willing to walk away. Other countries have done a better job than us at controlling their drug costs because they have said no to some drugs. We can make progress on the issue, but it will be done in incremental steps and undoubtedly involve trade-offs.

QUALITY
Even if we were able to snap our fingers and eliminate all the access and cost issues associated with providing health care, the work would be far from done. I can’t begin to cover this topic in any comprehensive fashion, but it’s vital that as we think about moving forward as a state, the quality of care be part of the conversation. 
To begin, let’s acknowledge that medical care is only a small part of what determines a person’s health status. The implication is we need to expand our definition of quality care to cover as many determinants as possible. There are five generally accepted determinants of health:
  1. Biology and genetics. Examples: sex and age
  2. Individual behavior. Examples: alcohol use, and smoking
  3. Social environment. Examples: discrimination, income, and gender
  4. Physical environment. Examples: where a person lives and crowding conditions
  5. Health services. Examples: Access to quality health care and having or not having health insurance.
Social Determinants of Health
When we talk about quality, we need to expand our discussion from just talking about health services. One field of work revolves around the Social Determinants of Health:
“Our health is also determined in part by access to social and economic opportunities; the resources and supports available in our homes, neighborhoods, and communities; the quality of our schooling; the safety of our workplaces; the cleanliness of our water, food, and air; and the nature of our social interactions and relationships. The conditions in which we live explain in part why some Americans are healthier than others and why Americans more generally are not as healthy as they could be.” 
Rural health
There are a myriad of issues that need attention. Rural hospitals have been closing impacting the availability of care. It may be the right decision to close certain hospitals, but we need to assure that there are appropriate replacements for needed services. Maternity care is one area where providers have not found it “cost effective” to locate needed services in sparsely populated areas. While that may be an appropriate decision for the provider group, it may not be an appropriate decision for society. We need to acknowledge that maternity care is a “public good” – a service that we all have a stake in seeing made available regardless of profitability – and create a system where expectant mothers are getting the care they need. Similarly, we need to assure access to emergency services. The question of how to structure a cost-effective system that both provides quality care and accounts for individuals barriers (transportation, lodging for family members, etc.).
Restore public health infrastructure
During LePage’s two terms in office, we’ve seen the closing of school-based health centers, the ending of public health partnerships and the elimination of public health nurses. We need to restore services and recreate an efficient, effective public health system here in Maine.
The areas listed above merely scratch the surface of the work that needs to be done. I’d be remiss not to mention that there is already much work on quality issues being done here in Maine. Continuing and enhancing that work is vital.  

CONCLUSION AND DISCLOSURE
As we’ve seen, there is much Mainers can do to continue our tradition of caring for each other. As I noted above, this list isn’t meant to be “final,” it’s meant to begin the conversation. I hope it shows the breadth of actions we can take to bring us closer to the ideal of providing everyone the health care they need when they need it.
Finally, I note this is a good time for the discussion due to the impending change in governors. But please note I am not affiliated with any specific campaign. A check of the public record will show that I have contributed to Janet Mill’s campaign and I state proudly here that I intend to vote for her. But I bear sole responsibility for this piece; the campaign was in no way connected to its creation.


Sunday, May 13, 2018

The President’s Drug Price Address: Smoke and Mirrors With a Dash of Policy

I wanted to believe something would come of this speech-- I really did. As a candidate, the President talked about doing something material about drug pricing including having the government (through Medicare) directly negotiate prices as well as other substantive changes. Sadly the speech given by the President and the accompanying “plan” released by HHS (American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs) will do little to impact drug prices. To be fair there will be some impact, but nothing fundamental will change.

In case you’re wondering, it’s not just me who had that reaction, and it’s not just those who oppose the current administration. The stock market also found nothing to be concerned about on behalf of the drug manufacturers. As noted by Bob Herman in Axios: Pharma stocks boom after Trump's drug speech. This headline from EndPoints News sums up the general reaction to the speech: Trump’s ‘sweeping action’ to lower drug prices mocked by analysts as relieved investors trigger rally in Big Pharma stocks.

I spend a lot of time (my wife would say too much) thinking about drug prices. I write a weekly newsletter for ICER on the drug industry and recently, I had the opportunity to speak to Maine Senator Angus King about high drug prices. To understand what was and wasn’t addressed by the President’s speech, we need to start by understanding the problem; during my conversation with the Senator, I discussed how the drug pricing issue is really several different problems. Let’s look at those issues and how the President did and did not address them.

One way to categorize the problems is by looking at two dichotomies (generic vs. brand and price vs. cost) and the resulting four areas of concern (understanding there are overlaps and interaction between the categories):
  • Generic drugs (availability and lack of competition)
  • Brand name drug (including unique issues for specialty and orphan drugs)
  • Cost to the system
  • Price individuals pay (out-of-pocket cost) 

The President touched on these issues and added his standby, criticizing other countries. In the words of Jonathan Cohn in the Huffington Post: “There is one element of the administration’s drug strategy that has a distinctly Trumpian tinge to it: criticism of other countries.” (Trump’s Plan On Prescription Drug Prices Looks Nothing Like What He Promised).

Let’s start with this one – The President argues that other countries "extort unreasonably low prices". The problem with that characterization is that it’s just not true. Other countries negotiate drug prices (remember, he said he wanted Medicare to negotiate while campaigning). Additionally, no one thinks the prices other countries pay for drugs impacts what we pay – do you think if a firm was getting more in England that would make them charge you less? And finally, even if it was true that foreign prices were the fundamental issue, how does he think he is going to influence what other countries pay for drugs

However, as I mentioned above, there were some positives in the speech. Many of the positives were the steps outlined to address the issues around generic drugs – perhaps the area that is “simplest” to fix. Before we proceed, for reference note that while fixing the problems around generics is important, brand-name drugs account for 73 percent of retail drug spending, despite comprising only 11 percent of prescriptions (http://www.gphaonline.org/media/generic-drug-savings-2016/index.html).

Among the generic issues that need to be addressed are:
  • Biosimilar obstacles - Five of the top 10 selling drugs have biosimilars approved, but most are not on the market due to litigation (biosimilars are generic versions of biologics)
  • Generic introduction obstacles – Generic manufacturers can’t get samples from brand manufacturers, patent lawsuits slow the generic development process, and pay not to play contracts exist
  • Generics with only single source yield higher prices

The administration’s plan includes some specific measures to impact these issues. Additionally, before release of the administration’s plan, there was already some movement on these with the FDA identifying the issues, the CREATES Act trying to control in some of the abuses, and the new non-profit generic drug manufacturer being started by an alliance of hospitals (currently over 1/3 of the hospital systems in the country are participating).

Sadly, while there are some concrete steps in the administration’s plan, overall the document is a laundry list of proposals with no timeline for implementation. The document also has many places where it discusses seeking input on addressing identified issues (although the plan itself discusses no method for providing input). Seeking input is good, but clearly, this plan is not “the most sweeping action in history to lower the price of prescription drugs for the American people” as the President claimed during his speech.

Next, let’s talk about brand name drugs; among the factors leading to high costs are:
  • Lack of competition during the patent exclusivity period 
  • Extension of patent exclusivity period by slight changes to a formulation that may not provide clinical benefits
  • Cost-plus reimbursement for physician-administered drugs in Medicare means providers are incented to use higher-priced medications

There is not much in the administration’s plan to address these issues (although there is reference to increased use of value-based purchasing, a way of assigning and paying more appropriate prices for drugs based on research into the drug’s value) and the administration’s plan does identify the physician-administered drugs as an area to address.

There are other more fundamental ways to change the way drugs are developed not touched on by the administration’s plan. Ideas such as “prizes not patents” that would offer a set dollar amount as a prize for a new drug that treats a specific condition and Building a NASA for Prescription Drugs would be game-changing: I’d love to see these ideas getting more attention and discussion.

Cost to the system - one proposal receiving attention is requiring manufacturers to include the list price of the drug in their advertising. I have my doubts about this – both with the legality of the measure and with the impact it would have – but it certainly sounds good, doesn’t it?

Out-of-pocket costs - the plan does focus on i current system of rebates used by manufacturers and pharmacy benefit managers (PBMs) on behalf of the drug purchasers. The President singled out PBMs as being a problem, and there is no doubt they have garnered their share of profits. Certain actions such as working to provide more transparency to the rebates and eliminate gag clauses (that prevent pharmacists from talking about less expensive options) are positives that will reduce what an individual (if they are insured) pays at the drugstore.

However, it’s worth noting that while some of the rebate money goes to the PBMs, much of it goes to the payers where it is used to reduce premiums (the medical loss ratio rules in the ACA see to that). So ultimately, the system won’t save any money, and many individuals won’t save much since they will face higher premiums in exchange for the lower copay or coinsurance amount.

Also, worth noting is that the environment is not static. The PBM landscape was already in a state of upheaval as the CVS-Aetna and Cigna-Express Scripts deals move forward. It is unclear what these new relationships will mean for how PBMs conduct their business.

Another way the administration’s plan tries to address costs is the proposal to allow Part D formularies (formularies are a list of drugs covered by the plan) to have one drug per class instead of two – the theory being this will allow for “tougher negotiations.” Like with so much in health care, the implementation of this idea will determine its impact on patients. Restricted formularies can be an appropriate cost-saving strategy, but they must have adequate exception procedures. While many will be able to use the drug in the formulary, there will always be some who need one of the alternatives. Moving from two drugs per class to one will increase the number who will need to go outside the formulary increasing the importance of an appropriate exception process.

Above, I’ve done my best to approach the Administration’s plan with an open mind. There are some parts of the plan that will help although there is not as much substance as we had hoped. The President did not include two of his major campaign promises – Medicare directly negotiating prices and the importation of drugs from other countries. (Personally, I was not disappointed at the omission of the importation idea – I don’t think it would work as discussed in Appendix 1 below.)

After so much build-up, the reality is that the plan is just smoke and mirrors with a dash of policy thrown in.






Appendix 1 - Drug Importation

This idea, while not included in the administration’s plan is popular. Several states (Vermont being the farthest along) are looking to do this on their own. However, I remain skeptical and believe that at best this might be a transitional solution. Before I get to the reasons I don’t think this strategy will work, let me comment on the safety argument against importation. I consider this a scare tactic and not a reason to oppose importation – I’m sure all else being equal it would be possible to ensure the safety of Canadian drugs being imported into the US.

However, all else is not equal, and there are fundamental reasons why the strategy won’t work long term. Importing drugs from other countries is essentially outsourcing out drug pricing problem. There are difficult discussions to be had and decisions to be made regarding drug pricing; it won’t work if we try to point to Canada and say I’ll have what they’re having…

Other countries have lower prices than us for a reason. They obtain them by negotiating the countries single price for a drug. The key to a successful negotiation is the ability to say no – that above a certain price the purchase won’t be made – in the US we don’t negotiate a single price for everyone. And while some benefit plans do say no to certain drugs, most government plans (like Medicare and Medicaid but not the VA) essentially are not allowed to say no.

Why would a manufacturer agree to supply enough drugs at the Canadian price to export to the US when they are currently earning a higher price in the US? It would be a simple matter for them to restrict the Canadian purchasers from reselling the drugs, or to restrict the supply so that there was no product available for export. Again, while importation sounds like a good idea, if tried at any scale I don’t believe it would work.




Appendix 2 - Additional Resources

Thursday, December 28, 2017

Reports of the ACA's Death Have Been Greatly Exaggerated


A new survey out this week tells us that “31 percent believe Trump has repealed the Affordable Care Act, 49 percent say he hasn’t, and 21 percent are unsure.” To paraphrase Mark Twain: reports of the ACA’s death have been greatly exaggerated.

While the penalty for not having health coverage (the mandate) has been zeroed out starting in 2019, despite the constant attack, most of the law (Medicaid expansion, insurance subsidies, protections for those with preexisting conditions, etc.) remain the law of the land.

However, that doesn’t mean 2018 and beyond will be smooth sailing for the continued expansion of health coverage. Below we’ll talk about the future of health coverage and the ACA – both nationally and here in Maine.

Specifically, we’ll cover the following:
  • Open-enrollment results
  • Impact of zeroing out the mandate penalty
  • Short-term plans
  • But wait there’s more…


Open-Enrollment Results

Let’s start with the preliminary results of open enrollment for 2018 coverage. Going into open-enrollment, most observers (including me) were “sure” that the numbers would be significantly worse than last year due to the shorter enrollment period and the Administration’s sabotage. With open-enrollment over for much of the country, the results have been a very pleasant surprise. The final enrollment numbers will end up very close to last year’s total. It turns out the law is very much alive, and people really do want health insurance.



What happened? The shorter enrollment period was always part of the long-term plan for the ACA. The idea is that there would be several weeks each Fall when just about everyone in the country was enrolling in health plans: Medicare, the Marketplace, and employer coverage enrollment periods would all roughly coincide. To me, the shorter time frame itself wasn’t the problem, the reason for the concern was the cut in the advertising and outreach budgets. Luckily, I was wrong - there seem to be several factors that made up for the budget shortfall: 1) The very public fight over the ACA in the summer and fall made people more aware of open-enrollment 2) Insurance companies increased their advertising budgets 3) Heroic efforts by advocates and assisters to get people signed up, and 4) the increased subsidies resulted in many being able to purchase coverage for less than they paid last year (more about this below).

So, we’re starting 2018 with about the same number enrolled as last year – what happens next?


Impact of zeroing out of mandate penalty

As part of the tax bill recently signed by the President, the penalty for not having health coverage will be zero dollars beginning in 2019. For 2018 the penalty remains in effect and the IRS has announced they will reject tax returns for 2017 that don’t report coverage or claim an exemption (so even if you’re so inclined, don’t cancel your coverage yet).

The CBO estimates that eliminating the mandate would result in 13 million fewer insured. That translates to 50,000 fewer insured here in Maine if the CBO is correct. Although there is a growing feeling that the numbers may be overstated, there is no question that millions fewer will have coverage and premiums in the individual market will rise precipitously.

The greatest fear is that elimination of the mandate will lead to the dreaded death spiral. The ACA relied on both carrots and sticks to keep people in the market, zeroing out the mandate penalty eliminated the stick. Without the push to coverage, the theory goes that fewer healthy people will buy insurance, so the pool of people with insurance is “sicker” driving up premiums. The increasing premiums then drive even more healthy people out of the market, making the pool even sicker, driving up premiums even more. Hence the death spiral.

The reality is that the situation is more complicated than the theory (isn’t it always). The premium subsidies available to those earning less than 400% of the Federal Poverty Level (FPL) are based on the second to lowest cost silver plan premium in an individual’s market – as the premiums go up, so do the subsidies. So those who are subsidy-eligible will be shielded from the increases and still be able to afford the insurance – meaning there is a floor of subsidy-eligible individuals who will not abandon the market.

In fact, given the elimination of the cost-sharing payments to insurers and the resulting increase in silver plan premiums, the subsidies were more generous beginning this year, allowing for individuals to get a better deal. (One of the side effects were many people receiving subsidies were able to purchase bronze plans for just a few dollars a month.)



So, while the stick has been eliminated, for some the carrot has been enhanced; counteracting some of the expected market erosion. However, because the carrot is not available to everyone, it won’t eliminate all the erosion. The people who will face a dire situation are those earning more than 400% of FPL who receive no assistance. As premiums increase, they will be left without affordable options.

Some who voted for the tax bill and the elimination of the mandate penalty claimed to want to protect their constituents from the premium spike. Maine’s Senator Susan Collins made a “deal” to get two bills passed that she claims will mitigate the damage of eliminating the penalty. Let’s see if that’s true (spoiler alert – it’s not).

The first bill to consider is Alexander-Murray. This piece of legislation was designed to addresses the elimination of the cost-sharing reimbursement (CSR) to insurers. However, the bill was written months ago before we saw how the market would respond. As I reviewed above, the unintended consequence of the President cutting CSR reimbursement is that premium subsidies have risen providing a better deal for many who shop on the ACA marketplace.

This bill does nothing to mitigate the elimination of the mandate penalty – as the Democratic Sponsor Senator Murray noted, it would be like fighting fire with penicillin – have no impact at all. Additionally, many would be worse off if Alexander-Murray passed due to the change in silver plan premiums and the resulting change in subsidies.

The second bill is the Collins-Nelson Reinsurance bill (or possibly some other reinsurance bill). If adequately funded both in dollars allocated per year and in the number of years it will be funded (a big if), the bill could address one of the mandates policy goals – providing a stable insurance pool. But can the bill pass the House? Many conservatives are opposed to the bill, and Speaker Ryan has said he wasn’t part of that deal.

Even if it is adequately funded and does pass, it does not address other goals of the mandate such as increasing the number of insured.

We must also consider how insurance companies will respond to this further destabilization of the markets. Several insurers have already pulled back from participation in the marketplace, and I think it’s fair to say that trend will continue. Here in Maine, while I’m confident Community Health Options (one of the last remaining co-op plans) will remain, I think it’s an open question how Harvard Pilgrim (our other marketplace insurer) will respond.

There has been some talk of states imposing their own mandates as a response to the Federal change – in fact, Massachusetts still has theirs on the books from when Romney Care was implemented. While there is nothing legally preventing this from happening, we must acknowledge it would be a hard sell. There is no denying the mandate is the most unpopular part of the ACA, and it would be a heavy lift in most states to try and institute one.

Perhaps Margot Sanger-Katz of the New York Times summed it up best: “The end of the mandate will establish a sort of natural experiment, in which its influence will become much more clear.”


Short-term plans

Adding to the market instability that will be brought about by the elimination of the mandate penalty is the upcoming loosening of regulations around short-term health plans and association health plans. These plans are not subject to the ACA – so they don’t cover the essential health benefits, and they don’t have any protections for those with pre-existing conditions. What they do have is medical underwriting.

Even before the ACA, these products were problematic. Only healthy people could buy them, and they usually found that if they got sick, the benefits were insufficient. The ACA and accompanying regulations helped to marginalize these products. However, the President signed an executive order in the Fall instructing that the regulations be loosened for these plans.

If these proposed changes proceed unchecked, these plans could further drain healthy people from the ACA compliant plan insurance pool (note we are expecting the new regulations early in January).

This is one area where states can effectively prevent the damage. These are insured products and so subject to state regulation. I encourage states to consider instituting additional consumer protections and limiting the damage these plans can do.


But wait there’s more…

Before we wrap-up, a few more items to note as we think about access to health coverage in 2018. Please don’t take the brief mentions below to signify that these issues are any less important than what we’ve already discussed – if I wrote as much as I wanted about each of these; I’d never stop.

Medicaid Expansion
Here in Maine voters passed a referendum to implement Medicaid Expansion. Governor LePage is against the idea and has put in place arbitrary roadblocks to the implementation. While I know the Democrats in the State Legislature will do everything they can to implement the referendum, I fear that it will be the new Governor who takes office in 2019 will be the one to implement expansion. The LePage Administration will drag its feet, and it’s possible the issue ends up in court – delaying the implementation even further. I hope I’m wrong about this one but…

Medicare/Medicaid/Social Security
Let’s start with a bit of good news. As part of the continuing resolution passed at the end of December, the “Paygo” provision that would have led to an automatic $25 billion Medicare cut was overruled by House and Senate.

However, while those automatic cuts won’t happen, Speaker Ryan has already said he wants to work on cutting Medicare/Medicaid/Social Security in 2018. Stay tuned.

CHIP / Community Health Centers
CHIP still has not been fully funded. While the Continuing Resolution included some short-term funding, it was inadequate. It included just $2.85 billion for CHIP through March 31. How important is CHIP? “From 1997, when CHIP was enacted, to 2012, the uninsured rate for children fell by half, from 14% to 7%.”



The lack of CHIP funding is a national embarrassment – but if possible, it’s even worse considering the recently passed tax bill. It will cost $100 billion to extend CHIP for five years compared to the unfunded $1.5 Trillion tax cut just passed.

In addition to not adequately funding CHIP, funding has not been assured for Community Health Centers. I’ll let the Commonwealth Fund describe the implications:

“If Congress does not act, community health centers will lose nearly 70 percent of the federal dollars they rely on to operate. The U.S. Department of Health and Human Services estimates that the significant funding cut would lead to one-quarter of community health centers sites closing, 51,000 workers being laid off, and 9 million people — more than one-third of all community health center patients — losing the comprehensive, high-quality, and low-cost care they need.”


Conclusion

As I try and peer into the health coverage landscape of 2018, I can’t help but invoke my spirit animal, shruggie: ¯\_()_/¯ We can make certain predictions about how things will play out, but if 2017 has taught us anything, it’s how silly we all were to think we could predict the future.

With that qualification in mind, here’s my best guess.

First the good news, the Medicaid expansion remains the expansion will be implemented in more states (including eventually Maine). Also, the subsidy-eligible will continue to be able to access the individual insurance market with products that if not as affordable as we’d like, will remain within reach. The existence of the subsidy-eligible population will mean that some (but not all) insurers will continue to participate.

Now the bad news, the law may effectively disappear for those who earn over 400% of FPL and have no access to employer-sponsored insurance. Many will be at risk who have protection today. Tim Jost, professor emeritus of Washington and Lee law school, summed it up this way: "The exchanges will essentially become a home for consumers for qualify for premium tax credits and a high-risk pool for everyone else, and a very uncomfortable place for insurers to be. The number of uninsured will shoot up, as will the uncompensated care burden for hospitals."

Additionally, while the law as currently configured will protect those earning less than 400% of FPL, the spike in premiums and the resulting spike in subsidy payments helps to draw a target on the subsidies as described by Sara Rosenbaum at George Washington University: “This, of course, sets the stage for terrible reductions in subsidies along with Medicare, Medicaid, and CHIP subsidies, ultimately.”

For today, despite continued frustrations, we must keep fighting the good fight as we stay aware of the dangers that lie ahead.




Wednesday, November 15, 2017

Once more unto the breach, dear friends

A new insidious threat reared its head yesterday when a provision eliminating the individual mandate was added to the Senate version of the tax bill.

Fellow Mainers, please let Senator Collins know this is unacceptable.

As many of you know, the mandate works to bring everyone into the system.  Without it, the CBO estimates 13 million fewer people would be covered and premiums would rise 10% over the baseline increase.  

Note that the CBO analysis assumes all else being equal, we still have the threat of the changes encouraged by the Executive Order (Donald Trump’s Terrible Executive Order on Health Care).

For those needing a refresher, Paul Krugman provides this explanation of why the mandate is needed (remember the three-legged stool?): 

"It starts by requiring that insurers offer the same plans, at the same prices, to everyone, regardless of medical history. This deals with the problem of pre-existing conditions. On its own, however, this would lead to a “death spiral”: healthy people would wait until they got sick to sign up, so those who did sign up would be relatively unhealthy, driving up premiums, which would in turn drive out more healthy people, and so on.
So insurance regulation has to be accompanied by the individual mandate, a requirement that people sign up for insurance, even if they’re currently healthy. And the insurance must meet minimum standards: Buying a cheap policy that barely covers anything is functionally the same as not buying insurance at all.
But what if people can’t afford insurance? The third leg of the stool is subsidies that limit the cost for those with lower incomes. For those with the lowest incomes, the subsidy is 100 percent, and takes the form of an expansion of Medicaid.
The key point is that all three legs of this stool are necessary. Take away any one of them, and the program can’t work."  
Source:  Three Legs Good, No Legs Bad
As you read about events, please don't be fooled by the bone being tossed of the Alexander Murray bill being approved in tandem with the tax bill.  Given the way the premium subsidy changes played out, Alexander Murray would end up cutting subsidies for some and doing little to stabilize the markets.  Senator Murray has already indicated that she would not support passage of her bill in light of the mandate being eliminated.

"But Ms. Murray rejected any suggestion that the mandate repeal could be paired with her legislation. 
“That is the exact opposite of what we should be doing,” she said. “Americans have stood up and spoken loudly for the last year saying they do not want the markets destabilized, and their provision in the tax bill that they are talking about will really destabilize the marketplaces.”"
Source:  Senate Plans to End Obamacare Mandate in Revised Tax Proposal
There are many reasons to object to the tax bill.  Another one of relevance to the health care discussion is the CBO report yesterday that the GOP tax bill could spur $25 billion in Medicare cuts.  

I don't usually include a call to action in my writings, I try and explain a situation as I understand it and leave the rest to you.  But this time is different.  Without trying to be hyperbolic, I believe that passage of the Senate tax bill would be the beginning of the end of the ACA as a functioning law.  

If you are a fellow Mainer, please let Senator Collins know how you feel.  And if you've found this piece helpful, please share.



Thursday, November 2, 2017

Evidence and Empathy – Two Reasons to Vote Yes on 2

On Thursday night November 2, I'll be speaking at "A Faith-Based Perspective on the Need for Medicaid Expansion in Maine" taking place at Woodfords UCC Church at 7 PM.  Below are my remarks.


I have spent my career working on various parts of our health care system. I started working for MetLife on long-term care insurance in 1991 and then spent over 15 years at Mercer Consulting in their healthcare practice.  I’ve lived in Maine for ten years during which time I’ve worked at Health Dialog, Consumers for Affordable Health Care and the Institute for Clinical and Economic Review.

As you might imagine, during this time my understanding of this complicated topic has grown, and my perspective has matured.  Today, when I analyze a proposed policy, I try and keep two things in mind; evidence and empathy.

Many speak of the need for evidence-based medicine.  Too much of our current treatment is based on what has been done in the past, not based on what works.  The same can be said of policy decisions.  Too many are made based on what sounds like a good idea, often contradicting the evidence of what has worked and what has not worked.

While evidence is crucial, equally important is maintaining empathy for the people we are trying to help.  If we start to treat them as data, we risk making decisions that denigrate their humanity.

Tonight, we’ll talk about Medicaid expansion through the lens of evidence and empathy. Spoiler alert, it passes both tests.  I’ll go over some of the evidence; providing some of the facts and figures.  My fellow panelists will then, much more eloquently than I’m capable of, talk about the empathetic and moral reasons why this is so important.

Before we dive into the details about the proposed Medicaid expansion, permit me to digress for one minute to remind you about another part of the ACA, the open enrollment period.

If you buy your health coverage on the individual market – that means you don’t get it at work and are not eligible for government programs like Medicaid, the open enrollment period started this week.

Sadly, the current Administration is doing everything they can to sabotage the process, so here are some very brief reminders:
  1. The ACA was not repealed
  2. Open enrollment has begun
  3. Open enrollment is only half as long as last year, it ends December 15th
  4. Yes, premiums are going up, but so are premium subsidies
  5. Premium subsidies AND cost-sharing subsidies are still available
  6. Due to distortions in premiums caused by the Administration stopping the payments to insurers for the cost-sharing subsidies, it is more important than ever to comparison shop. Increased silver plan premiums mean subsidies are higher so some will be able to buy insurance for less this year than last.  Some will be able to get bronze plans for free and some will be able to get a gold plan, with lower out-of-pocket costs than silver, for only a few dollars more a month than a silver plan.  So, if you are not eligible for cost-sharing subsidies and you purchased a silver plan last year, this year a bronze or gold plan might make more sense
  7. Help is available, go to enroll207.com to find help here in Maine.

Thanks for listening to that now let’s get back to the reason we’re here tonight, talking about why a yes on 2 vote makes so much sense.  Or in other words, why we need Medicaid expansion.

Before I get into the facts and figures of what passing question 2 will accomplish in the future, let’s start with a brief history lesson.

Did you know that the way health coverage is structured in this country is Hitler’s fault?  Here’s why.  During World War 2, there were wage and price controls.  However, employers were desperate for workers, since much of the working age population was off fighting the war.  To help attract workers, they offered additional health coverage. They were allowed to do so on a pre-tax basis, not subject to the wage and price controls - and so employer-sponsored coverage spread rapidly. 

Fast forward to 1965, in order to provide health coverage to more of the population, President Johnson signed the law creating Medicare and Medicaid.   As you know, Medicare covers seniors and Medicaid covers a combination of low income, disabled and seniors.

Fast forward again to 2010 when the ACA was passed.  The ACA was designed to take our existing system and use all the elements to expand coverage, lowering the number of uninsured.  That included making it easier for those who didn’t have access to coverage through a job to either purchase their own on the individual market, or if their income was low enough, receive coverage through Medicaid.

According to the original intent of the law, those earning less than 138% of the Federal Poverty Level or FPL would be eligible for Medicaid.  Those earning above 100% of FPL would be eligible for premium subsidies.

So why are we voting on expanding Medicaid? 

In response to a legal challenge, the Supreme Court ruled that Congress could not require states to expand, making it an opt-in program.  So far, 31 states have expanded Medicaid, and Maine may become the next state to do so if the referendum passes.  In states that have not expanded Medicaid, those earning less than 100% of FPL and were not previously eligible for Medicaid are out-of-luck, they currently have no help available to them.

Our state legislature tried – they passed expansion five times.  But each time it was vetoed by the Governor and there were not enough votes to override the veto.

As of 2015, nationally about half of the population receives coverage from their employer.  Another 19% from Medicaid, 14% from Medicare, 7% from the individual market, 2% from other government programs such as the VA and about 9% are uninsured.  Although that last number is edging back up.

How much does the Federal government spend on this?  In 2016 the Medicare budget was 675 billion, the Medicaid budget was 450 billion and the employer tax exclusion for health coverage also cost about 450 billion.
I mention these dollar amounts so that as we proceed, we can take into account those who are already benefiting from Federal expenditures as we consider the fairness of adding additional populations who are in need.  Specifically, think about some of the opponents to the referendum who get health coverage from their employers – they don’t seem to worry about the lost federal revenue where their benefits are concerned.

With that background, let’s get into the specifics.  We’ll look at; who expansion will help, what it will cost, some of the additional benefits of the referendum, and some of the weak arguments against it.  Lot’s to cover so let’s keep going.

Who would this help?
The most important reason to vote for question 2 is that it would provide health care coverage to more than 70,000 Mainers.  The group eligible for Medicaid would be expanded to include all those who earn less than about $16,000 a year for an individual or $34,000 for a family of four.

It’s worth noting that many of those who would be newly eligible are working while others are unable to work.

Half of the adults who would be covered by the Medicaid expansion are permanently disabled, have serious physical or mental limitations or are in fair or poor health. Low-wage jobs are often physically demanding, precluding those with limitations from employment.

Of the other half, who might be viewed as “able-bodied,” 62 percent are already working or in school and 12 percent are looking for work; only 25 percent of that half are not currently working or in school.

The bottom line then is that only 13 percent of adults covered by Medicaid’s expansion are able-bodied and not working, in school, or seeking work. Of that small group, three-quarters report they are not working in order to care for family members and the rest report other reasons, like being laid off.

Keep in mind that contrary to what those who are against the expansion would have you believe, even if you are working it does not mean you have access to affordable health coverage. Only 28 percent of employees of private firms with low wages such as retail, food service, and agriculture get health insurance through their jobs. Almost half of employees (42 percent) of these firms are not even eligible for job-based health insurance.

Surveys of Medicaid expansion beneficiaries in Ohio and Michigan have found that Medicaid expansion has actually made it easier for people to look for work and maintain employment.  In Ohio, among expansion enrollees who were unemployed and looking for work when they gained coverage, 75 percent said Medicaid made the task easier.  Among those who were employed, half said Medicaid made it easier to stay working.

Although some of these people, those earning more than 100% of FPL, are currently eligible for premium subsidies, at those incomes, visits to a doctor or filling a prescription are not in the budget.  Many are overwhelmed by the deductibles and co-payments for health care services. The reality is that despite the improvements under the ACA, there are still working Mainers who simply cannot afford health insurance coverage.  As the Congressional Budget Office reported, many poor people would choose not to be covered, because even if they could afford the premiums with help from tax credits, deductibles and co-payments would still be prohibitively expensive.

Cost
So, what would this cost Maine? Is it a good deal for us?  The Office of Fiscal and Program Review, a non-partisan part of our state government, said expansion would cost taxpayers $54 million a year while Maine would receive $525 million a year from the federal government for Medicaid expansion.  Note that the $54 million represents only five percent of current state Medicaid expenditures and 2 percent of our state budget.

The Feds will pay 94 percent in the first year declining over time to a federal match rate of 90 percent by the state fiscal year 2021.

The federal money brought into the state would be used to pay for medical services – it will be distributed to hospitals, clinics, and doctors’ offices.

Maine taxpayers are already paying for Medicaid expansion in other states. We should also get the benefits here.

Additional benefits
In addition to providing health coverage to over 70,000 people – providing the physical well-being and mental peace of mind that goes along with having coverage - there are additional reasons why expansion makes sense.

We hear about the nation’s and Maine’s opioid crisis every day.  Expanding Medicaid will help to address Maine’s drug crisis by greatly improving access to treatment services for currently uninsured people struggling with addiction;

Covering these 70,000 people would also reduce the uncompensated care burdens on our hospitals, especially important for our struggling rural hospitals.  In states with Medicaid expansions, uncompensated care fell sharply resulting in improved financial margins. These effects were not observed in non‐expansion states.

And as I alluded to earlier, rather than discourage work, there is evidence that Medicaid helps to keep people working.  John Kasich, Republican Governor of Ohio recently wrote: “According to a recent assessment of Ohioans who gained coverage through Medicaid expansion, a majority now find it easier to find or keep a job, manage their health to avoid costly trips to the hospital down the road, and even find it easier to put food on the table.”

Objections
Given the times we’re living in, sadly it seems every issue is contentious.  Even, or maybe especially, issues like this designed to help those in need.  This is certainly true of question 2.  While the objections have been loud, they are not particularly compelling.  Let’s take a few minutes and review some of the details.

Objection: We tried this already

Maine’s earlier Medicaid expansion in 2001 resulted in uninsured rates dropping substantially.  Despite claims that this rise was associated with steep cost increases to the state budget. An analysis of the Maine experience shows that cost increases were in line with Medicaid cost increases nationally and that most of the cost increase was attributable to factors associated with the major recession in the early 2000s – that is, to increased enrollment in the traditional Medicaid program.

Objection: Medicaid doesn’t work

Not true.  Just one example is a Kaiser Family Foundation survey explored the experiences of those currently covered by Medicare and Medicaid. Very large majorities of those covered report positive experiences with Medicare (91%) and with Medicaid (86%).  These numbers are similar to what people with employer coverage say (87% positive).

Objection: We’ll hurt seniors

AARP, although not taking a position on the referendum, issued a statement in response to claims that seniors would be harmed: “These claims are inaccurate,” reads the AARP statement. “Multiple independent fact checkers and nonpartisan analysts including the Kaiser Family Foundation have confirmed that there is no connection between Medicaid expansion and waiting lists for long-term care services for the aged and disabled including nursing homes and home and community-based services (HCBS). In fact, the vast majority of states without HCBS waiting lists have expanded Medicaid.”

There is also no evidence from other states that Medicaid expansion caused states to reduce care for the elderly, cut school funding or do any of the other scary things opponents say will happen if Question 2 passes in Maine.
There are no waiting lists to enroll in Medicaid; states must enroll all eligible beneficiaries, including children, seniors, people with disabilities, and adults, in coverage — without exception.  States can — and many do — have waiting lists for Medicaid’s home- and community-based services (HCBS), which give people needing long-term services an alternative to nursing homes. Gov. LePage and other conservative policymakers have said the Medicaid expansion is responsible.  There’s no connection between the two.  Nine of the 11 states without HCBS waiting lists are expansion states, and the non-expansion states of Florida and Texas have the biggest waiting lists.

Final thoughts
I started out talking about passing the dual tests of evidence and empathy.  The evidence is clear, expanding Medicaid will help over 70,000 Mainers by providing them with health coverage and does so in a fiscally responsible fashion.  On the empathy front, to me, it’s also clear - taking care of one another is just the right thing to do.  I’m sure our next speakers will elaborate a bit more eloquently on that point.

So, I’ll conclude with two final figures.  First, support for expansion crosses party lines - 17 Republican governors fought to maintain Medicaid expansion as the Administration worked on repealing the ACA.  Second, we know that expansion works - the uninsured rate declined an average of 48 percent in expansion states and only 28 percent in non-expansion states from 2013 to 2016. The ACA was always meant to work in two major ways, private insurance reforms, and Medicaid expansion.  Without expansion, we’re leaving the work unfinished.


So please vote yes on question 2 to pass Medicaid expansion.

Wednesday, October 18, 2017

Can the Senate Function as Intended?

Yesterday afternoon it was announced that Senator Murray and Senator Alexander had reached a bipartisan agreement to provide funding for cost-sharing reduction subsidies and make other minor changes to how the ACA is currently being administered.

This is how the Senate is supposed to work, two sides meet and hash out a compromise.  However, questions remain as to if the compromise will be fully accepted (more on that below). 

After reviewing the bill, my bottom line is that this is a good deal for supporters of the ACA.  It represents some compromises, but to me, the benefits far outweigh my concerns.

Summary of the bill (being circulated by Andy Slavitt):

If you’re interested, here is the full text of the bill.

As mentioned above, as of this morning, acceptance of this compromise by all parties is far from assured.  While passage in the Senate is the easier lift, Senator McConnell (as of this writing) has not yet committed to bringing it to a vote.

Prospects in the House are even more questionable, as some conservative Republicans have already come out against the bill.

There are suggestions that the compromise may be part of the next funding bill for the Federal Government (needed by December 8) but those are just rumors at this point.

Finally, the President has been ambiguous in his reaction, while praising the compromise in an afternoon news conference, in the evening he made the following remarks:

It’s also worth remembering that we thought there was a deal to reauthorize CHIP, but we’re still waiting on that to be introduced in both chambers as well as waiting on Community Health Center funding.

So, as of this morning, while I would vote for this bill, it’s unclear if enough of our representatives would do so, or if they will even have the chance to do so.

But hope springs eternal, so let's review a few things about the specifics of the compromise:
  • The copper/catastrophic plan is just another option – they will be part of same risk pool as other plans so do not present an adverse selection risk.  At the end of the day, due to limits of out-of-pocket max, the plans are not that different than Bronze plans
  • This is not a “bailout” – these payments are about providing insurance companies funding for the benefits (cost-sharing subsidies) they are legally obligated to provide
  • It is unclear (and to me doubtful) that this will impact rates currently set for 2018.  To do so the bill would have to move much more quickly than expected and there would need to be a delay in the start of open enrollment.  That said, there will be a mechanism so that insurers are not paid twice for the cost-sharing subsidies
  • There is funding in the bill to support enrollment.  The money would be sent to each state, and for states that did not want to spend the money (good morning Maine) there are provisions for the Feds to allocate the money within the state so that it would still be utilized

We can expect to hear a lot more in the next few days about if and how this compromise moves forward.  

In the meantime, remember that open-enrollment starts on November 1 and if you purchase individual coverage it is urgent that you comparison-shop, given the current state of the market.  This morning’s New York Times has a good rundown of the state of things absent passage of Murray-Alexander:  Trump’s Attack on Insurer ‘Gravy Train’ Could Actually Help a Lot of Consumers.

As always, thanks for reading and stay tuned.