A three-month limit was originally intended to close a loophole in Obamacare coverage requirements. The Trump administration's removal of that restriction has insurers rushing to satisfy consumers who need this option.
The Trump administration's executive order aimed at reversing the Obama administration's rule restricting short-term health coverage to less than three months is prompting health plans to quickly put together products that could benefit a range of consumers who need access to gap health plans.
It also knocks another leg out from under the Affordable Care Act. The disadvantages that come with the three-month rule were intentional, to encourage fuller participation in the health insurance exchanges.
The short-term rule issued by the Obama administration only went into effect in April 2017, so the true effect has not yet been seen. Prior to April, consumers had the option to enroll in short-term plans that were typically far cheaper than a plan on the Affordable Care Act exchanges. The three-month rule was intended to close a loophole in the original law that critics said would have allowed people to buy short-term coverage when they could have purchased a plan during open enrollment.
The removal of the three-month limitation will be welcomed not only by short-term policyholders but also by a diverse range of policymakers and industry leaders, says Kev Coleman, head of research and data with HealthPocket.com, a free website that compares and ranks all health insurance plans. Some policymakers welcome the move as a way to placate consumers who are unhappy with the sharp increases in premiums and deductibles, and those left unhappy that the Trump administration has not dismantled Obamacare altogether.
Fourteen U.S. senators led by Sen. Ron Johnson, a Wisconsin Republican, asked for the short-term regulation to be rescinded earlier this year, backed up by the National Association of Insurance Commissioners (NAIC), the National Association of Health Underwriters (NAHU), and the state departments of insurance in Georgia, Illinois, Kansas, Louisiana, Nebraska, Oklahoma, and Wisconsin.
"This is generally regarded as a welcome development for insurers and many of those that left the market are interested in returning now if that rule is rescinded," Coleman says. "They've marketed these plans in the past with longer maximum duration plans, so there is nothing to learn or a risk to mitigate. They will be ready to go if the regulatory process resolves itself and the rule is changed."
Short-term coverage opportunities
Insurers may not only increase efforts to promote consumer awareness of these coverage options but also work on new plans and benefit designs as more people priced out of the ACA market in 2018 seek alternatives, he says.
Trump's executive order begins an administrative process that could still see the rule upheld, but Coleman expects the short-term rule will be reversed as early as January 2018.
Consumers who missed the open enrollment period are harmed by the restricted short-term plans, Coleman says, as are those with limited or no options on the healthcare exchanges and those in the "Medicaid gap"—making less than 100% of the federal poverty level but living in a state that did not expand Medicaid.
People without legal residency in the country cannot buy coverage on the exchanges, so short-term coverage may be their only option, Coleman says. For a range of consumers, short-term coverage can help as they go through transitions or wait for other options such as the next enrollment period, and insurers are ready to capitalize on that need.
"For decades, the short-term health plan market has played a role in helping consumers during insurance coverage transitions, often due to job loss. The three-month limitation implemented in April hurt the market by eroding the consumer appeal of these plans by requiring enrollees to re-apply quarterly and experience a reset of their deductibles," Coleman says. "Not surprisingly, enrollment shrank and we saw HCC, a major insurer in the market, stop selling the plans. If the three-month restriction is lifted as expected, it is a reasonable expectation that consumers will flock back to these plans with insurers soon to follow."
Shaun Green, senior vice president at Agile Health Insurance, recently told the Washington Examiner that his company is anticipating high demand for short-term plans, noting that the cost rises by 3% to 4% every 12 months. "We're very bullish," he said. "We are looking to have a great year ourselves."
The three-month rule imposes penalties that make the product unappealing even to consumers caught without health insurance coverage, Coleman explains. Under the three-month rule the consumer has to buy a new plan every three months and the deductible resets. Any new health conditions that arise in that three months are not covered because short-term health plans do not cover preexisting conditions, Coleman notes. This was by design, to avoid encouraging consumers who might buy this coverage only for a major medical need and then drop it after.
The Trump administration's executive order is expected to restore state-specific regulation, in which a maximum coverage period of 364 days was allowed in most states.
"It's very important to make the period allowed for the short-term plans coincide with the lockout period for those who miss open enrollment," Coleman says.
A nonprofit health plan provides beneficiaries low-cost access to medication-assisted treatment. The insurer also implements prescription restrictions and physician education.
With six of every 1,000 Medicare beneficiaries and almost nine of every Medicaid beneficiaries abusing prescription opioids, health plans have a strong incentive to help their members address this problem. Getting people off opioids yields tremendous benefits for the individual but also for the health plan that can be stuck paying for all the health effects of addiction.
That improvement may require an upfront investment by the health plan, and a California insurer is finding that its nonpfit status gives it more leeway to address the issue proactively.
Opioid treatment spending increased 1,000% over the five years from 2011 to 2015, according to a study from FAIR Health, an independent nonprofit that manages the database of privately billed health insurance claims. That was one impetus for SCAN Health Plan to address the opioid crisis with a multipronged approach that is showing good results.
SCAN is a nonprofit organization that operates a Medicare Advantage plan with 185,000 members in California. The devastating effect of opioid addiction prompted SCAN to develop holistic, proactive measures to reduce opioid overutilization and increase awareness among members and physicians in its network, says CEO Chris Wing.
'Good numbers'
The percentage of SCAN beneficiaries using opioids dropped 16% from the first quarter of 2014 to the second quarter of 2017, going from 18.6% of all plan beneficiaries to 15.7%. SCAN also got its opioid prescribing rate to 5%, below the national average of 5.74% and the California average of 5.46%.
The effort also reduced the percentage of members utilizing concurrent opioids and benzodiazepines from 1.9% to 1.37%—a 27% reduction.
“It’s not going to be a quick fix but we’re posting some good numbers by making sure we’re very strict on our formulary so that anything that might be addictive is monitored closely, and by providing easy access to the drugs necessary for treatment of addiction,” Wing says. “We spend a lot of time educating providers, because though we think providers should already be educated because of all the noise about opioids, they have to be educated on so many important topics these days. We want to make sure we’re actually helping them rather than just bombarding them with more instructions or criticism.”
Multipronged approach
SCAN addresses opioid overutilization in several ways, starting with providing beneficiaries access to medication-assisted treatment. Most SCAN health plans offer the drug opioid addiction medication buprenorphine for a $5 copay and open formulary access to Naloxone, which can rapidly reverse opioid overdoses. Naloxone can be furnished without a prescription by pharmacists.
The health plan also has a prescriber education program, offering CME credits. It emphasizes that opioids are not first-line therapy for chronic pain and a three-day course should be sufficient for acute pain. The education program encourages the lowest-effective dose to start, along with other prescribing guidelines.
SCAN also makes an effort to reduce the inappropriate supply of opioids with requirements for prior authorization and quantity limits.
Beneficiaries using opioids also are provided education with the aim of destigmatizing addiction and explaining that the recovery process typically includes relapses.
“We want a two-way conversation. We want highly educated members having conversations with highly educated physicians and finding the right way to use opioids,” Wing says.
Wing notes that being a nonprofit helps SCAN take an aggressive approach to reducing opioid overutilization.
“We’re not the only plan that cares, but being a not-for-profit gives me a certain latitude. Our mission is what drives us, rather than worrying about what I’ll report to shareholders,” Wing says. “We have a budget and want to meet it, but if we come up with an initiative that is potentially a budget killer and it might help with seniors’ health and independence, I’m going to get dispensation from the board. So we have a little more flexibility to do things like having 45,000 members in to educate them, offering CME for doctors, the things that might cost a little bit but can be successful in addressing this problem.”
The 340B program is intended to help safety net hospitals, but some others have taken advantage. A lack of transparency and accounting led to deep cuts for all participants.
Hospitals receiving drug discounts will take a big financial hit in January when the federal government sharply reduces the Medicare payment for outpatient drugs, effectively cutting a subsidy that some hospitals use to provide needed medications to those who cannot afford them.
The affected hospitals are bracing for a significant drain on their bottom lines, and some serve the neediest populations. However, some other hospitals have used the program to increase profits rather than to help underserved populations.
The U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services released a final Medicare Outpatient Prospective Payment System (OPPS) rule November 1 that cuts Medicare reimbursement for separately payable outpatient drugs purchased by hospitals under the 340B program, which helps certain hospitals and other healthcare entities pay for covered outpatient drugs. The 340B program requires pharmaceutical companies to sell drugs to these hospitals at a discount, but CMS reimburses the hospitals as if there were no discount.
CMS will cut the reimbursement rate from the current average sales price (ASP) plus 6% to ASP minus 22.5%, starting January 1, 2018.
CMS estimates that the change will result in a $1.6 billion reduction in OPPS payments to 340B hospitals for separately payable drugs. The new reimbursement rate was derived from a May 2015 Medicare Payment Advisory Commission (MedPAC) Report to Congress, which estimated that the ASP minus 22.5% rate was the "lower bound of the average discount" on drugs paid under the Medicare OPPS. However, MedPAC's March 2016 Report to Congress recommended a less drastic reduction in payment to ASP minus 10%. Under that rate, most 340B hospitals could still see a financial benefit from the program.
Instead, the adopted rate will negatively affect all 340B hospitals, says Keely Macmillan, general manager of bundled payments for care improvement with Archway Health, a Boston-based firm that works with providers to manage bundled payments.
"Right now, the hospitals make a big margin on these drugs they're purchasing and can use that money how they want," Macmillan says. "The intent of the program is commendable, to help safety net hospitals that care for our most vulnerable population, treating the uninsured and the most Medicare and Medicaid patients. The biggest failure of the 340B program has been a total lack of transparency and accountability on the dollars that flow through this program."
Researchers from the National Institutes of Health have reported that the 340B program is used to improve profits as well as to serve the needy. The 2014 study found that some hospitals and hospital-affiliated clinics served communities that were wealthier and had high rates of health insurance. "Our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics," they wrote.
"You've got hospitals that are abusing this and really shouldn't be getting these discounts. The money is supposed to go back and better serve their patient population but there's no accounting on where that margin goes," Macmillan says. "CMS has realized this and is taking this step to correct that."
Unfortunately, the cut is a blunt instrument approach to fixing the problem, Macmillan says, hurting the true safety net hospitals that need the 340B program to serve their populations instead. CMS should have crafted a more refined approach that held hospitals accountable for the money and fulfilled the intent of the program without cutting funds to all participants, she suggests.
"This will have a serious impact on some hospitals, and mostly on the ones least able to absorb it," she says. "Some of these drugs, like cancer medications, are extremely expensive. We're likely to see hospitals saying they can't provide certain services to their communities any more without this discount."
Some services could be moved to physician practices or ambulatory surgery centers, settings other than the hospital outpatient department, Macmillan says.
"Chemotherapy and other drug infusion, for instance, don't necessarily need to be provided in a hospital setting, and this may be a driver to move these services to a more cost-effective setting," she says. "There is support among some parts of the healthcare community for encouraging the move of these services away from a hospital setting. This cut could also benefit patients because it will lower their copays, so the hospital's loss is not the only effect from the CMS cuts."
A recent survey indicates Americans have been following the debate over the Affordable Care Act, and they’re worried. Their top concerns involve being left without coverage if the law changes.
A large majority of Americans are aware of the debate over potential changes to the Affordable Care Act (ACA), and they fear losing coverage for pre-existing conditions and Medicare, as well as losing the employer mandate for healthcare coverage.
Almost half (47%) of rural Americans have a negative impression of the ACA, compared to 19% of urban Americans and 34% suburban Americans, according to a survey from the national non-profit Transamerica Center for Health Studies (TCHS).
The survey shows that 81% of Americans are aware of the healthcare debates in Washington, D.C.; of those, 92% are concerned about those changes, and 59% are very or extremely concerned. The three biggest fears among Americans include loss of coverage for those with pre-existing conditions (42%), reduction in Medicare coverage for seniors (31%), and loss of the employer mandate to offer healthcare coverage (30%).
Survey participants had good reason to fear loss of coverage: 67% of them reported having at least one chronic health condition, and 19% cited managing a chronic illnesses such as heart disease, diabetes, or high blood pressure, as one of their top two most important health-related priorities.
“Being able to pay for the care I need” was cited as the most important concern (36%), with nearly one in five (19%) saying they are currently unable to afford routine healthcare expenses such as health insurance co-pays, deductibles, and out-of-pocket expenses. Only 13% said their access to affordable healthcare coverage has increased in the past one to two years.
The survey found also that 57% do not feel the government (state or federal) should require individuals to purchase health coverage. Only 28% believe the ACA has directly impacted their health insurance choices in 2017 in a positive way.
The survey found that 12% of adults are uninsured, which is down from 15% in 2014 and 21% in 2013. Most commonly, the uninsured say paying their health expenses and the penalty is less expensive than the health coverage options available to them (29%). About one in six (18%) uninsured adults said they are unaware of the ACA’s insurance mandate for individuals.
Forty percent of the uninsured have a negative impression of the ACA, with 30% positive; that’s compared to 31% negative and 44% positive impressions among the insured. Hector De La Torre, executive director of TCHS, says the survey findings confirm that the cost of healthcare insurance dominates all other concerns.
“Year after year, we have found that affordability is top of mind for Americans and yet few say they are currently saving for healthcare expenses, and a substantial proportion of employed adults are not sure they are taking advantage of the healthcare savings offered by their employer,” De La Torre says.
Two states saw record premium increases. Employers are reacting by shifting more expenses to employers.
Premiums for employer-sponsored health insurance coverage rose an average of 6.6% in 2017, up from the five-year average increase of 5.6%, according to new data.
The increase is fairly modest but the departure from a five-year trend could signal trouble for employers and employees alike, as companies are looking for ways to transfer more of the higher expenses to workers.
The 2017 United Benefit Advisors (UBA) Health Plan Survey indicates that two states saw record premium increases for employer-sponsored programs in 2017: 24% in Connecticut, up to $655 from $530; and 14% in New York, up to $712 from $624.
Employee premiums for all employer-sponsored plans rose from an average $509 in 2016 for single coverage to $532 in 2017 and from $1,236 to $1,272 for family coverage (a 4.5% and 3% increase respectively). The average annual total costs per employee increased from $9,727 in 2016 to $9,935 in 2017.
However, employers did not absorb all of those increased expenses. The employee share of total costs rose 5% from $3,378 to $3,550, while the employer's share rose less than 1%, from $6,350 to $6,401. Peter Weber, President of UBA, says rising health plan costs are forcing employers to shift more premium dollars onto employees, offer more lower-cost consumer directed health plans (CDHPs) and health maintenance organization (HMO) plans, and increase out-of-network deductibles and out-of-pocket maximums.
“Premiums have been holding relatively steady the last few years,” Weber says. “And while this year's increases are not astronomical, their departure from the trend does warrant attention.”
The research also shows reductions in prescription drug coverage to defray increasing costs even further. For a second year, prescription drug plans with four or more tiers are exceeding the number of plans with one to three tiers. Almost three-quarters (72.6%) of prescription drug plans have four or more tiers, while 27.4% have three or fewer tiers, the survey shows.
Even more surprising, Weber says, is that the number of six-tier plans has surged, accounting for 32% of all plans, when only 2% of plans were using this design only a year ago.
Median in-network deductibles for singles and families across all plans remain steady at $2,000 and $4,000, respectively. Single out-of-network median deductibles saw a 13% increase in 2016, the survey indicates, and a 17.6% increase in 2017, from $3,400 to $4,000. Both singles and families are facing continued increases in median in-network out-of-pocket maximums (up by $560 and $1,000, respectively, to $5,000 and $10,000).
The number of employers using self-funding grew 48% for employers with 25 to 49 employees in 2017 (5.8% of plans), and 13.4% for employers with 50 to 99 employees (9.3% of plans).
Overall, 12.8% of all plans are self-funded, up from 12.5% in 2016, while almost two-thirds (60.9%) of all large employer (1,000+ employees) plans are self-funded.
“Self-funding has always been an attractive option for large groups, but we see self-funding becoming increasingly desirable to all employers as a way to avoid various cost and compliance aspects of healthcare reform,” Weber says. “For small employers with healthy populations, self-funding may be particularly attractive since fully insured community-rated plans under the Affordable Care Act don't give them any credit for a healthy group."
A recent report indicates a 6% increase in healthcare payments tied to APMs over a year, but a deeper dive into the data suggests a smaller impact. Conclusion? Fee-for-service still dominates.
An uptick in healthcare payments tied to alternative payment models (APM) shows providers are continuing to move away from fee-for-service to alternatives they see as providing more incentives for higher-quality care and improved outcomes. The increase is fairly modest, however, and should be viewed with some skepticism.
A new report from the Health Care Payment Learning and Action Network (LAN) indicates that in 2016 about 29% of healthcare payments were tied to APMs compared to 23% in 2015. LAN is a public-private partnership launched in 2015 to push the adoption of new value-based payment models. The results are in line with LAN’s goal to tie 30% of total U.S. healthcare payments to APMs by 2016 and 50% by 2018.
LAN used data from America's Health Insurance Plans, the Blue Cross Blue Shield Association, and the Centers for Medicare & Medicaid Services across commercial, Medicaid, Medicare Advantage, and fee-for-service Medicare markets. The data were derived from more than 80 participants, accounting for nearly 245.4 million people, or 84% of the covered U.S. population.
The report indicates that 43% of healthcare dollars were in Category 1 (traditional fee-for-service or other legacy payments not linked to quality), 28% of healthcare dollars were in Category 2 (pay-for-performance or care coordination fees), and 29% of healthcare dollars were in a composite of Categories 3 and 4 (shared savings, shared risk, bundled payments, or population-based payments).
Read the data carefully
The results could be misleading if the data is not studied carefully, says Sean McSweeney, founder and president of Apache Health, a company providing billing support to healthcare providers. The report shows a significant percentage of revenue coming from APM methods, but McSweeney points out that the 29% of payments were not necessarily all from APMs, but rather they were “tied to” APMs.
“While it is likely true that payments tied to APM were in the range of 29%, this still only represents a low single-digit percent of reimbursement,” he explains. “For example, 29% of payments may have had a bonus or reduction associated with the payment of 4% to 9%. Therefore, 29% of 4% is approximately 1.1%. This illustrates how this report might be misleading to some without understanding that the financial impact so far is likely measured in the low single digits, while the report appears to make it much larger.”
Similar words of caution come from Dan Unger, senior vice president of product development and financial decision support at Health Catalyst, whose data analytics technology is used by Kaiser Permanente Healthcare, the University of Pittsburgh Medical Center, and others.
“Although the Category 3 and 4 bucket increased from 23% to 29%, it’s interesting how they don’t break out that category more deeply. There is a very big difference between Category 3— APMs built on fee-for-service architecture and Category 4—population-based or capitated payments.”
Based on Health Catalyst survey data and the work of others, Unger says only 5% to 10% of healthcare dollars are truly at risk.
“So the numbers are misleading because of how they grouped those two buckets,” he says. “ In reality, the majority of healthcare dollars are still fee-for service. The needle isn’t moving as fast as they are claiming.”
Given that reality, Unger says healthcare leaders need to think carefully about how they react and invest in this impending shift. Even looking at the LAN results warily, he says, it still may be prudent to invest in cost reduction, readmission reduction, coding and documentation improvements, patient safety, and even to dabble in care management for specific at-risk populations.
“Healthcare organizations can invest in technology, capabilities, and cultural changes that address specific focus areas that build some key competencies to survive in a population health world, while not damaging, or even improving, their financial situation in what is still very much a fee-for-service world,” he says.
The pharmacy giant could be trying to move beyond contract-for-services by acquiring a health plan with a huge customer base. Regulators may be wary of the deal reducing options for Aetna members.
The surprise announcement that pharmacy giant CVS will try to acquire one of the leading health plans has analysts wondering what the end game is and why the drugstore chain would be willing to pay more than $200 a share for Aetna, a deal that would value Aetna at more than $66 billion.
It may be all about bringing pharmacy benefit management (PBM) in-house with the health plan, yielding benefits for both the pharmacy and insurance side.
Aetna competitor Anthem had announced just earlier that it was forming its own PBM company, IngenioRx, with CVS, which would help it compete with UnitedHealth Group, which has its own PDM, OptumRx.
The focus on PBM is key to understanding why CVS would value the Aetna shares so highly and why the health plan would entertain the offer, says CEO of Tom Borzilleri of InteliSys Health, a company aimed at bringing greater transparency to prescription drug prices, and the former founder and CEO of a PBM.
"There appears to be a significant shift among payers and plans to bring the function of pharmacy benefit management in-house versus the existing or typical contract-for-services arrangement," Borzilleri says. "What is truly unique about this proposed transaction is that not only would CVS be acquiring a plan, but Aetna would be establishing a brick-and-mortar pharmacy network for members to exclusively access."
CVS could essentially trim competitors from the entire pharmacy network that Aetna currently maintains and possibly incentivize members and doctors to have their prescriptions sent to CVS locations, he explains. It's no secret that CVS maintains one of the highest drug ingredient contract rates in the market, along with Walgreens, Borzilleri says.
CVS also is motivated by Amazon.com's moves into the pharmaceutical space, he says. The company has been developing a PBM for Amazon employees.
"This deal would allow CVS to better control profitability that it could potentially lose through the imminent emergence of Amazon and essentially steer Aetna members to them exclusively," Borzilleri says. "We have seen a shift in insurers bringing PBM functions in-house and we may see increased activity across other plans to do the same. The problem with this type of consolidation is that members will be given fewer options and there will be a reduction in price transparency."
Under the proposed transaction, price and cost transparency are likely to suffer because the PBM side of the business is significantly profitable, and retail sales also benefit from bringing more consumers in the door, he explains.
"Why do you think that when you walk into any CVS store that the pharmacy counter is in the back of the store and not by the front door? It's because the pharmacy itself generates very low margins and everything in the front of the store generates the majority of revenue," he says. "So for CVS, it will be acquiring millions of customers that may currently shop or have their prescriptions filled at competitor pharmacies and simply exclude those competitors locations to get covered prescription claims filled only in their stores."
In theory, Borzilleri says, such a deal could open the door for the illegal practice known as "steerage," in which a pharmacy compensates a doctor to prescribe a specific drug to a patient rather than an alternative or one that costs less.
"Additionally, plans/payers are notorious for charging the full copay on a drug that could be paid for in cash at a lower price and also excluding lower-cost generics from their formularies and sometimes adjusting copays in order to create alternative profit centers," he explains.
Borzilleri says such possible outcomes may result in the transaction attracting more scrutiny by the U.S Department of Justice than the Aetna/Humana transaction that was recently abandoned due to antitrust concerns.
Is the Senate's bipartisan compromise a workable fix or a 'futile' stopgap?
The bipartisan Alexander-Murray bill aimed at propping up the Affordable Care Act long enough for more substantial changes to be made is receiving a mixed response from lobbying groups and legislators, with some saying the bill only extends the life of a system that should be allowed to die.
Supporters say the bill would stabilize a volatile healthcare insurance market and preserve coverage for millions of Americans by continuing the cost sharing reduction (CSR) payments that health plans say are essential to helping them survive the ACA.
The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) released an assessment Wednesday of the measure, finding that the deal would reduce the deficit by $3.8 billion over the next decade "without substantially changing the number of people with health insurance coverage, on net." By contrast, earlier proposals to overhaul the ACA lost steam this year after CBO scores indicated that they would likely drive down the number of insured Americans by tens of millions.
"This nonpartisan analysis shows that our bill provides savings and ensures that funding two years of cost-sharing payments will benefit taxpayers and low-income Americans, not insurance companies," Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA) said Wednesday in a joint statement.
The CSR payments are intended to compensate insurers for providing coverage to lower-income consumers at below cost, and many say losing those payments will drive premiums higher and force some insurers to leave certain markets.
The compromise
Alexander and Murray developed the compromise bill in a bid to maintain the CSR subsidies that the Trump administration announced October 12 it would halt. The White House argues the CSRs were never authorized by Congress.
California is leading the charge in a legal challenge of President Trump’s stated intention to stop the payments, and the American Hospital Association, along with several other groups representing hospitals and other healthcare organizations, has filed a brief in support of the CSRs. But a federal judge in California sided Wednesday with the White House, ruling that the government doesn't have to continue making the payments while states challenge the move in court, Reuters reported.
A bipartisan coalition of 24 senators—12 Republicans and 12 Democrats—have signed on to the healthcare legislation as cosponsors. Preserving the CSRs was a major priority of the Democrats, who compromised by agreeing to the Republican push to allow states to seek waivers of ACA requirements in their own states.
Ending the subsidies is expected to result in healthcare plans raising premiums even higher than otherwise planned. But the Alexander-Murray bill would authorize the CSR payments for two years and tie them to the changes in the ACA that give states more flexibility to seek waivers from the law’s requirements.
The proposed legislation also would allow insurance companies to sell less comprehensive plans to all consumers. Republican leaders say the allowance would make more affordable plans available, which, in turn, would encourage more people to buy coverage and help the insurers remain profitable.
"This is a first step: Improve it, and pass it sooner rather than later. Our purpose is to stabilize and then lower the cost of premiums in the individual insurance market for the year 2018 and 2019," Alexander said.
Bill opposition
The Association of American Physicians and Surgeons (AAPS) opposes the bill, saying it seeks to stabilize the insurance marketplace by forcing taxpayers to pay insurers to lower out-of-pocket costs for certain plan members.
Jane M. Orient, MD, executive director of AAPS, says the ACA actually makes insurance unaffordable.
"The deceitfully named Affordable Care Act did not just destabilize the individual insurance market; it destroyed it by outlawing genuine, voluntary insurance," Orient says. "ACA-compliant plans are not true insurance, but coercive prepayment schemes for a federally dictated package that might be rejected by most subscribers."
Orient says the bill being considered should be seen as an inappropriate form of legislative life support.
"Resuscitating Obamacare with Alexander-Murray would only prolong its dying process, but at great expense," Orient says.
"Instead of running a futile Code Blue on Obamacare, we should be attending to American medicine and the American economy," she adds.
Bill 'provides critical stability'
American College of Emergency Physicians (ACEP) President Becky Parker, MD, FACEP, disagrees.
She says ACEP supports the Alexander-Murray legislation because it will provide critical stability for the individual health insurance marketplace, ensuring that millions of Americans have continued access to the health coverage they need and deserve.
"This legislation is a good-faith bipartisan effort that will help limit increases in health insurance premiums and preserve important consumer protections, such as the Essential Health Benefits package that includes emergency services, while also providing additional flexibility for states to implement innovative approaches to coverage," Parker says.
The end of cost sharing reductions has insurers trying to raise premiums even higher than planned. Those high premiums and other changes to the Affordable Care Act may drive consumers away from the exchanges.
The loss of cost sharing reductions (CSR) and the presidential executive order altering the Affordable Care Act will combine to significantly shake up the insurance market for 2018, one analyst says.
The effect is likely to include raising rates so high that the number of healthcare consumers who do not purchase coverage will skyrocket.
Health plans are scrambling to raise their rates even higher than already planned, responding to President Donald Trump's announcement that insurers will no longer receive the subsidies.
Insurers were forced to submit rates for next year while the fate of CSRs was still uncertain—one set of rates is for if the subsidies continued and the second is for a higher rate to be used if they did not.
Some insurers are asking for a chance to revise the rates already submitted, says Julius W. Hobson Jr., an attorney and healthcare analyst with the Polsinelli law firm in Washington, D.C.
The CSR termination comes right after President Trump issued a new executive order he says is designed to increase competition and choice. Critics say it would seriously weaken the ACA, and some say that's intentional.
President Trump says the order will give millions of Americans more access to affordable coverage and make it easier for people to obtain large-group coverage. Others worry that it could lure healthy young Americans away from the ACA exchanges, leaving those who remain to pay higher premiums.
"The combination of the executive order and the CSR termination wreaks havoc on the health insurance market for all of 2018," Hobson says. "This also comes just before the open enrollment and with cutting back money for the patient navigators who help people sign up, and with reduced access to the website. That all means there are going to be fewer people who sign up."
Higher premiums and deductibles already were driving some consumers away from purchasing individual healthcare plans, Hobson notes, and more will follow when the CSR loss forces insurers to raise rates even higher.
If the Trump administration stops enforcing the individual mandate, as it has said it might, that would make even more consumers forgo coverage, he says.
Fewer consumers buying insurance on the ACA exchanges intensifies their existing problems, Hobson says.
Premiums and deductibles will continue to rise as insurers struggle to remain profitable with a smaller pool of older, sicker patients driving high utilization costs. More and more consumers will leave the exchanges if they can, he says.
"People are going to be looking at premium increases they just can't afford," Hobson says. "The individual market will take a big hit, but the impact on the group market is harder to predict. We don't know yet whether the increases in the individual market will bleed over into the group market."
The recent changes are intended to weaken the ACA, Hobson says.
"The administration has said the ACA is imploding, but also that they're going to do everything they can to wreck it. It's not imploding on its own, it's being shoved down the trash chute," Hobson says.
"Losing the CSR payments is critical and, at this point, it's unlikely that even if Congress acted they could do anything in time to affect 2018. There's no way of looking at this other than it having a negative outcome," he says.
The health plan's bold goal is to improve customer health 20% by 2020. Humana's strategy includes helping community make better use of existing resources.
A community health initiative by Humana is proving beneficial to both the company and consumers by improving the health of those whose care tends to be the most costly for any health plan.
A key part of the health plan's strategy is to help communities make better use of the resources already available to them.
Humana announced its Bold Goal community health program two years ago, aiming for a 20% improvement in the health of its customers 2020, using the CDC's population health management tool known as Healthy Days to benchmark community health and measure progress.
The measurement takes into account how a person is feeling holistically, including his or her mental and physical health.
The 2017 Humana Bold Goal progress report showed a two percent improvement on a national basis among its membership. That is a significant improvement for Humana customers, who mostly are Medicare Advantage enrollees, says Roy Beveridge, MD, chief medical officer at Humana.
Better Health, Better Financials
Members typically stay with Humana for about seven or eight years, which gives the company a chance to encourage meaningful changes in their health, he says.
"The more we improve their health, their lives improve. But also, the better it is for us financially," Beveridge says.
"We learned years ago that we have these phenomenally, wonderfully aligned interests. The healthier we make our population, the better off we are financially and obviously the better it is for the patient."
It doesn't happen with just Humana's input and effort, Beveridge says. The Bold Goal program incorporates grocery stores, pharmacies, local governments, gyms, transportation sources, and other factors that can affect an individual's health.
"If we can help the community as a whole by addressing food deserts and supporting local food banks, we're actually helping improve global health," Beveridge says. "That works in hand with the effort we put into improving the health of individuals."
In San Antonio, TX, for instance, community leaders welcomed Humana's help, but asked them not to create anything new.
All the resources existed already, but the community needed a way to bring them together in an effective way for consumers, says Pattie Dale Tye, segment vice president at Humana and leader of the Bold Goal initiative.
A 'Clinical Town Hall'
Humana met that need by putting together a "clinical town hall" that has become a model for the Bold Goal initiative in other communities as well.
Humana brought together local stakeholders in community health that included government officials, nonprofit leaders, business leaders, and healthcare professionals to discuss what issues pose the greatest challenge to health improvement and map out ways to address them in the coming year.
The town halls also helped identify members for a health advisory board to direct those efforts. Humana has helped establish these boards in a dozen markets across the country.
"The San Antonio health advisory board has launched a diabetes resource directory, free and available to all members of the community and all physicians, so anyone can go to one place and see all the resources available to address diabetes," Tye says.
"That's an example of convening the community around one issue to have the biggest impact."
Beveridge says the Bold Goal program is a natural outgrowth of the move to value-based care. "In this outcomes-based world, if you think you can do it just by yourself, you're deluded," he says.
"We know that if we want to be successful in managing and improving the health of the people we serve, it has to be more than just the traditional approach of providing the medicine and making an appointment for next month. It's how you deal with all these other things in a person's life that affect their health, the things that must be addressed to improve the health of a population."
