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In the weeks ahead, President Donald Trump will make good on a promise to deliver expanded access to association health plans (AHPs). Under a proposed rule scheduled to be finalized by the Labor Department this summer, more small businesses and self-employed individuals will be able to join together and purchase coverage as part of an association.

President Trump has promised the deregulation of AHPs will deliver “tremendous insurance at a very low cost” – echoing claims made for decades by association health plan proponents.

But the plans aren’t without controversy. Here’s a closer look at AHPs and what these changes might mean to consumers and the health insurance marketplace.

Association health plans aren’t new

From the sounds of Trump’s rhetoric, association health plans are a new and exciting coverage solution for Americans. AHPs aren’t in fact, new. Since the mid-1970s, millions have been enrolled in association health plans, which promised more purchasing power and less expensive premiums made possible by a large pool of  group members.

But the plans have been controversial since the beginning – due in part to concerns about the plans being “vehicles for fraud” or financially unstable. As a result, the plans received great scrutiny in the early 1980s and Congress responded to concerns by giving states broad authority to regulate the plans.

ACA made them more consumer friendly

Because that regulation varied greatly by state, the Affordable Care Act enacted provisions that held AHPs to an even higher, more consistent standard nationally – including increased consumer protections. The ACA required that association health plans sold to individuals and small employers must meet the same standards that the ACA applied to the individual market and small-group market.

Plans in those markets are required to cover the essential health benefits, cannot reject applicants or set premiums based on medical history, cannot put lifetime or annual caps on benefits, cannot charge older applicants more than three times as much as younger applicants, and must cover at least 60 percent of average medical costs. Individual and small-group plans are also subject to the ACA’s risk adjustment program, which means that plans with healthier enrollees end up subsidizing plans with sicker enrollees.

Those rules protect individuals and small groups from a host of problems that used to arise before the ACA, but they also mean that premiums are higher than they used to be, particularly for healthy people.

What’s the hype about AHPs now?

Those higher premiums – and the fact that they’re associated with ACA’s consumer-friendly regulations – are at the heart of the Trump Administration’s passionate embrace of and hype for expanded access to AHPs.

Under the new rule, small businesses and sole proprietors would be able to join together to create an AHP, either purchasing large-group coverage or self-insuring. This is important because the rules that apply to large-group plans are much less restrictive than the rules that apply to small-group and individual plans. This means the plans could be less comprehensive in terms of the benefits they offer.

And many AHPs would choose to self-insure, which is an option that further reduces regulatory burden and generally isn’t feasible for small groups. (Self-insured plans are not subject to state insurance regulations, or to some of the ACA’s regulations that do apply to other large group plans, such as the rule that requires insurers to spend the majority of premiums on medical claims.)

The bottom line, then, is that under an AHP, coverage could be less robust, which would mean that the plans would be more likely to attract healthier people. The combination of reduced benefits, healthier enrollment, and administrative costs being spread across a larger group would generally result in lower premiums for an AHP versus ACA-compliant individual or small group coverage.

In addition, large groups have negotiating power with insurers, whereas premiums for the small-group and individual market are set in stone by insurance regulators. So the self-employed individuals and small groups that join an AHP would benefit from the leveraging power of a large group.

How would the new rule expand access?

Under the new rule, more small businesses and self-employed individuals will be able to more easily join together as part of an association – instead of having to purchase ACA-compliant coverage in the small-group or individual market. The finalized rule would do this by:

  • allowing sole proprietors to join AHPs instead of having to purchase individual-market coverage,
  • allowing small businesses and self-employed individuals to join AHPs based on being in the same industry OR being located in the same area, and
  • allowing small businesses to join together in an association with the sole purpose of obtaining health insurance.

Current rules require a business to have at least two employees (who aren’t married to each other) in order to join an AHP, and AHP member businesses generally have to be in the same industry, so that they have a “commonality of interest.” (A bakery and an auto body shop can’t currently form an AHP just because they’re both located in the same city.)

Current rules also require the association to have an overall purpose beyond securing health insurance for members, and require member businesses to have control over the AHP.

In addition, current regulations require AHP coverage to be issued based on small-group market regulations if the member businesses in the association are small enough that each would qualify as a small-group on its own. The combined size of all of the businesses in the association is irrelevant in terms of the type of coverage that’s available via the AHP. That rule would also change under the proposed AHP regulations, allowing the association to use its combined enrollment to gain access to the large group market.

Criticisms of association health plans

The problem with expanded AHPs is twofold:

  • The coverage won’t be as good as current individual and small-group coverage, and
  • The people who remain in the ACA-compliant individual and small-group markets will tend to be sicker and older, which will drive up premiums in those markets.
AHPs appeal to healthier consumers

In general, small businesses and self-employed individuals who join AHPs are expected to be those with lower-than-average health care costs.

To be clear, the AHPs would not be able to actively discriminate in terms of preventing a less healthy group from joining, and would not be able to charge specific employees or businesses higher premiums based on medical history.

But even without overt discrimination, the coverage offered by an AHP could be tailored such that the plan simply wouldn’t be attractive to a small business with employees in need of significant medical care. And member businesses could also be charged differing premiums based on non-health metrics like the type of industry or the age of the employees.

A drain on existing risk pools

The result? Those without significant health care needs would be attracted to the new AHP options, but individuals and small businesses with significant health care needs would tend to stay in the ACA-compliant market. 

An analysis by The Actuary projects that between 3 and 10 percent of the people enrolled in ACA-compliant individual market coverage will switch to AHP coverage under the new rules. These individuals will be healthier than average, leaving a less healthy population in the ACA-compliant market. The AHP coverage would not be as robust, but that might go unnoticed – until enrollees end up needing care that isn’t covered. 

The proposal to expand access to short-term plans and the elimination of the individual mandate penalty at the end of 2018 will exacerbate the exodus of younger, healthier enrollees from the ACA-compliant market, driving premiums even higher, and further destabilizing the market.

AHPs’ bottom line for consumers?

In a nutshell, if you’ve got significant health conditions, expanded AHP coverage isn’t likely to be appealing. But if you’re healthy and not overly concerned with the details of your coverage, joining an AHP under the new rules might provide short-term premium relief.

You might find, however, that if and when you end up needing extensive medical care, the coverage isn’t as good as you thought it would be. At that point, you may find yourself wanting to transition back to the ACA-compliant market at the next available opportunity. But the ACA-compliant market will suffer as a result of the exodus of healthy people who switch to AHP coverage.

Overwhelming criticism from policy experts

HHS published the proposed rule in January 2018, and accepted public comments until early March. They received 723 comments, which voiced both support and opposition.

But the Los Angeles Times reviewed the comments, finding that 279 of them came from organizations in the health care or health care advocacy fields. These comments represent groups with an above-average understanding of health policy, and 266 of those 279 comments expressed opposition to proposed rule.

Sandy Praeger, a Republican, who was previously the Insurance Commissioner in Kansas and the president of the National Association of Insurance Commissioners, noted with regards to the comments on the proposed rule that “Basically anybody who knows anything about healthcare is opposed to these proposals.”

But there are also numerous comments from self-employed individuals and small business owners who are frustrated with the current cost of coverage, and welcome the chance to obtain lower-cost plans. Comment number 246, from L. Keith, is a good example.

So on one hand, you have people with significant expertise in health policy who are very concerned about the potential impact of the expansion of AHPs. But on the other hand, you have regular Americans who perhaps earn just a little too much to qualify for premium subsidies (or who are affected by the family glitch), and who are finding it challenging or impossible to afford coverage. These folks may not be health policy experts, but their health insurance woes are very real, and the promise of something — anything — that can alleviate their problem, at least in the short-term, is welcome news.

Health policy changes have to take a long view though, looking at the impact both now and several years down the road. Clearly, the expansion of AHPs will provide healthy self-employed people and small business owners with a new, more affordable coverage option.

But how will that coverage hold up when the enrollees are no longer healthy? And how will the rule changes affect the stability of the overall insurance market? These are the questions that led health policy experts to overwhelmingly oppose the AHP rules.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Despite the collapse of Obamacare stabilization legislation, it may still be possible to deliver at least a bit of help to unsubsidized Affordable Care Act enrollees – by fixing the glitch in the law’s formula for determining rebates that insurers with high profits or administrative expenses have to pay. The flaw, which I learned of while working for a health plan, appears to have gone unnoticed outside of the industry. It has cheated policyholders of over $700 million so far.

The existing formula encourages overcharging.

Under the health reform law, insurers must pay rebates whenever medical expenses account for less than 80% of premiums charged for coverage sold to individuals or small employers and 85% for coverage sold to large employers. The rebate amounts are calculated by subtracting what the insurer actually spent on medical care from 80% or 85%, as applicable, of the premiums collected.

The problem with the formula is that it enables insurers who set premiums too high and are required to pay rebates to earn higher profits than if the premiums they set meet the standard. Here’s an illustration:

Click image for larger version.

For health plan customers, the bug in the formula means that if they get charged too much, the insurance company gets to keep a piece of the excess amount – 20% for individual and small group policies and 15% for large group coverage. Since the rebate provision was implemented in 2011, insurers have pocketed a total of $557 million in overcharges from individual and small group customers and $179 million from large group customers, based on total rebates paid so far.

To get the incentives right, increase rebates.

What would a fix look like? At a minimum, the incentive to overcharge should be eliminated. That could be done by adjusting the formula to boost rebates to a level that equalizes the profit and expense allowance between insurers who overcharge and those who don’t. So, in the case of individual coverage, insurers who miss the 80% standard would pay rebates 25% higher than the law currently requires. (In the illustration above, $100 instead of $80.)

The better solution would be to flip the incentives and adjust the rebates so that insurers would have the same incentive to set rates meeting the standard that they currently have to overprice. If an insurer set a rate that triggered the rebate requirement, its profit and expense allowance would be reduced below what insurers who don’t overcharge are allowed – 20% lower in the case of individual and small group coverage. This would require boosting rebates to individuals and small businesses by 50%.

It would be especially helpful to consumers if the formula got fixed now since the recent repeal of the individual mandate will inject a big unknown into actuarial forecasts of enrollee medical costs for next year. When faced with that kind of uncertainty, insurers tend to price conservatively (i.e., higher), and by rewarding them for doing so, the existing rebate formula will exacerbate that problem. Adjusting the formula to instead discourage – or at least not incentivize – overpricing could make a real difference in the rates they set for next year.

Implementing a fix

Since the glitch in the formula is written into the law, fixing it would require legislation. While congressional action of any kind on Obamacare would be a heavy lift, this bit of reform might have some appeal on both sides of the aisle. It would offer Republicans a way to tamp down premium hikes that will be announced just before the November elections without adding to government spending, and would offer Democrats a way to strengthen Obamacare’s consumer protections. In addition, polling shows that majorities of both Democratic and Republican voters support the rebate provision, so giving it more teeth would likely be broadly popular.

An alternative approach might be for states to take action on their own. The Affordable Care Act allows states latitude to set stricter rebate standards than those written into the federal law. However, it is unclear whether that would include revamping the formula. That’s something lawyers will need to consider.

Fixing the rebate formula would admittedly provide only modest relief – far less than is needed. But with rates as high as they are and headed even higher, Obamacare enrollees could use all of the help they can get. 

Michael Johnson is the former director of public policy at Blue Shield of California (2003 – 2015). He is currently waging a campaign to force the nonprofit health plan to provide greater community benefit.

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Louise Norris, a frequent contributor at healthinsurance.org, has posted the latest edition of Health Wonk Review over at her own blog, the Colorado Health Insurance Insider.

Her wrap-up – an ode to spring (for most of us, anyway) – features 10 great posts from HWR’s regular contributors. The line-up includes a couple of posts about silver loading from Andrew Sprung and David Anderson. If you’re wondering what could roil ACA exchange plan shopping, you’ll want to read these posts.

If you’re paying attention to the whole opioid crisis, this also has a couple of posts from distinctly different vantage points. And if you want the latest on costs of health coverage – and healthcare – there are a couple of nice posts about that as well.

Hat tip to Louise for a great wrap-up – and for including our own post: a look at the latest Medicaid-related developments at the state level.

Be sure to check it out.

Next up: Jason Shafrin hosts Health Wonk Review at the Healthcare Economist next month.

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For those that don’t know, I was raised by my grandparents. They began caring for me when I was two months old.

When I was nine, I was diagnosed with a serious childhood illness similar to spinal meningitis. I spent three months in the hospital. My grandparents had health insurance, but they weren’t allowed to list me as a dependent and their insurance wouldn’t cover my care. They were forced to make great sacrifices to pay for my health care.

I got better, but when my grandparents looked for an insurance policy that would cover me they discovered that, because of my previous illness, they couldn’t find such a policy. Not from any insurer. Not at any price. I was branded with the words “pre-existing condition.”

Millions of families have a loved one with a pre-existing condition and I want to make sure that no parent, foster parent or grandparent has to choose between helping their child get better or going bankrupt.

One of the ways I’m working to provide this critical security to families and patients is through my Fair Care Act that I recently introduced. My Fair Care Act would prevent greater access to short-term, junk plans, while safeguarding current protections for those with pre-existing conditions and helping prevent further premium increases and unstable insurance markets.

Blocking watered-down coverage

The legislation would block the Trump Administration’s proposed rule that would allow insurance companies to sell short-term, junk plans, and it would once again guarantee protections for people with pre-existing conditions.

The Urban Institute recently found that the steps that President Trump and Congressional Republicans have taken to date to sabotage the health care system, and allowing insurance companies to sell junk policies, would increase premiums and lead to more uninsured Americans.

In my home state of Wisconsin, premiums would go up by an average of 20 percent in 2019, and 130,000 more Wisconsinites would lack comprehensive health coverage in 2019 because they would either become uninsured or would be enrolled in junk plans that don’t provide key health benefits.

My Fair Care Act is an opportunity for lawmakers to keep their word and guarantee protections for pre-existing conditions, but we must do more to ensure more Americans have access to quality, affordable health care.

Improving affordability, access to essential services

That’s why I introduced another reform that provides a better deal for young Americans by improving health coverage affordability while maintaining protections and access to essential services.

My Advancing Youth Enrollment Act ensures that more than four million uninsured young adults could be eligible to receive additional financial support to help reduce their monthly premiums. Making health care more affordable for younger adults can help ensure that they sign up for coverage, which will help further stabilize the marketplace and lower costs for all.

We must take action to help stabilize the health insurance marketplace and bring down premiums, and a critical way to accomplish that goal is to increase tax credits for young and healthy individuals in order to encourage them to sign up for coverage in the Marketplace.

Across the country, premiums keep rising as a result of repeated attempts to sabotage our health care system. Instead of re-hashing old, partisan battles, we need to work together to make it easier for people to find quality, affordable health care coverage.

Extending tax credits for young adults

The Advancing Youth Enrollment Act would increase the value of premium tax credits for young adults ages 18 to 35 years old, which would result in more financial support to help them afford quality health coverage. Importantly, this protects older adults and those with pre-existing conditions from facing higher costs or seeing their current tax credits reduced.

Despite significant coverage gains, nearly 7.8 million 19- to 34-year-olds remain uninsured, including more than 4 million who are eligible for premium tax credits. Due to the Trump Administration sabotage that has caused premium increases and strained the health of the risk pools, we must incentivize young adults to enroll and to increase their access to affordable options.

Stabilizing the health insurance market

I’ve also made a point to support bipartisan solutions that strengthen and stabilize the health insurance market and improve access to health care. That’s why I cosponsored the bipartisan Murray-Alexander health care stabilization legislation and led the effort in the Senate to restore investments in enrollment outreach and in-person assistance. In-person assistance is especially critical to ensuring younger adults sign up for health care, which further helps stabilize the market and lower costs.

The people of Wisconsin did not send me to Washington to take people’s health care away; they want us to work together to make things better, not worse.

So, I’m going to keep working to protect and expand coverage, and make health care more affordable. I’m eager to pass these critical reforms that will do right by American families.

Let’s get this done.

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Bernie Sanders’ Medicare for All proposal, first introduced in the 2016 presidential campaign, got a lot of progressive pulses racing. No private insurance. No out-of-network charges. No premiums, deductibles or copays (or at most, $200 for non-preferred drugs, added to the legislative version Sanders introduced in September 2017).

Most healthcare experts, including progressive ones, were less enthusiastic. More than 150 million Americans get health insurance through employers, and most are satisfied. Ending that system would cause massive disruption. Eliminating cost-sharing would make cost control difficult – while the federal government would be footing the entire bill for everyone. Major new taxes would be required.

An incremental alternative: ‘Medicare for All Who Need It’

Enter the Center for American Progress, a think tank with close ties to the Democratic party, with a more incremental and phased-in plan that gradually draws together existing Medicare, Medicaid and employer-sponsored insurance systems. Importantly, employer-sponsored insurance would not go away, but its costs would be contained because the rates such plans pay to healthcare providers would be brought in line with the public program.

Enrollees in the new public program, dubbed Medicare Extra, would have access to all doctors, hospitals and other healthcare providers who accept Medicare – i.e., virtually all providers. Care would not be free to enrollees, except for the poor and near-poor. Premiums would rise with income, maxing out at 10% of income for the affluent. Actuarial value – the percentage of the average user’s costs covered by the plan – would range from 100% for the poor and near-poor to 80% for the affluent.

Coverage would be comprehensive, encompassing not only the ACA’s Essential Health Benefits but dental, vision and hearing services. Existing barriers to coverage for the disabled would be removed. The two-year waiting period before those who qualify for Social Security Disability Insurance can enroll in Medicare would be eliminated, as would asset tests required to qualify for disability Medicaid. “Given the leadership role the disability community played in protecting the ACA, it’s especially important that disability issues be included,” notes Harold Pollack a professor of public policy at the University of Chicago.

Medicare Extra would not be “Medicare for All,” since employers could continue to offer their own plans if they chose. Within a few years, though, it would be “Medicare for Most.” Newborns would be automatically enrolled, as would people turning age 65, all who buy their own insurance in the individual market, and all of the uninsured, including legally present noncitizens. In Year 6, Medicaid and CHIP would be absorbed. Many employers would likely opt in, too.

Private options maintained

Like current Medicare beneficiaries, a third of whom are enrolled in private Medicare Advantage plans, enrollees in Medicare Extra would have the option of choosing a private plan that would offer the same benefits and could add extra benefits for additional premium. Thus private insurers would not go away – the plan’s authors acknowledge that Medicare Advantage plans often provide high quality care – but as with MA, the rates those plans pay to providers would be closely tied to the rates paid by the public Medicare Extra plan. The same is true for plans maintained by employers, thanks to a rule that healthcare providers outside the employer’s network could charge no more than Medicare Extra rates – effectively tethering in-network rates to the program as well.

Employers could opt to continue providing private insurance to their employees, or sponsor employees’ enrollment in Medicare Extra, or leave employees to enroll in Medicare Extra on their own and reimburse the federal government for a share of the cost. Small employers (under 100 employees) could simply leave their employees to enroll in Medicare Extra without contributing to the cost. If the employer opts to offer private insurance, plans would have to provide an actuarial value of at least 80%, the level provided to the highest-income enrollees in Medicare Extra.

‘All-payer’ cost control

Thus, while the system would not be strictly single payer, all payers would pay basically the same rates to healthcare providers. The authors specifically identify this rate-setting power as the essential cost-control ingredient in diverse kinds of successful national healthcare systems in countries such as Germany, Denmark and Canada. A “blended” rate means that Medicaid will pay more than at present, while employers will pay less (as will the new public plan for working age people).

The plan would achieve additional cost savings by negotiating rates on a national level for prescription drugs, medical devices, and medical equipment – and by demanding rebates for drugs priced above a level deemed appropriate by independent evaluators.

Why maintain the employer-sponsored health insurance system? In a word, to control the federal government’s share of the total cost of healthcare in the U.S. – and so the required tax increases, which would still be substantial. (The plan would finance new spending mainly by new taxes on the wealthy.) The plan’s authors point out that employers currently contribute $485 billion annually to the payment of healthcare costs. The CAP plan aims both to preserve some of that private sector funding and to make it more cost-efficient, so that employees get more bang for their buck.

Political realities

There’s not much for beneficiaries of such a system not to like. Medicare Extra promises all-but-universal access to virtually all healthcare providers, on an affordable sliding scale with respect both to premiums and out-of-pocket costs. But how viable is it politically? What are the chances that Democrats would pass such a plan?

Not very high, according to Timothy Jost, emeritus professor of law at Washington and Lee University.

“I can’t see that it’s feasible from a political standpoint,” Jost says. “Pharmaceutical companies will hate it, because it will limit their profits – they’ll say it limits innovation. Physicians will see diminished income, or diminished growth in income. Hospitals are going to paid at Medicare rates, or Medicare plus a bit rather than commercial rates – that’s going to trouble them. Wealthy people are going to have to pay higher taxes.”

As to whom the plan benefits, Jost points out that as with all plans to expand and improve healthcare access, it’s primarily people in the lower end of the income distribution, who historically don’t vote in large numbers.

At the same time, Jost allows that for Democratic elected officials, supporting a plan with this kind of sweeping reach “could be a litmus test to win the support of the hardest-working people in the Democratic party. That support is very important for electoral politics – but whether at the national level they would have enough clout to overcome incredibly powerful lobbying efforts is very questionable.”

Pollack, who like Jost closely followed implementation of the Affordable Care Act, takes a different view of the political realities. His starting premise is the deep regard in which Americans hold Medicare and the broad support, expressed since the 2016 campaign, for expanded access to affordable healthcare.

As for the partisan manner in which the Affordable Care Act was passed (without a single Republican vote) and the eight years of Republican sabotage it’s sustained since then, Pollack’s takeaway is somewhat counterintuitive.

The fact that Republicans wholly rejected the private-plan structure of the ACA marketplace, Pollack says, “requires Democrats to think about expanded Medicare or Medicaid models, not because of ideology but because a complex, ideologically moderate approach to expanding coverage can’t be implemented within a politically polarized environment.” Oddly enough, we’ve learned, “Republicans are more likely to protect and embrace expanded Medicare benefits than to protect the private market established through the ACA marketplace.”

What about the fierce opposition from the various sectors of the healthcare industry to payment rates imposed by government, directly or indirectly, across all market segments? “I don’t think they’ll like it. There will be some negotiation, but it’s coming,” Pollack said. “People lived with the cuts the ACA made in hospital reimbursement.”

Here too Pollack’s takeaway is somewhat counterintuitive. Healthcare providers, he senses, may have a harder time resisting straightforward rate-setting than various forms of “micromanagement” based on “outcomes research” – e.g., various government-imposed pay-for-performance programs. That may hold for the general public too. “I think people are ready to have government use its monopsony [single-payer] power to hold prices down … but whether Americans are willing to use comparative effectiveness research [which could reduce access to some treatments] is a very open question.”

Bipartisanship? Not this time

In crafting the ACA, Democrats worked hard and failed to win Republican support, and they worked hard, with some success, to win support from doctors, hospitals, pharma and other “stakeholders.” But that support – from doctor and hospital groups in particular – was lukewarm at best eight years later as Republicans pressed their repeal efforts. And so, according to Pollack:

“The lesson Democrats have learned politically is that they’re alone. They’re not going to get Republican support. They’re not going to get stakeholder support for some of the most critical things.”

Pollack added that Democrats have also learned from the tactics Republicans used in their bids to ram through ACA repeal bills (very nearly successful) and tax cuts (successful) via budget reconciliation, a Senate maneuver that avoids filibuster and so can enable a bill to pass with just 51 Senate votes. (That would solve the problem, highlighted by Timothy Jost, of winning over the most moderate and vulnerable Democratic senators.) “Democrats will be much more ruthless the next time around,” Pollack asserts.

As momentum for health reform built in 2008 and 2009, Pollack recalled, there was a strong demand in Democratic circles for bipartisanship – a belief that they could win Republican buy-in for a national plan modeled on the plan Republican Governor Mitt Romney had put through in Massachusetts. Now, Pollack concludes, “there’s much more demand for authoritative Democratic solutions. There’s a belief across the Democratic spectrum that Republicans are not viable partners.”

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It’s February 15 … and a day too late for a Valentine Edition of Health Wonk Review this week. The good news? I’m all swept up in the Olympic spirit and ready to award some hardware to this week’s Health Wonk Review contributors.

No medal awarded.

Is the JPMorgan/Amazon/Berkshire Hathaway healthcare alliance the “worst idea ever?” Joe Paduda – over at Managed Care Matters – doesn’t think so. In fact, it’s not the proposal that’s getting low marks from Paduda.

In Media coverage of Amazon/Berkshire/JPMorgan misses the point. Paduda gives critics of – and coverage of – the healthcare alliance a thumbs down. He also speculates on some outcomes of the A/B/J alliance.

Meanwhile, David Harlow has a medal-worthy rundown of the Amazon/Berkshire/JPMorgan alliance and also Apple’s foray into personal health records. David asks, “Are they both less than they seem? What would it take for these announcements to really capture our attention?”

David shares his thoughts on what it will take for these behemoths to succeed in A tale of two tech titans hoping to help healthcare.

And speaking of behemoths and healthcare, in Anthem Insurance & Emergency Room Visits That Go Uncovered Louise Norris offers a great explainer about unexpected ER bills and a controversy over how insurers pay for trips to the ER.

Norris is, of course, writing about Anthem, which issued new rules in Georgia, Indiana, Missouri, and Kentucky in 2017 that shift the cost of ER visits to the patient if a review of the claim determines that the situation was not an emergency after all.

An infraction worthy of a DQ

At Health Care Renewal, Roy Poses brings us the tale of an Olympic-level assault on freedom of the press – one that rises to the level of not doping but perhaps dopiness.

In Free Press? Don’t Need No Stinkin’ Free Press – Center for Medicare and Medicaid Services (CMS) Tries to Intimidate Modern Healthcare Journalist, Poses tells the story of a ham-handed CMS attempt to bully (unsuccessfully) Modern Healthcare journalist Virgil Dickson into changing a January 23 story.

It’s a must-read.

Head-to-head action that will make you hit Instant Replay

This week’s submission from #CareTalk – Mr. Azar Goes to Washington – actually required me to tune in to a 10-minute discussion on YouTube. And I’ve gotta say I was both entertained and enlightened by the banter between David Williams (Health Business Group) and John Driscoll (CareCentrix) as they made predictions about the impact of newly appointed HHS Secretary Alex Azar.

Come for the zingers. Stay for the Lightning Round.

The American ‘judge’ scores Peru

International flavor is, of course, what the Olympics is all about – and Jason Shafrin definitely fills the bill with his fascinating look at Health care in Peru.

Let’s just say that if health systems competed for medals, Peru would have a tough time overcoming its apparent underdog status. Spoiler: life expectancy in Peru is ranked 126 out of 224 countries. (Before 2007, more than 60 percent of the population had no health insurance coverage.)

A medal for members of Congress?

Over at ACASignups.net, Charles Gaba has the dirt on efforts by Senate Democrats to help stabilize the Affordable Care Act by pushing for increased ACA subsidies. Should Patty Murray get a medal for her efforts? Not sure, but Charles should definitely get a Gold for his tireless work to deliver health reform updates and analysis to us all.

But wait. Tom Lynch at Workers’ Comp Insider is also awarding high marks to * gasp * legislators in DC. In Who’d A Thunk It? Something Good Out Of DC!, Lynch explains how “in a rare Washington Kumbaya moment,” legislators dedicated a little pork to “poor people who are aging and sick: America’s Dual Eligibles.”

“Finally, this Congress has done something that will benefit our most vulnerable citizens. Let’s hope it’s not a one-off,” Lynch writes. (And we concur.)

Something else we can all cheer for

And speaking of news that gives us hope and inspiration … Henry Stern at Insureblog had a post that elicited a cheer from Yours Truly this week.

In Something different (and potentially quite helpful), Stern adds his voice to an apparently growing movement intended to give us all more coverage when we go to the hospital. I won’t spoil the post for you, but I will drink to Henry’s sentiment with a wink and a “Bottoms up!”

A recap from the podium. No, not THAT podium.

OK. So it wasn’t a medalist podium somewhere in South Korea, but Andrew Sprung did make it to that OTHER important convo in 2018 – Health Action 2018, Families USA’s annual confab of healthcare activists.

Andrew reports that the event was “largely devoted to taking the measure of the political power somewhat miraculously tapped by a wave grassroots passion and action that staved off repeal – and groping toward a path by which Democrats can build on or move beyond the ACA in years ahead.”

His recap of the conference – Democrats and activists prepare health care offensive – examines what kinds of next steps – or false starts – the conference conversations pointed toward.

And finally – a story of indomitable spirit

The thrill of victory in defeating ACA repeal. The agony of Obamacare sabotage. It’s a great story.

Also great? A story on this site: Shawn Dhanak’s account of four consumers who are ignoring news of health reform setbacks and continuing to put their faith in the ACA’s protections. They’re still enrolling – like their lives depend on it.

So put on your giant foam finger and join me in waving a little American flag for this week’s contributors.

You stuck that landing!

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In 2017, Donald Trump and Congressional Republicans did everything within their power to dismantle the Affordable Care Act. And while they haven’t achieved their ultimate goal of full repeal, the law’s saboteurs certainly managed to foster uncertainty about the law’s fate.

What’s not at all uncertain? That more Americans are appreciating the law more than ever – and they’re showing it by continuing to enroll in ACA-compliant plans.

Is there uncertainty about the law’s growing popularity? Recent research shows that by the end of 2017, a record-high percentage of Americans viewed the law’s impact as “mostly positive,” while the percentage who viewed its effects as “mostly negative” reached a five-year low.

Did repeal attempts – including successful repeal of ACA’s individual mandate – make consumers uncertain about whether they still need the law? Not hardly. Even with the enrollment window shortened by the Trump Administration, at least 17 states have already exceeded last year’s enrollment numbers and by late January, enrollment had already reached more than 96 percent of last year’s total.

“The demand – as well as the need – for health insurance is as strong today as it was when we first began offering coverage five years ago,” said Peter V. Lee, executive director of Covered California. In the past week, California drew within striking distance of an all-time exchange enrollment record.

Consumers still want – and need – ACA’s help

So what’s on the minds of these consumers? I talked to a handful of them who enrolled in 2017 for coverage this year and who also say they’ll enroll again in 2018 – shortened enrollment window and no mandate be damned.

For these consumers – and millions of other Americans – Obamacare was not collapsing prior to actions taken by this Congress and Trump administration saboteurs. It was not a disaster, but rather the only thing standing between them and the inability to treat a chronic illness, or bankruptcy due to unforeseen medical bills.

With all the wrenches thrown into the gears, the future of the ACA is still far from certain. ‘Get it while you still can’ is the dominant theme I hear in conversations with consumers these days.

‘It’s unaffordable for me without the subsidy’

Awsam Aloos: “[Health insurance] is unaffordable for me without the subsidy. It’s there now, so I’m going to use it.”

Awsam Alloos, 37, of Clinton Township, Michigan has stayed covered despite being relatively young and in good health. He told me he plans to re-enroll next year despite the loss of the individual mandate.

Fittingly – given his work as a Financial Coach with the Dearborn, Michigan-based Arab Community Center for Economic and Social Services (ACCESS) – he says it doesn’t make any sense go without health coverage while the Affordable Care Act makes it possible to get covered. “You could be walking in the snow and slip. You never know what will happen.”

Only needing to see the doctor once or twice per year, Awsam values the peace of mind that coverage provides him. “If I had an accident, thousands of dollars in medical bills could be devastating.”

Awsam further explained to me that part of his motivation for staying covered is to take advantage of the monthly tax credits he qualifies for. “It’s unaffordable for me without the subsidy. It’s there now, so I’m going to use it.”

Awsam enrolled in a Silver HMO plan through the federal exchange, or Marketplace, for just under $100 per month after a roughly $200 per month tax credit is applied. “The Marketplace is a great deal,” he exclaims.

‘Consumers are scared to lose their insurance’

Eva Jirjis, right, a certified enrollment assister (Photo: Kaes Almasraf)

Eva Jirjis, a federally certified enrollment assister and colleague of Awsam’s at ACCESS, says many of the people she helped enroll during the last enrollment period were enthusiastic about enrolling after they found they still could.

“They were excited that their insurance wasn’t canceled and that the subsidy was still there – and they want to get it again. Many are sick and really need the help.”

The most recent enrollment window had a different feel from previous years, Jirjis says, as someone who has worked as an enrollment aide since 2014. “[Consumers] are scared to lose their insurance, so they want to [enroll] while they still have the chance … They don’t know what’s going to happen; it either will be here or won’t be here.”

Eva admits she cries for some of the individuals she helps sign up when she thinks about what would happen to them without access to comprehensive medical insurance. “They need the insurance. They wake up every morning and turn on the news to see if there are any changes, to see if they still have their insurance. I have hundreds of families like that.”

‘Unshackled’ from her cubicle

Many consumers on the roller coaster ride of the past year have no other choice but to make use of the ACA for as long as they can.

Katya Powder, 34, is a freelance singing instructor in New York City. Diagnosed with epilepsy at the age of 18 and Crohn’s Disease at age 21, her pre-existing conditions rendered her unable to purchase insurance on her own for years until the ACA came along. She stayed on her parents’ plan as long as she could through college, and reluctantly took job as a receptionist just she could gain medical coverage after college.

Marketplace coverage proved to be the key Katya needed to unshackle her from that cubicle job.

In calling the Marketplace for the first time and learning she could get covered – no questions asked – “I began sobbing uncontrollably. After being rejected my entire life for something that I literally needed to survive, I was so overwhelmed with relief and gratefulness,” she wrote in a blog posted on Progress Michigan’s web site. “When I look at the past four years of the healthcare I have received, I’m even more grateful because my health has improved tenfold.”

Powder has, not surprisingly, re-enrolled in coverage for 2018, and receives about a $300 monthly subsidy through New York’s exchange. Today she’s doing what she loves because of her access to quality, affordable coverage.

“Ever since Obamacare, I haven’t been hospitalized,” she told me recently. “I attribute that to the fact that I can provide for myself, and I can see the doctor more often and not worry about how much it will cost. I don’t know how many people believe in the mind-body connection, but for me it’s very apparent. ”

Spared $150,000 in medical expenses

Namir Yedid, a 35-year-old, San Diego-based entrepreneur, is one such individual. In 2014 he wanted to pursue his own software company start-up. After having employer-sponsored insurance for much of his adult life, he felt comfortable enough to make that leap on his own – knowing he could purchase coverage through California’s exchange.

It’s a good thing the Marketplace coverage was there for him.

Cut to February 2015, when his dermatologist noticed a bump on his chest that looked like a cyst. A biopsy later revealed that it was in fact a rare form of malignant cancer. Fortunately, the cancer was removed with an operation and has not returned. But, in all, the cost of multiple rounds of surgeries to remove the tumor and reconstruct his chest – and about a week and a half in the hospital – totaled over $150,000. Thanks to the ACA, however, his out-of-pocket expense was a grand total of $7,500.

Even before that experience, “it wasn’t like I was not going to get covered,” Namir says. “But it was very clear to me … that the ACA made a tremendous difference in my experience [fighting cancer]. It was due to the provision about capping my out-of-pocket expenses. The fact that I wasn’t bankrupt was because of the ACA.”

While Namir is healthy now, his type of cancer does tend to recur. He says grateful for the accessibility he still has to coverage – in spite of his having cancer – as well as the financial assistance he receives to offset his monthly premium and the many deeper provisions of the law he’s learned of through his ordeal.

Cautious optimism

The Trump administration is hoping its thinly veiled strategy to dismantle the law piece by piece will discourage or shove people out of the Marketplace one by one, leading to further erosion of the program. Sure, its tactics could very likely impact Obamacare’s structural soundness in years to come.

But these stories seem to reflect a deeper trend in consumer sentiments about the ACA: Enthusiasm for the relatively new coverage options and all its protections has staying power.

Shawn Dhanak is a former media strategist for Enroll America’s ACA outreach and education campaign in Michigan. As a victim of the pre-Obamacare health insurance marketplace himself, Shawn is committed to cutting through the noise and political spin to dispel myths about the historic healthcare law and highlighting examples of just how beneficial it has been to people who need access to care the most.

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Joe Paduda is helping ring in the New Year with the first Health Wonk Review of 2018 over at Managed Care Matters.

If you’re looking for some great blogs to follow – and not just writers obsessed with the Affordable Care Act – this month’s edition is a great example of the variety of topics that show up under the Health Wonk Review umbrella. This edition includes posts about the costs of prescription drugs, about the workers comp landscape, and health care dysfunction being driven by corruption.

And sure, there are great posts about health reform – including an open enrollment wrap-up, an update on the medical loss ratio’s impact, and a post explaining how the ACA is driving up insurance prices. (Thanks, Joe, for including our post from Louise Norris.)

It’s a quick read, but loaded – as always – with analysis from respected authorities on health policy. Check it out!

Next up: Yours Truly hosts Health Wonk Review on February 15. I smell a Valentine’s Edition!

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Throughout 2017, the Trump Administration and Republicans have been pushing the idea that the Affordable Care Act is “imploding” or “collapsing under its own weight.” Among the most damning evidence they’ve pointed to is “bare counties” – areas where no health carrier filed ACA-compliant marketplace health plans for 2018. But while that was a looming problem earlier in the summer, it has been resolved nationwide, for the time being.

Some carriers are leaving, but others are filling the gaps

When rates and plans were initially filed for 2018, there were 82 counties across the country (out of 3,142 total) where no insurers intended to offer coverage. But insurance regulators in the affected states have worked tirelessly to convince insurers to fill in the bare spots, and the last one — Paulding County, Ohio — was filled as of August 24. Insurers can still back out for a few more weeks, as contracts with HealthCare.gov don’t have to be signed until September 27. But for the time being, every area of the country has exchange plans filed for 2018.

To be clear, that doesn’t mean there won’t be any problems for individual health plan shoppers this fall. The uncertainty created by the Trump Administration and the GOP repeal effort has certainly pushed some insurers to exit the exchanges at the end of 2017, and more could follow them out the door in the coming weeks.

But the previously “bare” counties in Tennessee, Washington, Kansas, Missouri, Ohio, Indiana, Wisconsin, Nevada, and Virginia now have insurers slated to offer coverage. In some cases, more than one insurer stepped up to fill in bare counties.

Here’s the current status of carrier exits – and entries:

Which carriers are leaving the exchanges

Here’s a summary of which insurers are leaving, and where, as of mid-August:

Which carriers are entering the exchanges

In several states, insurers are actually entering the exchanges or expanding their coverage areas:

  • Oscar Health is entering the exchanges in Ohio, Tennessee, and New Jersey (after leaving the NJ exchange at the end of 2016), and expanding their coverage area in California and Texas.
  • Blue Cross Blue Shield of Tennessee is expanding their coverage area to once again include Knoxville.
  • Blue Shield is expanding their coverage area in California.
  • Bright Health is joining the exchange in Alabama.
  • CareSource is expanding their coverage area in Ohio and Indiana.
  • Centene (which includes Buckeye Health Plan, Silver Summit, Coordinated Care Corporation, Ambetter, and Celtic) is expanding their coverage area in Florida, Georgia, Indiana, Ohio, Texas, and Washington, and joining the exchanges in Nevada, Missouri and Kansas. In doing so, they have filed plans in numerous counties that would otherwise have had no insurers for 2018.
  • Medical Mutual is expanding their coverage area in Ohio.
  • Molina is expanding their coverage area in Ohio.
  • Montana Health CO-OP froze their enrollment in December 2016, but they have reopened enrollment in the summer of 2017, and will once again offer coverage in Montana during open enrollment.
  • University of Utah Health Plans is expanding to a statewide coverage area in Utah’s exchange for 2018.

What does it all mean for consumers?

First of all, we’re not saying that there’s nothing to worry about. Carriers are nervous, and some are exiting the exchanges. And although virtually all counties have at least one insurer lined up to offer plans in the exchange for 2018, there will be more areas of the country with only one insurer offering coverage.

According to CMS, nearly 28 percent of exchange enrollees will have access to just one insurer in the exchange for 2018. (It’s worth noting, however, that the map CMS has been updating all summer does not account for all of the filings that insurers have submitted. As an example, the map still shows all of Alabama with just one insurer for 2018, despite the fact that the Birmingham area will have two.)

But regardless of how many insurers will offer coverage in your area, it’s certainly nerve wracking if you currently have coverage with one of the exiting insurers, and are facing an involuntary plan change for 2018.

So what does all of this mean for consumers, as we head into the fifth open enrollment period?

What happens if your carrier exits?

Insurers that are exiting the exchange generally have to provide enrollees with at least 90 to 180 days notice, depending on whether the exit is from just the exchange, or the entire individual market (on and off-exchange).

The exchange also sends out communications to enrollees each fall regarding coverage for the upcoming year. So if your insurer is leaving the exchange, you will be notified by the exchange and by your insurer, well in advance of open enrollment. If the exchange is planning to map you to a new plan, they will communicate that to you as well.

Mapping people to new coverage when their previous insurer exits the exchange is a procedure that HealthCare.gov implemented for 2017 (and some state-run exchanges have adopted similar protocol), in an effort to ensure that people don’t find themselves uninsured on January 1. In previous years, that was the result if an insurer left the exchange and the enrollee didn’t return to the exchange during open enrollment to actively pick a new plan.

HealthCare.gov’s mapping protocol means that most enrollees will still have coverage on January 1. But open enrollment is your opportunity to pick your own plan instead of just accepting the replacement plan that’s selected for you by the exchange. However, consumers need to be aware that open enrollment will end much earlier this year than it has in the past. In nearly every state, it will run from November 1, 2017 to December 15, 2017, although there are some state-run exchanges that have announced extensions.

Is your county OK with just one carrier?

Even if there’s just one insurer left in your area (which will likely be the case in South Carolina, Wyoming, Oklahoma, Alaska, Delaware, Mississippi, and Nebraska, along with rural areas in quite a few other states), premium subsidies will keep coverage affordable for most enrollees, and the ACA’s medical loss ratio rules will prevent price gouging.

The ACA also requires insurers to have adequate provider networks, although HHS is now leaving oversight of network adequacy to the states. (Most states already conducted their own network adequacy reviews, but HHS managed that process for 21 states, and is now deferring to the states instead.)

So in the rural areas of the country where there will be just one insurer offering exchange plans, it’s important to understand that the ACA has built-in safeguards to protect consumers. Insurers in those areas cannot simply raise prices due to the lack of competition, nor can they offer coverage with overly skimpy provider networks.

And premium subsidies will result in after-subsidy premiums (for the second-lowest-cost Silver plan) that are the same in areas with one insurer as they are in areas with several insurers. (Note that after-subsidy premiums will actually be slightly lower in 2018 if your income stays the same.)

What if your county is ‘bare’?

To be clear, there is currently no official contingency plan for this scenario. And although there are no ‘bare’ counties as of late August, that could change in the weeks before insurers have to sign exchange contracts, particularly if the Trump Administration continues their current approach to CSR funding and enforcement of the individual mandate.

If additional insurer exits do result in bare counties after the contracts are signed in late September, it would be an unprecedented situation that would call for unprecedented solutions.

Some of the possible solutions that have been considered around the country include a public option, legislation that would allow people to use premium subsidies to buy off-exchange plans, and legislation that would allow people in bare counties to buy plans through the DC small group exchange (which is what members of Congress and their staffers use).

Although there are currently no areas of the country without plans filed for 2018, there is also no solution in place yet to address that situation if it does arise. But insurance regulators and insurers have thus far done an admirable job of solving the problem in the 82 counties that were facing the prospect of having no exchange plans available in 2018.

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If you feel you haven’t quite gotten your fill of health policy for the week, head on over to xpostfactoid for the latest edition of Health Wonk Review. Host Andrew Sprung has dedicated this edition to the individual who continues to suck the air out of every room: President Trump.

It’s a quick read, but loaded with, as always, with something for everyone, with – in Andrew’s own words –

“snapshots of a country that continues to trail its peers in population health measures; an opioid vendor looking to short-circuit potential tobacco industry-level liability; an individual market for health insurance offering unaffordable plans to many of the unsubsidized, and freakish bargains to some of the subsidized; and, for a little futuristic relief, a human resources tech vendor that may chain healthcare data to a block, where it shall remain unaltered forever and ever.”

It’s great stuff. Our thanks to Andrew for graciously including our recent post – timely reading for folks who may be wondering just how long they can go without insurance before they’d face the ACA’s individual mandate.

Next up: Julie Ferguson hosts Health Wonk Review on December 14.

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