Health Reform

Governor Walker announced yesterday that Wisconsin would not pursue designing an Exchange, the marketplace through which many will be purchasing their health insurance plans starting next fall.  As part of Obamacare all states are to have such marketplaces up and running.  It is each state’s choice as to whether or not to design and implement the plan or to have the federal government do it.

Covering Kids and Families’ project coordinator, Michael Jacob, did an interview for a local ABC TV affiliate about this decision:    The newscast does a nice job of explaining what the Governor chose and why.

The question on many people’s minds is does it make a difference to have a state versus a federal Exchange.  My general impression is “not as much as people think.”  For those who will be choosing their future health insurance plans through this online marketplace, there will still be options.  One would assume that the federal representatives will negotiate with insurers who offer products in Wisconsin, and will hold them to the standards set in an agreed upon Essential Benefits Package.  So when it comes time for choosing plans starting October 2013, that marketplace/Exchange should be up and running.  Plans will then go into effect January 2014. In the past Wisconsin’s Office of the Commissioner of Insurance has done a solid job of protecting consumer interests as new insurers offer products in the state.  And Wisconsin has been a leader in this regard.  Perhaps the feds will not be as thorough but I cannot see any evidence of that. The Huffington Post did post an article talking about the impacts of federal Exchanges.

The one issue cited there that I am concerned with is how effortlessly people whose eligibility status for Medicaid may change over time will be directed through the Exchange enrollment process to the plan that is right for them.  This is because it is the Exchanges that will be channel through which all uninsured people apply.  Based on an individual’s or family’s circumstances they will be offered different types of insurance plans.  And if they are eligible for their state’s Medicaid program, the online Exchange is to direct them to that plan rather than the private ones in the marketplace of plans.

Since the Medicaid programs are state administered, even though they are paid for by both state and federal dollars, there is a legitimate concern that outside folks developing a Wisconsin federal Exchange may be less likely to have all of the correct information to make that transition completely smoothly.  One would suspect though that it should work well if the state is closely involved with at least that aspect of the development of the Exchange.  If not, then yes, this could be a significant barrier to ease of enrollment into Medicaid for people who are otherwise eligible.  And those on Medicaid are our lowest income Americans who are often living in less than desirable conditions creating a perfect storm for their likely need for timely and appropriate health care access.  It will be significant barrier to those individuals to remain uninsured, to not have a funding stream following them to the doctor, clinic or hospital (which is what Medicaid is in the eyes of those providers). Review the Kaiser Family Foundation map of US to see where states stand on their roles with the Exchanges.

The way the insurance aspect of Obamacare works is that there are THREE main ways that people will get insurance. Think of this as a three legged stool that needs all three legs to stand.  All parts need to function in order to move to having fewer uninsured Americans.

• The first, and most common, is that people will get health insurance through their places of employment, just as most do today.
• The second is through the Exchanges.  Many who have been uninsured before will look to that marketplace to have affordable options.  Those options will be more affordable for them than they are today because of the power of larger groups of people, healthy and non-healthy, being mixed together in the insurance pools.  This should bring premiums down.  And remember, because of the individual mandate, everyone will be required to be insured or face fines.  This is to insure that healthy people join the mix. There is good evidence that it has worked in Massachusetts, a state with a mandate.  Here is a nice summary article on how well Massachusetts did.

For some who have trouble purchasing insurance because of income there will be tax credits to make that insurance affordable.  For some, they will be exempt from the mandate.  And because of consumer protections, no one will be denied the ability to purchase insurance because of a pre-existing conditions.  Insurers were willing to play this game of insuring those with pre-existing conditions because the healthy would be mandated to buy insurance.  As long as there are healthy people in the pool paying premiums, as proved in Massachusetts, then this spreading of risk works.  And I think we should all remember that either we or a loved one are in reality just a step away from having a tragic medical event occur that would cost us dearly if we didn’t have insurance.  American on the whole seem to support everyone being able to be insured.  The battles had been over how to get there.  We now have a law that got us closer to having all insured.

• The third leg of the stool are the public insurance programs.  These include Medicare, Veterans Benefits, Indian Health Service, all federal programs, and Medicaid, a state-federal partnership program.  As mentioned above, directing people who are eligible into the Medicaid part of this third leg will not be a concern if there is a close relationship between Wisconsin and the feds on this technical aspect of the online enrollment as the federal Exchange for Wisconsin is designed.  As for having Medicaid bolster up the number of insureds in Wisconsin, this may not be as much the case as some had hoped.  While Obamacare did require that states expand Medicaid coverage to individuals under 138% of the federal poverty line or face significant threats to that program overall, the Supreme Court negated the Department of Health and Social Services ability to penalize states who did not expand their eligibility criteria.  At this time it does not appear that Wisconsin will be expanding eligibility for our Medicaid program as Obamacare would have allowed.  I have provided a fact sheet here from Kaiser Family Foundation on where states stand on Medicaid coverage.

All the links in the above article for anyone who prints this to share.

Michael Jacob, interview: http://www.wkow.com/story/20123676/impact-of-health-care-decision

Huffington Post article talking about the impacts of federal Exchanges: http://www.huffingtonpost.com/2012/11/15/health-insurance-exchanges_n_2138576.html

Kaiser map of US with state Exchange info: http://healthreform.kff.org/en/the-states.aspx

Massachusetts Exchange story: http://www.cbsnews.com/8301-18563_162-57459563/massachusetts-health-care-plan-6-years-later/

Kaiser fact sheet for Medicaid: http://www.kff.org/medicaid/7993.cfm

There has been confusion over how many people might “lose” their insurance under the health reform law.  When folks use this expression what they really mean is not losing insurance or the ability to purchase insurance affordably; it is losing access to employer based insurance. 

Changing from an employer based system of providing health insurance to one where many purchase their insurance through Exchanges does not mean that people would lose their insurance, just their usual method of obtaining their insurance.  Everything about ACA is intended to INCREASE the number of insured people.

In the world of ACA, starting Jan. 2014, people would be able to buy insurance through their state Exchanges, private online marketplaces of insurance policies.  So yes, many may no longer be getting their insurance through their employers; however, they would now have the option of purchasing insurance through the Exchanges AND most businesses would still contribute to those premium expenses as part of their fringe benefit package offerings.  That’s how businesses attract and keep and honor their employees.

There are also incentives to keep a strong employer based model of health insurance in place, so the CBO report was estimating how many businesses might take advantage of that or not.  Note that many think maintaining an employer based insurance system is unsustainable, especially since insurance premiums are based on the size of the pool of employees.  For years we have seen small businesses drop out of the health insurance business.  With the Exchanges there will be insurance options for those employees and for the millions of part time employees who never had employer based insurance.

There are historical reasons why we developed an employer based insurance system in the US.  It was a fringe benefit, a non-monetary one used to attract employees at a time when there was rationing and wage freezes imposed during WW II.  So, it was a fluke, not a planned way to get the most people covered.  And without the new protections of ACA (that will mean that one cannot be denied coverage because of a pre-existing condition), the current, before ACA, employer based system ties people to their current employer for fear of never getting insurance again if they want to change jobs.

Therefore, talking about folks “losing” insurance misrepresents the opportunity many will now have, more health insurance choices.

Roberta Riportella, Ph.D.

The American Academy of Pediatrics draws attention to the new state-by-state fact sheets on the importance of Medicaid for children.

As noted by author Ielnaz Kashefipour, American Academy of Pediatrics, “The information that these fact sheets contain, and the advocacy work they support, will have sustaining benefits and long-term impacts. For example, the fact sheets show that as a national average, a pediatrician treating a child who is on Medicaid receives only 70 percent of what would be paid to treat a senior on Medicare for the same illness.”

Here is Wisconsin’s Medicaid Fact Sheet from the American Academy of Pediatrics.

The University of Wisconsin shared the implications of the Patient Protection and Affordable Care Act on employee benefits in their newsletter this week.  In their article Health care reform: Its impact on your benefits they state that many of the provisions in ACA have already been included in the State Group Health Insurance (SGH) program, while other changes will occur within the next few years.

The article includes a nice table that shares the impacts of ACA on the State Group Health Insurance.

Medicaid plays an important role for many Americans today.  In a chart published by the Kaiser Family Foundation they note that prior to the ACA expansion, Medicaid eligibility varied widely by state and category.  ACA’s Medicaid expansion sets sets the minimum eligibility levels at 138% of the Poverty Level across all states.  More than half of America’s 49 million  uninsured fall in this income range.

The Urban Institute estimates that 181,000 Wisconsinites would gain eligibility for BadgerCare if the state takes advantage of the opportunity provided by the Affordable Care Act (ACA).

Read the full report they issued with the Robert Wood Johnson Foundation (RWJF) early this month.  It examines the make-up of the population that could gain coverage if Wisconsin uses the federal funding that would cover almost all of the cost of the adults who would be newly eligible for BadgerCare coverage, beginning in 2014.

Listen to Roberta’s discussion on WPR’s NEWSMAKERS: ONLINE – AFFORDABLE HEALTH CARE…SORTING OUT THE DETAILS

Some of the topics covered:
What aspects of the law have been in place since 2010?
What changes will consumers see in 2014?
Insurance:
a) Where does uninsured person buy it?
b) Penalties for not purchasing
c) Will more small/large businesses purchase for employees? Other effects? Tax incentives
d) Changes within insurance companies?
What is health insurance exchange?  And much more!

Correction to conversation:
“Independent insurance agents are likely to be among the pool of supported “navigators,” a new role that CMS is trying to support in communities. All navigators may help consumers purchase insurance but yes, likely through the Exchanges.”

Part 1: Steve Roisum reports on an informational session held this week in La Crosse that addressed the Affordable Care Act; and a discussion with UW Extension Health Policy Specialist Dr. Roberta Riportella about how the Affordable Care Act will impact health consumers.

Part 2: We continue our discussion about what the Affordable Care Act means for people. Our guest is Dr. Roberta Riportella, a health policy specialist for UW Extension.

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Today’s older Americans enjoy longer lives and better physical function than did previous generations, although, for some, an increased burden in housing costs and rising obesity may compromise these gains, according to a comprehensive federal look at aging. The report, Older Americans 2012: Key Indicators of Well-Being, tracks trends at regular intervals to see how older people are faring as the U.S. population grows older.

This report provides the latest data on the 37 key indicators to portray aspects of the lives of older Americans and their families. It is divided into five subject areas: population, economics, health status, health risks and behaviors, and health care.

Here is a Summary / Press Release for NIH which provides details for these major findings:

• Increased labor force participation by older women
• Declines in poverty, increases in income since 1974
• Increased housing problems
• Rising rates of obesity
• More use of hospice

If you are interested in creating aging friendly communities visit Dr. Clifton Barber’s blog Creating Aging-Friendly Communities in Wisconsin: Community-level planning for the coming “Age Wave.”

Did you get your check?

Aug. 1 marked the deadline for insurers to refund consumers and employers if they didn’t spend at least 80 percent of premiums on health care.

The 80/20 rule:  The health care law generally requires insurance companies to spend at least 80 percent of consumers’ premium dollars on medical care and quality improvement. Insurers can spend the remaining 20 percent on administrative costs, such as salaries, sales, and advertising.  The 80/20 rule is also known as the Medical Loss Ratio (MLR) standard.

Consumers in every state will also receive a notice from their insurance company informing them of the 80/20 rule, whether their company met the standard, and, if not, how much of difference between what the insurer did or did not spend  on medical care and quality improvement will be returned to them.  Insurance companies that do not meet the 80/20 standard must provide their policyholders a rebate for the difference no later than Aug. 1, 2012.

For a detailed breakdown of these rebates by state and by market, please view the chart on the linked page on healthcare.gov. The chart shows the rebate will be an average of $151 for each family covered by a policy.  In Wisconsin the chart shows an average rebate of $76 per insured family.

Also on August 1 another provision takes effect requiring most employers to include contraceptive and other women’s health services without co-pays in the insurance plans they offer workers.

Various news outlets reported on these latest events.  Follow the story in The Wall Street Journal, the USA Today, or on NPR.

I thought you might be interested in the page, Study: One In 10 Employers Will Drop Health Coverage In The Next Few Years, on the Kaiser Health News website.

Summary: The report by the consulting company Deloitte, which is to be released Tuesday, predicts the decline in work-based plans as much of the health law kicks in. Meanwhile, two Massachusetts insurers see opportunities to expand their out-of-state business.