January 25, 2014
I joined a panel of experts on exchanges, health care reform and insurance to give insights on ACA plans going into effect. To The Point tweeted key comments from each of us, including:
- Bryce Williams, Towers Watson, @brycewatch:
The ACA could be major boost to entrepreneurship
- Sarah Kliff, Washington Post, @sarahkliff:
36 hrs into Obamacare, vast majority can signon & signup w/in an hr
- Susan Shargel, Shargel and Company
- David Nather. Politico, @DavidNather
- Gerald Kominski: UCLA Center for Health Policy Research, @UCLAFSPH
In the full podcast, you’ll hear comments on these points and more:
The New Year brought with it medical coverage for millions of Americans under the Affordable Care Act. On Jan 1, about two million people began to receive private health coverage through the state health exchanges or the federal website.
With one of the nation’s most sweeping changes to social policy in decades, no longer can insurers deny coverage to people with pre-existing conditions, or charge them more for their coverage than other customers. It’s also the first time they can’t legally charge women higher premiums for the same coverage as men, and the first time they can’t set a specific limit on the amount they spend on “essential health benefits” for individual policyholders.
But there are a lot of “if’s” in the implementation of Obamacare:
- Will people be able to find a doctor who accepts their new plan?
- Are the nation’s healthcare providers ready for the change in policy?
- How will Obamacare shape the political climate this election year?
I joined a panel of experts on when the ACA will be ready for prime time. To The Point tweeted key comments from each of us, including:
- Bryce Williams, Towers Watson: Hard to penalize Americans for not buying what they can’t easily buy online says @brycewatch
- Juliet Eilperin, Washington Post White House correspondent: WH has stopped giving reporters like @eilperin hard #s about Obamacare web hits
- Jyoti Bansal, AppDynamics: Healthcare.gov glitches partly due to “old legacy systems” from state websites says @appdynamics
- Peter Suderman, Reason magazine: Whopping 7% polled say Obamacare roll-out has gone “quite well” says @petersuderman
- Tayse Haynes, Cabinet for Health and Family Services of Kentucky: One surprising state where Obamacare’s been less rocky: Kentucky. We hear from the health czar.
In the full podcast, you’ll hear comments on these points and more:
- What factors states had to consider in setting up their exchanges
- What could happen with those who get their coverage later due to state exchange glitches
- How options for young people’s coverage could impact state exchanges
- How this launch compares to the roll-out of Medicare Advantage and Part D nearly a decade ago
Towers Watson Announces OneExchange for full- and part-time employees and pre-65 and Medicare retirees
January 31, 2013
OneExchange combines the strengths of Extend Health’s exchange platform with Towers Watson’s expertise in health benefit design and strategy.
As part of employers’ health care reform (or ACA) implementations, OneExchange will let employers leverage a single exchange with solutions for some or all of their active and retired employee populations: full-time, part-time, early retirees and Medicare-eligible retirees.
January 30, 2013
The genesis of the Medicare exchange market offers some good insights about what things could look like after the seismic shift that’s coming to the rest of the insurance market in 2014.
The law changes. In 2003, the Bush administration enacted the Medicare Prescription Drug, Improvement and Modernization Act (MMA), creating a thriving market for guaranteed-issue medical and prescription drug plans that could finally be compared head-to-head.
Companies and insurers engage. In 2005, one of the Big Three auto manufacturers challenged Extend Health to get better rates on Medicare plans than it could: In the close radius of the company’s headquarters, it had good enough sway, but having to rent networks in retiree destinations from Florida to Nevada meant its group plan was less efficient than the burgeoning individual Medicare market.
Extend Health built a network of national and regional carriers that offered retirees the same or better individual Medicare coverage at the same or better cost than their former group plan. And at the same time, made the company’s costs predictable and sustainable – no longer driving double-digit rate increases for that employer.
Now Extend Health powers retiree coverage at all of the Big Three and many other auto industry employers along with companies in every sector.
Health care consumers reap the benefits. Six years before MMA was passed, almost half of all retirees from large companies had access to health coverage through their former employers [see EBRI study, Figure 2], but that number took a nosedive due to the skyrocketing costs of offering health care. Six years after MMA was enacted, the number finally leveled off and may even be starting to trend back upward, thanks at least in part to the path offered by private Medicare exchanges.
In today’s fragmented market, individual consumers without an employer to negotiate on their behalf pay the most for health insurance. However, in a guaranteed-issue coverage world (like Medicare today) insurers sharpen their pencils to reach individual consumers through an exchange because it effectively becomes a “super-pool” consisting of everyone within a defined geographic area – providing a critical mass of consumers larger than that of any single employer.
What we’ve seen in the development of the Medicare market gives us reason to believe that a truly agnostic exchange – not a closed single-carrier environment or one that simply switches employers from defined benefit to defined contribution funding – is the practical meeting ground for consumers, employers, insurers and the storm of health care reform changes to come in the next year.
Employers have a lot of big decisions to make about health benefits in 2014. But despite headlines filled with state and federal exchange readiness count-downs, for large employers, many of those decisions don’t have to shake the foundations of their health benefit strategies right away. As employers get ready for the coming seismic shift in health care, their top concern is going to be doing the right thing to meet the needs of their workforces and businesses.
And the right thing is not easy to figure out:
- It depends on regs and health plan options that haven’t been fully defined yet.
- It depends on which employee population they’re looking at, both active and retired.
- It depends not just on the calendar day that exchanges flip the on-switch but more importantly on when certain health care reform changes begin to mature.
I anticipate that, come 2014, employers’ adoption of exchanges for some employee populations could look something like the hockey stick trajectory seen in the 1980s with history of corporate 401(k) adoption: Soon after the law changed in 1978, a handful of employers began a move to the new model, but three years down the road, about half of employers were already offering or thinking of offering a 401(k) and the numbers increased by leaps and bounds in the years after that.
In my next blog post, I’ll be talking more about employers’ needs this year, considerations for how to do the right thing and resources they can turn to for solutions.
- Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997‒2010, Employee Benefit Research Institute (EBRI)
- History of 401(k) Plans: An Update, EBRI
- Exchanges Part 1: Everyone wants in, Extend Health blog
- Exchanges Part 2: What to look for and what to look out for, Extend Health blog
November 20, 2012
Exchanges are the new vehicle for health care reform changes coming down the road, and the on-ramp is coming right up
With elections and this past summer’s SCOTUS decision behind us, the major events that could have altered the macro course of the Patient Protection and Affordable Care Act (PPACA or ACA) are behind us.
The health care providers, insurers and those closely tied to getting health care benefits into the hands of consumers – particularly employers – now face a series of milestones, not all clearly defined, through Jan 1, 2014 – when 30 million previously uninsured Americans could begin new health care coverage – and beyond.
Just how these different interests– consumers, insurers, providers and the law – converge is where the rubber meets the road.
Circle these dates on your calendar
- Dec 14, 2012 – States can declare whether they will run their own state health care exchange, let the Feds run it for them or partner with the Feds.
- 2013 –Medicare payroll tax increases for higher-wage employees. Employee pre-tax contributions to health flexible spending accounts get capped at $2,500.
- Feb 15, 2013 – States must declare if they would prefer to partner with the Feds
- March 1, 2013 – Employers must notify employees of exchange-based coverage options
- Fall 2013 – State and private health benefit exchanges will be operational for people to begin signing up for new Jan 1, 2014 health plan start-dates.
- 2014 – The mother lode of rules comes online: individual mandate, play-or-pay mandate, premium and cost-sharing subsidies, Medicaid eligibility expanded in some states and additional group health plan mandates.
- 2016 – Sales of health insurance across state borders permitted if neighboring states agree.
- 2017 – States can choose to open exchanges to large employers.
- 2018 – Cadillac tax kicks in.
Pieces of the regulatory puzzle that have to be filled in
- Just out today – Proposed rules on essential health benefits, guaranteed issue and employment-based wellness programs were published by Health and Human Services.
- Full-time vs. part-time – More specifics distinguishing full-timers and part-timers will be clarified for the purpose of applying penalties for not offering health benefits.
- Premium tax credit – How this will be calculated by the IRS.
Stay tuned for a shift in focus in these areas
- Fix-it – Look for a PPACA-fix bill to be proposed in early 2013. There are some provisions that will need to be adjusted, where costs or incentives don’t necessarily promote the best behaviors.
- Look for adjustments in how health savings accounts and health reimbursement accounts are capped and taxed.
- Expect health insurers to be more vocal on the Feds minimizing the health care premium tax and on states taking up ACA’s Medicaid expansion.
- At issue in the Senate will be the Independent Payment Advisory Board (IPAB) and the medical device tax among other negotiations.
- Providers take on new gravitas in the cost arena – Accountable care organizations will be going full-steam ahead. Over 80% of the ACOs created to date have been created by hospital and doctor groups, which could signal a shift in control away from the health insurance carriers to providers. The jury is still out on whether ACOs will lower total health care costs, but hospitals are certainly now incented to hold down preventable readmissions and hospital acquired conditions.
- Entitlement reform – Medicare will continue to evolve according to the plan laid out in the ACA and will be a big part of talks during grand bargain negotiations in 2013. With both sides of the political spectrum far apart on reform, this will be interesting.
Stay tuned for a shift in focus in these areas
As these timeline, rule and structural developments start coming online, there will be a lot to keep track of and many calculations to make. I pay close attention to these and will write on new trends in the health care and insurance space as they break.
- Obama administration moves forward to implement health care law, ban discrimination against people with pre-existing conditions
- Maine May Warm To ‘Obamacare’ After Democratic Sweep
- Post-election flood of ‘Obamacare’ rules expected
- Health Insurers Are Shifting Focus to Costs, Ignagni Says
- Boehner Suggests GOP Will Target Specific Pieces of Health Care Law
- Improvements sought for health insurance law
September 18, 2012
With talk of health care exchanges on the rise, savvy employers who have been using private Medicare exchanges like Extend Health for years are ahead of the game in getting ready for 2014.
This month has seen a swath of real life examples of employer learnings and results from transitioning health care benefits for retirees to an exchange:
- On the Microsoft in Health blog: Nevada’s Success in Deploying a Private Medicare HIX is an interview with James Wells, executive officer of the Public Employees’ Benefits Program in Nevada.
- Cover story for HR Executive magazine: “The ‘Grand Experiments’: Are corporate exchanges the answer to soaring healthcare costs?” examines Eastman Chemical’s experience with an exchange and what companies and HR professionals can look forward to from exchanges as health care reform rolls out.
- Feature article in Employee Benefit News:“Employers get sneak peek at health care exchanges” focuses on what state exchanges can learn from companies like International Paper and Oak Ridge National Labs who are using a private exchange today.
We are proud to say that all of these employers have used the Extend Health Medicare exchange.
For regular commentary on developments and trends in health care, insurance, and technology, follow @brycewatch and @ExtendHealth on Twitter and check out http://www.extendhealth.com.
At 10:07 a.m., Thursday 6/28, the Supreme Court of the United States issued its ruling on the constitutionality of the individual mandate, and ended (for now) the challenge to the Affordable Care Act.
With Chief Justice Roberts siding with the majority, the Supreme Court decided in a 5-4 vote to uphold the individual mandate as a tax. The case before the court on Medicaid expansion was upheld narrowly, with the Court ruling that the federal government may not cut off all of the Medicaid funding of states that opt out of Medicaid expansion – but the expansion can continue.
For the actual text Supreme Court ruling, go to the Supreme Court of the United States website. To see a replay of a live blog of the orders and opinions of the court, go to the SCOTUS LiveBlog.
I will be linking to thought provoking commentary on and reactions to the decision from my Twitter account @brycewatch.
June 25, 2012
No healthcare decision from SCOTUS today. It could be any day from Tuesday to Thursday this week.
SCOTUSblog expects the healthcare opinion Thursday. I will be checking each morning to be sure. Stay tuned here and @brycewatch on Twitter. Thanks for following.
June 20, 2012
Knowledge is power — the power to think, to act, to buy, or even to not do any of the above. Our nation’s health insurers and health care providers need to figure out how to put power back into the hands of consumers. Consumers today have too many constraints when it comes to accessing decision-critical information about the cost of health care. That’s a hard pill to swallow when there’s so much at stake.
A recent post on The Health Care Blog featured a fascinating yet not unsurprising finding: The cost for appendectomies can vary by more than $100,000 between health plans and hospitals.
Dr. Renee Hsia of UCSF was asked what appendectomies cost by a friend who had to pony up over $50,000 in co-pays for one. Dr. Hsia’s research, which looked at pricing variability across the state of California and was published in the Archives of Internal Medicine, found that an appendectomy could run from $1,529 to $182,955 — varying as much as $7,504 to $171,696 within one hospital.
The question of where to begin is starting to be answered by sites like FAIR Health’s Consumer Cost Lookup. It uses continually updated claims data from insurers and third-party administrators for 126 million people to benchmark costs. Visitors to the site can find typical rates for certain services in their area as well as what Medicare pays.
Fourteen other states have or are setting up searchable databases to help compare health care prices and quality.
The savings that can be realized are impactful not only for consumers but for health insurers themselves. Because half its members had no idea when they were being referred to out-of-network providers, Aetna launched a service to let members know if their outpatient surgery could be done by an in-network provider. In many cases, the surgery could be done less expensively, in-network reducing out-of-pocket costs for Aetna members, not to mention for Aetna.
More and more insurers are trying to help people locate services and compare costs, like UnitedHealthcare’s postcard campaign, which lists costs for common lab services at in-network and out-of-network facilities in members’ local areas and its online tool for estimating the costs of over 100 common treatments.So what’s central to all of these stories? Information.
In the California appendectomy story the information was too hard to get: too many sources, too many different plans. And, technically Aetna didn’t offer consumers (and network doctors) anything they didn’t already have access to. The information was just too hard to piece together and act on.
What these stories show us is that health care consumers today need access to information, plus tools and services to make sense of it all. Like Aetna, United Healthcare and other insurers who have developed cost-comparison tools for consumers, the insurance side of health care has been making cost information more available to aid consumer decision-making. We look to healthcare providers and hospitals to start doing the same.
Bringing transparency to the costs of services and products can supercharge consumer decision-making, forcing healthcare providers and hospitals to be more upfront with price information and to work on getting a better handle on costs for “incidents of care.”
The Extend Health exchange platform is a great example of transparency in an insurance shopping site. It delivers information on thousands of private Medicare plans to our customers — and it does it in an easy-to-understand way. Our system supports benefit and cost transparencyby allowing customers to compare plans side-by-side and estimate their prescription drug costs for the year. These tools, along with the opportunity to speak with a benefit adviser if they wish to, help ensure that our customers find the plan or plans that meet their health needs and the needs of their budget.
Massachusetts and Utah already offer the ability to buy health insurance online through their state exchanges. The upcoming Supreme Court decision on the Patient Protection and Affordable Care Act will determine if citizens in every state will have the same opportunity. If all or part of the ACA is struck down, health insurance exchanges — a forum whose effectiveness is based on transparency in costs, benefits, services and products (such as drugs) — could be in jeopardy.
- A 14-month effort to answer one question: Can shopping for insurance be easy?
- Paper Cuts: Reducing Health Care Administrative Costs
- HHS site tracks government data on health system indicators, such as access to care and costs
- Attributes of a Health Literate Organization
- Data trove may shed light on health-care uncertainties
February 24, 2012
Three highly qualified experts wrote this thoughtful post for the Health Affairs Blog, examining how the recurring brinksmanship attending the SGR “doc fix” distracts from a larger discussion that needs to happen around how to save money on Medicare in the coming decades.
Such a discussion must begin with the recognition that the purpose of the Medicare system is not to save money. If our goal was to spend less, we could abolish the system and spend nothing. The goal of Medicare is to provide protection for elderly Americans against the financial risk associated with illness, and in the process provide beneficiaries with access to high quality care. Our challenge is to accomplish those goals in a fiscally sustainable manner.
The three authors, (Michael Chernew, PhD, Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School; Darius Lakdawalla, Director of Research at the Schaeffer Center for Health Policy and Economics at USC; and Dana Goldman, holder of the RAND Chair in Health Economics and Director of Health Economics at RAND) have written a cogent and thought-provoking argument for the economic necessity of bundled payment systems in Medicare.