Tag: obamacare

Obamacare is about more than pre-existing conditions

September 29th, 2020 by
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I swear to uphold pre-existing condition protections

The Affordable Care Act (aka Obamacare) is a comprehensive law that affects every corner of the healthcare system. It’s unreasonable to expect voters to grasp every nuance of the law, but it is useful to go a step beyond the current public discussion that says, essentially, individual mandate: bad, coverage for pre-existing conditions: good.

Bottom line: opponents can’t simply get rid of Obamacare, declare pre-existing conditions covered and call it a day.

Consider the example of a family friend whose  son was diagnosed with an auto-immune disorder in his early teens. It’s kept under control with a biologic drug that costs over $100,000 per year. There are other costs for diagnostic tests, specialist appointments, and the potential need for hospitalization and surgery. The parents are self-employed; they pay Blue Cross about $30,000 per year for insurance.

In a free market, the family would be uninsurable –or the “pre-existing condition” wouldn’t be covered and the family would face financial ruin. My guess is Blue Cross pays out $100,000 to $200,000 per year for this family –guaranteeing a big loss on the $30,000 premium!

It actually makes sense from the insurance company’s perspective to reject people with pre-existing conditions. After all, you can’t buy life insurance if you’re at high risk of death, you can’t buy homeowners insurance if your house is on fire, and you can’t buy auto insurance to cover a crash you just had.

Under Obamacare we decided as a country that pre-existing conditions would be covered. That wasn’t the consensus before.

But there’s more to Obamacare than just requiring insurance companies to pay for the treatment of pre-existing conditions. Consider some related protections that would evaporate if Obamacare were repealed or ruled unconstitutional.

Obamacare prohibited insurers from doing a lot of other things they used to do. Under the law:

  • You can’t be charged a higher premium because of pre-existing conditions
  • Your premium can’t go up and your policy can’t be canceled because you got sick
  • Insurers cannot impose an annual or lifetime cap on medical expenses

In order for such a system to work, everyone needs to have insurance. That’s where the mandates for employers and individuals to buy insurance come in. The mandates are not about taking away the freedom to decide whether to buy insurance, they are about making sure there are enough healthy people in the system to cover the costs of those who get sick.

The likely alternative to Obamacare isn’t a “free” market. People won’t stand for it. Rather it’s some version of Medicare for All.

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By healthcare business consultant David E. Williams, president of Health Business Group

 

 

 

Check out #CareTalk @HLTH2019

November 7th, 2019 by

CareCentrix CEO, John Driscoll and I talk #CareTalk on the road to the HLTH conference in Las Vegas, where we interviewed some big names include Obamacare architect Zeke Emmanuel, Former CMS Administrator Andy Slavitt, Former Congressman Patrick Kennedy, Walmart Health exec Marcus Osborne, and Boston Children’s Chief Innovation Officer John Brownstein.

You can check out the whole series on the YouTube playlist.

Could Medicaid for all be the answer?

June 14th, 2017 by
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Putting it all together

The Affordable Care Act is a complex law, but for a major piece of legislation that actually made it all the way through a very open legislative process, it’s remarkably coherent. Republicans have tried to sabotage it since before it was passed, and yet it still managed to succeed while a Democratic Administration remained in power. I have predicted in the past that if Republicans actually managed to poison Obamacare that they would come to regret it, because it would lead eventually to the rise of a single payer (i.e., truly socialist) system.

I assumed that the move toward single payer would take a generation to happen and would be driven at the federal level. But Nevada’s quick embrace of Medicaid for everyone surprised me, and it looks like a good option that addressed a lot of tough healthcare financing problems. Even if this Nevada plan ultimately dies on the vine, it provides a template for other states.

Here’s the basic story behind the Nevada Care Plan: Obamacare supporters are worried about what will happen to people who use the exchanges/marketplaces if Trump or Congress is successful in destroying the markets. Trump has been wreaking havoc on the marketplaces by threatening to cut off the subsidies that make premiums and out-of-pocket expenses affordable. The American Health Care Act (AHCA), aka Trumpcare, Ryancare, etc. would be the death knell. As a result, millions of people who get insurance through exchanges today would be out of luck.

A Medicaid for all approach enables people at any income level to buy into Medicaid, paying premiums if their income is too high to qualify under current rules or if they are are otherwise ineligible. Medicaid provides a very comprehensive set of benefits –broader, in some ways, than commercial plans or Medicare. Prescription drugs are covered, and so is nursing home care. Even better for the patient, there are no co-pays or deductibles. Cost per patient is lower than commercial plans or Medicare because Medicaid pays physicians and hospitals rock bottom rates, and by law Medicaid gets the best pricing on drugs.

Interestingly, many of the insurance companies that have succeeded on the exchanges are Medicaid managed care plans like Centene and Molina that have adapted their products to the Obamacare population.

Medicaid for all would not preclude private plans from participating in the market. In fact, its existence could pave the way for a variety of supplemental or upgraded plans that could be purchased by individuals or offered by employers. That approach is similar to what happens in other rich countries like the UK.

In summary, Medicaid for all has some really good features:

  • It bends the cost curve considerably by forcing lower prices on hospitals, physicians and other providers. The main reason healthcare spending is higher in the US than in other rich countries is because unit prices are higher here. In one fell swoop that could be addressed, even if providers aren’t entirely pleased.
  • Drug pricing, which is such a lightning rod, could also be addressed quickly by bringing prices into the Medicaid framework, the one place where they are reasonably well controlled.
  • It would enable everyone who wants to be covered to be covered.
  • It would eliminate the vagaries of the exchanges. No one would need to worry about whether insurance companies would offer plans from year to year.
  • In theory, it could enable states to innovate, assuming that they are given the freedom to modify benefits around the edges.

Admittedly, Medicaid for all might dampen innovation by reducing the financial incentives for the introduction of new drugs and devices and placing more control in the hands of government. But frankly commercial health plans have not done a good job of spurring innovation or cutting costs; few people are likely to shed a tear if their role is reduced.

By healthcare business consultant David E. Williams, president of Health Business Group.

 

Goodbye Obamacare? More like hello single payer!

November 10th, 2016 by

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Once Donald Trump enters office, Republicans will be in a good position to repeal Obamacare, something they have been foaming at the mouth to do for quite some time. Democrats might be able to filibuster to prevent an outright appeal, although the majority has other ways to gut the law, such as the reconciliation process.

I say let them go ahead and repeal Obamacare without putting up a big fight. As Trump told 60 Minutes, “I am going to take care of everybody. Everybody’s going to be taken care of much better than they’re taken care of now.” He also promised to provide “quality, reliable, affordable health care.”

I look forward to hearing the great ideas revealed by Trump and the Republicans in Congress. If they can do what they say then I’m entirely in favor of it and will give them the credit that’s due.

Meanwhile, I’m going to feel free to criticize the stock initiatives of the Republican party, which were largely mirrored in Trump’s campaign statements:

  • Repeal Obamacare, by which they really mean keeping the popular pieces like making health plans accept members with pre-existing conditions without charging higher premiums, but at the same time jettisoning the unpleasant aspects such as the individual mandate and taxes that help subsidize coverage. Sounds nice, but without a mandate, plans will suffer from adverse selection, premiums will skyrocket, and people will be left uninsured
  • Let health plans sell insurance across state lines. This one is highly touted but in reality it’s a big yawn. The plans themselves have little appetite for moving across borders and even if they did, most new entrants won’t be able to establish strong enough negotiating positions in the markets to bring down premiums
  • Change Medicaid to block grants so states can do what they want with the money. This isn’t a terrible idea because it could allow states to more freely innovate and tailor Medicaid to meet local needs. In practice it’s likely to be used just as a way to screw the poor
  • Promote drug re-importation. Remember the senior citizen buses to Canada in the 1990s before Medicare Part D and the mail order pharmacies with drugs supposedly from Canada, that disappeared once Obamacare required drug coverage? Well, the GOP might bring these back. But the drug market has changed and the most pricey new meds won’t necessarily be attainable from abroad anyway
  • Let individuals who buy their own health insurance take a tax deduction the way businesses already do. Again, sounds great in theory but it’s a regressive approach that rewards higher income people who are in the top tax brackets. It also encourages premiums to rise and widens the budget deficit. The Cadillac tax or some variant that limits deductibility by businesses is more fiscally responsible
  • Expand Health Savings Accounts (HSAs), allow them to be shared among family members and passed on as part of one’s estate. Not a bad idea but hardly a game changer in its own right

Remember, thought, that the Republican ideas above were presented by conservatives, while Trump himself has been at least a liberal and frankly more of a socialist when it comes to health care policy, at least based on his earlier writings. Once he learns that the ideas of the conservatives in Congress won’t produce universal coverage, he may well go back to improving –instead of replacing– Obamacare, moving to a Canadian style single payer system, or opening up Medicare for all, just like Bernie and much more radical than Hillary.

I can’t wait to see how it all plays out.

Image courtesy of Thanamat at FreeDigitalPhotos.net


By healthcare business consultant David E. Williams, president of Health Business Group.

 

How narrow is a narrow network?

July 15th, 2015 by
Is narrow good or bad?
Is narrow good or bad?

Health Insurance Exchanges are one of the most interesting and potentially impactful features of the Affordable Care Act. The exchanges allow eligible individuals to compare health plans on an apples-to-apples basis and choose the one that’s most appropriate for their individual circumstances.

Health plans are interested in participating in these exchanges because they offer one of the few sources of member growth. Federal subsidies make exchange plans affordable for middle income buyers who make too much to qualify for Medicaid.

Not surprisingly, exchange customers are price conscious shoppers. That means plans have to work hard to offer low enough premiums to be competitive. The Affordable Care Act outlaws some of the ways health plans used to stay competitive, such as charging different prices based on health status, refusing to cover certain patients, making exclusions for pre-existing conditions, and offering skinny benefits packages.

One of the few things plans can do is to offer different networks of physicians, hospitals and other providers. Exchange plans have embraced the concept of “narrow networks,” which offer a smaller than usual collection of providers as a way to hold down costs. I have heard and seen a lot of anecdotes about what this means in practice, but now there is some real data.

Avalere has conducted an analysis of health plans in the top five exchange states to compare the size of exchange plan networks with the size of commercial networks in the same geographies. Sure enough, the plans included an average of 34 percent fewer providers on average, and 42 percent fewer oncologists and cardiologists.

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Although anyone’s initial reaction is that a bigger network is better, that is not automatically the case. If the narrower networks exclude the wasteful, low quality providers the result could be increased quality and cost effectiveness.  If network inclusion is based just on unit costs, then who knows the outcome on quality. And if fewer providers means it’s harder to get an appointment, that could be problematic. Patients might even end up spending out-of-pocket for out-of-network coverage.

I asked Avalere vice president Elizabeth Carpenter to answer a few questions that immediately came to mind: You report the average, but how much variability is there? How have network sizes changed since last year? How often do exchange members go out-of-network?

Elizabeth answered the first question as follows, “Overall, we did see noticeable variation among the five states we examined. However, interestingly, it was not consistent across provider type. For example, exchange plans in one state may cover a higher percentage of primary care physicians than another state’s exchange plans but may cover a lower percentage of hospitals.”

As I expected, Avalere hasn’t yet done the work to answer the other questions. Clearly there are lots of interesting studies to be done on the impact of exchange plans on costs, quality, and the overall insurance market. I eagerly await them.

Image courtesy of marcolm at FreeDigitalPhotos.net

By healthcare business consultant David E. Williams, president of Health Business Group.

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