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The Dane Difference: Why Are Dane County’s Exchange Premiums Lower?


December 18th, 2014

During the next few years, states and the federal government will likely seek solutions to control costs and improve quality in the Affordable Care Act (ACA) health insurance marketplaces. State and federal policymakers should look carefully at the decades-long success of the Wisconsin State Employee Health Plan (WSEHP) in controlling the rapid rise of health insurance costs in Dane County—where Madison, Wisconsin’s state capital, and the University of Wisconsin, are located—as they seek to improve the effectiveness of the ACA’s marketplaces and health insurance costs in general.

The WSEHP consistently obtains substantially lower health insurance premiums in Dane County than in Wisconsin’s 71 other counties. In 2013, an individual plan in the WSEHP was about $1,400 cheaper annually in Dane County, or 16 percent less than the average in the rest of the state; and a family plan was about $3,500 cheaper, also a 16 percent difference. This Dane difference has existed for at least a decade, with the gap slowly widening over that time.

Why does WSEHP get much lower premiums in Dane County than in the state’s 71 other counties, and what lessons can policymakers learn from this difference?

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Implementing Health Reform: Enrollment And Reenrollment For 2015 (Updated)


December 16th, 2014

The December 15, 2014 deadline for reenrolling in qualified health plan (QHP) coverage to assure continuous coverage as of January 1, 2015 has come and gone.  Individuals who were enrolled through the federally facilitated marketplace (FFM) for 2014 but did not return to the marketplace to shop for 2015 plans will be passively reenrolled in their 2014 plan or in a plan similar to it.  The 2015 open enrollment period lasts through February 2015, and individuals can return to the FFM at any time before then to change plans.  But the change will not be effective for January 1.

A number of state-operated exchanges—including New York, Massachusetts, Idaho, Rhode Island, Washington, Minnesota, and California—have reportedly either extended the date by which individuals can enroll or reenroll and still have coverage effective January 1 or given individuals who had begun the enrollment process as of December 15 extra time to complete the process for January 1 coverage.  The FFM has not extended the deadline.

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Implementing Health Reform: Beneath The Hood Of The ‘Cromnibus’


December 12th, 2014

The “Consolidated and Further Continuing Appropriations Act, 2015” or “Cromnibus” legislation moving through Congress contains a number of provisions that relate to the implementation of the Affordable Care Act (ACA).

Risk Corridors

The provision that has been most widely noted so far requires the risk corridor program to be budget neutral for 2014. The risk corridor program moves funds from qualified health plans (QHPs) that have lower than anticipated allowable costs to those with higher than anticipated allowable costs. Section 1342 of the ACA, which creates the risk corridor program, contains no explicit appropriation.

A report issued earlier this year by the Government Accountability Office (GAO), which is the final authority on the legitimacy of government expenditures, determined that the continuing resolution for 2014 permitted the Centers for Medicare and Medicaid Services (CMS) to fund the risk corridor program for 2014 both from payments collected from plans with lower than anticipated costs, which were properly characterized as user fees, and from funds transferred from other CMS accounts. No risk corridor payments were in fact payable in 2014, however, as risk corridor payments will first be made in 2015 for 2014.

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Two Theologies Have Blocked Medicare-For-All


December 11th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

In the 50 years since Medicare was enacted, Congress has never seriously considered extending Medicare to all Americans, nor even lowering Medicare’s eligibility age below 65. This pattern persisted even during those periods when national health insurance was at the top of the national agenda. This is not what the original advocates of Medicare anticipated when Medicare was enacted in 1965. They saw Medicare as the cornerstone of a national system of health insurance that would eventually cover all Americans.

Two Myths that Undercut Medicare-for-All: Managed Care and Competition

In the paper we presented at the Yale conference, we reviewed short- and long-term factors affecting the debate about Medicare over its lifetime, and then turned to a discussion of two long-term factors: the rise of what came to be called the managed care movement, and the resurgence of a longstanding campaign promoting the idea that competition can right the wrongs of American medicine.

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What To Watch For During This Year’s Open Enrollment Period: Lessons From The Health Reform Monitoring Survey


December 10th, 2014

The Obama Administration recently lowered its expectations on the number of individuals that are likely to enroll in health insurance plans through the Marketplace by the end of 2015—suggesting that it might be more difficult than expected to find and enroll remaining uninsured residents while retaining people who signed up during the first open enrollment period (New York Times; Wall Street Journal; Washington Post’s “Wonkblog”).

One potential barrier to enrollment is low levels of Marketplace awareness among the uninsured: September 2014 estimates from the Urban Institute’s Health Reform Monitoring Survey (HRMS) indicate that only 52 percent of uninsured adults reported hearing some or a lot about the health insurance Marketplace created by the Affordable Care Act (ACA). Despite this large knowledge gap, awareness of the Marketplace has improved since last September, when only 30 percent of the uninsured reported hearing some or a lot about the Marketplace prior to the first open enrollment period.

While increasing awareness of the Marketplace will continue to be important as the second open enrollment period unfolds, there are two additional issues that may determine how many more uninsured people actually gain coverage this year. First, will the remaining uninsured be reluctant to seek coverage and enroll during the current open enrollment period, and if so, why? Second, for people seeking information on health plans, what sources of information are they likely to turn to, and will those sources be adequate to meet the demand?

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Children’s Health: Health Affairs’ December Issue


December 8th, 2014

The December issue of Health Affairs includes a number of studies examining current threats to the health and health care of America’s children, and what can be done to meet their needs within an ever-evolving health care system. Some of the subjects covered: the role of Medicaid in reducing early-term elective deliveries; how pediatric services are covered in the state insurance Marketplaces; Medicaid spending on children with complex medical conditions; and the effect of abuse and neglect on children’s health and school engagement.

This issue of Health Affairs is supported by The W.K. Kellogg Foundation as well as by the Children’s Hospital Association, The David and Lucile Packard Foundation, Nemours, the Annie E. Casey Foundation, and The Child and Adolescent Health Measurement Initiative.

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Health Affairs Web First: National Health Spending In 2013 Continued Pattern Of Low Growth


December 3rd, 2014

A new analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) estimates that in 2013 health care spending in the United States grew at a rate of 3.6 percent in 2013 to $2.9 trillion, or $9,255 per person. The increase was slower than the 4.1 percent growth in 2012 and continued a pattern of low growth that has held relatively steady at between 3.6 percent and 4.1 percent annual growth for five consecutive years.

The continued low growth in health spending is consistent with the modest overall economic growth since the end of the recent severe recession and with the long-standing relationship between economic growth and health spending—particularly several years after the end of economic recessions, when health spending and overall economic growth tend to converge. As a result, health spending’s share of the nation’s gross domestic product (GDP) remained at 17.4 percent in 2013.

The study is being released today by Health Affairs as a Web First and will appear in the January issue of Health Affairs. It was discussed this morning at a reporters briefing in the National Press Club.

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The Family Glitch, Other Thorny Children’s Coverage Policy Issues, And The Future Of CHIP


December 3rd, 2014

Editor’s note: For more on the topic of children’s health, stay tuned for the December issue of Health Affairs, set to be released next week.

Health Affairs’ recent policy brief on the family glitch highlights one of the key issues affecting how well children will be served in the new post Affordable Care Act (ACA) coverage landscape. Many observers thought that with the creation of health insurance marketplaces and subsidies for low-income families, there would no longer be a need for the Children’s Health Insurance Program (CHIP), which was created in 1997 to provide health coverage for uninsured low-income children.

Together with its larger sister program, Medicaid, CHIP has been quite successful in achieving this legislative goal. From 1997 to 2012, the national rate of uninsured children was cut in half from 14 to 7 percent. Yet, 7 million children still remain uninsured. The ACA, meanwhile,  was aimed primarily at reducing numbers of uninsured adults. The question now is, what policies and systems are needed to sustain and further the progress that has been made to increase rates of children’s insurance?

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Implementing Health Reform: Federal Exchange Reenrollment And More (Updated)


December 2nd, 2014

On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) released a Guidance for Issuers on 2015 Reenrollment in the Federally facilitated Marketplace (FFM).  This guidance sets out in great detail—with clarifying examples—the process which the FFM and insurers will use to send and receive enrollments and reenrollments for 2015, including the process that the FFM will use to communicate to an insurer when a 2014 enrollee selects a different insurer for 2015 coverage.  The guidance is primarily directed at insurers but should also be of interest to consumers and those who are assisting them.  It demonstrates, I believe, a much higher degree of planning and intentionality than was evident in the 2014 open enrollment period, when enrollment rules often seemed to be developed on the fly.

This post describes the reenrollment guidance, as well as initial enrollment figures for the FFM and other ACA-related developments.

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Implementing Health Reform: Minimum Essential Coverage And The Multi-State Plan


November 24th, 2014

Two earlier posts this past weekend analyzed the massive Department of Health and Human Services 2016 Benefit and Payment Parameter Proposed Rule, released on November 21.  Also on November 21, the Internal Revenue Service of the Department of the Treasury released a final rule on Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals, while the Office of Personnel Management released proposed modifications to the multi-state plan (MSP) program rule.  This post explores these rules.

Minimum Essential Coverage

The ACA requires Americans to either maintain “minimum essential coverage” (MEC) or pay a tax.  There are a number of exceptions to the requirement, however, and the concept of MEC can become quite complicated.  The final rule published by the IRS provides guidance as to the meaning of MEC and the rules governing some of the exceptions.

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Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Insurance Provisions


November 23rd, 2014

On November 21, 2014, the Centers on Medicare and Medicaid Services of the Department of Health and Human Services released its proposed Benefits and Payment Parameters (BPP) RulePart I of this post examined the benefit provisions of this proposed rule. This post will analyze the parts of the rule that deal with the insurance market reforms; the reinsurance, risk adjustment, and risk corridor programs; health insurance rate review; and the individual and SHOP exchanges.

New Definitions Of ‘Plan’ And ‘State’

The regulation begins with a modified definition of the term “plan.”  The terms “plan” is important in the ACA regulations.  A plan has been defined, with respect to a health insurer, as the combination of a benefit package, metal tier, and service area.  The new definition adds to this combination cost-sharing structure and provider network, so that plans that differ in their cost-sharing structure (deductibles, copayments, or coinsurance) or provider networks are different plans, even if they are offered at the same metal tier.  This definition becomes important, for example, in determining whether a plan offered outside the exchange is the same as a qualified health plan (QHP) offered in the exchange and can thus participate in the risk corridor program.  The proposed regulations later propose that the unreasonable rate review regulation applies at the plan level.

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Implementing Health Reform: 2016 Benefit And Payment Parameters Proposed Rule, Consumer Provisions; Hardship Exemptions


November 22nd, 2014

On November 15, 2014, the marketplaces reopened for 2015.  Anecdotal reports indicate that in most places enrollment and reenrollment are running smoothly.  But the Centers of Medicare and Medicaid Services (CMS) of the Department of Health and Human Services (HHS) is looking forward to 2016.  On November 21 CMS published its massive 2016 Notice of Benefit and Payment Parameters (BPP) Proposed Rule  with accompanying fact sheet.  It also published the draft 2016 actuarial value calculator and draft actuarial value calculator methodology for 2016.  Finally, CMS published a guidance on hardship exemptions for certain individuals.

Not to be outdone, the Department of the Treasury, Internal Revenue Service released its final regulation on Minimum Essential Coverage and other Rules Regarding the Shared Responsibility Payment for Individuals, together with a Notice regarding Individual Shared Responsibility Payment Hardship Exemptions that May be Claimed on a Federal Income Tax Return Without Obtaining a Hardship Exemption Certificate from the Marketplace and a Revenue Procedure setting out indexed adjusted percentages of income that will be used for determining the level of contributions expected of individuals before premium tax credits become available, the affordability threshold for the shared responsibility payments unaffordability exemption, and the threshold for determining whether employer coverage is affordable for purposes of determining eligibility for tax credits.

Finally, the Office of Personnel Management released a lengthy proposed rule proposing modifications in the multi-state plan program.  These rules, proposed rules, and guidances will be addressed in a series of posts over the next several days.  This post will address primarily the consumer-facing provisions of the BPP proposed rule, focusing on changes in benefits.  A second post will follow, discussing the provisions of the rule more relevant to insurers, such as proposed changes in the reinsurance, risk adjustment, and risk corridor rules.  A final post will discuss the IRS rule, which is primarily a finalization of proposals and guidances already made public, and the OPM multi-state plan rule.

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New On GrantWatch Blog


November 21st, 2014

Health Affairs GrantWatch Blog brings you news and views of what foundations are funding in health policy and health care.

Here are the most recent posts:

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Challenges For People With Disabilities Within The Health Care Safety Net


November 18th, 2014

Medicare and Medicaid were passed to serve as safety nets for the country’s most vulnerable populations, a point that has been reemphasized by the expansion of the populations they serve, especially with regards to Medicaid. Yet, even after 50 years, the disabled population continues to be one whose health care needs are not being met. This community is all too frequently left to suffer health disparities due to cultural incompetency, stigma and misunderstanding, and an inability to create policy changes that cover the population as a whole and their acute and long-term needs.

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Analysis Of Medicare Spending Slowdown Leads Health Affairs Blog October Most-Read List


November 17th, 2014

Loren Adler and Adam Rosenberg’s examination of the causes of slower Medicare spending growth was the most-read Health Affairs Blog post in October. Their post was followed by Jeff Goldsmith’s interview with former Kaiser Permanente CEO George Halvorson.

Next on the top-ten list was J. Stephen Morrison’s look at the US response to Ebola and the role of Centers for Disease Control and Prevention Director Tom Frieden, followed by Tim Jost’s post on reference pricing and network adequacy.

The full list is below:

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How Consumers Might Game The 90-Day Grace Period And What Can Be Done About It


November 17th, 2014

Under the Patient Protection and Affordable Care Act (ACA), individuals receiving a federal subsidy are entitled to a three-month premium nonpayment grace period. As long as such an individual has paid at least the first month’s premium of the year, in any subsequent month the individual has three months to make the premium payment before coverage is terminated.

The grace period has obvious benefits for consumers, yet as a recent Health Affairs Health Policy Brief describes, this provision of the law has created significant apprehension among doctors and other health care providers who worry they will go unpaid when coverage is retroactively terminated for their patients. Unfortunately, as we explain here, this provision could have even broader adverse implications for the health care system.

The grace period law could encourage subsidized individuals to regularly pay only nine months of premiums and receive, in effect, twelve months of coverage. Should this gaming become widespread it could increase premiums (perhaps by as much as several percentage points) for everyone who purchases coverage in the individual (non-group) exchanges.

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Implementing Health Reform: Setting The Stage For 2015 Open Enrollment


November 16th, 2014

On November 15, 2014, the Affordable Care Act marketplaces reopened for 2015 enrollment, the second year of ACA coverage.  On November 14, the Centers for Medicare and Medicaid Services and the Office of Personnel Management released guidance and reports laying the groundwork for the second year.  This post covers these and notes briefly a couple of ACA court decisions that also came down on November 14.

Plan data release.  CMS released a number of data files containing information on plans available on the marketplaces for 2015 and their rates.  First, the release includes “landscape files” including plans available by county along with premium and cost-sharing data for selected scenarios and services for the 2015 plan year for the federally facilitated marketplace and federally facilitated SHOP.

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Risk And Reform Of Long-Term Care


November 14th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

The 50th Anniversary of Medicare and Medicaid offers an opportunity to reflect on how U.S. social policy has conceived of the problem of long-term care.

Social insurance programs aim to create greater security—typically financial security—for American families (See Note 1). Programs for long-term care, however, have had mixed results. The most recent attempt at reform, which Ted Kennedy ushered through as a part of the Patient Protection and Affordable Care Act (ACA), called the CLASS Act, was actuarially unsound and later repealed. Medicare and especially Medicaid, the two primary government programs to address long-term care needs, are criticized for failing to meet the needs of people with a disability or illness, who need long-term services or supports. These critiques are valid.

Even more troublesome, however, long-term care policy, especially in its most recent evolution toward home-based care, has intensified a second type of insecurity for Americans. This insecurity arises when someone becomes responsible for the long-term care of a loved one. In a longer forthcoming article, I argue that this insecurity—which I call “next-friend risk”—poses a serious threat to Americans and needs to be addressed. (I borrow the phrase next friend from a legal term for a person who in litigation represents someone with a disability who is otherwise unable to represent him or herself. Although not a legal guardian, the next friend protects the interests of an incompetent person.)

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High Quality, Affordable Care: Making The Case For Smarter Networks


November 13th, 2014

Narrow networks are one means health insurance plans have used to mitigate increases in health insurance premiums. These networks have become more prevalent since the expansion of coverage brought about by the Affordable Care Act (ACA). But these narrow networks have given rise to complaints that consumers are being denied access to, and choice of, providers. These complaints are causing policymakers to consider, and in some cases adopt, new laws and regulations on network adequacy.

In the following blog post, I argue that policymakers should consider that there are different types of narrow networks and should be careful not to adopt policies that inhibit new contractual arrangements among payers, providers, and hospitals, such as Accountable Care Organizations, which hold the promise of better quality care at lower cost. At the same time, issuers must provide accurate and current information on which hospitals and providers are in the network and are accepting new patients, and must make the case that smarter networks can lead to better outcomes at lower cost.

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The Short-Term And Long-Term Outlook Of Drug Coupons


November 12th, 2014

In the October 2014 Health Affairs article, “Specialty Drug Coupons Lower Out-Of-Pocket Costs And May Improve Adherence At The Risk Of Increasing Premiums,” Catherine Starner and coauthors explore the relationship between drug coupons and specialty drugs. Specialty drugs, primarily injectables and biologics, are costly drugs used to treat complicated, chronic conditions that typically require special handling, administration, and monitoring. Starner et al. report that specialty drugs have an average monthly cost to patients and payers of about $3,500.

In their innovative study, Starner et al. find that nearly half of the patients in their sample who were prescribed specialty drugs used personal drug coupons to reduce their personal financial responsibilities. Coupons come in the form of maximum copay and monthly savings cards, and can be accessed from the brand-name manufacturer’s website, printed out, and cashed in at the pharmacy.

Manufacturers promote drug coupons as supplementary patient assistance programs that can fill gaps in insurance coverage by reducing individual patients’ responsibilities for out-of-pocket health care costs related to high-cost specialty drugs or other pharmaceutical products. For example, patients taking etanercept (Enbrel), an expensive biologic specialty drug indicated for rheumatoid arthritis, can receive savings via the Enbrel Support plan, which reduces the monthly co-pay to $0 for the first six months and $10 per month thereafter.

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