Nothing… shit happens and this kid is now a pre-exisiting condition that will get underwritten out of any pool for the rest of his life.
I am a student in the doctoral program at the Duke University Department of Population Health Sciences. I am working towards my my doctorate in Health Services Research with a policy focus. I am fundamentally fascinated by insurance markets, consumer choice and the navigation of complex choice environments. I'm currently RA-ing at the Duke Margolis Center for Health Policy.
I used to be Richard Mayhew, a mid-level bureaucrat at UPMC Health Plan. I started writing here and have not found a reason to stop.
Conflicts of interest: Previously employed at UPMC Health Plan until 12/31/16. I also worked full time as a research associate at the Duke University Margolis Center for Health Policy. I have received direct funding from the National Institute for Healthcare Management, and I have been on projects funded by the Rockefeller Foundation, Kate B. Reynolds Charitable Trust, Gordan and Betty Moore Foundation, Duke University Health System, CMMI, and various value based payment consortiums. I serve as a consultant on a grant from the Commonwealth Fund and have acted as a consultant to several ACA insurers.
Research Production is here: https://scholar.google.com/citations?user=zof9b4IAAAAJ&hl=en
David Anderson has been a Balloon Juice writer since 2013.
The voice of experience versus buzzwords
There is always an XKCD for everything:
Here to Help https://t.co/Zk5zGAZdmd https://t.co/zWFbcThhdz pic.twitter.com/2O5oe5T0oG
— XKCD Comic (@xkcdComic) May 1, 2017
If there was an easy solution it would have been implemented a long time ago in most circumstances.
Now get off my lawn and enjoy your open thread.
The voice of experience versus buzzwordsPost + Comments (127)
Once more dear friends….
Call Congress —
? This is a red alert: PENCE is calling moderates and telling them they have the votes. Only a TIDAL WAVE of calls tomorrow can stop them. ?
— Topher Spiro (@TopherSpiro) April 30, 2017
The House GOP thinks that it might have either the votes or is close enough to having the votes for the AHCA that the last hold-outs will cave rather than have their arms twisted twice around their ears and a reactionary primary challenger. They also think that this is the last week or so where their calendar lines up for a double reconciliation for 2017. So call Congress.
Update
Health care lobbyist who has been reliable throughout #AHCA debate thinks House Rs are within 6 votes
— Dylan Scott (@dylanlscott) May 1, 2017
Right now the arm twisting is going on full force, so they need calls to say that their district just won’t let them kick people for tax cuts.
Update 2
BREAKING: Rep. Billy Long (R-Mo.) tells me he's a NO on new GOP health bill! Brings to 22 the number of NO votes https://t.co/MFBvOPW9qP
— Scott Wong (@scottwongDC) May 1, 2017
Conservation of issues
.@SenAngusKing It all comes down to money – add enough into the system and the details of what you call it (hidden pool, reinsurence etc) less important
— Mitchell Stein (@mhstein) May 1, 2017
The core issue of the AHCA is not the decision to gut pre-existing conditions protections by gutting community rating requirements where everyone has to be offered a policy at the same price. It is the decision to pull out almost a trillion dollars of spending on healthcare and redistrisbute those resources towards upper income tax cuts. Everything else is a detail.
Those details matter. Paying for healthcare at Medicaid rates instead of rental network commercial rates is far cheaper and buys a lot more units of service. Using smart value based insurance design buys more efficient and effective units of care at a given price. Visible or invisible risk sharing and risk pools alters incentives of carriers. Market design matters.
But all of this matters at the margin. The core short run problem in healthcare is the conservation of issues. No matter what the law is in July, the same people will present with the same problems. The question is who bears the cost and how it is financed. The pre-ACA system had employers a significant element of the cost if the individual had a good job. Medicare and thus society as a whole bore the cost if the individual was old or permanently disabled. Medicaid and CHIP bore the cost if the individual was a kid or pregnant or in a nursing home or severely ill. And then fifteen to twenty percent of the people bore all the cost and the risk themselves. The ACA has altered that equation. The AHCA will push a massive amount of risk back onto that fifteen to twenty percent of society plus add some more people at full risk of their own health.
That is one way to lower federal government costs. But the issues are conserved. It is just a cost shift to people without the reserves to actively handle risk efficiently. The issues don’t go away because the money goes away.
Networks and the credit card model for health insurance
If you loved credit card companies and how they all were headquartered in South Dakota to take advantage of their very lender friendly laws before the passage of the CARD Act, you will love the health care vision of Rep. Jim Jordan.
Jim Jordan lays out his understanding: allowing people to buy across state lines means if one state guts pre-existing conditions…
— Matt Fuller (@MEPFuller) April 26, 2017
The vision is that the House Freedom Caucus/MacArthur Amendment is attached to the AHCA. The AHCA passes the House and Senate without major modification. At least one state opts for the waiver to allow for medical underwriting and gutting essential health benefits by replacing a federal standard with a state standard. A minimal essential health benefit package could still include prescription drugs but only require generic drugs and very common, low cost brand drugs. Specialty drugs including most chemotherapy agents, cystic fibrosis treatments, Hep-C cures and coagulation disorder treatments could be excluded from the minimally required list.
A second bill would also be passed that would allow for insurance to be sold across state lines. And that gets us to the individual health insurance market looking like the pre-CARD Act credit card market. Most states may still require guarantee issue and community rating but the states mandating these restrictions either will not have any in-state insurers offering products in the individual market or their locally regulated individual market effectively work as a high risk pool.
Matthew Fiedler at Brookings has a good analysis on the race to the bottom in an opt-out state:
In brief, healthy people would have a strong incentive to “opt out” of the community-rated pool and instead pay a premium based on health status. With healthy enrollees opting out of the community-rated pool, community-rated premiums would need to be extremely high, forcing sicker individuals—including those with continuous coverage—to choose between paying the extremely high community-rated premium or being underwritten themselves. Either way, people with serious health conditions would face prohibitively high premiums. As a result, community rating would be eviscerated—and with it any meaningful guarantee that seriously ill people can access coverage.
And if a state elects to operate a waiver in an environment where insurers can choose the state of regulation, that state will effectively gut community issue across the country.
But.. but… but… what about networks?
That is a common argument as to why selling across state lines would not be attractive. In the current world of guarantee issue and community rating, this is a strong defense. Networks are tough to assemble and expensive to build. We know there is a chicken or an egg problem. Large membership is needed to get good provider rates. Good provider payment levels are needed to offer attractive premiums that leads to large membership numbers. A new insurer trying to move into a new state has to build a network. And it has to build a network by either going super skinny or by being willing to lose significant money for several years to buy membership.
But that is under guarantee issue/community rating rules. Networks are not a blocking force for cream skimming carriers.
If an insurer wants to expand out of its home region in Rep. Jordan’s vision, they can either build a network organically or they can rent a network. Rental networks are very common. They are how regional carriers offer national emergency room coverage. They are how smaller carriers offer very high end specialty care. The provider are paid at a very high level. Some rental network contracts are full usual and customary, others are full billed charges, some offer a discount on one of those two benchmarks and others are 500% of Medicare. These are expensive networks where regional carriers work very hard to minimize the number of claims paid to that network.
If a minimally viable network can be rented even at an extremely high per unit rate, and the plan can medically underwrite to only offer coverage to people who will never use the skimpy, practically inadequate, high cost network, this works as a business model.
If an individual has a complex medical condition during the contract year, the insurer has significant claims expense but since the network is extremely unattractive to individuals with complex care needs, the one time catastrophic expense will leave the plan at the next open enrollment if they can afford to do so or if they are in a policy that does not have guarantee renewability.
This is effectively the Assurant business model from the pre-ACA status quo. They aggressively underwrote policies to only include healthy people, they offered very low rates and access to a very expensive to them network and seldom payed a claim as their covered population just did not use services.
Networks are not a barrier to entry for carriers that think they can aggressively underwrite.
Networks and the credit card model for health insurancePost + Comments (47)
Keep swimming, just keep swimming
GOP looks short on repeal vote https://t.co/MD1Mrks5G4
— POLITICO Pulse (@POLITICOPulse) April 27, 2017
Keep on swimming, keep on calling
Update 1
Keep on calling:
Mario Diaz-Balart, who was a yes on previous AHCA, now wavering with MacArthur amendment.
"At this stage, I'm not seeing much that I like."
— Matt Fuller (@MEPFuller) April 27, 2017
The vulnerable Republicans are getting squeezed hard, so time to pop them like a zit three days before prom.
Call Congress
In a way, screwing with the individual market is a smokescreen. AHCA still ends Medicaid expansion and slow-strangles all Medicaid.
— xpostfactoid (@xpostfactoid) April 27, 2017
Medicaid is the key. The AHCA is still cutting $800 billion plus from Medicaid over a decade and this is the point of resistance for the Tuesday Morning Group, a group of 40 to 50 less conservative Republicans who are likely to represent districts that are vulnerable in wave elections.
Let them know that this is important and that killing Medicaid kicks them out of a job in 2018.
@jamiedupree @Morning_Joe Dent claimed more NO votes since the news.
— Millard Fillmore (@MillardFillmor1) April 27, 2017
With Chaffetz going out for surgery, Ryan can afford to lose 21 votes assuming every Democrat shows up. (Any Democrat who is not in the ICU or at the funeral of spouse and does not vote should be primaried). The House Freedom Caucus might still have two or three No Votes, Rep. Massie from Tennessee is still a NO vote. The Tuesday Morning Group needs to supply at least seventeen or eighteen No votes to defeat the legislation.
.@RepCharlieDent Dent says MacArthur Amendment "actually takes us in the wrong direction" & "further weakens protection for people w/ preexisting conditions"
— David Wright (@DavidWright_CNN) April 27, 2017
Call Congress and tell them what you think…