America’s Health Policy; It’s Literally All Over the Map

After the furor and failure of the Republican effort to repeal the Affordable Care Act (ACA), an alternative conservative strategy emerged that would allow states to design and run their own health care programs for the individual insurance market and the Medicaid program. Congress could then focus on legislative matters of greater importance, reduce administrative responsibility, and transfer the issue of health care delivery and management to the states.  This is being accomplished in two principal ways:  Executive order and regulation (at federal and state levels) and through U.S. Department of Health and Human Services (HHS) 1115 Waivers.  Greater state flexibility in the provision of health care services can be positive, as evidenced in the State of Maryland’s use of “smarter planning” which is achieving savings and increased efficiency.  However,  there will also be turmoil and problems as health care delivery shifts from a centralized model such as the ACA, to state management,  both positively and negatively.   The new steward of HHS,  Secretary Alex Azar, appears to be a knowledgeable, serious appointee who is focused on developing big changes, which would be a positive development.   This is an evolving process and there are political headwinds and logistical hurdles.

Medicaid is at the forefront of change for states that initially refused to expand. These states are aggressively pursuing 1115 waivers and regulatory changes to re-design health care benefits and eligibility requirements that involve significant changes in Medicaid policy.  The prize?  Federal funding for local health care service for the poor and disabled and greater control over who is eligible for Medicaid and what is required for eligibility – long a Republican sticking point.  State waivers were originally designed under the ACA for research and demonstration purposes, however, the Trump administration is allowing greater experimentation by states both for Medicaid and the individual health care market.  There is much that can be learned from state Medicaid experiments, but only if they are fairly evaluated.  The waivers are also being employed to develop lower-cost, lower-benefit plans for the individual health insurance market that will test the constitutional limits of federal health insurance requirements.  New concepts are emerging from new types of providers, corporate experiments and membership concepts through religious organizations and others.

Kentucky was the first state to request and receive a Medicaid waiver, launching a significant overhaul of traditional Medicaid policy and benefits.  Changes included:  work requirements (euphemistically called Community Engagement Requirements), changes to dental and vision benefits tied to “My Rewards Points,” premium payment requirements, deductibles, and elimination of retroactive eligibility.  Re-enrollment for eligibility requires extensive paperwork by Medicaid recipients, and missed enrollment deadlines or incorrectly executed paperwork can result in penalties, including loss of coverage.  Health care analysts predict that difficulty in meeting compliance requirements will be a major predictor of loss of coverage eligibility and several lawsuits have been filed.  Kaiser Health Foundation estimates Kentucky enrollment could decline by year five in excess of one million persons.  Where will these people turn for health services if they lose Medicaid coverage?  EMTALA (Emergency Medical Treatment and Labor Act) is a safety net for the indigent, but health care providers will aggressively seek payment for cost of services as  EMTALA does not reimburse for indigent care burdening hospitals and patients alike.  A recent uproar occurred when Tennessee announced their plan to use Medicaid dollars to pay for the more expensive administrative costs for development and supervision of their new eligibility requirements which would result in fewer people being served.  Predictably, Republicans are pushing work requirements for Medicaid eligibility in other states but they are having mixed results.  Arkansas, Idaho, Indiana, and Iowa jumped on the Medicaid waiver train after Kentucky launched its program.  Significantly, governors of states that receive federal approval via the 1115 health waiver plan are able to implement approved changes by executive order without legislative approval.   Still, not all governors are embracing Medicaid expansion.  Maine is the first state to approve Medicaid expansion by popular referendum, over the strong objection of Governor Paul LePage.

Individual health plans offer the second major area for potential change.  In the traditional health insurance market, BlueCrossBlueShield (BCBS) proposed lower cost, basic coverage plans in Idaho which did not include all of the federally required Essential Health Benefits.  These plans, entitled “Freedom Blue;” are a return to health insurance of yesteryear, when cost caps, medical underwriting, exclusions, and bare-bones coverage were common.  They are also more affordable and will compete directly with ACA marketplace plans for subscribers.  Lower premiums (achieved through lower benefits), will drain younger, healthier persons from ACA marketplace plans leaving sicker persons in the ACA plans with inevitable premium increases.  A legal challenge to Idaho’s Freedom Blue plans resulted in denial of approval by HHS Secretary Azar for non-compliance with federal benefit requirements.  However, HHS offered a “work-around” that will allow them to offer lower-cost health insurance plans that “skirt” coverage of the ACA Ten Essential Health Benefits but are in effect for shorter time periods.  There is great concern that many people will leave the ACA marketplace plans for premium savings and experience unexpected health expenses as well as further erode the stability of the ACA.

Big businesses are exploring changes through self-insurance.  Leading the way are Amazon, Berkshire-Hathaway, and J.P. Morgan-Chase, who are teaming up to test a new concept in self-insured plans that removes profit, utilizes enhanced technology, and applies better management.  Their goal is to offer their employees affordable, quality health coverage while cutting costs for their businesses.  Their experiment will be watched closely by other large employers.  Amazon’s Jeff Bezos plans to take the health care experiment a step further by entering the prescription drug provider market, medical equipment provision, and other areas that fall within health care delivery.  Amazon already has the technology, warehouse distribution system, customer base, and negotiating strategy to move into direct competition with major pharmaceutical providers.

One of the more unusual concepts in the individual healthcare arena are religious health care memberships.  Organized by and for their members, they are not legally “insurance providers;“ rather, they are a social contract between members. These health care memberships are exempt from regulations that apply to traditional health insurers which should raise alarm, but other providers are rushing in to copy the concept in order to compete for marketshare.  Pre-existing exclusions, lifetime reimbursement caps, narrow benefits and religious restrictions are common as are lower premiums and more limited coverage.  Health insurance has always been tightly regulated to protect consumers.  Expect turmoil and litigation if this concept expands as a competitive force in health care.

As America continues to de-centralize health care delivery in stark contrast to other industrialized nations, its citizens and residents will experience increased volatility in cost, coverage, and access.  A recent Kaiser survey finds that six in ten people favor a national health care plan, which is in direct opposition to the state management model being implemented by Congress.   In the current period of health care policy uncertainty, more deaths will occur from treatable health problems and more people will be uninsured or under-insured.  Costs will rise disproportionately for the elderly, disabled, and those with chronic illnesses, which begs the question:  How has dismantling the ACA made health care better?  Healthcare is a major concern of the American people, as evidenced by exit polling following the recent Pennsylvania election, where voters stated health care was the dominant factor in their voting decisions – across party lines.    In a country that has struggled to find agreement as to what health care should consist of and who should design and direct it, the sheer number of changes that are emerging are certain to present many challenges.  For too many years, health care in America has been under attack; people’s lives have been adversely impacted; and high insurance, medical cost and coverage uncertainty, are wide-spread. These new insurance experiments will shift more health care management to the states and will create a maze of inconsistent health care requirements and policy from state to state.  There is no way that the delivery and quality of health care will not suffer.  Who knows?  It may even make Republicans wish they had worked with Democrats to fix the ACA!

 

 

 

 

15 Comments

    1. For the last nine years, the focus has been on trying to make ACA work in spite of Republican efforts to repeal it….some 66 attempts that I recall. Bernie Sanders concept was Mediare for All as he is a solid proponent for universal health care and felt the Medicare umbrella would provide the necessary structure.

      Currently , there is talk among Progressives about a version called “Medicare Xtra”, which fundamentally offers access to Medicare prior to age 65, with the additions of pediatric and maternity optional coverage. Frankly, nothing is going to be done to improve health care under Republican control. Despite all their protestations about repealing and replacing the ACA, they never had a replacement plan to offer and frankly were willing for the private market to design it for them. The rest, as they say, is history. Now, rumor is that Dr. Shulkin was outsted at the VA (his words) because there is a push from the Trump administration to privatize the VA.

      If you are driving at another point, please offer it.

      1. Bart, Democrats were not allowed to introduce legislation to fix the ACA after the GOP swept Congress in the 2010 election. However, there were a few changes that were made as the article below indicates.

        https://www.quora.com/Since-Obamacare-became-a-law-in-2010-how-many-times-have-the-Democrats-tried-to-improve-it-legislatively-Is-there-a-timeline-of-their-efforts

        From 2011 going forward, Democrats had little cooperation for calendaring items for discussion in committee or on the floor of the House/Senate. They literally were in a fight for their lives in many legislative areas, not the least of which was healthcare. At some point in the process, as elected officials, you have to determine where to spend your time and resources. As I mentioned earlier, Republicans tried 66 times to outright repeal the ACA which was ALL they were interested in doing. That pretty well shut down the Democrats ability to broker changes although as the article above points out, they did try on a limited basis.

  1. What I don’t understand is how states like the Dakota’s (populations of 750 K and 867K ) are supposed to function as stand alone entities. How will a small population state, particularly one with a very low population density, achieve any autonomy or economies of scale?

    Or are the citizens of those states supposed to accept medical standards of 50 years ago?

  2. OT, but W. Virginia’s recent teacher strike (a resounding success, you’ll remember!) looks to have cracked something in America. Despite a 6K+ raise in Oklahoma, teachers are still going to descend on the capitol on Monday, claiming that a decade’s worth of cutbacks amount to far more than that. Strikes in Kentucky and Arizona are ramping up too, and it’s reasonable to assume that other states will follow in comparatively close pursuit – just as the ’18 midterms are starting to get into full swing.

    https://www.cbsnews.com/news/teachers-in-kentucky-arizona-oklahoma-take-action-for-better-pay/?ftag=COS-05-10aaa0g&utm_campaign=trueAnthem:+Trending+Content&utm_content=5ac04be504d3012d3e7dd55a&utm_medium=trueAnthem&utm_source=twitter

  3. Mary,
    You’re being far too polite in characterizing Republican efforts at “reform” as anything other than gutting protections.

    Republican governors have wanted to kick poor people off medicaid for decades (they do wish to preserve medicaid’s nursing home and long-term care benefits, which primarily benefit middle and upper class people, and indeed, which now consume a larger portion of Medicaid’s costs than acute care for poor people). However, they think it’s BS that if they kick people off medicaid, they’ll get fewer Federal dollars for their medicaid program.

    Thus block grants: you get the same block of money regardless of what your actual medicaid costs are, based on the number of poor people in your state — regardless of whether you actually provide insurance for those poor people. And you’re free to savagely cut benefits to the point that many Republican states were planning to use some of the medicaid block grant to fund their general revenues. There is no actual interest in improving coverage for poor people.

    Even such moves as banning retro-active coverage is purely vindictive, not just to poor people, but to hospitals and doctors. Many times, a poor person who’s eligible for medicaid never applies. When he gets in an accident and is brought to the hospital, the hospital must provide him care, which, in a bad trauma, can easily run into the high 6 figures. At that point, the hospital’s social workers get involved and will help the patient apply for medicaid, which then retroactively covers the entire hospital stay. It’s simply a way to help hospitals and doctors recoup the cost of providing otherwise uncompensated care, to a patient who should have been covered by medicaid in the first place.

    Removing that retroactive coverage means the hospital must still treat the patient, but now will not be able to get compensated for it, even if the patient is eligible for coverage.

    The medicaid waivers are not about genuine experimentation. In years past, several states that wished to implement single-payer universal coverage applied for medicaid waivers (which would allow them to use the medicaid money to partially fund their universal system) and were denied (not by Trump, but by past Presidents).

    There is no good faith effort to reform the health care system coming from Republicans. Nothing. Not even so called “rational Republicans” really have any plan aside from letting more of the nation’s healthcare budget be diverted as private profits, while kicking more “freeloaders” (which includes middle class people paying for private insurance) off the rolls for purely ideological purposes.

    It’s gotten to the point of irrationality that even the Republicans’ traditional allies such as health insurance companies have started to pushback. Quite frankly, they got almost everything they wanted when Obama implemented the Republican’s plan with Obamacare. They’re very aware that with the growing possibility of nationalized health insurance, further squeezing the American public and letting them die while padding their own coffers might backfire in a spectacular way. In many ways, Obamacare was the last chance private insurance had to show it can perform before the industry gets wiped out in favor of Medicare for all. To their horror, they’re discovering that their former allies, the Republicans, and their “reforms” are the health care equivalent of Slim Pickens’ riding a nuclear bomb to their own destruction, waving his hat enthusiastically the whole way down.

    1. WX – thank you for your honest and fair assessment. My natural cynicism for the majority of the Republican agenda is something I fight continuously, therefore I gave them credit for having better intentions about health care than they deserve. From a lay person’s perspective, it is extremely difficult to put the pieces of health care together so that it makes sense to oneself, much less explain it to others – particularly when those who are so ill-intentioned are also so duplicitous.

      Your observations and points add a great deal to this topic. I hope you will consider offering a post that reflects your experience.

    2. One correction, WX. Medicaid block grants are not how these funds have been distributed – not yet, anyway. If you know differently, please explain. My research indicates Medicaid funds are paid for expenses incurred, in arrears, not in advance, and states submit the number of eligible persons that meet both their state and the federal formulas. States that expanded Medicaid under the ACA prior to 2016 received 100% match; after that time the percentage dropped to 90%, which is still an excellent contribution for the poor.

      The real question, as you note, is the reluctance if not outright repugnance of many red state governors to provide services of any kind that resemble “welfare”, whether it is healthcare or what have you. That will not change until Republicans no longer control the appropriations process which makes the mid-term elections so critical, among many reasons.

      I am interested to know more about your statement that prior presidents refused to allow waivers for demonstration purposes for a universal healthcare pilot. Can you explain further?

      I have always believed in universal health care on a moral and economic basis. The ACA was hurt badly with its poor roll-out, and the SCOTUS ruling that Medicaid expansion could not be mandatory. Other rulings chipped away at other aspects of the plan with the good help of Republicans through legislation changes and cuts and by Trump via Executive Order and regulations. Frankly, and I know you agree, healthcare in America is a mess, and blame can be assigned to many; however, now we all know and it is up to the American people to pick leaders who will make healthcare a national priority, not southern walls and deportation.

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