PPACA: Feds Say Their Exchanges Will Love Agents


PPACA: Feds Say Their Exchanges Will Love Agents

By Allison Bell

May 16, 2012

The Center for Consumer Information and Insurance Oversight (CCIIO) says "federal facilitated exchanges" (FFEs) will work about as closely with agents and brokers as the states will let them.

CCIIO officials talk about the relationship between the FFEs and agents in a new batch of exchange guidance.

CCIIO, an arm of the U.S. Department of Health and Human Services (HHS), also has released a set of guidance aimed at states that are setting up their own exchanges.

Provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) encourage states to set up "health insurance exchanges," or Web-based insurance supermarkets, that individuals and small businesses can use to buy health coverage.

PPACA opponents are fighting the act in Congress as well as in the courts. If the act takes effect as written and works as drafters expect, a state could choose between setting up an exchange, participating in a multi-state exchange consortium, or letting the federal government provide exchange services, or FFE services, for its residents.

Agents and brokers have been wondering just how much state and federal agencies will let them participate in the exchange system, and how likely they will be able to generate significant commission or fee revenue by working with the exchanges.

"HHS expects that licensed agents and brokers will continue to assist consumers in accessing health insurance, and will work with agents and brokers to promote enrollment through the exchange," officials say in the FFE guidance. "To the extent permitted by a state, an FFE will permit agents and brokers to enroll individuals in a [qualified health plan (QHP)] ‘through an exchange’ if the agent or broker ensures that an individual completes the eligibility verification and enrollment application using the exchange Internet site or the agent or broker’s site that meets certain conditions; the exchange transmits the enrollment information to the QHP issuer; and the agent or broker meets other applicable requirements (an agreement, training, and registration)."

HHS will provide licensed agents and brokers with a portal to the FFE Web site if those producers meet HHS standards, officials say.

Producers can use the portal to help individuals apply for eligibility for enrollment in a QHP and for insurance affordability programs, and if applicable, select and enroll in a QHP through an FFE, officials say.

"To the extent permitted by a state," HHS wants to work with Web-based brokers that are helping consumers chose health plans online, officials say.

HHS intends to use an application programming interface (API) to help Web brokers help individuals enroll in exchange health plans through an FFE, officials say.

Federal officials have noted that exchange runners could take two different approaches to managing exchange coverage options: Letting any qualified, willing insurer sell coverage through an exchange, or operate as an "active purchaser" and use a bidding process to try to bargain for lower rates.

"At least in the first year, we anticipate having an open market model," Steve Larsen, director of the CCIIO, said today during a press conference held to unveil the guidance documents. "Then we’ll look at the potential for having other options."

The Supreme Court is now considering the constitutionality of PPACA and could throw out part or all of the act.

"We believe the law is going to be upheld," Larsen said when he was asked how he expects the Supreme Court’s ruling to affect exchange program implementation.

Larsen said CCIIO is still developing exchange program cost estimates.

CCIIO officials leave room for the possibility that some states that choose to run their own exchanges may want to shut out agents.

In the guidance aimed at builders of state-based exchanges, officials note in a sample exchange builder application that how a state-based exchange works with producers is up to the state and the exchange managers.

"If the state permits activities by agents and brokers," officials say in an application question, the exchange should "clearly defined the role of agents and brokers including evidence of licensure, training, and compliance" with the relevant federal regulations.

Source: http://www.lifehealthpro.com/2012/05/16/ppaca-feds-say-their-exchanges-will-love-agents


Health insurers need to stop being wimps, study finds

Health insurers need to stop being wimps, study finds

By Sarah Kliff, Updated: Tuesday, May 8, 11:20 AM

Health insurers don’t have a great reputation. Some even think they’re evil. Others say they’re heartless. But the real problem, according to a new paper in the journal Health Affairs, might be that when insurers sit across the negotiating table from hospitals and other providers, they turn into wimps..

The study, lead by the Urban Institute’s Bob Berenson, looked at health cost trends in a 12 large cities, interviewing hospital and health plan leaders in each area. Everywhere they looked, Berenson and his colleagues saw consolidation. Small physician practices were joining large physician practices, and large physician practices being bought up by hospitals. And this is giving them an edge over insurers.

A large hospital can make itself a “must-have” for a health insurer’s network and demand higher reimbursements, while an insurer might decide it can live without the smaller hospital down the street.

For their part, health insurance plans aren’t putting much downward pressure on those prices. In discussing interviews with insurers and hospital administrators, Berenson describes insurers as seemingly “resigned” to the fact that hospitals will demand higher payments for their services.

“According to both plan and provider representatives we interviewed,” the researchers write, “health plans have not recently been aggressive in negotiations with powerful providers….Terms such as truce and detente were used to describe the current state of relations between health plans and powerful hospitals. As a respondent from a must-have hospital said, Blue Cross Blue Shield is ‘such a big player and we are such a big player—we have to come to terms.’”

Why aren’t health insurers more aggressive negotiators? For one, there’s the risk of losing a must-have hospital that won’t contract with a health plan that expects to pay less for hospital services. “There is a dynamic in the market that makes it impossible for a private payer to change anything,” one interviewee tells Berenson. “Employers would not support plans in showdowns against hospital systems.”

When hospitals increase rates, the fallout for the health plan is not necessarily negative. Much of the increase can get passed on to insurance subscribers as a hike in premiums. Employers could potentially ditch an insurance plan over premium spikes, but if no insurer is bargaining rates down, there are few alternatives.

The Affordable Care Act could help push prices down by requiring additional review for any premium increases over 10 percent. The rule could give health plan an incentive to demand lower prices from hospitals, if only to dodge additional regulatory scrutiny.

Berenson is skeptical that the law’s provision will be enough to drive down costs. He makes the case for more government intervention in rate-setting with a system like Maryland’s, where the state decides how much hospitals can charge. In Massachusetts, the state’s payment reform law could also move the state in that direction.

© The Washington Post Company

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Jim Webb: Health-care law represents a leadership failure for Obama

Posted at 11:58 AM ET, 04/18/2012

Jim Webb: Health-care law represents a leadership failure for Obama

By Karen Tumulty, Washington Post

President Obama’s new health-care law will be his greatest liability as he attempts to once again win the critical swing state of Virginia, Sen. Jim Webb (D-Va.) warned Wednesday.

“I’ll be real frank here,” Webb said at a breakfast organized by Bloomberg News. “I think that the manner in which the health-care reform issue was put in front of the Congress, the way that the issue was dealt with by the White House, cost Obama a lot of credibility as a leader.”

U.S. Democratic Sen. Jim Webb gestures while talking to journalists during a press conference at the U.S. Embassy Wednesday, April 11, 2012, in Yangon, Myanmar. (Khin Maung Win – AP)

Webb voted for the law, but also for more than a dozen GOP-offered amendments to it.

“If you were going to do something of this magnitude, you have to do it with some clarity, with a clear set of objectives from the White House,” added Webb, who opted not to run for a second term this year. “…It should have been done with better direction from the White House.”

He faulted Obama for playing too passive a role in shaping the legislation. Taking a lesson from Bill Clinton’s failed 1994 health-care overhaul effort–which was faulted for its micromanagement of the details of the bill–Obama opted to spell out a broad set of goals, and let Congress work out the details.

What happened in the end, Webb said, “was five different congressional committees voted out their version of health-care reform, and so you had 7,000 pages of contradictory information. Everybody got confused. … From that point forward, Obama’s had a difficult time selling himself as a decisive leader.”

Webb also said that if Obama had opted for a smaller measure, he would have stood a chance of winning the support of a significant number of Republicans on Capitol Hill.

The White House had no immediate comment on Webb’s statement.

Webb added that he believes most Virginia voters–outside the staunchest partisans–have not yet begun to focus on former Massachusetts Gov. Mitt Romney, the all-but-certain Republican presidential nominee.

“People are getting ready to pay attention to his message, the average person, rather than the nominating base,” Webb said. “Romney has a case to make. He has to make his case.”

The court can’t stop the health-care revolution

The court can’t stop the health-care revolution

By David Ignatius, Washington Post, Published: March 30

Listening to the lawyers talking nonstop last week about health care gave me a headache, so I decided to consult one of the nation’s top doctors. He offered a real-world diagnosis of what’s happening in health care — and a reminder of how much it’s changing, regardless of what the Supreme Court decides about Obamacare.

My medical guru is Delos “Toby” Cosgrove, chief executive of Cleveland Clinic, a $6 billion network that’s one of the biggest and best providers in the country. Cosgrove explained how the health system is being transformed by basic economic pressures that predated the new law and will continue, regardless.

Talking with Cosgrove, you get the sense that the political (and now, legal) version of the health-care debate is in many ways a distraction from what matters most, which is how care is actually delivered to patients. And that’s changing, inexorably, because of underlying cost pressures.

The Supremes could throw Obamacare out the window, and we’d still have a revolution in health-care delivery that promises better treatment for Americans, at lower cost. The Patient Protection and Affordable Care Act will make this revamped system accessible to more Americans, so I’m for it on equity grounds. But even if the mandate to buy insurance disappears, hospitals and docs will keep moving into the new world of care.

We should understand that the current debate is over financing and access — not health-care delivery. As Cosgrove says, “That train has left the station.” Drawing on Cosgrove’s analysis, here’s a summary of the changes already in play:

●Hospitals are consolidating. Today, says Cosgrove, 60 percent of hospitals are part of consolidated systems; an example is Cleveland Clinic, which has locations in four states, including its headquarters in Ohio. These systems will keep merging as they drive toward greater efficiency. It’s the same process that happens in every industry, from banking to book retailing. It will make care a little more impersonal — but also cheaper and better.

This rationalization will close small and inefficient community hospitals — one U.S. official estimates that up to 1,000 hospitals should be closed. As a result, we’ll have fewer hospital beds and more outpatient and home care. What’s forcing consolidation is that reimbursements from Medicare are going to be reduced, requiring hospitals to cut costs.

●Doctors are becoming salaried, joining the trend pushed by the Cleveland and Mayo clinics and some other top providers. Today, about 60 percent of doctors nationwide are on salary, up about 10 percent from several years ago. Cosgrove predicts that this will rise to at least 70 percent over the next decade.

Salaried doctors won’t have the same economic incentives to provide expensive treatments that may not make sense for patients. They’ll be paid well (an internist at Cleveland Clinic starts at about $120,000), but they won’t receive the stratospheric salaries that once encouraged many a doc to dream of driving a Porsche.

Meanwhile, a shortage of doctors and nurses means that less senior (and less expensive) practitioners are providing more care. A physician’s assistant, increasingly, will treat minor ailments; in operating rooms, says Cosgrove, 40 percent of those present are technicians rather than doctors and nurses.

●Health records are finally going electronic, which should allow additional big savings. It’s an expensive transition (Cleveland Clinic has spent $300 million on electronic records systems over the past decade), but it will pay huge dividends in cheaper and better care.

●The federal government is gathering better data on health outcomes, which will encourage national standards for care. Hospitals already report 65 metrics for care to the Centers for Medicare and Medicaid Services. By 2014, they will be reporting 85 items that will measure everything from patient satisfaction to infection and mortality rates. Medicare payments to doctors and hospitals will partly reflect performance. Docs may complain about government intrusion, but this change should mean better care for the millions of baby boomers who will be entering Medicare over the next few years.

The health-care overhaul is happening, regardless of what the Supreme Court decides. The main consequence of the Obamacare case will be whether the justices toss out the existing rule book, forcing everyone to start over again. The justices can slow things down in this way, and they can make the system more equitable or less, but they can’t stop the revolution.


No Obamacare Exchanges

April 12, 2012 4:00 A.M.

No Obamacare Exchanges
Whatever SCOTUS does, states should refuse to create exchanges.

By Michael F. Cannon

Obamacare had a bad couple of days before the Supreme Court — so bad that President Obama made some ill-considered comments about the Court from which he still hasn’t totally backpedaled. Though the oral arguments over the individual mandate and severability were encouraging, we cannot count on the Supremes to kill Obamacare. Opponents must keep fighting it on all fronts.

The most important front right now is to ensure that states do not create the health-insurance exchanges Obamacare needs in order to operate. Refusing to create exchanges is the most powerful thing states can do to take Obamacare down. Think of it as an insurance policy in case the Supreme Court whiffs.

Exchanges are the new government bureaucracies through which millions of Americans will be compelled to purchase Obamacare’s overpriced and overregulated health insurance. Through these bureaucracies, insurance companies will receive hundreds of billions of dollars in taxpayer subsidies. Without these bureaucracies, Obamacare cannot work.

Here are just a few reasons why states should refuse to create them.

Jobs. Refusing to create an exchange will block Obamacare from imposing a tax on employers whose health benefits do not meet the federal government’s definition of “essential” coverage. That tax can run as high as $3,000 per employee. A state that refuses to create an exchange will spare its employers from that tax, and will therefore enable them to create more jobs.

Religious freedom. In blocking that employer tax, state officials would likewise block Obamacare’s effort to force religious employers to provide coverage for services they find immoral — like contraception, pharmaceutical abortions, and sterilization.

The federal debt. Refusing to create exchanges would also reduce the federal debt, because it would prevent the Obama administration from doling out billions of dollars in subsidies to private insurance companies.

The U.S. Constitution. The Obama administration has indicated that it might try to tax employers and hand out those subsidies anyway — even in states that don’t create an exchange, and even though neither Obamacare nor any other federal law gives it the power to do so. If that happens, the fact that a state has refused to create an exchange would give every large employer in the state — including the state government itself — the ability to go to court to block the administration’s attempt to usurp Congress’s legislative powers.

A lower state tax burden. States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it. But if states refuse, Obamacare says the federal government must pay to create one. Why should states pay for something that the federal government is giving away?

Bye-bye, Obamacare. That is, if the feds can create an exchange at all. The Obama administration has admitted it doesn’t have the money — and good luck getting any such funding through the GOP-controlled House. Moreover, without state-run exchanges, the feds can’t subsidize private insurance companies. That by itself could cause Obamacare to collapse.

Unfortunately, ever since Obamacare became law, lobbyists for the insurance companies and others who would financially benefit from it have been wooing state officials with the false promise that a state-run exchange would preserve state control over health care. If the Supreme Court fails to strike down the entire law, they’ll say, “Aw, shucks. Now you have to create an exchange.”

Nonsense. Obamacare does not and cannot mandate that states create exchanges. Moreover, state-run exchanges do not preserve local control. They will do Washington’s bidding, or else they will be commandeered or swept aside.

Even if we assume the Obama administration figures out a way to impose a federal exchange on states, are there any atrocities a federal exchange might inflict that federal regulations could not require state-run exchanges to inflict? Of course not.

That’s why every conservative and free-market group, including the Heritage Foundation and the American Legislative Exchange Council, has advised states to refuse to create an exchange and to send all related grants back to Washington. Florida, Louisiana, Oklahoma, Kansas, and Wisconsin have already done so.

If the Court strikes Obamacare down, state officials who refused to create an exchange will look prescient. If not, they will be positioned to drive a stake through its heart.

Michael F. Cannon is director of health-policy studies at the Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It.

New spotlight on state responses to health-care law

New spotlight on state responses to health-care law

By N.C. Aizenman, The Washington Post, Published: March 31

Variations in the way states have moved to implement the 2010 federal health-care law have taken on greater significance after last week’s Supreme Court hearings, whose tone heightened speculation that the statute would be overturned.

With the exception of Arizona, all of the states and the District of Columbia have amended their health insurance rules or practices to comply with mandates imposed by the law. Those mandates include the elimination of lifetime coverage limits and the requirement that many insurers allow parents to put adult children younger than 26 on their plans.

States used a range of methods that, at the time, amounted to little more than technical variations in approach. Now those distinctions could make all the difference.

Maryland and Virginia

Maryland, for instance, enacted a law that cites the federal statute by name and essentially says all of its provisions are now state law as well. This means that if the federal law is overturned, those provisions will be immediately null and void in Maryland as well.

Carolyn Quattrocki, executive director of Maryland Gov. Martin O’Malley’s Office of Health Care Reform, said state officials chose to simply reference the federal law because it seemed the easiest approach and would ensure that any tweaks to the federal law would automatically be reflected in state rules.

Avid backers of the federal law, O’Malley officials did not take into account the potential consequences of taking that route in the event the statute was overturned.

“We just weren’t thinking about the possibility,” Quattrocki said. “It just seemed so remote and absurd.”

By contrast, Virginia’s General Assembly adopted the full text of the federal provisions into state law. So those rules will remain on Virginia’s books — and binding on Virginia insurance plans — regardless of how the Supreme Court rules.

Still, there’s a wrinkle: Virginia lawmakers added a sunset provision specifying that the law will expire July 1, 2014.

Virginia Del. Thomas Davis Rust (Fairfax), a moderate Republican who sponsored the legislation, said he included the sunset provision because “everybody was concerned that if the federal law was overturned we would want to come back and take a look at this.”

“We chose July 1, 2014, because we thought the court case would be over by then one way or another,” he added.

South Dakota lawmakers went a step further, including what one state official dubbed a “suicide clause” that automatically repeals the state law if the entire federal law is found unconstitutional.

But the practical effect of this provision could be limited, at best. That’s because South Dakota’s director of insurance issued state regulations implementing the federal provisions. These remain in force unless and until they are specifically revoked by either the director or the legislature.

“There’s been so much variation in the state responses to the [federal law] that it’s difficult to tell what would happen if the law were struck down,” said Katie Keith, a professor at Georgetown University who co-authored a study of state actions in detail.

“We do know that many states have baked in at least the early market reforms in the law. But what’s less clear is what happens in states that have not fully baked them in. A lot would be left to state interpretation.”

The provisions most clearly at issue are insurance regulations in the federal law that have already taken effect.

‘Bill of Rights’

Often referred to collectively by the law’s supporters as “the Patient’s Bill of Rights,” the provisions include not just the ban on lifetime limits and the extension of coverage to adult children. They also include a prohibition against excluding children with preexisting conditions, restrictions on annual coverage limits and requirements that insurers cover preventive services such as mammograms and colonoscopies without co-pays or deductibles.

Compared with the far-reaching changes the federal law will usher in beginning in 2014, the “bill of rights” provisions are fairly modest. But they are among the most popular in the law, and they have already affected the lives of millions of Americans.

Technically, states did not need to align their insurance regulations with the federal law. But if they did not, the federal government would have had to enforce the rules.

“I guess our feeling is that insurance should be regulated by the state, and this was one way of ensuring that continued,” said Randy Moses, assistant director for policy analysis and legislation in the South Dakota Division of Insurance.

Like many Republicans in Virginia — one of 27 states to challenge the health-care law in court — Rust is no fan of the statute. Still, if the law is struck down in its entirety, he is not sure he would advocate allowing the insurance provisions in Virginia’s law to expire with the sunset.

“I think most of them are pretty noncontroversial,” he said. “The insurance companies are already writing them into their policies. People are already paying for them in their policies. And I think they are pretty widely accepted at this point.”

Staff writer Lena H. Sun contributed to this report.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Health Exchanges Have Fans in Some States

Health Exchanges Have Fans in Some States

By LOUISE RADNOFSKY, Wall Street Journal

A handful of states say they are planning to press ahead and voluntarily implement a key part of the 2010 federal health-care law even if it is wiped out by the Supreme Court.

The Obama administration’s law faced three days of skeptical questions from the court’s conservative majority this past week, increasing the odds that part or all of the law will be struck down. The justices met Friday for their weekly conference, where they were expected to take a preliminary vote and decide how to issue their written opinions on the case, but they aren’t expected to announce their decision until late June.

The health-care overhaul requires that all states have a new insurance exchange where consumers can comparison-shop for policies. The law calls for them to operate like travel websites that sell airline tickets, allowing people to stack up policies next to each other and get plan details in simple terms.

The exchanges, set to take effect in 2014, are one of the most popular parts of the new law. States can run their own exchanges or let the federal government do it for them.

Officials in Rhode Island, California and Colorado—states where governors are broadly supportive of the law—say they plan to move ahead with their exchanges even if the entire law gets struck down. They added that they expect the law will remain in place, and are working to meet the 2014 deadline to get exchanges up and running.

"You can crystal-ball yourself to death," said Peter Lee, the executive director for the exchange in California. "If the unthinkable became thinkable, there are members of the state legislature, there’s an exchange board, there are constituents across the state who would say, ‘OK, now’s the time to take the next steps.’ "

Lawmakers in California have floated the idea of introducing a statewide requirement for individuals to carry insurance or pay a fee. Massachusetts is currently the only state to have this requirement.

Associated Press

Rhode Island Democratic Lt. Gov. Elizabeth Roberts, above right, sees ‘a role for an exchange here.’

Rhode Island officials, too, said they were pressing ahead with their state exchange and would also consider passing state-level legislation to substitute for parts of the federal law if they are struck down.

"There’s a role for an exchange here…and that can happen no matter what happens with the Supreme Court," said Democratic Lt. Gov. Elizabeth Roberts, who has been overseeing Rhode Island’s health-overhaul efforts.

Ms. Roberts said she had pushed legislation three years ago to create a state requirement to purchase insurance or pay a fine. She said she would be prepared to do it again, if necessary.

While states could still create their own exchanges if the whole law fell, they wouldn’t get the law’s federal funding to run them, or the federal subsidies designed to help lower earners buy coverage in the exchanges.

The executive director of the Colorado exchange, Patty Fontneau, said the legislation creating the state’s exchange explicitly banned officials from using state funds to prop it up, and that funds from private companies or foundations might be options for keeping it going.

She said that as officials consider applications from vendors to provide the technology to run the exchange, they are discussing the importance of being able to adapt to a different landscape.

"The deadlines are so tight that we are continuing to move forward, because we have to be flexible, and we realize…we can’t really stop and wait to see what happens in June," she said.

Most states have taken federal money to begin establishing their own exchanges, though they are at varying stages in the process. In all, the U.S. has given out around $730 million in set-up funds to date. A few states have turned away all funds.

Some Republican-led states, which have opposed the health-care law but have moved ahead with their exchange preparations just in case, said they would likely halt their efforts if the court overturns the law.

"We’re prepared to stop at any time, or to consider moving forward," said Seema Verma, a health-policy consultant for Indiana GOP Gov. Mitch Daniels.

A spokesman for Florida GOP Gov. Rick Scott said the state would comply with the law if it is upheld, but that officials would "cross that bridge when we come to it." Florida has turned away federal money to create its exchange.

Lane Wright, the spokesman, said the governor’s administration was "confident" the law "will be ruled unconstitutional, and so we’re not very concerned how these exchanges would be set up."

Write to Louise Radnofsky at louise.radnofsky

A version of this article appeared Mar. 31, 2012, on page A5 in some U.S. editions of The Wall Street Journal, with the headline: Some States Want Health Exchanges.