The Affordable Care Act and Affordability

The official name of what some call Obamacare is the Patient Protection and Affordable Care Act. Most frequently it’s referred to as the Affordable Care Act or the ACA. There’s just one problem with this title: it’s questionable whether the new law is making health care — or health insurance — more affordable

When you ask politicians about bringing down the cost of medical care, they invariably pivot to discussing health insurance premiums. And the press lets them, no doubt because: 1) insurance companies are easier to beat up on than doctors and hospitals; and 2) controlling the cost of care is much more complex than addressing insurance premiums.

When it comes to “bending the curve” concerning premiums, the ACA is arguably working. While every broker can cite examples of clients receiving double-digit increases (often, many examples and north of 20%), overall, according to PolitiFact, “premiums have risen by about 5.8 percent a year since Obama took office, compared to 13.2 percent in the nine years before Obama.” This year, for example, the 2015 UBA Health Plan Survey indicates that the average annual health plan cost per employee in 2015 is increasing just 2.4 percent from the prior year.

One point for the ACA–for now. In some parts of the country, it should be noted, the second most affordable silver plan in the exchanges (a key benchmark) is increasing by 30% or more.While this development doesn’t mean all rates are going through the roof in all places, it’s a warning sign that needs monitoring moving forward.

For now, the rate of increase we’re seeing in health insurance premiums have stabilized. That, however, doesn’t mean that health care coverage is more affordable. Health insurance costs are like a teeter totter. On one side is fixed-costs known as premiums. On the opposite seat are variable costs represented by out-of-pocket expenses. The higher the fixed-costs, the lower the variable ones and vice versa. The laws of physics cannot be legislated away. So as the ACA helps keep premiums down, out-of-pocket costs are rising.

One driver of higher out-of-pocket costs is straightforward: High deductibles in health plans are increasingly common. Another less obvious reason is that carriers are narrowing their provider networks while increasing the cost of seeking treatment outside their networks. For example, according to the UBA study, family out-of-network deductibles increased 75% in the past five years.

For healthy consumers this is a net positive. Premiums are lower under the ACA and, since they don’t see providers, narrow networks aren’t a problem. For those who do need health care treatment, however, (and families are especially likely to have someone needing medical attention in a given year), this teeter totter is what’s making the Affordable Care Act not so, well, affordable.

This isn’t to say that the ACA is a failure. The uninsured rate in America dropped to 10% in 2014 from 18.2% in 2010–and will likely be lower in 2015. This means 15 more million Americans now have coverage than in 2010. Perhaps if we renamed the ACA the Health Insurance Access Act the description would be more accurate.

However, that’s not what it’s called and the ACA is failing to keep live up to its name. The reason, I believe, is because it does too little to address the cost of medical care. To be fair, the ACA includes provisions to reduce medical costs. Accountable Care Organizations and the Independent Payment Advisory Board are two elements of President Barack Obama’s health care reform plan that show promise.

At best, however, the ACA only lays the groundwork for controlling medical costs, and we need to do more. Because at the end of the day, to make coverage more affordable, we have to attack where the money is going. And in that regard, the facts are straightforward: health plans must spend 80% (individual and small group coverage) or 85% (large group plans) on claims. If health insurance is to become more affordable, health care must be more affordable.

That means changing the ACA something that will not happen during a presidential election year. That doesn’t mean, however, that we can’t begin pinning presidential candidates on what they would do to bring down medical costs. We’ve had a question  about fantasy football during the debates. Maybe the moderators could slip one in on concrete steps the candidates would take lower the cost of health care … and not let them pivot to the easy dodge of attacking health insurance premiums.

OK, that’s asking too much. Maybe they could ask them what they’d do to control insurance premiums and then ask about controlling medical costs. If nothing else it would be interesting to see how many of the candidates realize these are two different questions.

The Open Enrollment Convergence: Scope and Resources

To state the obvious, there are 12 months in the year. Unfortunately for health insurance companies, brokers, exchanges and those they serve, various health care coverage open enrollments for most Americans are crammed into less than four of those months. The scope and challenge of this Open Enrollment Convergence is mind-boggling.

Open Enrollments by the Numbers

Medicare’s open enrollment period is October 15th through December 7th of each year. Open enrollment for individuals runs from November 1, 2015 through January 31, 2016. The majority of small and large group plans renew on either December 1st (because last year employers wanted to put off coming into the ACA market for as long as possible) or January 1st (so benefit years coincide with calendar years).

Cramming all these open enrollments and renewals into a 15 week period impacts most Americans. The US Census Bureau estimates that in 2014 enrollment was:

  • 50 million in Medicare
  • 60 million in Medicaid
  • 45 million in medical policies they purchased themselves (primarily individual and family coverage)
  • 175 million in private group health coverage

Renewing any one of these cohorts in a two-or-three months is a Herculean challenge. Deal with all of them at once and you’ll find the Demigod in a fetal position off in a corner somewhere muttering about ACA compliance reports. Yet, all at once is when they’re happening.


Alcohol is not a resource. Nor will it help get brokers through the Open Enrollment Convergence. Avoid it until February 1st. The three sources, however, will help. This blog’s Health Care Reform Resources page lists additional useful sites.

The National Association of Health Underwriters, the preeminent organization for health insurance brokers, consultants and benefit professionals, publishes a lot of extremely useful material. The NAHU Compliance Cornered Blog is accessible to everyone. Tools and information in the association’s Compliance Corner are available only to members, but well worth the dues. One feature allows members to pose detailed questions to experts and quickly receive a personalized response. The breadth and depth of the compliance expertise available through this service is impressive and invaluable.

The Henry J. Kaiser Family Foundation is an outstanding resource for dependable information on health policy and parsing the Affordable Care Act. (The Foundation is unrelated to Kaiser Permanente health plans). The Foundation’s Health Reform FAQs recently updated 300 items on a broad range of ACA topics. If you’re into Twitter, you’ll benefit from following the Kaiser Family Foundation. (Of course, if you’re into Twitter I hope you’ll follow me as well, he shamelessly plugged).

The Department of Health and Human Services is the government’s lead agency on the ACA. The HHS Health Care site serves up extremely helpful data, forms and explanations along with a bit of not unexpected ACA cheer leading.

Go Team

I wish I had a pithy message to help get you through the fourth quarter renewals; some poster-worthy motivation you could hang on your wall. However, in the accurate words of the folks at, “If a pretty poster and a cute saying are all it takes to motivate you, you probably have a very easy job. The kind robots will be doing soon.”

Robots will not be handling an Open Enrollment Convergence anytime soon (the stress would rupture their … whatever robots rupture). New tools are on their way to help benefit brokers manage the workload. These, however, will amplify the high-touch service and expertise benefit brokers deliver, not replace agents.

Because there’s nothing easy about helping consumers find and use the health care coverage they need. Fortunately, professional benefit brokers are really good at doing just that.

This may not be a motivational statement, but it is factual.

ACA Co-op Troubles Not Surprising

Strong support emerged during the Congressional deliberations that led to the Patient Protection and Affordable Care Act behind a government-run health plan to compete with private carriers. The “public option” failed, but did create political space for the concept of consumer-owned, non-profit health insurance co-operatives. The co-ops found their way into the ACA, but now, as a group, are in big trouble. Eight of the nation’s 23 health co-ops are going out-of-business and more may follow.

The Case for Health Co-ops

Then Senator Kent Conrad championed health co-operatives during the health care reform debate. Modeled after the electrical co-ops in his home state of North Dakota, he saw them as health plans owned by local residents and businesses. They would receive start-up money from the federal government, but otherwise would compete against private carriers on a level playing field.

Co-op advocates hoped they would bring competition to markets dominated by too few private carriers. In addition, they expected these non-profits to provide individual consumers and small businesses additional affordable health insurance choices. With focus on the first goal, health co-ops might be in a better place today. Unfortunately, too often they sprung up in states where competition was already strong.

The ACA set-up a roughly $6 billion fund to help get “Consumer Operated and Oriented Plans” up-and-running. The long-term financial viability of health co-ops was to flow from premiums paid by those they insured and the “Three Rs”—programs established by the ACA “to assist insurers through the transition period, and to create a stable, competitive and fair market for health insurance.” Specifically these were the ACA’s reinsurance, risk adjustment and risk corridor programs.

It’s Tough Being New

A (not so) funny thing happened on the way to the health co-ops’ solvency. Starting a health insurance plan is difficult and failure always an option. (I know. I was executive vice president at start-up SeeChange Health, an insurer that failed last year.) New carriers, by definition, have no track record, no data concerning pricing, provider reimbursements, claim trends, and the like. Their first foray into the market is an educated guess. Worse, new plans usually have a small membership base. This provides little cushion against the impact of miscalculations or unwelcome surprises.

A new health plan launching in the midst of the industry’s transition to a post-ACA world faced added exponentially greater difficulties. In 2013, when most of the health co-ops launched, no one knew what the market would look like in 2014. Exchanges, metallic plan requirements, guarantee issue of individual coverage and more were all happening at once. Were employers going to stop offering coverage? How were competitors going to price their offerings? Would provider networks be broad or narrow? The questions were endless; the answers at the time scarce. In a speech during the lead-up to 2014 I described the situation as carriers “playing chicken on tractors without headlights in a dark cave while blindfolded–at night.”

This is the world into which ACA-seeded health co-ops were born. That they now face  serious financial problems should surprise no one. They saw themselves as “low-cost alternatives” in their markets. If they were going to err in setting prices it was not going to be by setting premiums too high.

Besides, if they priced too low they were protected by the risk corridor program. As described by the Centers for Medicare & Medicaid Services, which manages the ACA’s financial safety net, the “risk corridors program provides payments to insurance companies depending on how closely the premiums they charge cover their consumers’ medical costs. Issuers whose premiums exceed claims and other costs by more than a certain amount pay into the program, and insurers whose claims exceed premiums by a certain amount receive payments for their shortfall.”

The majority of the nation’s health co-operatives saw claims exceeding premiums. Being on the “shortfall” side of the equation, the government was to come to their rescue like the proverbial cavalry with the money needed to keep them going.

Except the cavalry is a no-show. Too few carriers had too little claims surpluses to cover the too large losses of too many health plans. Only 12.6 cents on the dollar due under the risk corridor program is expected to make it to plans on the shortfall side of the equation the CMS announced on October 1st.

The Math Always Wins

Several of the health co-ops were in financial trouble before this news. Losing millions of dollars in expected relief doomed more. As of today, the dollars-and-cents have failed to add up for CoOportunity Health (the co-op in Iowa and Nebraska), the Kentucky Health Cooperative (which also served West Virginians), Louisiana Health Cooperative, Health Republic Insurance of New York, Health Republic Insurance of Oregon, the Nevada Health CO-OP, Community Health Alliance (a Tennessee co-op), and the Colorado HealthOP. Just to use the Colorado situation as an example, the Colorado HealthOp needed $16.2 million; they expect to receive $2 million.

Do these failures mean health insurance co-ops are a bad idea? Not necessarily. What they point to is that health co-ops may have been better off focusing on bringing competition to markets where there were too few plans, not joining a pack where there were enough. Even then, the collapse of the risk corridor program may have doomed them, but they’d have stood a better chance.

As noted above, Senator Conrad modeled the health co-operatives on electrical co-ops found in some rural communities. Where too few customers make it unprofitable for traditional utilities to invest in the infrastructure required, consumers, seeking electricity, not profits, come together to extend the grid.

Those implementing the ACA should have followed this model. Instead of funding 23 health co-operatives, the Administration should have offered seed money to fewer co-ops located where they would be the alternative in the market, not just another one. This may have allowed them to extend financial support long enough to at least partially offset the risk corridor shortfall. Then, just maybe, we could have avoided the “surprise” of failing health co-ops.

Health Care Reform Absent from Democratic Debate

Two hours of policy-heavy dialogue and, unless I missed it, not one of the five Democratic candidates for President uttered the words “Obamacare,” “Affordable Care Act” or “health care reform.” True, Senator Bernie Sanders brought up “Medicare for all” and declared that health care coverage is a right of citizenship. However, there was no mention of his remarks by the other candidates, former Senator Lincoln Chafee, former Secretary of State Hillary Clinton, former Governor Martin O’Malley, and former Senator Jim Webb.

Update: October 14, 2015: Oops. There was a brief discussion of allowing undocumented immigrants eligible for coverage under the ACA. The focus of this segment was immigration and the candidates mention of health care was incidental. I don’t think this undermines the point of this post, but they did mention it. My bad.

Ignoring health care reform is a s pretty amazing development when you think about it. Health care reform was a big part of the Democratic presidential primary campaign in 2008. The passage of the Patient Protection and Affordable Care Act in 2010 turned American politics upside down adding copious amounts of fuel to the Tea Party movement. Yet, in the CNN/Facebook debate from Las Vegas … not a word.

I’m not saying CNN should have made health care reform the primary topic of Tuesday night’s Democratic debate. However, a short simple question soliciting short simple answers would have, I believe, highlighted some differences among the candidates. At the very least it would have contrasted the Democrats running for president from the Republicans seeking the office.

My hoped for question: “What changes to the Affordable Care Act, if any, would you seek if elected President?”

We know Senator Sanders’ response: he’d scrap the Affordable Care Act for a single payer system. Would any of the others join him? Maybe. Would any of them defend the health care reform law as is? Possibly. Quizzing the candidates on legalizing marijuana was of interest to some, no doubt, but, in my mind at least, finding out what they’d change in the ACA is both a more important and fascinating topic.Of course, given the topic of this blog, I am a bit biased.

Jeb Bush Reveals Health Care Reform Plan

Ironically, this is the day former Republican presidential candidate, Governor Jeb Bush, detailed his health care reform proposal. Calling the ACA a “monstrosity,” Governor Bush said the government should help Americans obtain catastrophic coverage (albeit with a preventive care component) to protect them from financial ruin, but not force individuals to buy and businesses to offer comprehensive coverage.He would require carriers to cover insured’s pre-existing conditions for individuals who maintain continuous coverage.

Under Governor Bush’s proposal, individuals without employer coverage would receive tax credits allowing them to buy coverage against “high cost medical events.” Governor Bush also called for raising the contributions limits allowed on health savings accounts.

Significantly, Governor Bush recognizes that the ACA can’t simply be repealed without serious adverse impacts on what he calls “the 17 million Americans entangled in Obamacare.” He calls for a transition plan to help them move from the ACA to the Governor’s system.

Governor Bush’s health care reform plan also calls for restoring state regulation of insurance markets, promotion of health information technology adoption, wellness rewards and innovation in care delivery models. An interesting, and maybe wishful, provision of his proposal is “an app on your smart phone that calls your doctor to your front door, just as it does for a car to come pick you up.”

Maybe Next Time

Health care reform in general and the Affordable Care Act will no doubt be a big part of the general election. Governor Bush has laid out one approach for Republicans. It would be nice to learn a bit more about what Democrats would do. CBS hosts the next one on November 14th. Maybe the issue will come up then.

Is requesting one straightforward health care reform question asking for too much?


Ease Up on ACA Reporting

No one goes into business because they love paperwork. Well, OK, someone in the stationery business must be into it, but most people abhor it. Which is why it would be nice if Congress and President Barack Obama could come together to pass a bi-partisan proposal to amend the Patient Protection and Affordable Care Act with the Commensense and Verification Reporting Act of 2015.

The legislation was introduced in the House of Representatives as HR 2712 by Representatives Diane Black, a Republican from Tennessee, and Mike Thompson, a California Democrat. In the Senate the legislation, S 1996, is being put forward by Democratic Senator Mark Warner and Republican Rob Portman. Their goal, supported by over 175 businesses and associations, is to simplify the reporting employers need to support enforcement of the Affordable Care Act’s individual and employer mandates. Those regulations, promulgated by the Internal Revenue Service 2014, are quite burdensome and confusing–more than is required to achieve the purpose of the ACA.

The ACA tweak doesn’t do away with the reporting of information necessary to administer the health care reform law. The proposals simply streamline the process and reduce the burden. The proposal doesn’t undermine the individual mandate nor does it relieve employers from their responsibility to provide coverage or pay a fee to help offset their employees moving into the individual market. What it does do is make it easier for employers to comply with the ACA while still providing regulators the information they need to police the system.

This isn’t the first run at simplifying reporting under the ACA. Legislation similar to HR 2712 and S 1996 was introduced in the last Congress. That bill, S 2176, went nowhere. So is there any reason to believe this year’s attempt will fare any better?

Well, maybe. Yes, it’s true that any legislation aimed at improving the ACA has a rough road. Republicans want to kill the Affordable Care Act, not fix it. The House has tried to repeal or undermine the ACA so often pundits and the press have a hard time keeping a tally. No one in the GOP wants to face a primary challenge accusing them of being soft on Obamacare.

But, Congress has proven they can come together on simple fixes to the Affordable Care Act, especially if they help businesses. In 2011 Congress and the White House came together to remove expansion of the 1099 reporting requirement from the ACA. And this month they worked together in a bi-partisan fashion to allow states flexibility in defining what is, and is not, a small group.

It’s this last accomplishment — passage of the Protecting Affordable Coverage for Employees Act — that provides a glimmer of hope that maybe the Commensense Reporting and Validation Act of 2015 has a snowball’s chance of passage. Maybe.

It won’t be easy, however, and if it happens at all it will be next year. Congress’ s dysfunction has reached epic proportions as represented by the fiasco over electing a Speaker. Over the next several weeks Republicans will be consumed with getting their house in order (you’ll pardon the pun). Little time will be left for a full agenda of major issues touching on keeping the country out of default, avoiding a government shutdown, determining the fate of the Export-Import Bank, and more.

Getting any legislation through Congress during 2016 is problematic because it’s an election year. Elections distract lawmakers. They tend to focus more on scoring political points than addressing real problems. It’s a problem.

All of this means that proponents of HR 2712 and S 1996 will need to position their paperwork fix as a political win for enough candidates — I mean, members of Congress–to get them to pay any attention to it at all. If they are successful in this, however, the small amount of momentum generated by the recent passage of The Protecting Affordable Coverage for Employees Act may be enough.

Assuming members of Congress hate paperwork as much as the rest of us.


Health Care Reform the 2016 Where’s Waldo

At this time in 2011, six months before the Iowa caucuses, health care reform was a big deal. Republicans couldn’t see a live microphone without calling for its repeal. And one would think that the official name of what was commonly referred to as “Obamacare” was “the President’s signature issue” in his first term. Flash forward four years and health care reform is now the “Where’s Waldo” issue of 2016: it’s there somewhere, but darn well hidden.

True, every candidate on the GOP wants to repeal the Patient Protection and Affordable Care Act. They are all happy to haul out the old tropes about how the ACA is a job killing, anti-free market, mess and a government overreach. Many will be happy to explain how it’s all unconstitutional.

Meanwhile, every candidate on the Democratic side is defending the ACA, although some more enthusiastically than, well, at least one. Candidate Bernie Sanders has promised to introduce “Medicare for all” legislation (a euphemism for single payer) soon and would seek a single payer solution were he to become president. Yet even on the Democratic side, the topic of the ACA is pretty well hidden in their campaigns.

In fact, a quick survey of campaign web sites shows a remarkable lack of emphasis on health care reform by presidential candidates. On the Democratic side, health care reform doesn’t make the issues list on the campaign web sites of former Governor Martin O’Malley or Senator Bernie Sanders. Defending the Affordable Care Act is the ninth issue addressed by former Secretary of State Hillary Clinton’s web site.

On the Republican side Donald Trump is too busy bullying his opponents and the press to mention any issues other than immigration on his site. Health care reform makes Dr. Ben Carson list of issues, but he devotes just 98 words to the topic — and the only alternative he mentions is his support of health savings accounts. Former Governor Jeb Bush’s site is nearly issues free (there’s a white paper on his tax reform plan in the “news” section, but there is no “issues” tab). I couldn’t find anything about health care reform on the site. Then, I couldn’t find the issue (or any issues) on Carly Fiorina‘s or Senator Ted Cruz‘s sites, either.

Governor Scott Walker announces his intent to repeal Obamacare on his first day in office. And although I couldn’t find it on his web site, to his credit Governor Walker has offered a plan to replace the ACA. Senator Marco Rubio gets around to discussing health care reform on his web site after first mentioning 17 other issues while on Governor John Kasich‘s site it comes in at #3.

Given all that’s going on the world, it’s not surprising health care reform isn’t a driving issue. Which is remarkable. Health care reform arguably gave birth to the Tea Party movement. It cost Democrats the majority in the House in 2010 and helped chip away at their Senate majority until that was lost, too. In short, health care reform moved elections.

Now, not so much. The ACA is a part of America’s landscape now. Too many people are insured under the law to repeal it. Too much physical, digital and process infrastructure has been built out. Too many stakeholders are vested in the ACA continuing and opponents of the reforms have no coherent program to replace it.

This isn’t a bad thing. Because it opens up a real possibility that, once there’s a new President and Congress in 2017, they can accomplish something important: fixing the Affordable Care Act. The law has lots of flaws, but the debate since it’s passage has too often been an all-or-nothing affair: dump it or defend it. Yes, there’s been some tweaking around the edges of the legislation, but not the comprehensive review and modification that’s needed.

Finding Waldo can be hard. Finding a way forward to improve the ACA will be harder still. If little kids can find Waldo, perhaps there’s hope that what passes for adults in Congress can find common ground to improve the ACA. That’s still a long shot, but perhaps a bit more possible now than just a year or two ago.

Initial Response

It’s going to take some time to dive into the Supreme Court’s 5-4 decision on the constitutionality of provisions of the Patient Protection and Affordable Care Act. The opinion is now online for those who wish to wade through it. Here’s my initial take:

1. As noted in my first post today, the individual mandate isn’t much of a mandate, but the principle of a mandate could have brought down the entire health care reform package. It didn’t, but that doesn’t mean the individual mandate, as written, will have the impact supporters of the PPACA intend. The only thing that’s new today is that this provision of the law can now be described as a “tax.”

2. Chief Justice John Roberts makes clear that he believes an individual mandate would violate the Commerce Clause. However, because he interprets it as a tax, that observation is important, but doesn’t effect the outcome. The other four Justices in the majority (Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan), in a separate opinion, stated their belief an individual mandate is constitutional. However, in order to form a majority they’ve signed off on Chief Justice’s Robert’s interpretation. So while having four members of the Court interpret the Commerce Clause this way is significant to legal scholars and could impact the future, for now it’s immaterial.

3. The four Justices dissenting from the majority opinion (Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito) would have found the entire PPACA unconstitutional. Chief Justice Roberts often sides with this group of colleagues. He made history by parting ways with his more conservative colleagues. Justices might have lifetime tenure on the Court, but it still took courage for the Chief Justice to make this decision.

4. Politically, this decision is a two-edged sword for both presidential candidates. The Administration’s key domestic accomplishment has been upheld. The Administration can now move forward to implement the health care reform package without the cloud of court decisions making their work meaningless. But the President’s key domestic accomplishment is also one of his greatest liabilities in the upcoming election. The PPACA remains unpopular. Many Americans (including four Supreme Court Justices) believes it’s an unwarranted expansion of federal power at the expense of personal liberty. This decision will only flame the passions of those who take this view, meaning they’ll be going to the polls in November with one goal in mind: elect a President and Congress that will repeal the PPACA. Will supporters of the bill be as motivated and engaged? Not likely.

5. Just because the PPACA is constitutional does not mean we’ve seen the final version of the law. Congress will amend health care reform. Agencies (both federal and state) will interpret it. The PPACA is complicated and open to significant interpretation. The upcoming election will determine how much the law will change, not that it will be changing.

6. The PPACA accomplishes a lot of good things: increases access to coverage, provides some useful and meaningful consumer protections, takes the first steps needed to begin constraining health care costs, and more. The PPACA also botches a lot of important things: it will not make coverage more affordable, it doesn’t go far enough to constrain escalating health care costs, and more. Lawmakers owe it to their constituents to revisit the law and make some substantial changes. This doesn’t mean Democrats have to follow the GOP’s demand to repeal the law nor does it mean Republicans have to cave to the administration. But both sides need to recognize that the PPACA is the law of the land. Barring a GOP super-majority in the Senate come 2013, the PPACA is not going away. So responsible leaders will try to make it the best law possible.

7. The Court majority made clear an individual mandate is not justified by the Commerce Clause or the Necessary and Proper Clauses of the Constitution. This will have an impact on other social welfare efforts Congress might consider. Needing to fund expansion of the safety net through taxes is a tough political and practical challenge.

8. However, there were four votes to uphold the PPACA under the Commerce Clause. Which underscores the importance of this November election. Presidents appoint Supreme Court Justices. All of the Justices four of the Justices upholding the law under the Commerce Clause were appointed by Democrats. All four of the Justices voting seeking to overturn the law were appointed by Republicans. The Chief Justice shows that not every appointment votes in the way one would expect based on the party of their appointing President. And two of the liberal Justices joined with conservatives and agreed that the Medicaid expansion included in the PPACA was unconstitutional. But the fact is, the appointments of Republican Presidents tend to be more conservative; those appointed by Democrats tend to be more liberal. At least one, and maybe more, vacancies will open on the Supreme Court in the next four years. Who is President matters.

9. The Supreme’s decision on the Medicaid provision of the health care reform law will be interesting. In essence, a 7-2 majority said the law went too far in threatening to withhold Medicaid funding to states who refuse to expand Medicaid eligibility to those at up to 133% of the federal poverty level. They ruled the federal government can withhold the additional funding promised in the PPACA to pay for this expansion, but they can’t take all Medicaid funding away from non-participating states. Put another way: states have the ability to opt out of the Medicaid expansion. Given the importance of this expansion to reduce the uninsured, this is an issue President Obama and his allies in Congress will need to address. As noted above, the health care reform debate is far from over.

10. While watching the news about the decision, an ad by Concerned Women for America with a vicious (and somewhat inaccurate) attack on the PPACA aired on CNN. The upcoming election will be about the economy, but health care reform will be a major factor as well.

7. People who predict what the Supreme Court is going to do and how they are going to do it are making wild guesses. Pundits take another blow.

So, I don’t pretend to have any special insight on the meaning of the Court’s decision today. But my mother misses these posts so I thought I’d return to the keyboard again. I’ll try to write a more thoughtful piece later today or in the next few days. In the meantime, please let me know your thoughts on all this.

And the Winners Are … Maybe

According to SCOTUSblog, the winners are the Patient Protection and Affordable Care Act, the administration of President Barack Obama and the individual mandate … as a tax. But as Amy Howe of that blog notes “It’s very complicated, so we’re still figuring it out.” Chief Justice Roberts joined with the more liberal members of the Court to find the individual mandate (such as it is) constitutional.

So, bottom line: the PPACA is upheld. Yes, the Medicaid provision that allows the federal government to terminate state’s Medicaid funds if they fail to expand coverage to 133% of the federal poverty level is limited a bit through a strict reading of the provision, but the bottom line is the bottom line: the PPACA

The sky is not falling as of yet. The Republic survives. And the Chief Justice, appointed by President George W. Bush (not Justice Anthony Kennedy) is the swing vote. Few predicted that one.

The critical quote, again as reported by SCOTUSblog (which, really, anyone reading this as it’s written should just move over to that site) is “Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it.” Section 5000A being the individual mandate.

I’m Just Sitting on a Fence

Hello. As you may have noticed, this blog has been dark a lot longer than the month or two I thought it would be. But what’s 10 months among friends? I haven’t made it back to regular blogging because things at SeeChange Health have simply been too busy. We’ve launched statewide in California back in September, have grown very consistently since then (thanks to all of you supporting our approach to health insurance) and we’re waiting on regulators in Colorado to begin selling there. All of which has kept me away from this blog.

But how can I ignore what’s happening in Washington today? With the U.S. Supreme Court ready to announce their decision in just a few minutes, I thought I’d return for one more day of comment. So like much of the industry, I’ll be tuning in to SCOTUSblog for their live coverage and I’ll be back to provide whatever insight I can add as soon as the Supremes do their thing. Later tonight I’ll try to offer a more considered evaluation.

One quick observation first: what’s amazing about all this is that the Supreme Court’s decision concerning the Patient Protection and Affordable Care Act will be based on the constitutionality of the individual mandate. A provision that, in practical terms, is hardly a mandate at all. The fine/tax/penalty/whatever-you-want-to-call-it in the PPACA is so modest as to be all but meaningless. Yet whether a mandate in concept (if not fact) is constitutional will have tremendous impact.

As far as predictions go? I’m with the Rolling Stones on this one: “I’m just sittin’ on a fence You can say I got no sense Trying to make up my mind Really is too horrifying So I’m sittin on a fence.”

Be back soon.

HHS to Pay Brokers for Enrolling Consumers in Federal High Risk Pool

Should brokers be compensated for helping consumers to enroll in government programs like the Pre-Existing Condition Insurance Plan (PCIP) created by the new health care reform law? Until now, the federal government’s answer has been “no.” That changed today and a significant precedent is being set.

The National Association of Health Underwriters announced today that, beginning no later than October 1st, licensed agents and brokers will be paid a flat fee of $100 per enrolled applicant. (Payments could begin sooner if the changes to the application can be done more quickly).

This fee will only apply to the high risk pools set up by the federal government for the 23 states who declined or were unable to do so plus the District of Columbia. Many, if not most, state-run exchanges already pay brokers for assisting their citizens in enrolling in their pools. According to NAHU the average state-based fee is $85 per enrolled applicant.

In announcing the change, the Department of Health and Human Services noted the greater enrollment success achieved in states pools that compensate brokers for their work. As stated in the Department’s press release: “This step will help reach those who are eligible but un-enrolled. Several States have experimented with such payments with good success.,”

The decision to support and work with brokers is part of the Department’s efforts to increase enrollment in the PCIP high risk plans by removing administrative hurdles and lowering premiums. In fact,  in 18 of the states, premiums will be coming down as much as 40 percent according to a press release from HHS.

The PCIP was designed to provide coverage to individuals unable to obtain health insurance in the private market due to existing health conditions. 18,313 Americans have enrolled in the federal high risk pool through March 31st, a fraction of the 5 million consumers expected to enroll in the program (fraction as in “0.4%).

Progress usually comes in small steps, not giant leaps. The significance of HHS recognizing the value brokers bring to America’s health care system—and their willingness to pay for that value—should not be underestimated. For example, the House of Representatives will soon conduct a hearing on HR 1206, the legislation to remove broker compensation from the medical loss ratio calculations required by the Patient Protection and Affordable Care Act. Proponents of this law will be able to point to the recruitment efforts of HHS in support of the federal Pre-Existing Condition Insurance Plan to reinforce the need to keep brokers in their role as consumer counselors and advocates in the new health insurance world being created by the PPACA.

NAHU and other agent organizations worked hard to achieve this recognition. No doubt, however, some brokers will protest that the HHS program pays brokers only a one-time fee. This complaint is misplaced. Enrollment in the PCIP is fundamentally different than working with consumers shopping for coverage in the commercial market. The PCIP is, after all, a government health plan, more similar to Medicaid than to plans available on the open market. Further, enrollees in the high risk plan, by definition, cannot obtain traditional coverage. What’s significant is not the details of the compensation (although it is worth pointing out that HHS is setting the fee higher than the average paid by states), but the existence of compensation for enrolling Americans into a federal health plan.  When it comes to precedents, this is one that can aptly be described as “significant.”