To observers at the state level, the health-care reform enterprise is seemingly rudderless in the U.S. Capitol these days. So leaders of local health-insurance markets are finding there is only one useful coping strategy: Pick up an oar, and row as best you can.
Michael Stollar is president and chief operating officer of the Hawaii Medical Services Association, the largest health insurance carrier in the islands. The result of the unresolved health-care reform “repeal and replace” battle in Washington, D.C., has been that states have little choice but to go back to basics.
This actually can be a useful exercise, Stollar said. His company is focusing on efforts to boost preventive health care and follow-up with patients as its best mechanism for lowering health costs. That, he said, should transfer well to whatever national health policy ultimately prevails.
“We are engaged with the providers on payment transformation, aligning payment with the health outcomes, making the incentive to work more on prevention,” he said.
“We’ve had some doctors who think they’re doing great with writing prescriptions for health screenings. They were shocked to see that the patients may have had a prescription but they weren’t filling them.”
HMSA has been running scenarios for what it would do in the event that the Affordable Care Act, also called “Obamacare,” really does go down for the count.
For example, Stollar said, the company has mulled what would happen should the Republican campaign for its replacement, the American Health Care Act, eventually allows the sale of insurance across state lines.
“We’re not inherently against the sale across state lines,” Stollar said. “Our concern is around the rules and regs: Which state’s rules and regs would apply?
“But there is a fairly strong push to allow states the flexibility to do what they need,” he added. “Then we would hope they would kind of leave Hawaii the way it is.”
In Hawaii, “the way it is” includes at least a template that brings a little order to the confusion. Predating the ACA and the AHCA by four decades was the state’s Prepaid Health Care Act, which requires all Hawaii employers to provide coverage to workers putting in at least 20 hours a week.
Over time, employers have become accustomed to planning for that expense as a big part of the cost of doing business. The passage of the ACA in 2010 added numerous regulations to the insurance industry as well as funding to expand the states’ Medicaid coverage for the low-income group, further winnowing Hawaii’s already relatively small population of the uninsured.
This year, the state has taken advantage of the ACA’s waiver program and received approval for businesses to return to the Prepaid system of buying insurance directly from the carrier, rather than from a state or federal exchange.
The ACA, the signature legislation of the Obama administration, is still standing. It is secured only by the recent failure of the replacement bill to garner enough support from the disparate factions of the majority GOP in Congress, particularly in the House of Representatives.
In the past week there have been signs that the patient, the AHCA, has not yet expired on the operating table. On Thursday, House leadership announced that there was progress on an amendment aimed at winning over more of the conservative caucus, giving states leeway in accommodating patients with pre-existing conditions.
Without getting into the particulars of that discussion, it’s enough to say that its prospects for enactment are still anything but certain. It’s not at all clear that the U.S. Senate would allow that amendment under its arcane “reconciliation” rules, the only way the bill could pass with a slim majority vote.
Further, the tension between the GOP’s conservative and moderate wings — the latter being concerned that too much is being cut from Medicaid funds — still exists.
Beyond that, Stollar worries that suddenly cutting federal dollars for subsidies and other premium supports that keep health insurance more affordable might destabilize the health insurance market.
“If you stop the subsidies cold, then I think many insurers will leave the market,” he said. “There just wouldn’t be the stability. It may be worthwhile for them to maintain those.”
The state’s decision to waive the use of insurance exchanges for businesses also meant Hawaii would need another way to collect the subsidies. The federal government ordinarily awards these through the online marketplace.
Under the approved waiver, the state can use a mechanism that already exists. It’s a “premium supplementation fund,” established under the Prepaid Health Care Act, and it’s administered by the state Department of Labor.
The original intent of the fund was to help cover costs for qualified businesses, including those that are small and those facing bankruptcy, said Bill Kunstman, labor department spokesman.
Since 2011, almost $2.2 million has been paid out; $1.2 million more in qualifying payments are pending replenishment of the nearly depleted fund.
“We are still receiving requests for premium supplementation, but are not processing them at this time,” Kunstman said. “There’s something like $80,000 in there, which we’re currently holding in case an employee requires reimbursement or payment of medical bills due to a delinquent employer.
“Our understanding with the feds is that the new monies would be used for new applications, and not any towards the backlog,” he added. The first installment of the $459,169 promised to Hawaii for 2017 is due in October, he said.
Also calming the waters in Hawaii’s insurance marketplace is the assurance by the federal Centers for Medicare and Medicaid Services that businesses can avoid the upheaval of adopting new health plans through 2018.
When the ACA marketplaces started up in 2014, said state Insurance Commissioner Gordon Ito, businesses were allowed to keep plans put in place since the original 2010 enactment of the law, and now that allowance has been extended.
Also watching the health-care ebb and flow in the nation’s capital is Judy Mohr-Peterson, the state’s Medicaid program director who is also vice president of the National Association of Medicaid Directors.
There were regulations finalized in the last year of the Obama administration that some of these directors would like to revisit, and the signals from the current administration is that there could be flexibility here, she said. These include rules about home- and community-based settings such as assisted living facilities and care homes.
“The rules are very prescriptive,” she said. “Medicaid programs across the country would appreciate some dialogue about those rules.”
Mohr-Peterson, like Stollar, is taking the pause in health-care policymaking as an opportunity to revisit how to improve delivery at the local level.
“What the repeal-and-replace effort did was it highlighted the need for us to work together as a community of private insurers, providers, hospitals,” she said. “We need to work together to figure out how to do health care better: reforming how we pay for it, seeing that we have the incentives in the right place.”
In particular, Mohr-Peterson said, primary care and behavioral health providers are key to significant improvement in community health overall.
“For all the negatives, it did jump start that conversation about health-care delivery-system reform,” she added.”We have the worst outcomes; for all the money we’re spending, we’re not getting the value there. Health care costs are rising more quickly than any other sector.
“We are, of course, continuing to monitor what’s going on at the federal level,” Mohr-Peterson said. “But unless and until there is a lot more serious legislation that’s making its way through again, we are continuing to implement the Medicaid program as if the ACA is the law of the land. Because it is the law of the land.”
