I am reminded of a famous Mark Twain quote, “Reports of my demise are greatly exaggerated”, when it comes to the public noise about the roll-out of the Affordable Care Act After two days of a powerhouse lineup of speakers and attendees, the RISE-Sponsored2nd Annual Health Insurance Exchange Summit, was officially closed this week in Las Vegas. Voices of senior leaders from across the healthcare spectrum came together to discuss how various exchanges around the country are operating, and in which best practices are evolving. One of the key messages I took away is that it is time to take a deep breath and a step back to get some perspective. That is going to help us realize three important things:
- The health care reform movement is in motion and, like the proverbial toothpaste that cannot be put back into the tube, reforming the health insurance marketplace is not going to be undone.
- While a lot of this is brand new, it is not totally foreign ground. We have been down a similar path before and lived to tell the tale.
- A lot of the “news” is not altogether unexpected (while certain parts are honestly surprises, screw-ups and disappointments).
Looking back over the two-day conference, I captured numerous and far-reaching highlights. Summit participants learned a lot from the remarks and updates from several representatives from state health insurance exchange programs and state agencies supporting the rollout of the federal exchanges, as well as health insurance issuers, and other experts involved in the effort. Obviously, they are better informed than most of us who just read the headlines scrolling by on the TV screen. We heard from Arkansas, California, Colorado, Louisiana, Massachusetts, Michigan, New Jersey, Nevada, Texas, Washington State and Wisconsin.
While the rollout of the health insurance exchanges has been turbulent and troublesome, it is hardly the death knell sounding. For anyone that was around in 2005, it is vaguely reminiscent of the launching of Part D for Medicare. At that time, not only was a wholly privatized prescription coverage program added to the menu overnight for 42 million Medicare beneficiaries, it was also the conversion of the dually eligible Medicaid drug coverage from state programs to federal programs. The number of people impacted dwarfs the uninsured market in sheer size, although perhaps not in complexity. Remembering how that movie played out, it has gone down as an unqualified success.
It took time to shake out. Not unlike the navigators and different types of enrollment assistants involved in the Health Insurance Exchanges, there were State Health Insurance Information Program offices, legions of volunteers and consumer advocates trained and primed as best as could be with what was known at the time. Then, like now, there were snaps in computer systems and databases, and there were constellations of call centers, CMS employees, and health plan employees: thousands of people trying to make it work out. Despite the craziness, it ultimately came together and beneficiaries have reaped enormous rewards from the savings.
The non-dual Medicare population went from a status of having no prescription drug insurance to having Part D, which took some time to penetrate the market despite the carrots and the stick (late enrollment penalty). Nevertheless, the national penetration of Part D plus Employer Sponsored Insurance or other creditable coverage has virtually wiped out the lack of coverage.
Did someone snicker about the donut hole? Yes, the much hated donut-hole. Well, the Affordable Care Act has been filling in that gap incrementally since 2012. First, with a deal cut with the pharmaceutical industry, people in the coverage gap can get 50% of their brand-name drugs paid for. Second, the generic drugs are getting covered now at 21% in 2013, and that ramps up until 2020 when it achieves 75% coverage by law.
We know that Part D coverage rollout and the Health Insurance Exchange rollout are two very different things, of course. Success in one does not guarantee success with the other. But what I suggest is that we should take some comfort in our ability to muddle through the mess and clean it up over time. Expecting perfection off the bat is naïve and unrealistic.
The other case study in health care reform, of course, is the state of Massachusetts, where “Romneycare” has been in place since 2007. Well represented in the RISE event, a lot of nuggets were shared by Rosemarie Day (former COO of the Commonwealth Connector) and Allison Kean (current Manager of Strategy for the Commonwealth Connector). Now that Massachusetts has 98% of their citizens covered, the state is moving ahead with refinements on the exchange model, and the attention of the state is looking at fundamental provider payment reforms and health care delivery redesign. So there is a track record of success in the Health Insurance Exchange realm that is very encouraging after seven years of experience.
Make no mistake: there are serious problems in the ACA rollout to fix, and the sooner we fix them, the better. There are more problems than most people realize, but they are not insurmountable, given time and sweat. In the meanwhile, several million people who have individual insurance coverage today are getting cancellation notices. But a lot of those policies were lousy coverage that was all that people could afford on the private market before the ACA, and now they are considered inadequate. Some of them are getting shuttled over to the individual exchanges by employers that no longer want to offer group coverage. In some cases, it represents a worse coverage value and other times it represents a better one. Most of this was anticipated by the people closer to the action and seems to have caught the highest levels of politicians by surprise as well as the news media.
Are the young invincibles not going to show up and save the day? Matt Henry from Audience Partners explained that it is too early to say, and in fact, we expected the first wave of enrollees on the exchanges to be the low income people receiving federal subsidies because they do not have to pony up the out of pocket expense for the premiums, unlike the more affluent. The people in the most need of health coverage showed up first, which is entirely understandable. Harkening back to the Part D story, much the same thing happened: the relatively healthy people procrastinated and came in during the later waves. So the message here is “don’t get too worried yet”. Let’s wait until the end of March and see where we come in.
Is the low enrollment level for the first month a monumental disappointment? Not really. While the enrollment is relatively low, the number of people who already registered and completed applications is many times the final enrolled number. The federal subsidy eligibility process is a hold-up right now, so there is a backlog of people already in the pipeline to join.
Who are the folks coming into the exchanges and what burden of illness do they bring into the risk pools? If I knew, I would be the only one. But it is enormously important to figure out the answer, and that resolution will not happen until the enrollees are effective after January who receive health care services and their claims get processed. Then there will be a scramble to read the risk-tea leaves and more news will come forth. However, given the way that different types of enrollees are going to show up and enroll, we are not going to see any holistic view for a long time. The good news is that there are powerful analytics tools that have been developed and proven effective in the Medicare Advantage market and adapted to the unique considerations of the individual Health Insurance Exchange markets, including many of the sponsors of our conference. Unlike Medicare Advantage where the learning curve was long and torturous, there are solutions that are already developed and scalable to get off to the fast start needed under the HIX realities. RISE sponsors like Verisk, Censeo and Inovalon, among others, have some great capabilities along these lines.
I want to offer particular thanks to the representatives of all the organizations that came to the RISE event and shared their experience and points of view. The forum was a great way to learn from one another’s experience and garner some insights that could only come from people in the trenches working hard to make all of this work. RISE is excited about the opportunity to sponsor this forum and facilitate the knowledge transfer process. We look forward to helping build the national community of professionals engaged in this process that is bringing long-needed health insurance coverage to access health care from coast to coast.
If you were unable to attend the 2nd Annual Health Insurance Exchange Summit, the conference presentations are available for purchase from the conference producer, Healthcare Education Associates. Call them at 866-676-7689 for more information.