Karen Ignagni Discusses the Sustainability of the ACA

Sustainability in the Affordable Care Act marketplaces will occur when the health plans and the providers come together to establish both cost and quality goals and work together to achieve them, explained Karen Ignagni, president and CEO of EmblemHealth.

Transcript (slightly modified)

The sustainability of the ACA exchanges has been called into question with UnitedHealth exiting all but a handful of a markets.

I don’t think the sustainability is about whether one plan participates or not. I think sustainability, fundamentally, is about a couple of things. 1, can we have risk pools that are balanced with lower risk, healthier people, actually working to offset high cost with the chronically ill and those who are catastrophically ill—point number 1.

Point number 2: can we create a system where people don’t consider it a natural part of a process to enter only when they are sick and then leave when they’re treated? Sustainability is really about creating this participation so that the risk pools are balanced, so that the administrative procedures work, so that people are encouraged to stay over a 12-month period. And, that the providers and the health plans work very, very actively to first establish quality goals, second to establish cost goals and work together to achieve them. That’s going to create the sustainability of the system.

And finally, I think taking a hard look at the risk adjustment system. How have we done it? Is it over weighted in parts, underweighted in others? Is it creating some unintended consequences? First look suggests that it may be and we want to contribute to that dialogue. We intend to be very active in the policy discussion because we are committed to participating with New York, Connecticut and the other states in which we participate and will participate in the future. We are committed to working in partnership with our regulators and with the federal regulatory agency.

What unintended consequences were of the most concern to you?

I think what we’ve seen is very similar to what other plans are seeing. The people who have come into the exchange are generally far sicker than was expected, number 1. Number 2: we’ve seen that some people have moved into the exchange not in coverage and then when they had their issue addressed, they let their coverage lapse. Again, it destabilizes the exchange, it’s about maintaining those predictable balanced risk pools.

And then I think the last issue that’s really now being focused on the policy community and I think there’ll be much more focus on it. Is do we have the risk adjustment mechanism right? Is there too much unpredictability associated with risk adjustment? Question number 1. Is the weighting correct? Have we over weighted people who have chronic conditions and not done enough to deal with people who have catastrophic conditions, who it may not be expected? And they have those kinds of conditions but it’s not a sustainable thing over a year but they have those kinds of conditions.

Those are the sorts of things that are going to be looked at very, very carefully. We’re looking at our data. Other plans are looking at data. And there’s going to be much more discussion in the policy community about it.