Time to Try New Approach to Health Insurance

Regardless of which presidential candidate wins in the next week, changes will be coming to Obamacare. The profile of healthcare always rises this time of year as open enrollment beings on the federal exchange, but it’s increased even more during this heated election year.

It’s clear that something needs to be done, as respected accountable care organizations (ACOs) drop out of the CMS program, costs continue to increase and nearly 20% of those eligible for Obamacare live in areas where there is only a single insurer on the exchange.

I don’t think that incremental changes will stem the tide of defections. There needs to be bold action if the exchanges under the Affordable Care Act (ACA) are to continue.

My company pays $80,000 a year to provide healthcare coverage for 6 people. It’s a low-deductible, PPO plan because our staff is always on the road. It would be far easier to give our employees a stipend for health insurance and say, “Here you go. Buy your own plan.” But we don’t think that would be right thing to do for our company or our employees, because the exchanges appear to be broken.

Donald Trump seeks to repeal Obamacare and work with Congress to “create a patient-centered health care system that promotes choice, quality and affordability,” according to his campaign website. Other tenets include high-risk insurance pools for those who haven’t maintained continuous coverage, allow the purchase of insurance across state lines and give states more block grant flexibility to design innovative Medicaid programs.

On the other hand, Hillary Clinton seeks to build on the ACA, working to bring down out-of-pocket costs such as copays, deductibles and the cost of prescription medications. Clinton’s platform also includes providing additional incentives for states to expand Medicaid and increase access to healthcare for rural Americans.

Troubling Developments

It’s more than a little ironic that the Dartmouth-Hitchcock health system announced it was dropping ACO participation, especially since the idea for ACOs can be traced to a 2006 journal article written by professors at Dartmouth. The article noted that most Medicare beneficiaries receive care from doctors affiliated with the local hospital. Rather than assess the performance of individual doctors, wouldn’t it be better, the authors argued, to hold the hospital and affiliated physicians jointly responsible?

Elliott S. Fisher, MD, MPH, directs the Dartmouth Institute for Health Policy and Clinical Practice and is one of the ACO’s architects. An article about the ACO dropping out quoted Fisher as saying, “It’s hard to achieve savings if, like Dartmouth, you are a low-cost provider to begin with. I helped design the model of accountable care organizations. So it’s sad that we could not make it work here.”

To me, the lesson to be learned here is that what sounds good in the ivory towers of academia and in the big cities may not play well along Main Street, in rural areas and among those who provide significant care to the poor. Those who already provide high-quality care will find it difficult (if not impossible) to qualify for quality payments, and those who treat the sickest patients and those with multiple chronic conditions and socioeconomic challenges will also experience difficulties.

A mid-August analysis of ACA plans shows that 17% of Americans eligible for the exchange may only have one insurer to choose from. That includes 5 states: Alabama, Alaska, Oklahoma, South Carolina and Wyoming. Last year, just 2% of Americans had such a limited choice. In my home state of Nevada, 10 rural counties have only one plan.

Premium increases of 20%, 30% and 50% are being seen in several states as the 2017 buying season begins, although officials note that not everyone pays the “rack rate” for insurance because of subsidies.

It’s been widely reported that UnitedHealthcare and Anthem are pulling out of markets in several states because of increasing losses. And even Molina Healthcare, which has been touted as a marketplace darling because of its narrow network-HMO plans, faces mounting pressures should sicker exchange patients move to Molina plans.

CMS wants to create standardized plan options for the bronze, silver, and gold tiers on the exchange. Each plan will feature a fixed deductible, fixed out-of-pocket limit and fixed copay or coinsurance for a specific set of health benefits that meet minimum exchange quality standards. That might be a step in the right direction, but if major insurers are pulling out in droves, I doubt the ability of the federal government to do the job better.

And even after buying insurance, will people be able to use it? Look at Texas, which has 254 counties. In 158 counties with a combined population of 1.9 million, there is no general surgeon. That amount of people is equal or greater than the populations of 14 states. Another 147 counties with 1.8 million people have no OB/GYNs. Eighty counties have fewer than 5 physicians, and 35 have no physicians at all, according to a 2015 survey.

I believe, too, that the federal government would be well-served to focus more on ensuring the accuracy of claims payments. Medicare comprises 15% of the total federal budget, with an annual outlay that tops $540 billion. But it’s estimated that 12% of claims are wrong. A quick calculation shows that is $65 billion. That’s a whole lot of money, in my book.

Change can be difficult, and some facets of Obamacare are popular, including no lifetime maximum benefits, preventive health/vaccinations paid at 100% and adult children staying on parents’ policies until age 26. But it’s clear that the status quo is not working.

There’s no doubt that health insurance will be a hot button topic for the next president and the next Congress. You don’t need to be Democrat, a Republican, a Libertarian or a Green Party member to agree with that.

Andria Jacobs, RN, MS, CEN, CPHQ, Chief Operating Officer, PCG Software in Las Vegas, has more than 25 years’ experience in the healthcare industry, encompassing both administrative and clinical arenas. Prior to joining PCG, Jacobs was the administrative director, medical management for VertiHealth Administrators. Her clinical background is in emergency and critical care nursing. A certified compliance professional by the Healthcare Fraud and Abuse Compliance Institute, Jacobs previously was an independent consultant in ambulatory care and practice management, where her clients have included hospitals, physician groups, and the University of California, Los Angeles. During her time at CareAmerica Health Plan, Jacobs was instrumental in the initiation of programs in high-risk assessment, large case management, and continuum of care critical pathways.