Feds Take Lead on Health Insurance Exchanges

State marketplaces may offer more refined choices, but either vehicle should work, experts say
WebMD News from HealthDay

By Karen Pallarito

HealthDay Reporter

FRIDAY, March 8 (HealthDay News) — More than half the states in the nation have decided to let the federal government take on the task of creating one of the most complex yet vital parts of the massive 2010 health reform law, which was championed by President Barack Obama.

In 26 states, the federal government will set up so-called health insurance exchanges, where many Americans can shop for coverage beginning with open enrollment this October. Most of the states handing off exchange duties to Washington are led by Republican governors, including heavily populated states like Florida and Texas.

Only 17 states and the District of Columbia plan to create and run their own exchanges, and the remaining seven states will do it in partnership with the federal government, according to the Henry J. Kaiser Family Foundation’s latest count.

Colorado, one of the first states to enact health exchange legislation, expects to cover 300,000 uninsured residents through its state-run exchange, Connect for Health Colorado.

“I think we feel strongly that we have certain opportunities and challenges that we understand best, and so it does make sense for us to create a system that really is going to work for the stakeholders in Colorado,” said Dede de Percin, executive director of the Colorado Consumer Health Initiative in Denver.

Some states had placed exchange-building on the back burner as they awaited last June’s U.S. Supreme Court decision on the constitutionality of the health reform law, as well as the outcome of the November presidential election.

Republican Gov. Paul LePage of Maine was among those who, in the wake of President Obama’s reelection, decided not to implement a state exchange.

Maine has an estimated 133,000 uninsured people, a number that may swell by as many as 44,000, according to Joseph Ditre, executive director of Consumers for Affordable Health Care in Augusta.

“We are hopeful that the [federally facilitated exchange] will enable a vigorous outreach and enrollment campaign,” Ditre said. Still, he added that Maine’s decision to forgo a state-run exchange means the state won’t play an active role in negotiating with health plans to keep rates down and improve quality — at least not immediately.

White House says exchanges will be ready by Oct. 1

State-based health insurance exchanges are one of the mainstays of the Affordable Care Act, also known as “Obamacare,” for expanding access to health insurance coverage. An estimated 25 million people are expected to gain health coverage through the exchanges by 2022, substantially slashing the ranks of the nation’s 48.8 million uninsured.

The exchanges are intended to serve as a virtual “marketplace,” where consumers and small businesses can access online health plan descriptions and data on quality and consumer satisfaction. All exchanges must have a toll-free hotline that people can call to get their coverage questions answered, and trained “navigators” to assist with the enrollment process.

About 18 million people with incomes up to 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four) may qualify for premium assistance through the exchanges, according to the Families USA website.

To encourage greater state involvement in the exchanges, the federal government had proposed partnering with states to get the job done, but that option lacked broad appeal. Only four additional states — Iowa, Michigan, New Hampshire and West Virginia — applied for a partnership by the Feb. 15 deadline.

On March 7, the U.S. Department of Health and Human Services (HHS) conditionally approved those four partnerships. Earlier, HHS had conditionally approved partnerships with three states: Arkansas, Delaware and Illinois.

New Jersey is one state that nixed a state-federal partnership, opting instead for a federally run exchange. In a letter to HHS Secretary Kathleen Sebelius, Republican Gov. Chris Christie said his state was committed to complying with the Affordable Care Act, “but only in a manner that is the most efficient and effective for the residents of New Jersey and the businesses that will carry the costs of this new program.” He concluded that “federal operation of the exchange is the most responsible choice” for the state.

Despite the task ahead, the Obama administration insists that it will get the exchanges up and running by Oct. 1.

“No matter where a qualified consumer lives, he or she will have access to coverage through a marketplace,” Sebelius said in a recent blog post.

State vs. federal exchange

Consumers looking to buy coverage through that marketplace may not be able to tell whether it’s a state or federal effort.

“I think it will look like a state exchange to anyone. They won’t necessarily know,” said Sonya Schwartz, project director of State Refor(u)m, an online network for health reform implementation developed by the National Academy for State Health Policy in Washington, D.C.

There will be clear distinctions, though. Some state exchanges have adopted an “active purchaser” model, meaning they will limit consumer choices to health plans offering the best value. The federally facilitated exchanges, by contrast, will include all qualified health plans in a state.

“The other thing is, I think that consumers do probably have a better chance of getting their complaints or problems addressed in state-exchange states,” Schwartz said. In states with federally facilitated exchanges, she explained, “people will still go to their state officials, and officials won’t really know how they can help, necessarily.”

State-run exchanges may also have a leg up when it comes to spreading the word to people who need health insurance. “Everybody’s going to have to be engaged in reaching those people and educating them,” de Percin said.

Article Link: http://www.webmd.com/health-insurance/news/20130308/feds-take-lead-on-health-insurance-exchanges?page=2


Medicaid insurers gear up for profit

Phil Galewitz, Kaiser Health News11:14a.m. EST March 8, 2013

  • The Affordable Care Act could mean a boom in Medicaid patients in 2014
  • Many health care companies are hiring doctors and other staff
  • An influx of older patients could make clinics less profitable

WEST PALM BEACH, FLA. — After his back injury kept him out of work last year, Sergio Mera enrolled his family in Medicaid, the state-federal health insurance program for the poor.

These days when they need a doctor, the Meras travel less than a mile from their home to a new clinic. “They take good care of you,” says Mera, 37, as he sits in an exam room with his wife and two kids.

The clinic, affiliated with Molina Healthcare, one of the nation’s largest Medicaid managed-care plans, is one of about a dozen facilities the company is opening across the country to handle a wave of new customers in 2014. That’s when about 10 million more people are expected to sign up for Medicaid managed care under the Affordable Care Act, and as states shift enrollees into private plans, according to trade group Medicaid Health Plans of America.

For industry titans such as UnitedHealthcare and WellPoint, as well as smaller, Medicaid-focused plans such as Molina, the Medicaid expansion is expected to bring significant enrollment and revenue growth. “This is several hundreds of billions of dollars of new market opportunity for these plans over the next couple of years,” says Jason Gurda, managing director of health care at investment bank Leerink Swann in New York.

The plans already cover about half of all Medicaid recipients, or almost 30 million people. The Congressional Budget Office projects that 8 million more will enroll in the program next year, with the number growing to 12 million by 2020, as a result of the health law.

To better position themselves for the surge — and to avoid the overwhelmed doctors’ offices that were common in Massachusetts after that state expanded coverage in 2006 — many plans are adding doctors and other staff now. “We know demand for care is only going to increase, and we are trying to build capacity to get ahead of the curve,” says J. Mario Molina, CEO of the health plan his father started in 1980 with one clinic in Long Beach, Calif.

Preparations for a Medicaid managed-care boom include:

Molina, with nearly 2 million members, is building clinics in Florida, California, Michigan, New Mexico, Utah and Washington to supple-ment its network of independent doctors.

Health Plan of San Joaquin in California is using telemedicine so patients can “see” dermatologists while at a primary care physician’s office, due to a shortage of dermatologists willing to treat Medicaid patients, says CEO John Hackworth.

Meridian Health Plan, a Detroit-based physician-owned health plan, lets members choose a nurse practitioner as their primary care provider. It’s hiring community health workers to keep them well between appointments. “We have the same concerns as everyone else: making sure patients have enough access to providers,” says President Michael Cotton.

UnitedHealthcare, the nation’s largest Medicaid insurer, with nearly 4 million members, is opening health benefit stores around the country to assist Medicaid enrollees and offer free public health education.

Something of a gamble

The growth is not without risks for the insurers, Gurda says.

Until now, most Medicaid managed-care enrollees have been children, pregnant women and young parents. But many of the newly eligible will be older, and some may come with health needs that haven’t been addressed. “You certainly run the risks that medical costs can be higher than expected,” Gurda says.

States pay Medicaid health plans a monthly rate per member. The plans profit if they keep costs below that. Plans have an incentive to keep members out of the hospital.

When plans determine states are paying them too little, they pull out. For example, Centene announced in October that it would quit Kentucky’s Medicaid program, citing financial issues. WellPoint previously pulled out of state Medicaid programs in Connecticut, Nevada and Ohio after deciding the payment rates were inadequate to cover medical costs.

To keep members well, Centene, a Medicaid health plan with 2.5 million members in 18 states, recently started paying enrollees a few dollars each time they seek preventive services, such as $10 for a flu shot or $20 for an annual breast cancer screening. The money goes into an account that recipients can use to pay for utilities, transportation, baby supplies, child care or various health services.

More than 400,000 people have enrolled in Centene’s CentAccount program, which paid out $7.8 million last year. The idea is to avoid expensive emergency room visits and catch problems before complications set in, thus cutting costs. “It’s a way to help our members get the care they need and save money,” says Jonathan Dinesman, a Centene vice president.

Finding physicians

Another big challenge health plans face is recruiting doctors, since Medicaid pays them less than Medicare or commercial insurance carriers. To entice doctors to participate, the federal health law this year temporarily increased pay for those providing primary care services to the same level as Medicare rates — an average 70% pay raise. The pay raise only lasts through 2014, which has limited its effectiveness, Molina says.

Some insurers, such as Philadelphia-based AmeriHealth Mercy Family of Companies, with about 1 million members, have begun paying doctors and hospitals bonuses to meet quality targets, such as making sure their patients take prescribed medications. “The incentives give us added leverage with providers,” says Marilyn Eckley, senior vice president of operations at AmeriHealth Mercy.

Health plan officials say they’re also trying to broaden the pool of doctors by easing administrative hassles, by making it easier to get prior authorizations for tests and by providing real-time data showing which preventive exams a member needs.

Molina is building clinics with doctors on staff in areas that lack Medicaid doctors or federally funded community health centers. It decided on the West Palm Beach location after records showed many members were using ERs for routine care.

The clinic takes patients by appointment and walk-ins. Jose Hernandez, the family physician who works at the clinic, says he enjoys caring for the poor and wanted a job closer to his home near West Palm Beach. While the clinic is still building business, Hernandez says he expects that will soon change. “This is the calm before the storm,” he says.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a non-profit, non-partisan health policy research and communication organization not affiliated with Kaiser Permanente.