Mike Leavitt pick may be signal on exchanges

Mike Leavitt pick may be signal on exchanges
By: Jason Millman, Politico blog
June 5, 2012 11:21 PM EDT

The selection of Mike Leavitt to lead Mitt Romney’s transition team doesn’t mean the Affordable Care Act’s health insurance exchanges are here to stay. But it is a reminder of how some Republicans, regardless of the ACA, have already been circling behind the exchange concept.

It also gives the health care world an idea of how exchanges could look under a Romney administration. In all likelihood, they’d be portals — the way Leavitt’s home state of Utah did them — and not much like the more active marketplaces of the Affordable Care Act.

News over the weekend of Leavitt’s involvement in a would-be Romney administration sent some on the right into near apoplectic shock that Romney would pick someone who’s profiting from ACA implementation. Leavitt’s firm is making millions advising states on how to design exchanges, the ACA’s state-based marketplaces that will deliver federal subsidies to purchase insurance and enable about half of the law’s coverage expansion.

But a President Romney would obviously still be the guy calling the shots, and of course he’s repeatedly stressed his dedication to blowing up the health care law on Day One and starting from scratch. His campaign again made that much clear following some weekend chatter over Leavitt’s role.

If a Romney replacement plan does surface, though, it’s possible that exchanges — an idea that has Republican roots — could be in the mix of options. And if exchanges were to be resurrected, they wouldn’t look very much like those in President Barack Obama’s health care law, if Leavitt’s and Romney’s own history with exchanges is any indication.

What’s more, that would be welcome news to some red states that for some time have liked the exchange concept but not its association with “Obamacare” or the prescribed requirements now coming almost weekly from Washington.

“Exchanges are going to be part of the future no matter what,” Leavitt told POLITICO in February. “The Affordable Care Act didn’t invent the exchange — we’ve been trying since the ’70s to get the small and individual group markets to buy insurance like a larger group. That has always been the problem, and the exchange will always be the solution.”

So what would a Romney/Leavitt exchange look like? Think “Utah” much more than “Massachusetts.”

In the same POLITICO interview, Leavitt said he would encourage states to pursue “free market” exchanges, like the one created in his home state of Utah, as a way for states to move forward.

That means throw out the individual and employer mandates. Scrap the federal subsidies to help people purchase individual coverage with a mandated set of health benefits.

The exchange would be a portal for employers to let their workers shop for and compare health plans with some premium assistance from their firm. Further, any health plan that met the state’s minimum requirements would be able to sell on the exchange. The so-called Utah model, which predates the federal law, has drawn considerable interest from Republican states.

That’s also the vision Romney had for small businesses to participate in Massachusetts’s exchange, which also predates the 2010 federal law and is considered the liberal bookend to the Utah exchange. Yes, Romney owns the state’s individual mandate. But as governor, Romney had vetoed the employer penalty for not providing insurance — which the Democratic-dominated Legislature in Massachusetts overrode — and he wanted employees in the exchange to choose their own health plan.

“Gov. Romney had envisioned the small-employer exchange to be more of a defined-contribution model, where employers would pay a certain amount of money and their employees could choose any plan they want,” said Amy Lischko, who served as Romney’s health care commissioner when the state’s 2006 health care reform law passed. Instead, the Massachusetts law was broadly written to leave major decisions to be made after Romney left office, and the exchange board opted against the employee-choice approach.

Even as Republican governors are hesitant to commit to an exchange before the Supreme Court renders its decision on the ACA, they have expressed support for the exchange concept. It’s easy to see how states could take on their own efforts even if the court throws out the national law.

Idaho Gov. Butch Otter, who launched a website to tout the many ways he’s “fighting ‘Obamacare,’” had pushed state lawmakers this year to establish an exchange, an idea that he says he favored well before the national law.

“Long before the passage of the law, Idaho was exploring ways to create its own exchange emphasizing free-market principles and creating a competitive marketplace that would improve access to coverage and keep insurance decisions between Idaho patients and insurance providers,” Otter wrote in December.

Michigan Gov. Rick Snyder is another Republican that favors a “free-market” exchange, with or without the federal law.

“Even if the act of establishing a health insurance exchange were not mandated by the ACA, I would still be in favor of utilizing technology to create a better customer service experience for Michiganders,” Snyder said in September. “Done right, the [exchange] legislation will allow customers and small businesses to make more-efficient and better-informed decisions about buying health insurance coverage.”

© 2012 POLITICO LLC

Right winning war on exchanges

from Politico
By: J. Lester Feder and Jason Millman
April 18, 2012 11:33 PM EDT

The Cato Institute’s Michael Cannon’s been racking up frequent-flier miles.

He’s dropped in on more than a dozen states to make the case to lawmakers that they should not lift one legislative finger to implement President Barack Obama’s health reform.

“It has been a fun ride,” he said.

Conservatives like John Graham of the Pacific Research Institute have also been touring states with the platform provided by the American Legislative Exchange Council to help kill off state-based exchanges, a key piece of health reform that will help millions of people purchase insurance coverage — often with federal subsidies — starting in 2014.

“Our approach has to be absolute noncollaboration, civil disobedience — well, not civil disobedience but resistance … by whatever means,” said Graham.

Two years into the law’s implementation, conservative emissaries have contributed to impressive stats. Almost all red states are holding off on exchange legislation at least until the Supreme Court decides on the Affordable Care Act, and in most of those states, exchange-building legislation has crawled to a stop.

Both funded partly by the Koch brothers, Cato and ALEC form the cavalry that state-based conservative organizations call in to convert Republican lawmakers who have been considering establishing exchanges. While they’re no fans of the federal law, many Republicans in state government thought it was better to set up their own exchange than to let the Department of Health and Human Services do it for them if the law survives past 2012.

Some still think that — and disagree with some of the assumptions and interpretations the fly-in conservatives are making. But Cannon and Graham are undeterred.

“Every time when I go into these states, there are usually a bunch of Republican politicians who have bought this line that creating a state exchange will protect them from Obamacare,” said Cannon. “It’s fun going in there and telling them, ‘No actually, if you want to protect your state, tell the federal government: … It’s your stupid law; you implement it.’”

In his view, state autonomy under health reform is a mirage. States won’t actually have much control because the federal rules governing the exchanges are so far-reaching. The sole difference between a state-run and federal-run exchange, he said, is that a state will have to “to pay for the privilege of having their autonomy taken from them” if they pass their own bill.

Second, he argues that if states don’t act, employers will be better positioned to legally challenge penalties they would have to pay if their employees end up getting subsidized coverage in the exchanges. Cannon contends that the legislation as drafted only allows the subsidies to be given through a state exchange — not a federal one. Most legal experts think this is a drafting error that the Obama administration can fix through regulation, but Cannon believes the courts will strike down any workaround.

One state where his message resonated was New Hampshire, which he visited at the invitation of the Josiah Bartlett Center for Public Policy, a free-market think tank.

The New Hampshire Legislature not only allowed a Republican-sponsored exchange bill to die this winter, but the House went a step further and passed a bill prohibiting the state from enacting an exchange shortly after his visit.

And according to Maine Democratic state Rep. Sharon Treat, Cannon’s New Hampshire visit had a chilling effect across the state line. She had been in talks with some of her Republican colleagues about an exchange bill. That stopped.

“Now, they’re advancing the idea of don’t do anything, because we don’t want to help President Obama,” the Maine Democrat said.

This is exactly what the national conservative organizations had hoped for.

“It took a lot of people like Cannon and me and certain legislators to give some backbone” to lawmakers uncertain about drawing a hard line against exchanges, said Graham.

Graham said that national health experts are a vital resource for grass-roots groups, most of whom do not have health care experts on staff. He, for instance, recently visited the Idaho Freedom Foundation.

“They have to outsource,” he said of the local organizations. “Grass-roots liberty groups, tea party groups call us and say, ‘What are the reasons to oppose an exchange again?’”

These efforts get a boost from another Koch-aligned group, Americans for Prosperity, which is trying to fight off exchanges in eight states. These efforts are mostly kept in-house, without help from outside groups.

“We work with the policy shop in D.C. a lot to make sure we’re on top of the 644 pages” of final exchanges rules, said Teresa Oelke, director of AFP’s Arkansas chapter. “I think that is the largest point against the exchanges. We’re signing up for a program that we’ll have to pay for by January 2015, but the federal government has control of every single decision.”

The approach of these national organizations has reflected sophisticated lobbying know-how, suggested Alabama Republican state Rep. Greg Wren, who is co-chairman of the National Conference of State Legislatures Federal Health Reform Implementation task force. Though an ALEC member, Wren is one of the main Republican voices arguing that lawmakers who opt for doing nothing and open the door to a federal exchange are putting their state sovereignty at risk.

“They’ve targeted … leadership, committee chairs, and oftentimes, people in those positions can stop or speed-bump any kind of legislation,” Wren said.

Cheryl Smith also thinks the work by Cato and ALEC to derail exchanges looks reckless. She’s a former Heritage Foundation staffer who now directs the exchange practice of the consulting firm Leavitt Partners, which advises several red states trying to figure out how to handle the reform law.

Many legal experts doubt Cannon’s analysis of the health law, she said, and it’s risky for state lawmakers to leave their state’s future up to uncertain interpretation.

“He may be right, but if you’re a state policymaker, do you really want to bet the farm on that?” she said.

Medicaid and Early Births – Politico.com

Medicaid wants fewer early births
By: Joanne Kenen
April 2, 2012 10:19 PM EDT

Everyone who looks at the high cost of health care worries about the expense at the end of life.

But what about at the beginning?

Turns out there’s one deceptively simple change in obstetric care that can save millions of dollars and lead to healthier babies and healthier moms: stopping women and their obstetricians from inducing births before 39 weeks without a pressing medical reason.

That could be a tough sell though because early induction has become part of the culture.

About one in 10 births in the United States is intentionally early, and some estimates are higher. It’s a matter of choice and convenience, and sometimes efficiency, for both women and their doctors. A baby born at 38 weeks — a common time for early induction — isn’t premature. It sounds safe.

But mounting evidence shows that planned early births put babies at risk: more infants staying in neonatal intensive care units, more complications, more permanent damage and a higher death rate. Respiratory and digestive problems occur, and scientists are learning how early delivery can disrupt brain development.

There’s “an explosion of brain development in the last few weeks of gestation,” Billie Short, division chief of the Neonatal Intensive Care Unit at Children’s National Medical Center in Washington, said in a presentation about the costs and consequences of elective early births.

So private insurers, health quality groups, the March of Dimes, some large hospital organizations and now Medicaid — which pays for more than 40 percent of births in the U.S. — have teamed up to spread the word to women who are expecting. Their message: If nature intended for babies to be born at 38 weeks, pregnancy wouldn’t last 40 weeks.

“This is something that has got to change,” said Cindy Mann, Medicaid director at the Centers for Medicare & Medicaid Services — which along with its state partners could save hundreds of millions of dollars a year if such births were less common.

A baby born at 37 or 38 weeks isn’t premature, these groups tell women and doctors. But maybe they aren’t quite “full term,” either. The phrase being introduced is “early term.”

The message isn’t always getting through.

“We live in a culture of convenience and a culture of planning,” said Sue Gullo, managing director of the Institute of Healthcare Improvement, “Our whole culture is about making things neat and tidy,” she added.

A woman might want to avoid a particular birth date or choose to deliver when she knows it’s convenient for grandma to watch the older kids. She might try to maximize her maternity leave or improve the odds of having a specific obstetrician in a group practice when she delivers. Or she may just get tired of being hugely pregnant.

Obstetricians might like pre-planned births as a way of keeping more of their nights and weekends free. It might help make their practice more efficient if they can plan to be in the hospital delivering five babies on Tuesday, for instance, and be able to tend to their patients in the office on Wednesday.

Mann told POLITICO the trend must be reversed — not just on economic grounds but to protect newborns’ health. Early induction doesn’t mean quick or uncomplicated delivery; women who are induced early are also at increased risk for cesarean section. Some hospitals and medical practices have brought their early induction rates down sharply.

The Seton Family of Hospitals in Austin, Texas, has been a pacesetter by basically stopping the practice cold. It has seen a corresponding drop in birth traumas. In Ohio, a statewide collaboration on perinatal health in hospitals prevented an estimated 8,236 early deliveries and about 250 NICU admissions from September 2008 through March 2010 based on numbers researchers anticipated for births without intervention.

But elsewhere, the rate hasn’t budged, and in some hospitals, it’s a whopping 40 percent, according to the Leapfrog Group, a data-driven health care quality organization. Some outlier medical centers are even higher.

“There are pockets of success,” Mann said. “We know that the reduction can be accomplished. But it needs a lift.”

Getting doctors and women to bring the early induction rate down by half could save Medicaid $483 million a year — and several billion over a decade — and that figure doesn’t even include care that a child may need weeks, months or years after birth. Such efforts would be a lot less painful — and a lot better for the newborns and their families — than some of the other cost cutters that hard-pressed state Medicaid directors are contemplating.

A few states have imposed or are considering financial penalties for elective early births, but federal Medicaid officials aren’t considering such policies, Mann said.

Early deliveries aren’t unique to Medicaid. They happen across the country, in all socioeconomic groups, said Barbara Rudolph, senior science director for Leapfrog, which works with businesses and big health plans to address cost and quality.

And it’s one reason so many hospitals have NICUs. Early births keep them full — and profitable.

Gullo says it’s sort of a catch-22. Hospitals have NICUs, in part, because so many early-term babies end up needing them. And they go ahead and deliver the early babies because as long as they have NICUs, they can treat the infants if there’s a problem.

But some hospitals, like Seton, have changed that pattern quickly. Hospitals that have laid down the law, telling doctors they can’t deliver babies early without a compelling medical reason — a sort of zero tolerance — have seen the deepest and fastest drop in induction rates, Rudolph said.

Health and Human Services has targeted hospitals as a good starting point to leverage change. HHS Secretary Kathleen Sebelius earlier this year announced the Strong Start initiative to improve prenatal care, reduce preterm births and address the elective inductions.

The initiative is part of the Partnership for Patients quality improvement drive under the Center for Medicare and Medicaid Innovation, which was created under the health care reform law. About 3,200 hospitals are participating in the voluntary quality program.

“Women need to understand what they are asking for,” Gullo said.

“ If we help them understand the new evidence, people will make intelligent decisions,” Gullo said.

© 2012 POLITICO LLC

States make Medicaid expansion case

States make Medicaid expansion case
By: Jennifer Haberkorn
January 10, 2012 05:28 PM EST

Twenty-six states on Tuesday asked the Supreme Court to overturn the health care reform law’s mandatory state expansion of the Medicaid program, a sleeper issue in the health care reform lawsuit that could determine how much leverage the federal government has with the states on any issue.

The states, led by Florida, argue that the federal government can’t force them to expand the Medicaid program, which has operated as a partnership between the feds and the states, as part of the 2010 health reform law. They argue that the Medicaid expansion is possibly more coercive than the law’s individual mandate.

“While some individuals are exempt from the penalties designed to enforce the mandate, no state is exempt from the massive penalty — the loss of the entirety of funding under the single largest grant-in-aid programs for the states — and so Congress did not even contemplate the possibility of a state opting out of Medicaid,” attorney Paul Clement, who is representing the states, wrote in a brief to the court Tuesday.

The Medicaid argument, one of four issues in the health care law that the court has agreed to consider, is thought to be the toughest climb for the law’s challengers. But if the Supreme Court takes the states’ side, the ruling could limit whether the federal government can use money as an incentive for the states to act on any issue.

The states argue that the law’s Medicaid expansion is an illegal “commandeering” of states’ autonomy. Beginning in 2014, Americans who earn up to 133 percent of the federal poverty level will qualify for coverage, and the states will have to cover them if they want to stay in the program.

The states say that the federal government fundamentally changed the program in the 2010 law in ways the states never imagined when Congress created the voluntary Medicaid program in 1965.

Clement argues that the law is coercive because it ties all of the federal funding to the expansion, which is mandatory if the states want to stay in Medicaid. The states say the Medicaid program is so engrained in the national culture — and their budgets — that they have no real choice to leave it.

“If the ACA does not cross the line, no act of Congress ever will,” Clement wrote.

Many legal and health policy experts were surprised that the court agreed to review the constitutionality of the Medicaid expansion, since a lower court hasn’t struck it down and the issue of federal authority is relatively settled policy. Courts have generally agreed that the feds are allowed to use money as a carrot to get the states to act.

The last time the Supreme Court addressed the issue was in the late 1980s, when South Dakota challenged the law that tied federal transportation money to state requirements for increasing the drinking age to 21.

The Supreme Court upheld it, writing that the policy was legal — though it suggested that at some point, federal incentives will become so strong that they’re illegal.

“They said at a certain point, we don’t know what that is, incentives become coercion,” said Ilya Shapiro, an adjunct scholar at the Cato Institute who has written briefs arguing that the mandate is unconstitutional.

The states say that this time, the federal government has crossed the line and eliminated any semblance of a “choice,” so the Medicaid expansion is illegal.

The federal government argues that it is still a choice — even if it’s a difficult one. The Obama administration will have a chance to flesh out its argument in its own brief, which is due to the court by Feb. 10.

So far, the lower courts have agreed with the federal government. Both the Florida district court and the 11th Circuit Court that heard the 26 states’ lawsuit said the Medicaid expansion is valid.

Ron Pollack, executive director of Families USA, which supports the law and the Medicaid expansion, said the Medicaid question could have wider-reaching implications than whether the mandate to buy insurance is valid. A ruling for the states would be a “radical change in doctrine in what the federal government can do in respect with states on various initiatives,” he told POLITICO.

It would also be a blow to the health care reform law.

“This really is an essential piece of the architecture for expanding coverage for those people who don’t have it,” Pollack said. About half of those who will get new insurance coverage through the ACA will do so through Medicaid.

Pollack argues that states will be better off immediately after the expansion goes into effect. For three years, the expansion is 100 percent financed by the government (it gradually decreases to 90 percent). Plus, with more residents covered by Medicaid, the states’ bills for uncompensated care and uninsured emergency room visits would presumably decrease.

“For the states to argue this is harmful is really just incredible,” he said.

Jocelyn Guyer, co-executive director at the Georgetown Center for Children and Families and a senior researcher at the university’s health policy institute, said she’s confident the expansion will be upheld.

“The fact that all the states have taken up [Medicaid] reflects that it’s such a great deal,” she said. “We see this as highly unlikely, so we’re not spending a lot of time on it.”

This article first appeared on POLITICO Pro at 5:22 p.m. on January 10, 2012.

CORRECTION: A previous version of this story misstated the name and affiliation of Ilya Shapiro.

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