Is knowing what you’re talking about an automatic disqualification from writing about health policy at Forbes Magazine?
Josh Archambault at Forbes last June was advocating that Gov. Corbett (R-PA) pull the application for a waiver for Healthy PA because it was not reformy/screw the poor enough and fucks up some basic facts:
The flawed design of Healthy PA is also likely to result in higher costs to taxpayers. Similar to the “Private Option” Medicaid expansion in Arkansas, enrollees under Healthy PA can purchase any “private coverage option” in their geographic area without any additional financial cost to themselves.
This provision alone could drive costs sky-high. Enrollees have no financial incentive to keep costs low. In most regions of the state, the most-expensive plan costs more than twice as much as the least-expensive plan. Healthy PA enrollees are likely to flock to these Cadillac options, as they typically have broader provider networks and better prescription drug coverage. When enrollees pick these more expensive options, the tab picked up by taxpayers will skyrocket.
Wow, there is a lot of fail here.
First, Pennsylvania is not using the Arkansas model. Arkansas Medicaid expansion is being used by a pure premium support model. Arkansas Expansion gives people who make under 138% FPL sufficient subsidy to buy a cost-share Silver plan. This means Arkansas residents who qualify for expansion are placed in the same risk pool as Exchange eligible individuals who make more than 138% FPL.
Pennsylvania is reinventing the wheel. Pennsylvania is already a managed care state for its current Medicaid population. This means the state gives its Medicaid money to private insurers/managed care organizations (MCOs)who then pay for services in an HMO-like arrangement for Medicaid benefeciaries. Some of those insurers only work in the Medicaid field. Some also sell in the commercial, Medicare, CHIP and Exchange markets. The Pennsylvania Medicaid expansion creates “Private Care Organizations” that will offer two plans per region in the state. The two plans will be for medically frail/high need, and generally healthy/low need. These plans are not being offered on the Exchange, they are not being offered to employer sponsored coverage, they are not being offered to anyone else.
There is no chance that Cadillac style plans will be offered as the level of the capitation payment will be no where sufficient to cover that as 1115 waivers require net federal budget neutrality over the life of the demonstration project. The reimbursement rates that the state gives to the PCOs will be, age/gender/health status adjusted, similar to what MCOs currently get. The networks and benefit designs will be similar to what is currently offered on privatized Medicaid.
Currently, if my college roommate’s younger sister who lives in Philly was Legacy Medicaid eligible, she would sign up with the state, and have her eligibility determined. She would then get a choice of four or five different insurers. Her benefits might change slightly due to her health situation (pregnant women get better benefits etc). She would not see the capitated payment level that she brings with her to her choice. Under the Healthy PA waiver, she would have her eligibility determined, get a list of five plans at either the high risk or low risk group, make a choice and get an insurance card three weeks later. Again, she does not see what the capitated payment the state makes to her new insurer. The cost control device is not the indivual bearing the cost of coverage, but the insurance companies being told that they are getting a flat and fairly low head fee. The PCOs will aggressively prune networks of high cost providers and continue aggressive utilization review.
Rhetoric: Healthy Pennsylvania Private Coverage Option will reduce overall premium costs in the Commonwealth, by reducing emergency room visits and requiring less uncompensated (charity) care.
Reality: The promise of lower premiums in the private health insurance market resulting from Healthy PA rests on the hope that adding 500,000 individuals to the market will reduce costs.
Data, it is a wonderful thing:
Colorado Hospital Association did a fairly comprehensive study of 28 states (expansion and non-expansion) on charity care and self-payments from early June:
self-pay volumes and charity care experienced the opposite effect, with hospitals in expansion states recording significant reductions in these at the start of 2014. This decline in self-pay and charity care, occurring in parallel with the growth in numbers of Medicaid beneficiaries, shows that previously uninsured patients are now enrolled in Medicaid. Many hospitals provided on-site assistance to enroll eligible patients into Medicaid, promoting the recruitment of patients into Medicaid who otherwise would have self-paid or been provided with charity care.
The changes seen here are not only distinct, but also substantial. The Medicaid proportion of total charges increased over three percentage points to 18.8 percent in 2014 from 15.3 percent in 2013, representing a 29 percent growth in the volume of Medicaid charges. When compared to the first quarter of 2013, there was a 30 percent drop in average charity care per hospital across expansion states, to $1.9 million from $2.8 million. Similarly, total self-pay charges declined 25 percent in expansion states, bringing its proportion of total charges down to 3.1 percent from 4.7 percent. In contrast, the proportion of Medicare volume shows little variation through first quarter 2014.
So charity care is going down significantly in Expansion states compared to non-Expansion states, and the model that he argues is fatally flawed by giving too rich of a benefit to poor people is not actually the model being used.
SATSQ: Yes, knowing what the fuck you’re talking about is a fireable offense if you write about healthcare for Forbes.