I am a student in the doctoral program at the Duke University Department of Population Health Sciences. I am working towards my my doctorate in Health Services Research with a policy focus. I am fundamentally fascinated by insurance markets, consumer choice and the navigation of complex choice environments. I'm currently RA-ing at the Duke Margolis Center for Health Policy.

I used to be Richard Mayhew, a mid-level bureaucrat at UPMC Health Plan. I started writing here and have not found a reason to stop.

Conflicts of interest: Previously employed at UPMC Health Plan until 12/31/16. I also worked full time as a research associate at the Duke University Margolis Center for Health Policy. I have received direct funding from the National Institute for Healthcare Management, and I have been on projects funded by the Rockefeller Foundation, Kate B. Reynolds Charitable Trust, Gordan and Betty Moore Foundation, Duke University Health System, CMMI, and various value based payment consortiums. I serve as a consultant on a grant from the Commonwealth Fund and have acted as a consultant to several ACA insurers.

Research Production is here: https://scholar.google.com/citations?user=zof9b4IAAAAJ&hl=en

David Anderson has been a Balloon Juice writer since 2013.

David Anderson

Wave around the Waiver

by David Anderson| September 30, 20138:22 am| 57 Comments

This post is in: Anderson On Health Insurance

In the previous post, there were a couple of good questions about the Arkansas Medicaid “private option” waiver. The big one is would the Bronze plans on the Exchange be effectively useless to someone making 75% of FPL as they could not even look at the co-insurance and deductible as plausible payments.

Here is a bit more news on the Arkansas waiver (amazing what happens when one read’s the application!)

Arkansas will be submitting a SPA in addition to the submission of waiver requests for this Demonstration which includes eligibility limits for the newly covered population, updated cost-sharing requirements and the state’s selection of an ABP. Consumer cost-sharing obligations under the Demonstration will be identical to those under the State Plan for all individuals receiving the ABP. The SPA describing the ABP will include the cost-sharing design for all individuals receiving the ABP. As will be described in the SPA, Private Option beneficiaries with incomes below 100% FPL will not have cost-sharing obligations in year one of the Demonstration; Arkansas plans to submit amendments to the waiver to implement cost-sharing for Demonstration participants with incomes from 50-100% FPL to be effective in years two and three of the Demonstration. Individuals with incomes of 100-138% FPL will be responsible for cost-sharing in amounts consistent with both the State Plan and with the cost-sharing rules applicable to individuals with comparable incomes in the Marketplace. . For individuals with income between 100-138% FPL, aggregate annual cost-sharing will be capped at 5% of 100% FPL ($604 for 2014). Providers will collect all applicable co-payments at the point of care. QHPs will monitor Private Option beneficiaries’ aggregate amount of co-payments to ensure that they do not exceed the annual limit.

Let’s break it down.

Year 1, people under poverty line won’t have any cost-sharing.
Year 2 and 3 people under poverty line will have some cost sharing.
People over poverty line but MA eligible will have cost sharing up to 5% of federal poverty line.

§ 1902(a)(17): To permit the State to provide different delivery systems for different populations of Medicaid beneficiaries. The State is not requesting a waiver of comparability with respect to benefits, eligibility, or cost-sharing.

Earlier in the waiver, Arkansas is making a big deal about dealing with churn as its justification for the “private option:”

Continuity of coverage – For households with members eligible for coverage under Title XIX and Marketplace coverage as well as those who have income fluctuations that cause their eligibility to change year-to-year, the Demonstration will create continuity of health plans and provider networks. Households can stay enrolled in the same plan regardless of whether their coverage is subsidized through Medicaid, CHIP (after year one), or Advanced Premium Tax Credits.

I think this is a good policy justification for this option. We know that income variance is high at the bottom of the economic scale. Some people could have a good couple weeks of overtime at working that knock them out of one program to another, or someone who had just missed qualifying by $22 a week now qualifies after they lost the Thursday morning shift. People shifting between dissimilar plans and dissimilar networks and different providers are a problem because the continuity of their care (to use a highly technical term) sucks.

Wave around the WaiverPost + Comments (57)

Arkansas waiver news

by David Anderson| September 29, 20139:14 pm| 35 Comments

This post is in: Anderson On Health Insurance

CMS approved a waiver for Arkansas for Medicaid expansion. Instead of doing the mechanically simple thing of just expanding Arkansas Medicaid for individuals up to 133% of poverty line, Arkansas will engage in premium support. Individuals who are newly qualified for Medicaid in Arkansas will get a voucher to buy a policy on the Exchange.

The Hill blog:

Under the waiver, Arkansas will expand Medicaid to cover individuals whose income is less than 133 percent of the federal poverty line — the expansion contained in the Affordable Care Act.

But rather than placing those newly eligible residents on traditional Medicaid, Arkansas will offer them private coverage. Residents will be able to buy the private healthcare plans offered in the state’s insurance exchange — the other half of ObamaCare’s coverage expansion.

Iowa, following Arkansas’s lead, has already proposed a similar waiver, and state officials have said Arkansas’s plan could serve as a broader model.

This is big news with a couple of levels if implications:

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Arkansas waiver newsPost + Comments (35)

First, as a purely technocratic wonk, this is asinine. It is reinventing the wheel and adding some right angles to the second prototype for the hell of it. Medicaid has a system for enrollment that is scaleable and a set of providers who are willing to take it. Premium support will lead to the ineffecient use of a couple billion federal dollars over the next ten years. It will also lead to the waste of a few hundred million Arkansas dollars.

However, screw that. This is a political exercise that will make sure that tens of thousands of people who otherwise would not have gotten coverage will get coverage. A 8% or 10% inefficiency tax that allows people to benefit from Obamacare without calling it Obamacare is a net societal win. Furthermore, since it now builds in a layer of middle men that have minimal real value, there is a rentier class in Arkansas that will now be interested in keeping their income stream. A new advocate for Medicaid will be created which will make Medicaid sustainable in Arkansas.

Furthermore, several other states (Indiana and Iowa) have applied for very similar waivers from CMS. I think they will get the same waiver in the next couple of weeks. Pennsylvania’s expansion request will not be going through the same expedited approval. Pennsylvania wants to do a premium support model, but Gov. Corbett also wants to do some serious poverty shaming and lifetime limitations on both expansion and current Medicaid populations. I don’t think that waiver request has been filed yet, nor do I think that we can draw any conclusions from the Arkansas waiver to the Pennsylvania plan.

The Donut Hole in Medicare Part D (the prescription drug benefit) is slowly going away. Medicare Part D has four tiers of coverage.

Here is the 2013 benefit design:

Deductible phase where Medicare pays 0% (2013 $325)
Basic coverage where Medicare pays 75% ($325.01 to $2,970)
Donut hole where Medicare pays 2.5% ( $2,970.01 to $4,700) (Medicare has negotiated large discounts with providers)
Catastrophic coverage where Medicare pays 95% of costs ($4700.01 to infinity and beyond)

There is a reasonable non-spite rationale for this benefit design. I don’t think the rationale works well as it was implemented as the donut hole was too high to discourage drug use that could be safely discouraged.

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Time to make the donutsPost + Comments (23)

The idea behind the donut hole in the benefit design was to discourage “over-use” of drugs by the medium to high intensity users while still providing help to people who are truly screwed. This is fairly common benefit design in most health insurance plans.

However the problem is that the donut hole applies to people who most likely suffer from chronic conditions. The idea of a 97.5% coinsurance amount is that it will discourage people from buying unnecessary pills. The problem is that people who are hitting that level of payments need those pills. Discouraging people with chronic conditions from buying the drugs that they need leads to higher long run costs as manageable conditions become unmanaged acute crisis situations.

This is a significant problem with most deductible/co-pay/co-insurance plans.

The deductible/low co-insurance incentive structure makes sense for people like me and my family who are reasonably healthy and have no long term chronic conditions. We have the ability to absorb a one-off hit and we can anticipate that any hit is a one off, isolated event at this time in our lives.

It does not make sense for a college friend of mine. She was/is manic-depressive and her manic-depression was smoothed out when she was taking her prescribed regimen. She was, as most college students are, severely cash constrained. Her insurance had a combined $100 a month co-pay for her medications. Her solution to being flat broke was to stretch out her medication by either splitting pills in half (the more ‘successful’ system) or initially taking a full dose every other day. These systems led to one involuntary mental health commitment and two voluntary mental health commitments.

After her second voluntary commitment, her case manager figured out that the government could have saved several thousand dollars a night if she was able to get her meds for free. And amazingly, the case manager was right and fought like a tiger to get a modified care plan that got my friend her psych drugs at no cost share. The last I heard, my former friend was in a pretty good place at the total cost of $1,200 per year instead of $2,500 a night.

Benefit designs that are good (enough) for most people fail miserably when insurance moves from covering unexpected events to managing chronic conditions. People have relatively narrow time horizons and irrationally high discounts on the future in all cases. People in situations of scarcity are not optimizing complex multi-variate problems of life. They are managing single satisficing solutions with minimal regard to interaction impacts. Putting people who, systemically are costly, at the position to choose rent over needed medication is a good way to save money in year one but spend way more in year two.

Never forget that he train is barreling down on Trump, even as he dances on the tracks.

Sadly, media malpractice has become standard practice.

A consequence of cucumbers

The gop couldn’t organize an orgy in a whorehouse with a fist full of 50s.

Bad news for Ron DeSantis is great news for America.

There are more Russians standing up to Putin than Republicans.

Nikki Haley, who can’t acknowledge ‘slavery’, is a pathetic shill.

You’re just a puppy masquerading as an old coot.

You are so fucked. Still, I wish you the best of luck.

Proof that we need a blogger ethics panel.

Fight for a just cause, love your fellow man, live a good life.

Republicans are radicals, not conservatives.

Let’s show the world that autocracy can be defeated.

Republicans want to make it harder to vote and easier for them to cheat.

It’s a doggy dog world.

Donald Trump, welcome to your everything, everywhere, all at once.

It’s not hopeless, and we’re not helpless.

This blog will pay for itself.

When the time comes to make an endorsement, the pain of NYT editors will be palpable as they reluctantly whisper “Biden.”

It’s easy to sit in safety and prescribe what other people should be doing.

T R E 4 5 O N

Let’s not be the monsters we hate.

This really is a full service blog.

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Wave around the Waiver

Arkansas waiver news