While HHS has established a national set of minimum essential benefits for insurance packages offered by the states, it’s also left the door open for mischief by giving meaning to the most dangerous phrase known to man … “regulatory flexibility.”
Many experts predict that the insurance exchanges, thanks to bi-partisan support, will still move forward in many states with or without the Affordable Care Act because, well, the idea of offering low-cost insurance plans to the uninsured via a single Web site just sounds like a really, really good idea that elected officials of any stripe will want to rally around. But, not surprisingly, their definition of “low-cost” is decidedly different than the majority of the public.
I spent most of last week at the America’s Health Insurance Plans (AHIP) Institute in Salt Lake City listening to the best minds in the payer industry examine health reform in every which way. The message emanating from the industry to the rest of the country is pretty straightforward: if there’s no individual mandate, there will be no real reform. Without that individual mandate requiring nearly everyone to buy insurance, there won’t be enough healthy young people swimming in our national insurance pool to offset costly reform provisions such as requiring insurers to cover people with pre-existing conditions. AHIP, in a companion brief with the Blue Cross Blue Shield Association sent to the Supreme Court earlier this year, showed some literary flair when warning of a “market wide adverse-selection death spiral.”
But it was while outside the confines of the Great Salt Palace Convention Center that it really hit home for me what payers and providers are up against, even if they get the outcome they want from the Supreme Court. The Salt Lake Tribune ran an article inside its state news section about the Utah Legislative Health Reform Task Force’s meeting to define the “essential benefits” package for Utah insurance plans that will be offered via the state’s planned state insurance exchange.
In a story that’s playing out in other state capitols, there was a laundry list of things that one group or another says simply must be covered in their essential state health benefits benchmark plans: acupuncture, birth control, specialized therapy for autism, newborn screening for birth defects, and so on and so forth. That’s on top of what already has been federally mandated as essential and must go into the packages: emergency services, hospitalization, maternity, newborn and pediatric care (including oral and dental services; mental health and substance abuse treatment; prescription drugs; rehabilitative services; medical devices; labs; prevention and wellness; and chronic disease management).
The Blue Cross Blue Shield Association and the Council for Affordable Health Insurance have compiled a list of existing state requirements for essential benefits, and it shows the wide variance in how regulators have exercised their flexibility: while Idaho has established eight mandated benefits, Rhode Island has created a whopping 61. In all, states have established 1,904 mandated benefits above and beyond national requirements. And here’s the kicker: the Affordable Care Act requires the states to defray the costs of those benefits that are in excess of the HHS-mandated essential health benefits package.
I fear the United States is pricing itself out of the market for health reform. Piling on more “essentials” on top of an already daunting stack, as many states doubtless are going to do, is going to price even the most basic insurance too high for most people, which gets us spinning in the vortex: people buying insurance only when they’re gravely ill, healthy people paying a negligible penalty for not having insurance, a sizable chunk of our citizenry uninsured and paying the health consequences, as well as leaving unpaid bills like landmines strewn across the care continuum, ready to explode and take out practices and hospitals.
There are a lot of initiatives by providers and payers to work together to sort out the cost and quality problems everyone is facing. At AHIP I had the chance to meet some extraordinary payer I.T. leaders who are positioning their technology to help physicians and hospitals as much as themselves. (I suggest you check out a video interview I did with Sumeet Seth from D.C. Chartered Health Plan.)
Who would have thunk? Ten years ago, if you told me a physician and a payer exec met for coffee, I would have considered that an extraordinary effort at cooperation. But look how far those two factions have come, and all it took was a national expenditure spending crisis and an explosion of bad health. Now that they’re sitting at the same table and share the same concerns, it’s seems a cruel cosmic joke that defining “essential” might be what kneecaps their best efforts at true cooperation.