Medicaid Expansion, Payer Oversight Seen as Vital to Healthcare Reform

Medicaid expansion, regulation of insurers, and oversight of private insurance plans are key factors in the national healthcare reform effort, a Commonwealth Fund report suggests.

"In states choosing not to expand Medicaid, more than 15 million underinsured and uninsured people have incomes below poverty—earning less than $23,550 a year for a family of four," the Commonwealth Fund report released this morning says. "Unless their states expand Medicaid, there will be no new coverage options—either Medicaid or premium assistance—available to them."

On a teleconference call to present the findings Monday, the lead author of the report said the resister states are taking a high-risk gamble. "There's a lot at stake when we exclude those under 65 from having insurance," said Commonwealth Fund Senior VP Cathy Schoen. "It's a very valued good. It's something people want and they want better health."

The research sets state-by-state baseline data for the number of uninsured and underinsured across the country before the introduction of healthcare reforms under the Patient Protection and Affordable Care Act.

Low-income individuals were considered underinsured if they had health insurance but spent 5 percent or more of their income on medical costs. People in higher income brackets were considered underinsured if they spent 10 percent or more of their income on medical costs.

The key findings of the report include:

• Thirty-two million people under age 65 were underinsured in the United States in 2012.
• The rate of the underinsured in states ranged from a low of 8 percent in New Hampshire to a high of 17 percent in Idaho and Utah.
• Low- and middle-income people were at highest risk of being underinsured, accounting for 30 million of those who had health coverage but lacked adequate protection against high health costs. Low-income people face the highest risk by far, with 26 million listed as underinsured.
• About 47 million people were uninsured in 2012, a decline of nearly 2 million from 2010. The improvement is almost entirely due to the provision of the PPACA that allows children 25 and under to remain on their parents' health plans.
• About 2 million people have joined the ranks of the underinsured since 2012, mainly because of the proliferation of high-deductibles and other cost-sharing burdens for consumers.

Oversight of Private Insurance
The Commonwealth Fund's Schoen says payers and providers have essential roles to play if Medicaid expansion is going to be successful. "When we're offering insurance," she said of the emerging post-PPACA markets, "it's the private insurers we're relying on."

The report calls for "effective oversight of private insurance plans" and Schoen says effective regulation of insurers is a key factor in the national healthcare reform effort because they are creating the provider networks that form the foundation for insurance policies.

"They are agents, and they are organizing care systems for us," she said. "We're relying on private insurers to provide us with options, and we want to make sure they do a good job… This is really a chance for them to prove themselves."

"Comprehensive, decent coverage" for all Americans is in the interest of hospitals and physicians, Schoen said.

The practical benefits for providers include an overall improvement in patient health that will drive down healthcare costs as well as less bill collection activity, she said.

'Enormously Complicated Product'
Dr. David Blumenthal, president of the Commonwealth Fund, speaking on the call, said that reforms introduced under the PPACA offer both opportunities and challenges for consumers, who are expected to play a pivotal role in the evolving health insurance marketplace.

"For the first time, we have a transparent market," Blumenthal said. "People have the ability to see what's offered and to make a choice."

But the choice is not an easy one, especially for consumers who have never had health insurance before, he said. "Insurance is an enormously complicated product," Blumenthal said. He noted that many who decided against obtaining health insurance this year on the PPACA exchanges "weren't sure whether the plans were right for them."

Devising health insurance access mechanisms such as the PPACA exchanges is only the first battle in a lengthy US healthcare reform campaign, he said. "Once we create a structure that enables people to get insurance, we're going to have to embark on a long-term process" to educate consumers, Blumenthal added.

So far, 24 states have opted not to expand Medicaid, according to the Commonwealth Fund. New Hampshire is expected adopt a modified form of Medicaid expansion this week, with federal Medicaid dollars set to be used to subsidize the purchase of health insurance on the PPACA exchange.

The Granite State's proposed Medicaid expansion, a bipartisan approach crafted in the state Senate, simplifies the enrollment process for beneficiaries, State Senator Nancy Stiles (R-Hampton), said in an interview Monday. Offering health insurance to Medicaid expansion enrollees on the exchange avoids people having "to switch from place to place" to get coverage, she said.

But Schoen believes the biggest boost to providers could come from creating a healthcare system that does not segregate patients based on their ability to pay. "It would be a new day in America if doctors didn't have to look at someone's wallet before providing care," she said.