In an election season where undecided voters were courted like last chance prom dates and political rhetoric was at an all time high (or low depending on your point of view), the growing number of voters who just wanted the election to be over included an unlikely, but massive block of businesses: health insurers.
Jim Fox, a healthcare consultant at Warbird Consulting Partners, says the uncertainty over who would preside over the next phase of healthcare reform left health insurers feeling like they were on the sidelines.
"It's less on who gets elected as somebody getting elected and a direction gets established for the country and the payers to understand where it's going and what role they're going to play in that future," says Fox.
"Quite frankly, health plans have been—hospitals and large health systems—have had to deal with government regulations and oversights and review for a long time, so for them it's figuring out what direction the government goes... then figuring out how to deal with [it]," says Fox.
Now that health plans know President Barack Obama will continue to oversee healthcare reform, insurers can come up with the best strategy for slowing down, or in one case, repealing, parts of the Patient Protection and Affordable Care Act. Both Fox and the Association of Health Insurance Providers say their top issues all revolve around affordability.
1.Repeal the health insurance premium tax.
AHIP has been railing against this tax, which begins in 2014 and is assessed against health insurance providers to help pay for PPACA. The Congressional Budget Office estimates insurers will end up paying $14 billion in taxes by 2018.
Other studies show that cost getting get passed on to consumers by way of increased premiums. AHIP President Karen Ignagni, in testimony to Congress, said the premium tax would also hit Medicare Advantage enrollees hard.
She cited an Oliver Wyman study commissioned by AHIP. "Medicare Advantage plans will pay $220 per member in 2014 and $450 per member in 2023 as a result of this tax, for a total tax burden of $3,590 per member over ten years. For Medicare Part D plans, the tax will increase premiums by an estimated $9 in 2014 and $20 in 2023, for a total increase of $161 over 10 years."
The rate of increase on premiums for everyone else such as families and individuals ranges from 2.8% to 10% by 2016. There is currently a U.S. House bill with more than 200 co-sponsors supporting the repeal of the tax, though it got little play this past session and won't likely get looked at again until the new Congress is sworn in next year.
2.Loosen age-rating restrictions.
Starting January 1, 2014, the most a health insurer can charge an older person for coverage is three times the amount of a younger person. This is significantly lower than the ratio allowed now by most states, which is now 5:1.
The thinking behind the age-rating ratio is that older people use more services, so they pay more. Health insurers argue that reducing the amount they're able to charge doesn't decrease the amount the services cost, so, again, insurance premiums will rise for younger people who will be subsidizing a large chunk of care.
With an aging baby boomer population, insurers see this as a road to nowhere good.
3.Give states two years to transition to essential health benefits.
States have already been submitting their plans for what will be covered in addition to the list of 10 benefits mandated by PPACA.
The problem, says Fox, "is that creates a complexity for large companies, multi-state companies, where before you had a health plan, now you might need—if you're dealing in all 50 states—you might need 50 health plans for each state.
Fox also theorizes that if benefits are too complex or high in a state, then health plans will leave and reduce competition, leading to again, higher costs passed on to consumers. AHIP advocated for a two-year transition period so that states could have time to craft an EHB package that is affordable for everyone.
In a letter to the U.S. Department of Health and Human Services, Dan Durham, AHIP's executive vice president for policy and regulatory affairs, wrote, "If states select a benchmark plan that features more comprehensive and extensive benefits than is typically covered under small group plans today, many small businesses and families would be unable to afford coverage and could be priced out of the marketplace."
There are numerous other issues health plans would also like to see changed, says Fox, such as the mandatory rebates insurers have to pay out if they fail to meet the medical loss ratio. "That still has quite a bit of complexity in it for health plans to figure out how to do that, and I don't think people have fully figured out all the unintended consequences of that going forward," says Fox.
Removing prior authorization for emergency services is a concern as is the U.S. Supreme Court's ruling giving states the power to opt of out of expanding Medicaid. Fox says insurers question how PPACA reform can truly make healthcare more affordable for individuals, businesses, and families when there are so many places that premiums are removed from the current revenue cycle.
He says its simple math.
"If the health plans can't increase premiums enough to cover the costs that they're paying out, they will struggle economically. So their only choice is to increase premiums... which then start to make the costs prohibitive for individuals who will opt out into the state or federal subsidized programs. And that creates [another] whole set of questions of when does the state or federal governments get into being the health plan?"
Good question. Mr. President?
Jacqueline Fellows is a contributing writer at HealthLeaders Media.