Republicans promising change might not quickly admit it, but in some respects Obamacare’s replacement may look something like the original.

Obamacare 'Replacement' Might Look Familiar

KFF Health News, November 10, 2016

Republicans promising change might not quickly admit it, but in some respects Obamacare's replacement may look something like the original.

This article first appeared November 9, 2016 on Kaiser Health News.

By Jay Hancock and Shefali Luthra

The Affordable Care Act transformed the medical system, expanding coverage to millions, injecting billions in tax revenue, changing insurance rules and launching ambitious experiments in quality and efficiency.

Less of that might disappear under President-elect Donald Trump's pledge to "repeal and replace Obamacare" than many believe, say policy analysts. Republicans promising change might not quickly admit it, but in some respects Obamacare's replacement may look something like the original.

"It gets into a questions of semantics," said Mark Rouck, an insurance analyst for Fitch Ratings. "Are they really repealing the act if they replace it with new legislation that has some of the same characteristics?"

Problems that helped give rise to the health law — rising costs, an aging population, mediocre medical results — haven't gone away. The ACA pushed insurers, hospitals and employers to launch their own reimbursement reforms, which are largely unaffected by who runs Washington.

Even fierce health-law opponents may pause at the political risk of taking benefits from millions who gained coverage since its implementation. Subsidies for the middle class to buy insurance may remain — even if they're not the Obamacare tax credits applied through online marketplaces, said Joseph Antos, a health economist at the American Enterprise Institute.

"The idea that they're just going to wipe that money away is pretty unlikely," he said. "They don't want to be in a position of saying they're just kicking millions of people out in the street."

Others disagree.

"I think they go away," said Ana Gupte, a health care analyst for Leerink Partners. "The subsidies … are at risk" along with the ACA's requirement that everybody have health coverage, she said.

Topping the list of ACA provisions likely to survive under Trump is the requirement that employers cover workers' children up to the age of 26, analysts said. The measure is widely popular and not especially expensive.

A health law crafted by Republicans might also retain the ACA's protections for people with preexisting illness seeking coverage, said Glenn Melnick, a health economist at the University of Southern California.

That could include relaxing the ACA's limit on how much insurers can charge and allowing them to adjust premiums based on an individual's health, he said. However, that might put the price of insurance out of reach for many.

The health law's payment reforms might also survive in some form. The ACA prompted hundreds of experiments to control costs by rewarding doctors for efficiency and fixing payments for episodes of care or treating entire populations.

"Part of what I would expect to hear from [the new administration] is we want more value out of the entire system," said Daniel Steingart, a hospital analyst at Moody's Investors Service. "All of that jibes pretty closely" with ACA payment experiments by the Department of Health and Human Services, he said. "I can foresee a scenario where they gradually expand all those programs."

Republicans have criticized HHS's innovation lab, which presides over accountable care organizations and many other payment tests. But they may find it more appealing under their own supervision, said Rodney Whitlock, a strategist and former top Republican health advisor in the Senate.

"You can really want to curtail it — until maybe you're in charge," he said. "Then maybe you would like it."

In any case private insurance companies, employers and hospitals are likely to continue their own payment reforms, analysts said.

"Private industry is really taking that and running with it," said Gupte. To be sure, health policy and financing are likely to look substantially different in a Trump administration, experts said.

The ACA's biggest coverage expansion came through the Medicaid program for the poor and disabled, which added more than 15 million people. Trump has suggested giving states fixed federal grants for Medicaid, which could lead to a substantial reduction in coverage or benefits.

Even partial cuts in Medicaid funding and subsidies for private plans would hurt hospitals, which have benefited from the health law's revenue infusion.

"If you're running a health system and you now have more insured people through a Medicaid expansion or exchange customers — if even a portion of those go away, that might be your [profit] margin for the year," said Benjamin Isgur, who heads the Health Research Institute at PwC, a consultancy.

On the other hand, hospitals and insurers represent a powerful lobby seeking to maintain something that looks like the status quo.

"There's a bigger role [hospitals] can play, a much more cost-effective role we can play if we have a long-term strategy" as part of a consistent health reform program, said Bill Ryan, a spokesman for the Einstein Healthcare Network, a Philadelphia-based hospital system. "And stopping and starting seems to be a crazy way to do this."

Other aspects of health care will probably stay the same in the near future no matter what Congress does, analysts said.

Health costs continue to grow faster than the economy's ability to pay for them. Partly as a result, high deductibles — what patients pay before insurance kicks in — have become widespread in employer and individual plans alike. Neither have much to do with the health law, said Don Berwick, who was acting Medicare administrator early in the Obama administration.

Republicans "managed to make the public think Obamacare was causing all the trouble. That is absolutely wrong," he said. "They could repeal it tomorrow and still have a broken delivery system and costs would continue to go up."

Now Republicans face the same challenge, said Mark McClellan, who ran Medicare in the George W. Bush administration.

"It'll be a different path, but the urgency of finding ways to transform health care — to give care that's more personalized in prevention and less costly and more accessible, especially to people of limited means — the pressure to do that is not going to go away," he said. "It's going to increase."

Millions Could Lose Medicaid Coverage Under Trump Plan

Millions Could Lose Medicaid Coverage Under Trump Plan

KFF Health News, November 10, 2016

Reducing the number of people in Medicaid while ensuring that only the most needy remain eligible will be a goal for Trump and the new Congress, but there are obstacles to the Republicans' plans.

This article first appeared November 9, 2016 on Kaiser Health News.

By Phil Galewitz

Millions of low-income Americans on Medicaid could lose their health coverage if President-elect Donald Trump and a Republican-controlled Congress follow through on GOP proposals to cut spending in the state-federal insurance program.

The biggest risk for Medicaid beneficiaries comes from pledges by Trump and other Republicans to repeal the Affordable Care Act, which provided federal funding to states to expand Medicaid eligibility starting in 2014. Thirty-one states and Washington, D.C. did so, adding 15.7 million people to the program, according to the government. About 73 million are now enrolled in Medicaid — about half are children.

Reducing the number of people in Medicaid while ensuring that only the most needy — such as children and pregnant women — remain eligible will be a goal for Trump and the new Congress, said Brian Blase, senior research fellow at the conservative Mercatus Center at George Mason University in Virginia.

"If we do not have fewer people in Medicaid in four years, then we have not reformed health policy in a good direction," he said.

But there are obstacles to the Republicans' plans. Medicaid, one of President Lyndon Johnson's "Great Society" domestic programs that was created in 1965, is the nation's main health insurance program for low-income people.

Overhauling it is politically difficult because of the potential harm to recipients as well as the financial consequences to states, hospitals, doctors and other health providers, who might not get paid for their services if patients don't have coverage. Total Medicaid spending was $532 billion in fiscal 2015, with about 62 percent funded by the federal government.

One major change endorsed by both Trump and House Speaker Paul Ryan (R-Wis.) would transform Medicaid from an entitlement program into a block grant program.

Here's the difference. In an entitlement program, coverage is guaranteed for everyone who's eligible. The federal government's commitment to help states cover costs is open-ended. The states' obligation is to cover certain groups of people and to provide specific benefits. Children and pregnant women who meet specific income criteria must be covered, for example.

That formula would change if federal funds flow to states through block grants. States would have more flexibility to run their Medicaid programs as they wish — including cutting benefits and eligibility. And proponents say it would allow the federal government to spend less on Medicaid and make states responsible for covering costs beyond their federal allotments.

Turning Medicaid into a block grant program has been discussed for more than 25 years, but the idea has always met resistance from some states, health providers, health care advocates and Democrats. Even with a Republican majority in Congress and Trump in the White House, the plan would still face an uphill legislative battle.

The federal government rarely shifts power to the states and not all states want to be at increased financial risk for the program.

"Medicaid block grants face a very uncertain future," said Joel Cantor, director of the Center for State Health Policy at Rutgers University in New Jersey.

Another option to redefine Medicaid funding, similar to a block grant, is known as a per capita cap. States would be given a set amount of money per enrollee, which would increase each year but critics fear likely not keep up with rising health expenses. That method would help states better deal with growing enrollment because funding would rise, too.

Even without help from Congress, Trump's administration could change Medicaid using the executive branch's power to approve states' requests for waivers from federal rules. That could allow Trump to approve changes proposed by Republican governors that the Obama administration has rejected, including work requirements for Medicaid enrollees and monthly premiums and other cost-sharing.

Trump could also end some waivers that expanded Medicaid and sent billions in new federal funding to some states that transformed care.

Any congressional changes to Medicaid next year would likely include negotiations about the Children's Health Insurance Program, another federal-state program that provides coverage to youngsters whose families are slightly over the Medicaid eligibility. The program expires if not reauthorized by Sept. 30, 2017. According to the Kaiser Family Foundation, about 8 million children get coverage through CHIP, which has had Republican and Democratic support.

After Trump is in office, he may find it's harder than he realized to repeal Obamacare and tinker with Medicaid because cutting off coverage for millions of people could bring plenty of political fallout, said Joan Alker, executive director of the Center for Children and Families at Georgetown University.

Republican Gov. Matt Bevin of Kentucky took a similar tack last year, she observed, running against Obamacare and vowing in his campaign to eliminate the expansion. He has since proposed major changes to Medicaid, but he has not yet moved to kill the expansion.

Still, Alker said Trump's win puts the block grant idea front and center in January. And an agreement to do it could give states flexibility to make cuts in federally required benefits, such as health screenings for infants and children.

"I would be very concerned about what could happen," Alker said.

CA Faces Major Reversal If Trump, Congress Scrap Health Law

KFF Health News, November 10, 2016

Health policy experts don't expect Republicans to immediately kick millions of people off their insurance policies. Instead, they predict lawmakers may repeal parts of the law and allow for some transition period for consumers while a replacement plan is put together.

This article first appeared November 9, 2016 on Kaiser Health News.

By Chad Terhune

California has a lot to lose if President-elect Donald Trump and the Republican-led Congress fulfill their campaign pledge to repeal Obamacare.

The Golden State fully embraced the Affordable Care Act by expanding Medicaid coverage for the poor and creating its own health insurance exchange for about 1.4 million enrollees. Supporters held California up as proof the health law could work as intended.

But now President Barack Obama's signature law is in serious jeopardy and California officials are left wondering what Republicans in Washington may put in its place.

"There is no doubt that Obamacare is dead," said Robert Laszewski, a health care consultant and expert on the California insurance market. "The only question is just exactly how Republicans will get rid of it."

Health policy experts don't expect Republicans to immediately kick millions of people off their insurance policies. Instead, they predict lawmakers may repeal parts of the law and allow for some transition period for consumers while a replacement plan is put together.

Still, the personal and financial impact for the state could be jarring. The number of uninsured Californians would more than double to 7.5 million people if the Affordable Care Act was repealed, according to a recent study by the Urban Institute.

Researchers also said California stands to lose an estimated $15 billion annually in federal funding for Medicaid expansion and insurance subsidies — more than any other state. That loss of federal money would make it difficult for California to pursue health reform on its own.

State Sen. Ed Hernandez, (D-West Covina), chairman of the Senate Health Committee, said it's difficult to predict what the next iteration of the Affordable Care Act may look like.

"Will there be federal subsidies? Will the state legislature pay for subsidies to ensure Californians have coverage? Those are open questions," Hernandez said. "I will do everything I can to make sure California continues to take the lead on this issue."

California Insurance Commissioner Dave Jones said the state doesn't have the money to maintain Medi-Cal expansion or insurance subsidies on its own.

"With repeal, there is not some soft landing. There is not any capacity on the part of states to backfill what these cuts will do," Jones said. "I am very frustrated that the progress that has been made reducing the uninsured by half in this state and the nation will be undone. I am horror struck at all the Americans who will be without health insurance."

Congress already has voted to eliminate funding for Medicaid expansion and premium tax credits to dismantle two key pillars of the health law. Obama vetoed that legislation earlier this year, but Trump made the repeal of Obamacare a centerpiece of his campaign.

If repeal goes through, state leaders and consumer advocates may look to the ballot box, asking voters to fund expanded health coverage through higher taxes or fees. In Tuesday's election, Californians backed the extension of a hospital fee to help pay for Medi-Cal, the state's Medicaid program.

State officials could aim even higher and try for a government-funded single-payer health system at the state level. But that's expensive, disruptive to the current system and a tough sell to the public. Colorado voters soundly rejected a state single-payer initiative during Tuesday's election.

Some Republican lawmakers in California would applaud a reversal on Medi-Cal expansion. They have argued that state and federal spending increases on the program are unsustainable.

The state's Medi-Cal program now covers about a third of all Californians. The health law's Medicaid expansion has added about 3.5 million Californians to the program since January 2014 and total enrollment stands at more than 13 million.

Molina Healthcare, a Long Beach-based insurer, is a major player in Medicaid managed care nationwide and also covers about 600,000 people through exchanges in California and eight other states. The company's chief executive, Dr. J. Mario Molina, said he thinks Covered California and other exchanges will become a smaller part of health reform under a Republican plan and coverage expansion will shift more to Medicaid.

Molina said Republicans in Congress could grant governors more flexibility on Medicaid benefits to keep costs down while maintaining guaranteed access to coverage regardless of preexisting conditions, a popular provision of the health law.

"Republicans have the benefit of looking back at the experiment of Obamacare and seeing what worked and what didn't work," Molina said in an interview. "I think the Republicans will negotiate a deal where Medicaid gets expanded with more state control and exchanges will play a different role. The most cost effective way to do coverage expansion is through Medicaid."

Consumer advocates acknowledged the financial challenges posed by repeal but also encouraged Californians to keep signing up for coverage in the meantime.

"Californians should continue to enroll in Covered California this open enrollment season, in Medi-Cal, and all the benefits they are still entitled to–and then fight like hell to keep them," said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

But some Covered California policyholders expressed concern about what a Trump administration might mean for their coverage.

"I worry it will be gone, and I don't know what I will do for insurance," said Jane Henning Childress, 61, who lives in Calaveras County.

Taking into account her federal subsidy, she said she pays about $135 a month for her exchange plan. Earlier this year, she used it to help cover surgery for an ovarian cyst. "It sure helped me out," she said.

Even before the election, some major health insurers were pulling out of the exchange market nationally and premiums shot up 22 percent, on average, for state and federal exchanges for 2017.

In the Covered California exchange, the average rate increase was 13.2 percent for next year. That's higher than the 4 percent average rate increases that California negotiated its first two years. Open enrollment started Nov. 1.

Health insurers in California and nationwide face plenty of uncertainty as well from the election outcome. Some analysts said more insurers may exit state marketplaces rather than wait for them to unravel and risk getting stuck with too many expensive patients.

Four big insurers, led by Anthem Inc. and Blue Shield of California, account for about 90 percent of Covered California's enrollment.

"The unthinkable has happened," said Ana Gupte, a senior health care research analyst at Leerink Research. "With a Republican sweep of the White House, Senate and the House, we are looking ahead to a 2017 filled with much change and uncertainty in the health care markets."

This post is being periodically updated.

Trump, GOP In Congress Could Use "Must-Pass" Bills To Bring Health Changes

Trump, GOP In Congress Could Use "Must-Pass" Bills To Bring Health Changes

KFF Health News, November 9, 2016

Republicans could use fast-track budget authority to make some major changes to the ACA, although that could take some time. In the short term, however, Trump could use executive power to make some major changes on his own.

This article first appeared November 9, 2016 on Kaiser Health News.

By Julie Rovner

Throughout the campaign, President-Elect Donald Trump’s entire health message consisted of promising to repeal the Affordable Care Act.

That remains difficult with Democrats still commanding enough power in the Senate to block the 60 votes needed for a full repeal. Republicans could use fast-track budget authority to make some major changes to the law, although that could take some time. In the short term, however, Trump could use executive power to make some major changes on his own.

Beyond the health law, Trump also could push for some Republican perennials, such as giving states block grants to handle Medicaid, allowing insurers to sell across state lines and establishing a ;federal high-risk insurance pool for people who are ill and unable to get private insurance.

But those options, too, would likely meet Democratic resistance, and it’s unclear where health will land on what could be a jam-packed White House agenda.

Still, there are several health issues the next Congress and the new administration will be required to address in 2017, if only because some key laws are set to expire.

And those could provide a vehicle for other sorts of health changes that might not be able to clear political or procedural hurdles on their own.

Here are some of the major health issues that are certain to come up in 2017:

The Affordable Care Act

If the GOP could not repeal the law and Trump were to turn to Congress to address some of the issues associated with it, it’s not clear if the executive and legislative branches could work together to respond to rising insurance premiums, declining insurance company participation or other unintended impacts of the health law. Nonetheless, some aspects of the law are unavoidable next year. For example, Congress in 2015 temporarily suspended or delayed three controversial taxes that were created to help pay for the law.

One of those taxes, a fee levied on health insurers, is suspended for 2017, while a 2.3 percent tax on medical devices was suspended for 2016 and 2017. Both industries lobbied heavily for the changes — arguing that the taxes boosted the prices of their products — and would like to permanently kill the taxes.

Also on hold is the most controversial health law tax of all, the so-called “Cadillac Tax” that levies a 40 percent penalty on very generous health insurance plans. The idea is to prevent consumers who pay little out of pocket because of their coverage from overusing health care services and driving up overall health costs.

The tax was technically put off from 2018 to 2020, but experts say pressure will begin to mount next year for reconsideration because employers will need a long lead time if they are to change benefits to avoid paying it. While economists are virtually unanimous in their support for the tax on high-end health plans, business and labor both strongly oppose it.

Children’s Health Insurance Program

The Children’s Health Insurance Program, a federal-state partnership that Hillary Clinton helped set up in negotiations with Congress during her husband’s administration, is up again for renewal in 2017. CHIP covers more than 8 million children from low- and moderate-income households and has made a huge dent in the number of uninsured children. According to the Census Bureau, nearly 95 percent of children had insurance coverage in 2015.

When the federal health law passed in 2010, many policymakers thought CHIP would quietly go away because most of the families whose children are eligible for the program became eligible for tax credits to help them purchase plans for the entire family in the health law’s marketplaces. But it turned out that CHIP in most states remained more popular because it provided better benefits at lower costs than did plans through the ACA.

In 2015, Congress compromised between those arguing to extend CHIP and those who wanted to end it, by renewing it for only two years. That ends Oct. 1, 2017. In practice, if Congress wants to extend CHIP, it needs to act early in 2017 because many states have fiscal years that begin in July and need lead time to plan their budgets.

Prescription Drug And Medical Device User Fees

Also expiring in 2017 is the authority for the Food and Drug Administration to collect “user fees” from makers of prescription drugs and medical devices.

The Prescription Drug User Fee Act, known as PDUFA (pronounced pah-doof-uh), was originally passed in 1990 in an effort to speed the review of new drug applications by enabling the agency to use the extra money to hire more personnel. The user fees were later expanded to speed the review of medical devices (2002), generic copies of brand-name drugs (2012) and generic biologic medicines (2012).

PDUFA gets reviewed and renewed every five years, and its “must-pass” status makes it a magnet for other changes to drug policy. For example, in 2012 the renewal also created a program aimed at addressing critical shortages of some prescription drugs. Earlier renewals also included separate programs that gave pharmaceutical firms incentives to study the effect of drugs in children.

Some policy-watchers think this year the bill could serve as a vehicle for provisions to help bring down drug prices, although it is not clear how well many of the ideas currently being floated would work.

“I think [Congress] will talk a lot about it and do very little,” said Robert Reischauer of the Urban Institute, who called the drug price issue “incredibly complex.”

Medicare’s Independent Payment Advisory Board

One more issue that might come up is a controversial cost-saving provision of the federal health law called the Independent Payment Advisory Board, or IPAB. The board is supposed to make recommendations for reducing Medicare spending if the program’s costs rise significantly faster than overall inflation. Congress can override those recommendations, but only with a two-thirds vote in each of the House and Senate.

So far the trigger hasn’t been reached. That’s lucky because the board has turned out to be so unpopular with both Democratic and Republican lawmakers, who say it will lead to rationing, that no one has even been appointed to serve.

The lack of an actual board, however, does not mean that nothing will happen if the requirement for Medicare savings is triggered. In that case, the responsibility for recommending savings will fall to the secretary of Health and Human Services. Medicare’s trustees predicted in their 2016 report that the targets will be exceeded for the first time in 2017.

That would likely touch off a furious round of legislating that could, in turn, lead to other Medicare changes.

The fungus, called Candida auris, has been detected in a total of 13 hospital patients since May 2013; a CDC report provides details on the first seven cases, which were reported in New York, Illinois, Maryland and New Jersey.

Deadly Superbug Linked To Four Deaths In The U.S.

KFF Health News, November 7, 2016

The fungus, called Candida auris, has been detected in a total of 13 hospital patients since May 2013. A CDC report provides details on the first seven cases, which were reported in New York, Illinois, Maryland, and New Jersey.

This article first appeared November 4, 2016 on Kaiser Health News.

By Liz Szabo

A deadly new drug-resistant fungus has been linked to the deaths of four hospital patients in the U.S., according to a report released Friday from the Centers for Disease Control and Prevention.

The fungus, called Candida auris, preys on the sickest patients and can spread in hospitals. Although doctors have been concerned about the spread of antibiotic-resistant bugs for many years, this fungus is relatively new on the world scene. It was first identified in Japan in 2009 and has since spread around the globe, emerging in South America, the Middle East, Africa and Europe, according to the CDC.

The CDC first identified the fungus as a potential threat in 2013, based on a possible case in the U.S., and has been on the lookout for the fungus since June. In its new report, the CDC said the fungus has been detected in a total of 13 patients since May 2013; the agency provided details on the first seven cases, which were reported in New York, Illinois, Maryland and New Jersey.

All of the patients had serious underlying medical conditions, including cancer, and had been hospitalized an average of 18 days when they tested positive for the fungus. Two patients had been treated in the same health care facility and had nearly identical fungal strains. Doctors can't say for sure if the patients died from the fungus or their underlying health problems.

But health officials say the nation's hospitals need to be on alert.

"We need to act now to better understand, contain and stop the spread of this drug-resistant fungus," said Thomas Frieden, director of the CDC. "This is an emerging threat, and we need to protect vulnerable patients and others."

Identifying the fungus is difficult and requires special laboratory methods because it's so similar to other bugs. Most of the samples in the new report were initially misidentified as other fungal species, the CDC said.

Treating the fungus is even harder; 71 percent of the fungal samples were resistant to current drugs. Samples of the fungus in other countries have been resistant to all three major classes of antifungal drugs.

Hospitalized patients are at especially high risk from the fungus because many have had antibiotics, which can kill off healthy bacteria that help protect us from disease, said Peter Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine in Houston.

"It's a warning or wake-up against the indiscriminate use of antibiotics, especially in hospital settings," Hotez said.

Hospitals have been testing for the fungus more frequently due to outbreaks in Asia and the United Kingdom, said Amesh Adalja, senior associate at the UPMC Center for Health Security in Baltimore.

In earlier outbreaks, the fungus has killed 59 percent of patients, including 68 percent of patients whose infection spread to the bloodstream, said Adalja, who published a brief report on the infection Friday. Previous patients have had a median age of 54, Adalja said. The most common underlying medical problem was diabetes, and half of the patients had undergone surgery within 90 days. Nearly 80 percent of patients had a catheter placed in a major vein in the chest and 61 percent had a urinary catheter.

"Candida auris is a major threat that carries a high mortality," Adalja said. "Candida fungal species are ubiquitous.  …  As we learn more about this species, it will be essential to understand how it spreads in health care facilities and what the best infection control and treatment strategies are."

Although it's unclear exactly how the patients were infected, the CDC said that the fungus strains were related to ones found in South Asia and South America. None of the patients had traveled to those regions, however, and likely caught the infections here in the U.S.

The fungus apparently "arrived in the United States only in the past few years," said Tom Chiller, chief of the CDC's mycotic diseases branch. "We're working hard with partners to better understand this fungus and how it spreads so we can improve infection control recommendations and help protect people."

Hospitals should thoroughly clean rooms where patients with the fungus have stayed, the CDC said.

7 Tips To Help Avoid Costly Health Plan Enrollment Headaches

7 Tips To Help Avoid Costly Health Plan Enrollment Headaches

KFF Health News, November 1, 2016

The impact on coverage will vary, but the shifting landscape means that it's more important than ever for consumers to carefully evaluate the plans that are available in their area and choose the best one for their needs.

This article first appeared November 1, 2016 on Kaiser Health News.

By Michelle Andrews

With the annual sign-up period for plans on the health law's marketplaces starting Nov. 1, many consumers are worried about rising premiums, shrinking provider networks and the departure of major insurers such as UnitedHealthcare, Aetna and Humana from many exchanges.

The impact on coverage will vary, but the shifting landscape means that it's more important than ever for consumers to carefully evaluate the plans that are available in their area and choose the best one for their needs. There are several elements to factor into that decision.

It's crucial to log into the marketplace and review plan details. Comparing plan premiums and deductibles only scratches the surface of what you should evaluate before selecting a plan this fall. Policy details can make an important difference in coverage and costs, but it may take some digging to uncover them.

Avoid Premium Sticker Shock

Premium increases for 2017 will generally be higher than last year's rate hikes, though with significant geographic variation. In the two-thirds of states where the federal government runs the marketplace, the average premium increase for the second lowest cost silver plans will be 25 percent next year, according to a recent report by the Department of Health and Human Services. Last year, the comparable premium increase was 7 percent. The average premium, before tax credits, for the lowest cost silver plan will be $433.

About 85 percent of marketplace customers have incomes of up to 400 percent of the federal poverty level (about $47,000 for one person) and qualify for federal tax credits to help pay their premiums. If you are one of these consumers, it may be necessary to switch plans to minimize your share of the premium because your tax credit is pegged to the second lowest-cost silver plan in your area, which often changes from year to year.

Next year, three quarters of people can find a cheaper plan at the same metal level if they come back to the marketplace to shop. Consumers who bought the lowest cost silver plan in 2016 can save an average $58 per month by switching to the cheapest silver plan next year, according to HHS.

People with subsidies "can insulate themselves from premium increases by selecting one of the lowest cost silver plans," said Caroline Pearson, a senior vice president at the consulting firm Avalere Health.

If you're currently buying an individual plan but not going through the marketplace, be sure to recheck your eligibility for subsidies. Federal officials estimated earlier this month that 2.5 million people who purchased coverage outside the exchanges have incomes that would qualify for financial assistance.

Look For Hidden Benefits

A close look at plan details may show that coverage is more generous than it appears. Even as deductibles continue to rise, many plans are offering coverage for certain services before the deductible is satisfied. So instead of having to pony up the entire cost of your visit to the doctor or your prescription drug until the deductible is paid off, you may just owe a copayment.

This year, for example, 66 percent of silver-level plans sold on healthcare.gov covered primary care doctor visits before the deductible. Half of plans covered generic drugs before the deductible. (In addition, the health law requires that many preventive care services, including tests and screenings, vaccinations and contraceptives, generally be covered without requiring people to pay anything out of pocket in all new marketplace plans.)

This practice can serve two purposes. Encouraging primary care may save insurers money down the road on more expensive treatment. And exempting some services from the deductible could help make plans more appealing to the relatively healthy people insurers want to attract and who might otherwise balk at policies with a typical deductible of around $3,000.

"Part of it is trying to give people some value even if they're not high users of health care," said Sarah Lueck, a senior policy analyst at the Center on Budget and Policy Priorities in Washington, D.C.

Sidestep Automatic Reenrollment

If your plan is continuing next year, you may be automatically renewed, but that may not be your best option. Do some comparison shopping on marketplace plans to see whether there are changes to plan benefits or provider networks that matter to you and how 2017 pricing will affect your subsidy.

If your plan is not going to be available next year and you don't actively pick a new plan, you may find yourself automatically enrolled in a plan with similar costs and benefits. But that can mean changes in the list of approved drugs or losing access to your favorite hospitals and doctors, among other things.

Pay attention to timing. Enrollment ends Jan. 31, but to have coverage that starts Jan. 1, you must make a choice by Dec. 15.

Check Out New Standardized Plans

Next year, healthcare.gov will join several state-based marketplaces in offering standardized plans that are expected to help consumers make apples-to-apples comparisons between plans at the bronze, silver and gold levels and cut down on confusion caused by a sometimes bewildering array of options. In these "simple choice" plans, the deductibles and annual limits on out-of-pocket spending will be standardized, as will many of the consumer payments for medical services. For example, the standardized silver plan will have a deductible of $3,500 and the maximum amount you will owe out of pocket for the year will be $7,100.

In addition to standardized benefits, many of the plans cover a number of services before the deductible is satisfied, such as primary care and specialist visits, drugs, urgent care and outpatient mental health.

Many standardized plans also rely on copayments (fixed amounts that you pay for a service), rather than coinsurance (a percentage of the cost of the service), to a greater extent than people may see in regular marketplace plans, said Sabrina Corlette, research professor at Georgetown University's Center on Health Insurance Reforms. Insurers aren't required to offer standardized plans in most states, but the federal government is promising that the plans will be prominently displayed on healthcare.gov.

Dig Into Prescription Drug Details

Drug coverage is a big concern for many people, but finding plan details can be tough. You can check out a plan's list of covered drugs through healthcare.gov, but determining what your share of the cost will be can be more challenging. That's because even though state marketplaces typically only show four cost-sharing tiers online, many plans have five, six or even more tiers. In 2016, 40 percent of silver marketplace plans had more than four cost-sharing tiers, according to Avalere data.

Also, insurers on the exchanges may require that your doctor or other health provider get prior authorization from the insurer before prescribing some drugs for you or demand that you try a less expensive drug before getting a more expensive one, a practice called step therapy, said Pearson.

"If you're a consumer that has a lot of drug costs or takes specialty medications, actually consulting the plan documents is important, because you need more granularity than is available on the website," said Pearson.

Check Provider Networks

You will be able to check which doctors and hospitals participate in the plans you're considering on healthcare.gov. That's increasingly important as networks continue to narrow and fewer plans offer any out-of-network coverage. An initiative by the federal government to communicate whether a plan's network is basic, standard or broad in all states using the federal marketplace has been trimmed back to a four-state pilot in Tennessee, Maine, Ohio and Texas.

Use Caution When Shopping Off The Marketplace

If the marketplace plans don't appeal and you don't qualify for subsidies, you can shop for individual market coverage off the exchanges, although the number of such offerings has been declining, said Katherine Hempstead, who directs health insurance coverage research for the Robert Wood Johnson Foundation.

Off-exchange plans can't be too wildly different from what's available on the exchange, because they also have to cover the essential health benefits and offer plans in metal tiers that cover the same proportion of care as those on the marketplace, among other things. But in some markets, plans may offer different or broader provider networks outside the exchanges, said Corlette.

There's a potential downside, however. If your income is too high to qualify for subsidies at the beginning of the year, you may qualify for them later if your income drops — for example, if you lose a major client. But that's only an option if you're already enrolled in a marketplace plan.

"If you're enrolled outside the exchange and you have a change in income, you can't qualify for a special enrollment period to sign up for a different plan," Corlette said.

'Ubiquitous' Nature Of Painkillers Lands Kids — Even Toddlers — In The ER

KFF Health News, November 1, 2016

A surprising group of patients are suffering from opioid poisoning at rates that have also marked a dramatic increase: adolescents, children and even toddlers.

This article first appeared October 31, 2016 on Kaiser Health News.

By Shefali Luthra

As the nation continues to confront an epidemic of opioid and prescription painkiller addiction and overdoses, its victims seem to flood emergency rooms. But a study out Monday highlights a surprising group of patients suffering from opioid poisoning at rates that have also marked a dramatic increase: adolescents, children and even toddlers.

Because of what the authors call "the now widespread availability of prescription opioids in the United States" — with retail sales of these medications quadrupling from 1999 to 2010 — they sought to examine for the first time the rate of pediatric hospitalizations related to these drugs.

The findings, they say, indicate a need for comprehensive strategies that not only continue to tamp down on opioid prescriptions, but also step up efforts to raise awareness about the packaging and safe storage of these painkillers.

"It's exposure. Opioids are ubiquitous now," said Julie Gaither, a postdoctoral fellow at Yale School of Public Health and the study's lead author. "Enough opioids are prescribed every year to put a bottle of painkillers in every household. They're everywhere, and kids are getting into them."

Published in JAMA Pediatrics, the study analyzed hospitalization data for children between 1997 and 2012, examining more than 13,000 hospital-discharge records for opioid poisonings and using Census data to extrapolate how common these pediatric opioid overdoses were. They used discharge records collected every three years between 1997 and 2012 by the Agency for Healthcare Research and Quality.

One possible limitation: The data stops in 2012 and, therefore, rates may not reflect a dipping or plateauing because of increased awareness of the opioid epidemic. But the findings track with adult rates of abuse and addiction, which have dropped since 2012 but remain troublingly high, experts say.

Overall, researchers found the rates for children hospitalized because of opioid poisoning increased during the 16-year period — from about 1.40 per 100,000 kids to 3.71 per 100,000. Much of that is likely an effect of kids getting into their parents' medicine chests.

Specifically, the study found the rate of toddlers hospitalized more than doubled, going from 0.86 per 100,00 to 2.62 per 100,000. Many experts speculate these very young patients take the drugs because they think they are candy or a treat.

Teens are also at risk of overdosing on their parents' meds. Of all children, this age group is most likely to get hospitalized for opioid poisoning, and are more likely to do so deliberately — likely, the researchers wrote, because teenagers are at a particularly high risk of depression. In 2012, 10.17 per 100,000 teenagers were hospitalized for opioid poisoning.

Importantly, the research underscores the need for doctors to talk to patients about ways to keep the drugs safely, especially if children are in the household, Gaither said.

That's a good idea in theory, said Jonathan Chen, an instructor at Stanford Medical School who has researched the opioid issue. But doctors already face a lengthy list of sensitive subjects they should discuss with patients. And they aren't always conditioned to consider how a patient's health patterns may interact with the rest of the family.

"Conceptually, yes, of course that should be part of the conversation," Chen said. "But there's a lot of things we should discuss. … When I talk to a patient, I conceptualize them, and I don't conceptualize who else is in their household as much as I should." Chen was not involved with the study.

Pediatricians could also play a role, asking parents at well-child and well-baby visits about whether there's a risk of children being exposed to opioids. But that sort of screening hasn't traditionally been drilled into doctors the same way as discussing household risks, such as safe storage of cleaning supplies, whether the family has a swimming pool and even whether there are guns in the home.

Doctors also may not be conditioned to considering toddlers as particularly at risk of opioid poisoning.

"This is largely seen as an adolescent problem or an adult problem," said Sharon Levy, who directs the adolescent substance abuse program at Boston Children's Hospital and is an associate professor of pediatrics at Harvard Medical School. "But this paper really highlights that this really knows no age boundaries." Levy was also not involved with the study.

It's also unclear, Levy said, what the long-term health effects are for children who ingest opioids that weren't prescribed to them. Younger people in general are more at risk of addiction. And toddlers who take these drugs at adult doses face the danger of serious respiratory complications.

"Opioids cause respiratory suppression," she said. "If you are a 30-pound person and getting into the medication that was supposed to be for a 150-pound person, it's going to be a whopping dose for you."

The findings also suggest doctors should also be more thoughtful in prescribing to children, and especially teenagers. About 1 in 10 high school students reports having taken opioids for a non-medical reason — and close to 40 percent of them say they got those drugs through their own prior prescription. Meanwhile, the American Academy of Pediatrics notes, the rate of young patients being prescribed opioids almost doubled between the 1990s and 2000s.

The Centers for Disease Control and Prevention has been pushing doctors to prescribe pills in smaller amounts, so that people don't end up finding and taking leftovers. That could help. Large prescriptions — coupled with the fact that many people don't know how to dispose of drugs when they finish them — can make it easier for children and teens to get ahold of them, Gaither said.

That's an important factor to consider, Chen said. "Leftover pills aren't used, but do they get returned to the pharmacy, or thrown in the trash? Nope. They're stored in the medicine cabinet."

Smaller prescriptions will likely help, but they won't solve everything, Chen noted. After all, there are situations where a larger opioid dosage makes sense. For instance, someone suffering long-term cancer probably needs a larger amount of heavy duty painkillers, even if he or she has children in the house.

But children must be a part of the conversation, Gaither said.

"We've got to pay attention to children and the toll the opioid crisis is taking on them," she said. "Kids make up about a fourth of the U.S. population, and they're suffering from this crisis, too."

Insurers, Hospitals Clash Over Help Paying Obamacare Premiums

Insurers, Hospitals Clash Over Help Paying Obamacare Premiums

KFF Health News, October 31, 2016

Premium assistance programs are under fire from insurers. They argue that it is not fair for hospitals to try to steer people who could be covered by Medicare or Medicaid into marketplace plans with higher reimbursement rates.

This article first appeared October 31, 2016 on Kaiser Health News.

By Phil Galewitz

MADISON, Wis. — Having health insurance is vital for 21-year-old Mercedes Nimmer, who takes several expensive prescription drugs to manage multiple sclerosis. So Nimmer was thrilled to get health insurance last year through the Affordable Care Act's marketplace and qualify for a federal subsidy to substantially lower her cost.

Yet, the government assistance still left her with a $33 monthly premium, a hefty amount for Nimmer, who makes $11,000 a year as a part-time supply clerk.

Nimmer, though, doesn't have to worry about even that expense thanks to a United Way of Dane County program that has provided premium assistance to about 2,000 low-income people since 2014. The program, called HealthConnect, is funded by a 2013 gift of $2 million from UW Health, a large academic hospital system connected to the University of Wisconsin that also runs its own marketplace health plan.

"Oh my gosh, this is a big deal for me to get this help," Nimmer said, noting the insurance is vital to cover her medications. The money she saves from the assistance program goes to help pay for gas to get to work, she said.

HealthConnect is one of several community-based programs across the United States helping thousands of lower-income Americans with their Obamacare marketplace premiums. Similar efforts operate in Texas, Oregon, Washington, North Carolina and South Carolina.

But premium assistance programs have come under fire from insurers. They argue that it is not fair for hospitals, other health providers and disease advocacy groups financed by providers to try to steer people who could be covered by Medicare or Medicaid into marketplace plans with higher reimbursement rates.

The federal government has banned hospitals from directly subsidizing patients' health insurance premiums. But America's Health Insurance Plans, the industry's lobbying group, wants the Obama administration to prohibit all premium assistance programs that are funded directly or indirectly by hospitals and other providers with a financial interest in the patient's care.

"In many cases these practices are harming patients and undermining the individual market by skewing the risk pool and driving up overall health care costs and premiums," AHIP said in Sept. 22 letter to Andy Slavitt, the acting administrator of the Centers for Medicare & Medicaid Services. The letter notes specific concerns about plans assisting patients requiring kidney dialysis. It says one insurer saw its spending on those patients rise from $1.7 million in 2013 to $36.8 million in 2015 when the number of patients with serious kidney disease rose from 28 to 186.

AHIP officials also said patients could face consequences if the third-party groups stop paying premiums or the government determines patients are receiving a federal subsidy for which they are not eligible.

America's Health Insurance Plans wants the Obama administration to prohibit all premium assistance programs that are funded directly or indirectly by hospitals and other providers.

In response, CMS says it is considering new rules for third-party payment programs.

Nonetheless, insurers are taking action. Aetna, which announced this summer that it was scaling back its marketplace offerings, said that third-party groups steering patients to the individual market had contributed to an unhealthy mix of customers in its marketplace plans.

Blue Shield of California in July filed suit in a state court against CenCal Health, which manages the Medicaid program in Santa Barbara and San Louis Obispo counties. Blue Shield alleges that CenCal was avoiding millions of dollars in medical care claims by enrolling around 40 of its very ill members in Blue Shield's individual health plans and paying the premiums on their behalf. CenCal denied the allegations in lawsuit, saying it paid the patients' monthly Blue Shield insurance premiums so they could afford private insurance. It has since discontinued the practice.

UnitedHealthcare filed a lawsuit in federal court in July against kidney dialysis provider American Renal Associates, accusing it of encouraging patients in Florida and Ohio who were eligible for Medicaid or Medicare to move to the insurer's commercial plans to extract up to 20 times more than the $300 or so that the federal programs pay in reimbursements. American Renal Associates has said the suit is without merit.

The suit alleges that the patients' premiums were paid by the American Kidney Fund, an advocacy group for patients.

AHIP officials note that the fund is supported by dialysis providers who stand to benefit financially from patients gaining marketplace coverage over payments from Medicaid or Medicare.

The nonprofit American Kidney Fund has helped more than 6,400 people with their marketplace premiums. The fund's officials said it's not trying to steer people away from government coverage but trying to help those who otherwise couldn't afford coverage.

"It is critically important to emphasize that people with disabilities in general — and with end-stage renal disease in particular — should not be broadly excluded as a class from the insurance marketplace if they are unable to afford their health insurance premiums," LaVarne Burton, the fund's CEO, said in a statement.

Some patient advocates, like those at HealthConnect in Wisconsin, say third-party payers have an important role in helping low-income customers afford their coverage. UW Health said in a statement that HealthConnect helps all providers, including UW Health, by reducing the number of uninsured patients and potentially helping people seek care earlier in their illness.

The program pays an average of $109 monthly per person in premium assistance. For every dollar spent, HealthConnect generates $2.26 in federal subsidies, said Krystal Webb, a spokeswoman for United Way of Dane County.

United Way said it structured HealthConnect to avoid a conflict of interest. Eligible people first buy their policy, which can be any of several silver-level plans on the federal marketplace. After that, they can apply for a HealthConnect subsidy. The program is administered by United Way, and UW Health plays no role in patients' choice of health plan, although its marketplace plan, Unity Health, refers people who may be eligible there.

Despite AHIP's concerns, some health insurers in Dane County say HealthConnect is filling a need, according to interviews with several plans. "We support United Way's HealthConnect efforts as a way to provide affordable insurance options to the residents of Dane County," said a spokesman for Dean Health Plan, one of the larger marketplace plans in the county.

In Texarkana, Texas, Christus St. Michaels Health System donated $200,000 last year to an assistance program serving 138 people with marketplace coverage. The program is run by a local government agency called the Ark-Tex Council of Governments, and Christus has no control over who enrolls or what plan they choose.

"Our mission is to help the poor and this is certainly one of the ways to do that, and it gives people the opportunity to have health coverage when they normally wouldn't," said Mike Hargrave, the hospital's manager of employee assistance and community outreach services. People with incomes between 100 and 150 percent of the federal poverty level (about $11,880 to $17,820 for an individual) are eligible.

Hargrave doesn't deny the hospital could benefit when more people gain insurance, but he notes other hospitals in the region benefit, too.

The insurance industry is also troubled by premium assistance programs funded by anonymous donors since they could be hospitals looking to protect their identity, said AHIP spokeswoman Clare Krusing.

For example, PremiumHealth.org, run by United Way of the Greater Triangle in North Carolina helps more than 850 people with incomes between 100 percent to 175 percent of the federal poverty level in Durham, Orange and Wake Counties.

An anonymous donor provided $1.2 million in funding for the program, said Melanie David-Jones, a senior vice president for United Way. She would not say why the donor wished to remain anonymous.

Noel Pitsenbarger, 48, of Durham, said the program made it possible for him to have health insurance this year by covering the $200-a-month premium for his Blue Cross Blue Shield of North Carolina policy. With insurance, he said, he got a colonoscopy, physical exam and help paying for several medications. And it saved him from having to pay a $1,000 bill after he cut his finger and had to go to the emergency room.

"It's been extremely beneficial," he said.

Study Offers Young Doctors Strategies To Deal With Discrimination

Study Offers Young Doctors Strategies To Deal With Discrimination

KFF Health News, October 27, 2016

The issue has attracted national attention recently after a black physician from Houston posted on social media that a flight attendant had dismissed her offer to help and disputed her credentials when looking for medical aid for a man who needed treatment mid-flight.

This article first appeared October 27, 2016 on Kaiser Health News.

By Carmen Heredia Rodriguez

In July 2013, a man arrived in the emergency room of a California hospital seeking treatment for his child. But when the intern on call walked in to see him, the father looked at her name tag and demanded another physician. As a Palestinian, he didn't want his child treated by a Jewish doctor. The intern turned to her resident supervisor, Emily Whitgob, who told her colleagues about the incident.

The episode, Whitgob said, helped motivate her to study how doctors in training and their institutions should deal with patients' prejudice and to publish a report that outlines strategies offered by the professionals she and the other authors consulted. The recommendations, published Wednesday in the Association of American Medical Colleges' journal Academic Medicine, call for trainees to focus on their role as doctors by not taking hostile comments personally and meeting patients' anxieties with empathy.

Researchers recruited 13 experienced faculty members from the pediatric department at Stanford University School of Medicine in California to review a series of scenarios illustrating patient discrimination against a medical trainee. Participants shared their reactions to the situation and outlined strategies for diffusing the tension in such encounters.

The issue has attracted national attention recently after Tamika Cross, a black physician from Houston, posted on social media that a flight attendant had dismissed her offer to help and disputed her credentials when looking for medical aid for a man who needed treatment mid-flight. Her Facebook post went viral, garnering over 48,500 shares as of Wednesday.

It's not clear how often these episodes occur. But the journal article notes that a 2015 survey found 15 percent of pediatric residents at Stanford had experienced or witnessed mistreatment of medical residents by patients or families. Of those incidents, 67 percent involved discrimination by patients' families. Half the people in the survey said they did not know how to respond to the discrimination and a quarter thought that the hospital was not likely to take any action against the patients' families.

The situations can be complicated by the lack of racial and ethnic diversity in many hospitals. According to the most recent data available from the medical colleges association, black and Hispanics make up about 9 percent of U.S. doctors.

Whitgob, now a developmental behavioral pediatrics fellow at Stanford, said the results of her research can help create a set of guidelines to give hospitals and medical students a framework to handle patient discrimination in the field.

"I wanted to help create the tools so that they can cope with these events in the future," she said.

The experienced doctors in the study noted that if the patient needs immediate medical attention, providers should ignore any hostile comments and quickly deliver that care.

When the need is not immediate, the study participants also recommend doctors speak honestly to patients about underlying emotional triggers, which may perhaps allow a more constructive dialogue that will get to the patient's or family's hostility and may allow both sides to work toward establishing enough trust for care to be given.

Formal training is needed to equip doctors with the skills to engage in these discussions, according to the report. By developing self-awareness and sensitivity, medical personnel can shift the focus away from the discriminatory remarks and emphasize patient care. The group also advised providers to set expectations early in medical training by communicating that discrimination can happen to anyone.

Many of these concepts should not be new to trainees. As part of their accreditation, medical schools already are required to teach students about culturally competent health care.

Dr. Rebecca Parker, president-elect of the American College of Emergency Physicians, attended medical schools before cultural competency training was common and said she was initially surprised when patients objected to working with her because of her gender.

Today, Parker has made the issue a priority in her organization with a task force to promote diversity in medicine in part through campaigns that challenge the traditional notions of what a doctor looks like.

"We need to also educate our society about the diversification of our physician population," Parker said.

Medical training in the classroom alone generally doesn't fill all the needs, said Dr. Roderick King, associate professor in the department of public health sciences at the University of Miami and CEO of the Florida Institute for Health Innovation. Such training exposes medical students to cultural sensitivity, but that may not provide the necessary skills for developing the right approach for these situations. While he said he understands how the fear of insulting a patient could deter a provider from engaging with a patient from a different background, King views cultural competence as a skill that requires work to perfect.

"The more you practice it," he said, "the more comfortable you get."

Whitgob echoes King's emphasis on real-world training. But a safe learning environment is also important to shield trainees from discrimination, she said. While the experienced doctors admitted facilities can't protect trainees from every negative situation, peers and supervisors can alleviate the sting by offering their support. The report recommends institutions set up a chain of command for reporting incidents and affirm their commitment to protecting its personnel.

In the emergency room incident three years ago, Whitgob almost confronted the patient on her trainee's behalf. Ultimately, the intern worked through the situation, but Whitgob says she's now more aware of the potential for discrimination in the exam room.

"We can't prevent what comes through the door, "Whitgob said. "But we can think about it on our own time before."

What Would A Public Insurance Option Look Like?

KFF Health News, October 26, 2016

California's insurance commissioner endorses the idea. But the Director of the UCLA Center for Health Policy Research has at least one concern.

This article first appeared October 26, 2016 on Kaiser Health News.

By Pauline Bartolone

SACRAMENTO, Calif.— The "public option," which stoked fierce debate in the run-up to the Affordable Care Act, is making a comeback — at least among Democratic politicians.

The proposal to create a government-funded health plan, one that might look like Medicare or Medicaid but would be open to everyone, is being advocated by some federal officials, and gaining traction here in California too.

Amid news that two major insurers were pulling out of Affordable Care Act exchanges, 33 senators recently renewed the call for a public option. The idea was first floated, then rejected, during the drafting of the federal health law, which took effect in 2010.

Democratic presidential candidate Hillary Clinton includes a public option in her campaign platform, and President Barack Obama urged Congress to revisit the idea in a JAMA article published in August.

Dave Jones, the elected regulator of California's private insurance industry, endorsed the idea of a state-specific public option in an interview last month with California Healthline, though he did not specify how it might work.

A public option "would look just like an insurance plan," except that the state or federal government would pay for medical care, potentially set up the network of doctors and hospitals, and make rules about paying providers, according to Gerald Kominski, Director of the UCLA Center for Health Policy Research. Private industry could be involved in these or other aspects of running the health plan, much as they do in Medicare Advantage and managed Medicaid plans.

California Healthline interviewed Kominski to better understand how a public option could work. The interview was edited for length and clarity.

Q: When we talk about a public option, do we mean a health plan for which the government takes the risk, sets the coverage rules and pays out the claims — and enrollees pay premiums just as they would to an insurance company?

That is what the public option would be. But that still leaves out the answer to a lot of questions about how actually that would occur. How would a government agency essentially become the insurer? So we have two examples. We have the Medicare program and we have the Medicaid program.

Medicare establishes the rules. It contracts with insurance companies to pay the bills. And that's the way that Medicare has operated for over 50 years.

Now we have Medicare Advantage plans, where the contracting is not to pay bills but is basically contracting with insurers to bundle the services. And rather than pay the doctors and hospitals, the government pays the insurer and puts the insurer at risk.

Q: Insurers have opposed this idea in the past, and they're opposing it again now that it's being raised by members of Congress.

Private insurers could participate as administrators or providers on behalf of the state. But here's one concern that I have with that model: California has four large insurance companies in the exchange that account for about 90 percent of the market.

Let's say the state of California wanted to create a public option and hire an insurance company to administer that product for it. What would be the reason or the incentive for any of those companies to agree to be the plan administrator for the public option when the public option would be competing with the product that they're already offering? They would be competing with themselves.

Q: Some provider groups may be opposed to a public option because they say that government programs like Medi-Cal pay very little and they believe a public option plan would also pay little. Is this necessarily the case that a government program would pay low rates?

It's not necessarily the case, but it is in fact what we observe in the Medicare and the Medicaid/Medi-Cal programs.

Q: Do you think a public plan would help bring down costs in the health care system by negotiating for lower payments to hospitals and doctors?

I think that is possible in other areas of the country, where there are markets with one or two health insurance plans in the exchange. I think California has one of the most competitive ACA marketplaces. And so would the public option in California dramatically reduce premiums? I think the answer is no. It would have little or no effect.

For some people, the advantage is that we think that the public option's going to be around because the state's not going to back out of its commitment, whereas private insurers come and go in the marketplace.

Q: Is there something about California's health care system that uniquely primes the state for a public option?

I think so. One of the things that's unique about California is the high percentage of managed care enrollment. The public option in California would probably include or be based on a managed care model and Californians are pretty receptive to that model.

Q: So if the public option could include private insurance, why are the insurers so opposed?

Well, the simple answer is they don't want more competition. And again it goes back to, why was this battle so intense during the development and enactment of the ACA back in 2009 and 2010? The insurance industry said we cannot compete with a plan, a government plan, that pays doctors and hospitals using Medicare fees or fee schedules.

You remember the fundamental rule of business is you don't want more competition. You want the market to yourself.

Q: Do you think it would be more effective or easier to implement a public option at a state or national level?

Well that's where you can't ignore the political environment. And so the short answer is in the current political environment, doing something at the national level is extremely difficult. Even though there might be arguments to develop a public option at the national level, it's very challenging in the current political environment to get the agreement.

Q: Is there something that's more efficient about a national public option?

Potentially. It's economies of scale. You know, the larger your potential market nationally, the lower the potential costs per person. You just get administrative savings and efficiency. But it's not easy to create a national program. One issue that's challenging is how to put together a national network of doctors and hospitals that would participate. That's a lot of work.

Q: Do you think the idea of a public option is more viable now than it was when it was debated before and ultimately stripped from the Affordable Care Act?

A: Well, I think that what makes it more attractive right now is the fact that we've got two large insurance companies that are pulling out of the exchange marketplaces. And because of that … the idea of a public option to provide stability and protection for people in the exchanges has resurfaced. And I think with good reason.

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