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#FullRepeal Daily Digest

Associated Press: Cost-Control Plan For Health Care Could Cost You [This so-called reference pricing, when presented as a choice as a health care contract in a free market is one efficient way to increase competition and reduce costs – but it should not be centrally planned by the federal government]

  • The Obama administration has given the go-ahead for a new cost-control strategy called "reference pricing." It lets insurers and employers put a dollar limit on what health plans pay for some expensive procedures, such as knee and hip replacements.
  • Nonetheless, the departments of Labor and Health and Human Services said reference pricing could continue. Plans must use a "reasonable method" to ensure "adequate access to quality providers." Regulators asked for public comment, saying they may publish additional guidance in the future.
  • HHS spokeswoman Erin Shields Britt said in a statement that the administration is monitoring the effects of reference pricing on access to quality services and will work to ensure that financial protections for consumers are not undermined.
  • One way the new approach is different is that it sets a dollar limit on what the health plan will pay for a given procedure. Most insurance now pays a percentage of costs, and those costs themselves can vary from hospital to hospital. Now if you pick a more expensive hospital, the insurance still pays the same percentage.
  • The new strategy works like this: Your health insurance plan slaps a dollar limit on what it will pay for certain procedures, for example, hospital charges associated with knee and hip replacement operations. That's called the reference price. Say the limit is $30,000. The plan offers you a choice of hospitals within its provider network. If you pick one that charges $40,000, you would owe $10,000 to the hospital plus your regular cost-sharing for the $30,000 that your plan covers. The extra $10,000 is treated like an out-of-network expense, and it doesn't count toward your plan's annual limit on out-of-pocket costs.

The Fiscal Times: Big Increases in Obamacare Premiums and Deductibles Coming in November

  • Rate-proposal filings in the state of Washington show the four largest insurers proposing average increases across their plans ranging from 8.1 percent to 11.2 percent in a single year. Jonathan Wu of Value Penguin analyzed the proposals and concluded that the insurers tried betting on success, and came up short. “What is troubling about the data is that among these insurers, there is clearly an issue with the premiums offered in the first enrollment period,” Wu writes. Noting that the four companies offered the lowest prices in the market this year, their enrollment numbers are not surprising, but their consumers may get a less-pleasant surprise by the end of the year.
  • In Virginia, two insurers control 86 percent of the market, and both propose steep increases in 2015 premiums. Anthem, which has 113,614 of the roughly 170,000 enrollments, wants to boost prices by an average of 8.5 percent next year, while CareFirst wants a hike of 14.9 percent. All five insurers in the Virginia exchange want price hikes, with only Kaiser’s proposal falling below an 8.5 percent increase. If the Obamacare experience in these two states provides any indication, Wu writes, “then consumers might need to brace themselves for rate hikes in the coming months.”
  • That brings us to the group-insurance market, where most Americans get their health insurance. Shortly after the passage of the Affordable Care Act, the Department of Health and Human Services produced an analysis that predicted the employer mandates and increased costs would force “66 percent of small employer plans and 45 percent of large employer plans” to be canceled. That was the “mid-range” estimate, one that went unnoticed until the mass cancellations of plans in the individual market.
  • [RELATED] Vox: Six reasons Obamacare premiums are going up next year
  • [RELATED] The Los Angeles Times: Employer health costs to rise nearly 9% this year, survey finds

Forbes: Indiana's Mike Pence Shouldn't Embrace Obamacare's Medicaid Expansion — He Should Walk Away

  • Governor Mike Pence (R., Ind.) yesterday announced his plan to implement Obamacare’s Medicaid expansion. (Here is the waiver request.) Fearing push-back from simply expanding a broken program, Gov. Pence has tried to cover his expansion plan with the veneer of the Healthy Indiana Plan begun by Mitch Daniels,labeling his proposal “Healthy Indiana Plan 2.0.”
  • Under HIP 2.0, more than 284,000 able-bodied childless adults (and 91,000 parents) will become eligible for Medicaid expansion, an increase of nearly 700 percent. And unlike the Healthy Indiana Plan, there is no cap on enrollment, obligating the state to provide benefits to those individuals regardless of the availability of funds.
  • The HIP 2.0 proposal makes clear that Indiana’s best course of action is to walk away. The Governor and legislature should instead focus on reforming a strained program. States such as Florida, Kansas and Louisiana have led the way on true reform. Medicaid reform does not require creating a new entitlement for working-age, able-bodied adults without children, which is the main policy objective of Obamacare and HIP 2.0. Lawmakers should instead focus their efforts on fixing the Medicaid program with a proven pro-patient, pro-taxpayer solution to make the program work for the most vulnerable.
  • [RELATED] The Federalist: No, Mike Pence, Obamacare's Medicaid Expansion Isn't Conservative There's no such thing.
    • “There are two futures in health care—government-directed health care or consumer-driven health care,” Gov. Pence said in a statement. Indiana has presumably chosen the latter, but the governor’s plan isn’t consumer-driven in any meaningful sense. It is merely the latest iteration of full Obamacare Medicaid expansion thinly disguised as a conservative entitlement reform.
    • Indiana joins Michigan and a handful of other Republican-controlled states that are pursuing Medicaid expansion under the guise of a negotiating a “conservative” expansion of Medicaid with the Obama administration. But there is really nothing all that conservative about the state-specific plans to capture federal dollars earmarked for Medicaid expansion.
    • At the end of the day, Medicaid is a federal program and the feds are calling the shots. You can dress up an entitlement health care program to look like a private, consumer-driven plan and call it whatever you want, but they are not and never will be the same. It’s a shame that it will now cost the people of Indiana—and Michigan and Arkansas and all the other expansion states—tens of millions in cost overruns to figure this out.
  • [RELATED] The Wall Street Journal: Indiana Proposes Alternative To Medicaid Gov. Mike Pence Wants to Use Federal Dollars to Boost Enrollment in Healthy Indiana Insurance Plan
    • The proposal is the latest from a small group of mostly Republican governors pursuing alternative ways to tap billions of dollars in federal Medicaid money available under theAffordable Care Act. Most GOP governors are refusing the additional federal money outright, while those who have wanted to expand Medicaid faced objections from GOP-led legislatures.

National Journal: Conservatives Want a Bigger Obamacare Fight Around HHS Nominee The senators behind the government shutdown say Sylvia Mathews Burwell shouldn't get confirmed until she answers more questions about Obamacare

  • "The questions we propose in the letter have not only been asked repeatedly, but deal with issues she should have been prepared to answer at her hearings but did not," Lee said in a statement. "We are therefore going to attempt one more time to get answers to these simple questions and the Senate should not move forward on her nomination until we get them."
  • Some conservatives have grown frustrated with Burwell's confirmation process. At least three Republican senators have endorsed Burwell, and her nomination has not become a broader referendum on Obamacare. But conservative activists want to force the issue. "I certainly think you will hear more about what her role will be once she gets to the floor," said Dan Holler, communications director for Heritage Action, the advocacy arm of the Heritage Foundation.
  • Lee's and Cruz's letter to Burwell reflects conservatives' skepticism about Obamacare enrollment. They asked her how many of the law's 8 million sign-ups have paid their first month's premium, how many were previously uninsured, and whether that total includes duplicate applications.
  • And they pressed Burwell to explain how she would implement the Independent Payment Advisory Board, an expert panel tasked with cutting Medicare payments to doctors if the program's spending grows too quickly. President Obama hasn't nominated anyone to the board yet, and if he never does, the HHS secretary can step in as an "IPAB of one."
  • [RELATED] Senators Lee and Cruz Letter to Burwell

 

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