With big wins in the Senate, House, and governors’ races, the GOP is poised to push its policies – here’s a brief review of potential moves.  For the next two years the GOP will be in charge of Congress where it can do a lot to hamstring PPACA via budgeting procedures and incremental changes.  Then, GOP candidates can point to the failure of PPACA as proof of the incompetence of Dems.

Pretty neat.

First, let’s not jump to the conclusion that this race was all about “Obamacare”. Polls indicate ACA and implementation thereof was a secondary issue – if that – in almost every race.

Second, the next two years will be mostly political positioning in preparation for the 2016 election.  Republicans will seek to show Democrats are “the party of no”, offering up a plethora of bills for President Obama’s veto.  Dems will lick their wounds and take heart in the favorable Senate electoral landscape, which is pretty much the opposite of this year’s.  Whether that will remain the case two years’ hence remains to be seen.

Changes to ACA –

There will almost certainly be yet another effort on the part of the House to repeal PPACA, and the Senate will likely go along – subject to a filibuster. That will be political theater, laying the groundwork for incremental moves.

Expect an early effort to dramatically alter, if not repeal, the mandate for employers with more than 50 workers. It has been delayed already, is anathema to conservatives, and if combined with other “fixes” may force a signature.

There may also be a movement to overturn the individual mandate; this will also be veto’ed.

Copper plan – some have advanced the idea of a cheapo health plan that would cover about half of an insured’s medical costs.  While this doesn’t make much sense, it does have the backing of a couple Democrats in the Senate which may be enough to get it past the filibuster hurdle

The risk management program (the “3 Rs”) program that shifts ‘excess’ profits from insurers with low claims to help insurers with high claims costs cover their expenses (full explanation here) is particularly distasteful to conservatives who want insurers to rise or fail on their own.  It is scheduled to expire at the end of 2016; expect the GOP to push to end it sooner.  That said, the insurance industry and their allies will push very, very hard to keep the 3Rs in place.

The much-despised medical device tax will face repeal; not for good policy reasons but because the device industry is loaded with cash and spends it lavishly on lobbyists and politicians.  Washington at its best…

There’s a push to release more data on outcomes and pricing so consumers have a better idea what treatment costs and who has what outcomes.  Don’t expect this to get very far; for some good, and some not-so-good reasons, physicians don’t want this information out there – primarily because some will look bad.

Medicaid expansion – there’s likely going to be more resistance to expanding Medicaid due largely to the extent of the Republican wins.  Kansas and Maine would have added coverage if the Dems had won; there would have been more support in other states as well.  The broad-based wins by conservatives will push expansion off the agenda – at least until the next election.

What does this mean for you?

Washington is dysfunctional now, and will be much worse.

For investors, insurers, and employers, even more uncertainty about the future of health care.  Just what we need.

While by no means certain, it looks as if the GOP is going to gain control of the US Senate in January.  What, if any, are the implications for PPACA?

There’s a good piece in today’s California Healthline digging into the issue; it cites two potential priorities for a GOP-dominated Congress.  Slowing or continuing to delay the employer mandate, and eliminating/ravamping the risk corridors seem to be the most likely approaches.

However, there’s a bit of political risk in that, as many GOP backers want ACA repealed; they may see “fixes” as compromise, a very bad word these days among conservatives.

While some will argue that a GOP Congress will push for repeal, I’m not so sure. With about 10 million more Americans covered under PPACA, that’s a lot of voters that might be upset if their coverage was yanked out from under them.  There are any number of provisions that are quite popular – covering children to 26, eliminating lifetime dollar caps on expenses, no-cost preventive care, no medical underwriting come to mind. Any move to go back to the bad old days would result in a lot of angry insureds.

Delaying the employer mandate is much more attractive politically; small business people would generally like it, the President has already done this so there’s precedent, and it isn’t that hard to do.

The risk corridor is a much tougher task.  Insurers would lobby very hard against it; while opponents of corridors make the argument that they are simply a taxpayer bailout of the insurance industry, politically speaking it might well by toxic.  It could potentially lead to higher premiums and fewer health plan options, both of which would likely be used against the GOP in the next election – which is a mere 24 months away.

Of course, the Tea Party Reps in the House may follow a “damn the torpedoes” strategy, which would result in a vote to repeal ACA, followed instantly by a Presidential veto, thereby setting up two more years of gridlock.

IF that occurs, and IF voters get into a “throw all the bastards out” mode, the GOP may find itself right back in the minority in the Senate; of the 34 Senate seats up in 2016, 24 are currently held by the GOP.

What does this mean for you?

Depends on voter turnout...

We are starting to get some insight into how 10 million (plus or minus a couple million) newly-insured people will affect the health care delivery system.

For years, we’ve been speculating about the impact of coverage expansion on care – Will the new influx of folks onto the rolls of the insured increase waiting times?  Will they clog up emergency rooms, labs, doctors’ offices and surgery centers? Will it be impossible to get into a primary care facility?

Briefly, tighter supply early on, less so in the future as pent-up demand eases up.

Here are the details…

Using data from California’s Low Income Health Plan (LIHP), the Oregon Health Insurance Experiment and other studies, researcher Gerald Kominski and his colleagues assessed how the newly-insured use health care services, how that changes over time, and the impact on the health care delivery system.

The net is this –

“We see an increase in utilization in the first year, and especially in the first few months,” Kominski told California Healthline. “But then there’s a dramatic drop-off…this a temporary, not permanent phenomenon.”

There’s latent demand for health care services as those previously un-insured get those nagging health issues checked out and addressed, then things settle down. This makes sense; while there may well be a small population that has ongoing chronic issues, most will be pretty healthy.

Notably, the Oregon study appeared to indicate the population continued to use ER services at a relatively high rate; speaking to this Kominski was quoted saying: “the Oregon study, in a sense, has been the outlier. It calls into question some other studies, because it doesn’t show across-the-board positive benefits.”

That’s good; we need more research into the impact of increased enrollment on the health care delivery system, and different results will encourage deeper dives into the data.

What does this mean for you?

So far, access to health care hasn’t been too big a problem.  There appears to be more demand initially due to coverage expansion, and there will be somewhat more demand over time.

And we would do well to continue to monitor access data such as appointment times.

Today most of the news is about PPACA enrollment, prices, and issues related thereto.

First up, paid enrollment as of mid-August was about 7.3 million via the Exchanges. That’s a pretty big number, and substantially above initial goals (and below the President’s late spring estimate). To be fair, the President’ estimate was for those that signed up, not those who paid, and as those of us who’ve been in the insurance business know all too well, there are always enrollees who don’t pay their initial premiums.  A 9 percent non-pay is pretty good, actually.

Among those who got coverage via the Exchanges, most are generally happy. According to California Healthline;

• 71% expressed confidence they would receive high-quality care;
• 70% expressed confidence they could afford needed care;
• 68% rated their plans as good, very good or excellent

While many (including me) thought we’d see a spike in health care costs as the previously uninsured got coverage and sought care, the overall cost increase has actually been pretty modest.  From Kaiser Health News:

health and social spending as measured by the Census Bureau grew by only 3.7 percent from the second quarter of 2013 to the same quarter of 2014. Hospital revenue increased 4.9 percent during the same period. Revenue for physician offices barely budged, growing by only 0.6 percent. Medical lab revenue rose 1.9 percent.

Amongst all the positive news let’s not forget there are still a bunch of hurdles to overcome, starting with the next enrollment process, and extending through the expiration of the feds’ backstop insurance plan for Exchange insurers.  There’s a long way to go before we know how PPACA really turns out…

Finally, there’s been a good deal of intellectual arguments back-and-forth about the validity and utility of the Dartmouth Atlas, with critics claiming it is inaccurate and presents a false picture of practice pattern variation, and supporters (of which I am one) taking issue with the critics’ complaints.  The best synopsis I’ve seen comes from Sarah Kliff writing at VOX.

Hope your teams win this weekend…

Shockingly, there’s a good deal of confusion out there regarding what will happen with health insurance premiums in 2015, more specifically what’s going to happen in the Exchanges.

Let’s leave aside (for now) the possibility that we’ll have another enrollment mess like we experienced last fall (CMS officials are likely still twitching over that disaster…).  Instead, here’s what we know now.

1. Health insurers are pretty much guessing what the P&L on their Exchange business will be; there’s just not enough data, many didn’t fully enroll until late spring, and individual health plans’ enrollment is too small to be statistically valid (in many cases).
2. So, they are pretty much guessing what their rates for 2015 should be.
3. Some very big players – notably United Healthcare – didn’t participate in Exchanges last year, but will be this fall.  In some instances, their rates are very competitive, in others not so much.
4. The number of insurers participating and the number of plans they are offering in most exchanges is either level or increasing slightly.
5. A quick check of rates (thank you Kaiser Family Foundation) in a number of markets indicates prices for the benchmark Silver plans are decreasing by about 1 percent on average.
6. As Bob Laszewski pointed out in a recent blog post, many of the insurers that were the benchmark Silver plans in 2014 will not be benchmark plans in 2015 – either their prices went up or in some cases they may actually have decreased – either way they no longer qualify to be the benchmark plan (the second cheapest Silver plan).
7. Bob’s point – and it is certainly valid – is that the federal reinsurance program essentially protects Exchange insurers from significant losses.  No wonder the number of plans participating is increasing.
8. With that said, from a pure pricing standpoint, 2015 consumer insurance prices declined in a number of markets, and in those where they did increase it was in the single digits.

We won’t know if that will continue for a couple of years, when the federal reinsurance program expires.  The hope is market dynamics, competition among insurers, increased experience with narrow networks, ACOs, and other cost saving mechanisms is able to drive down costs and the federal program is no longer needed.

What does this mean for you?

Consumers love low rates.  Health plans that figure out how to keep them low are going to win big.

That depends on how you define success.

Are more people covered?  Is health insurance more affordable? Are patients “protected”?

In general, the data says yes.

From Jonathan Cohn, a summary of PPACA’s impact on coverage:

the proportion of working-aged adults without insurance dropped from 20 percent in the late summer of 2013 to 15 percent in the late spring of 2014...there are still a lot of Americans walking around without health insurance today. But there are about 9.5 million fewer of them than there were last fall… [emphasis added]

re Affordability, among those who enrolled in a PPACA-compliant plan, about half saw premiums increase – with the other half seeing a reduction.  Notably, the self-reported health status of enrollees was generally lower than the overall population.  This isn’t surprising; many likely couldn’t get coverage due to pre-existing conditions before PPACA.

Of course, many got subsidized insurance, which significantly reduced their premium cost.  Some may say this is a problem; I’d suggest that one can’t fairly evaluate PPACA on individuals’ ability to afford health insurance without accepting the need for and role of subsidies.  Which, btw, are paid for by various fees and taxes on health plans, devices, tanning beds, and rich benefit plans and reductions in reimbursement for Medicare.

The patient protection piece is harder to assess; the elimination of medical underwriting, requirement that plans cover kids to age 26, mandated enrollment, subsidies for small employers, and enforcement of actions against health plans who try to finagle their way to excluding certain groups (AIDS patients, for one), are all helpful.  However, given that health insurers have always made their money by not insuring those who might have claims, this will be a long, difficult, and up-and-down struggle.

Old ways don’t change without a lot of continued, intense, focused pressure.

What does this mean for you?

PPACA is here to stay. It is pretty far from perfect, but it’s better than the alternative.