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Obama throws support to a public option

 

President Obama has thrown his support to a  “public option” as part of fixing the Affordable Care Act  as well increasing the number of states with Medicaid expansion and  expanding enrollee tax credits. He called it all addressing the ACA’S “growing pains.”

To address uncompetitive ACA marketplaces, the president proposed creating a “public fallback plan”  — i.e., a “public option” — that would be offered with commercial insurance in  markets with too-limited competition.

He said that it is not “the time to move backwards on healthcare reform” and that “problems that may have arisen from the Affordable Care Act [are] not because government is too involved in the process. The problem is we have not reached everybody and pulled them in.”

To read a Becker’s Hospital Review story on this, please hit this link.


HHS chief points to ACA parts that need improvement

 

Health and Human Services Secretary Sylvia Burwell  has acknowledged that changes in the Affordable Care Act are needed to improve competition, affordability and access, Health News Florida reported.

“In some rural markets and smaller markets there isn’t as much competition {as elsewhere} and we need to take steps to improve that,” Ms. Burwell said. “And for some people while the subsidies are very generous and create affordability we think there are places for more assistance and help for working families.”

Ms. Burwell says the Obama administration is working to improve competition, by, among other ways,  considering creating a public option that would see the government directly enter the insurance marketplace created by the ACA.

“The public option is a way that we can, in places where there is not competition, make sure that people have choice and options and I think we think that’s an approach,” she said. “We welcome the opportunity to have the conversation about … the best ways to create additional competition.”

She added that  larger subsidies for working families and more and better explanations  of the benefits of health insurance to young people would help.

“Many of them {young adults} think about it in terms of just the premiums but people need to think through the issues of the benefits they get in terms of preventative care that’s free and also the kinds of things that people want to do in terms of health and nutrition and taking care of themselves and getting access to those services,” she said.

To read the Health News Florida piece, please hit this link.


Public option being eyed for California

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California State Capitol.

By CHAD TERHUNE

For Kaiser Health News

With  some major insurers retreating from the federal health law’s marketplaces, California’s insurance commissioner said he supports a public option at the state level that could bolster competition and potentially serve as a test for the controversial idea nationwide.

“I think we should strongly consider a public option in California,” Insurance Commissioner Dave Jones said in a recent interview with California Healthline. “It will require a lot of careful thought and work, but I think it’s something that ought to be on the table because we continue to see this consolidation in an already consolidated health insurance market.”

Nationally, President Obama and other prominent Democrats have revived the idea of the public option in response to insurers such as Aetna Inc. and UnitedHealth Group Inc. pulling back from the individual insurance market and many consumers facing double-digit rate hikes.

The notion of a publicly run health plan competing against private insurers in government exchanges was hotly debated but ultimately dropped from the Affordable Care Act when it passed in 2010.

Most of the discussion surrounding a public option, however, has focused on a nationwide plan, not one emanating from a state. In July, Democratic presidential nominee Hillary Clinton said she would “pursue efforts to give Americans in every state in the country the choice of a public-option insurance plan.”Health insurers have long opposed the idea, and other critics fear it would lead to a full government-run system.

Jones offered few specifics on what a public option might look like in the Golden State.

“I don’t want to begin to prejudge it,” said Jones, an elected Democrat serving his second term as head of the state Department of Insurance, one of two insurance regulators in California. “I don’t know whether you would start in certain areas of the state and expand from there. I think there would be significant reservations about the state running it. There would be a wide variety of governance models you could come up with.”

Politically, the proposal may gain more traction in Sacramento than Washington with Democrats firmly in control of the state legislature and many lawmakers eager to go beyond the boundaries of the federal health law. Depending on what form it took, a public option would require state legislation, some type of federal approval and some source of funding.

The idea of a California-style public option drew mixed reaction. Some consumer groups say they welcome another run at the public option after a disappointing outcome in 2010.

“We’re certainly very interested,” said Anthony Wright, executive director of Health Access California. “This is something we advocated for in its most ambitious form during the debate over health reform and there are elements of the proposal that could be adapted for California.”

Some health-policy experts questioned whether the proposal would backfire, ultimately reducing competition.

“I don’t know what would compel other insurers to stay in the market, so the public option could quickly become the only option,” said Katherine Hempstead, who directs the Robert Wood Johnson Foundation’s work on health insurance coverage. “I think that is only a clear win when the alternative is nothing.”

State Sen. Ed Hernandez (D.-West Covina), chairman of the Senate Health Committee, said a public option could make sense in some underserved areas. But he said it may not address the problem of large health systems dictating high prices, and it could interfere with the progress made by the Covered California insurance exchange.

Covered California said 7.4 percent of its 1.4 million enrollees will only have two health plans to choose from for 2017. The state’s biggest markets of Los Angeles, San Francisco and Orange County all feature six to seven insurers.

“I don’t know if a public option will create a lower price [for] the consumer,” Hernandez said. “Covered California has done a good job of keeping rates fairly stable and it has enough plans.”

Health insurers agreed. “Covered California has arguably one of the strongest and most stable exchanges in the country. There is robust consumer choice so we don’t think we need to mess with something that isn’t broken,” said Nicole Evans, a spokeswoman for the California Association of Health Plans, a trade group.

coveredcaliforniaenrollmentinsurers

For years, Jones has criticized the lack of competition in Covered California, and more recently he has opposed the mergers proposed by industry giants Anthem Inc. and Aetna Inc., saying they’re anticompetitive.

Anthem wants to acquire Cigna, while Aetna is trying to merge with Humana, but the U.S. Justice Department has sued to block both deals.

Covered California has fared better than many states in terms of insurer competition. Eleven health plans are participating in the state-run exchange for 2017, but UnitedHealth is dropping out after just one year in California’s individual market.

Consumer advocates had hoped UnitedHealth would become a strong rival to the state’s four largest insurers. Anthem, Blue Shield of California, Kaiser Permanente and Health Net (now a unit of Centene) account for 90 percent of the state’s exchange enrollment.

After modest 4 percent rate increases in 2015 and 2016, Covered California premiums are set to climb by 13.2 percent on average next year.

Jones said he anticipates that critics will cite the failure of numerous co-ops across America as evidence a public option won’t work. But he said that criticism is unjustified because the Republican-led Congress eliminated crucial funding that many of the co-ops were depending on.

The co-ops are nonprofit insurers backed with federal loans and designed as an alternative to commercial health plans.


Hospitals fighting revival of ‘the public option’

 

Hillary Clinton, under pressure from the left wing of the Democratic Party, is now pushing for “public option” coverage in the state and federal health insurance exchanges.

This would be a compromise between Sen. Bernie Sanders, who backs a “Medicare-for-all” approach, and the current  very complex system of private insurance partially paid for by employers, private insurance bought in insurance exchanges, and expanded Medicaid under the Affordable Care Act.

Polls have suggested that a majority of the public favors extending Medicare t0 all or at least a public option, in which people could chose government-financed insurance instead of coverage from a private insurer.

It appears that hospital executives oppose a public option because they fear that it would  cut the payments that hospitals receive to provide care. So the American Hospital Association and the Federation of American Hospitals  has sent this message  to the Democratic Platform Drafting Committee.

“Our members have serious concerns that creating a public option with Medicare-like payments would subvert those goals by depressing insurer payments to healthcare providers and disrupting the fragile finance system that sustains hospitals today.”

The letter asserted that two-thirds of the two groups’ member hospitals received Medicare reimbursements that are below cost of providing care, while the average operating margin on Medicare reimbursements for hospitals was negative 5.8 percent in 2014.

“Adding millions more enrollees whose healthcare would be reimbursed at Medicare rates would likely threaten access to needed healthcare services, particularly for those in vulnerable communities,” the letter said.

To read more, please hit this link.


Mrs. Clinton backs Medicare for many more

Hillary Clinton,  being pulled to the left by Sen. Bernie Sanders’s strong race against her for the Democratic presidential nomination, now says she favors lowering the age of  Medicare eligibility to 50 or 55, The New York Times reports.

“She has called for a range of health policy overhauls to preserve and expand the Affordable Care Act. She has proposed expanding financial protections for people with high health care costs and expanding subsidies to help middle-income people buy their own insurance. She also has proposed a package of policies to lower the price of prescription drugs.”

“But more recently, she has moved further. In February, she began discussing the possibility of a ‘public option,’ a government-run insurance plan available to people shopping on the existing marketplaces. That idea was considered when the Affordable Care Act was being debated in Congress, but it was ultimately removed from the law,” The Times reported.


Even Democrats give co-ops little support

 

Congressional Democrats are showing only lukewarm support for the struggling nonprofit insurance cooperatives created out of the Affordable Care Act as a partial way to offset the failure of efforts to create a “public option” that consumers could use instead of private insurance.

The insurance industry lobby blocked creation of the public option, though of course for poor people and the elderly there are  still the “public options’ of Medicaid and Medicare.

The co-ops were meant to lower insurance prices by challenging the industry giants’ dominance.

“I don’t want to sound like an apologist for the co-ops. I was never a fan,” said the No. 2 Democrat on the House Ways and Means Health Subcommittee, Mike Thompson of California, at a congressional hearing last week. “What most of us wanted was the public option. That would have provided the competition needed.”

The greatly shrunken co-op program remains a target for GOP,  even as it gets unenthusiastic help from Democrats. Their  final fate may have to await the results of next year’s elections.

 


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