A Surprise Move on Alabama’s Health Insurance Exchange


I learned yesterday that Governor Bentley has decided to throw the job of choosing an Essential Health Benefits package back at the feds.  Very interesting choice and I’m still scratching my head—all I can do is speculate on his motives, but I’ll tell you a couple of possible scenarios.  If you have other ideas, please share.

 

In his letter, Dr. Bentley does make some good points—there was a link in the Montgomery Advertiser to the actual letter yesterday, which has now been taken down.  I can’t find it elsewhere, but if one of you does, please post the link.  He wrote about the lack of guidance from HHS and their failure to fulfill their responsibilities, and then complains about Health Savings Accounts not being included as an option.  I believe he is wrong to praise Health Savings Accounts, since cost-sharing at the point of service is  an ineffective means of improving healthcare utilization (people do reduce spending but in equal measure on necessary and unnecessary care).  I completely agree with him about HHS abdicating responsibility.

 

The ACA states that HHS is to make a determination on the items included as Essential Health Benefits (EHB).  EHB are services insurers were supposed to cover without lifetime limits way back in 2010 on non-grandfathered plans, even though they have still not been officially selected by HHS yet.  They will be mandatory on the Exchanges in 2014—Exchanges will offer insurance policies on the state market outside of the typical employer and individual plans, also still in the mix.  Some of the Exchange policies will have government subsidies and out of pocket caps for lower income families above the Medicaid Expansion cutoff (but no subsidies if a family is actually poor, one reason we need the Expansion to happen).  As I’ve discussed previously, the subsidies and out of pocket caps will likely be insufficient to provide adequate coverage, and families may have cards they can’t afford to use—but we at least need to establish the best coverage possible at the beginning.

 

Even though the ACA did say EHB must reflect “typical” employer-based coverage currently offered, it didn’t specify how HHS was to determine “typical”.  There was some uproar in 2011 when the Institute of Medicine advised the selection of a small group plan instead of a typical large employer plan, since the small group plans tend to be skimpier.  HHS finally settled on punting the decision to states (recall our recent Constitutional Amendment for definition of punting).  States were supposed to select from one of four typical plans to determine the EHB included in our Exchanges.  If you live in a state where one or more of those plans has poor coverage, you could get stuck with poor choices on your Exchange.

 

Here is the “guidance” from HHS provided to states in 2011, and some interesting commentary.  It’s worth a close read.  The sticking point seems to be that although 10 broad categories of services are supposed to be included, there is a wide variety of ways to apply coverage.  This is particularly true for something called “habilitative” services, which apparently has no consistent definition and was not defined in the ACA itself—these are therapies designed to preserve function or gain function that a person never had initially, rather than recover lost function.  If you have a leg injury that can be overcome with physical therapy, for instance, a plan covering rehabilitative services would help you.  On the other hand, some insurers refuse to cover therapy for maintenance or development of function—for example, with cerebral palsy.   

 

HHS could have gone a much better route, by selecting coverage from typical large group plans in the country and telling states this is it—this is your EHB, deal with it.  No Congress to fight over the decision, so this can’t be blamed on partisanship.  President Obama, in fact, could have picked up the phone and said do it right.  Instead, a condition like cerebral palsy (which doesn’t actually change upon crossing state lines, go figure) will be potentially eligible for very different levels of service across the nation.  If the purpose of the Exchanges is to make sure people have access to real insurance, not just a card for show, the coverage needs to be meaningful.

 

You may recall that we had a comment period for our state’s selection process this summer, with very short notice and no press coverage I saw except on Left in Alabama.  Although the general public wasn’t actively encouraged to join in discussion, I know at least one advocacy group was invited to give a recommendation.  We recommended the most comprehensive coverage in the options, the FEHBP plan.  If you look at the comparison chart here, you will see that we had no options where all items were well-covered.  Maybe you think that’s no big deal, but if you or your family happens to come down with a disorder where the treatment or testing involves a non-covered service, you might feel differently.

 

If a state doesn’t choose, HHS has said that state’s EHB benchmark will be the largest small group policy sold in the state.  That’s the first column in our chart—not the skimpiest, but not the most comprehensive either. 

 

HHS can change their policy within the loose ACA language, without partisan agreement.  They are already late in choosing EHB, so it isn’t too late to speak your mind to HHS and our President.  Go back, folks, and do your job—set a meaningful, comprehensive EHB package.

 

Now, why did Governor Bentley take a stand?  I don’t know for sure, but I have a couple of guesses.  First, I don’t know what other advocacy and special interest groups recommended to the Insurance Commissioner for our benchmark plan.   If there was too much conflict between certain influential groups, it might have put Bentley in a political quandary.

 

Another possibility, maybe more likely—most groups could have selected the more comprehensive choice but interested insurers are pushing the less comprehensive options.  They want to be free to offer poor choices on the Exchange and rake in those federal subsidies without providing good insurance.  Even though plans are not supposed to exclude groups of patients by limiting coverage options, a minimalist EHB permits some sneaky cherry-picking.  Allowing the default to kick in (by appearing to hand the ball back to HHS) is probably the most politically savvy way for our Governor to satisfy the insurance lobby without appearing to do so.  A third possibility—and there could be a mixture of motives—is that the refusal of HHS to provide more specific guidance on items like habilitative services is making it impossible for states to be certain the EHB they choose will pass muster.  I’m not buying the rhetoric about Health Savings Accounts as his primary objection.

 

Here’s a chance for citizens to speak up.  Push HHS and Obama harder—don’t abandon Alabama to the greedy insurers and state policymakers who can’t or won’t stand up to them.  Our healthcare should not be controlled by political maneuvering.  The best choice—Medicare for All.  In the meantime, being stuck for now with the ACA, the least we can ask is decent coverage for money we will be forced to pay, specified at the federal level.  There is no reason coverage in one state, subsidized by federal money, should be inferior to that in another.  This is not a battle between Republicans and Democrats—it is a battle between citizens and big money, and big money is going to win unless we work harder. 

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1 Comment

Filed under Exchanges, Healthcare reform

One response to “A Surprise Move on Alabama’s Health Insurance Exchange

  1. Bonnie Mizerany

    I find all of this crazy because the B’ham. News reported several months after Bentley took office that a committee had been set up and was working on the exchanges. I saw several blurbs and then nothing.  I think it all just became a political hot potato that Bentley did not want to deal with.  The easy way out seems to be the norm.

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