Archive for June, 2011

6th Circuit Rattles the Right

Thursday, June 30th, 2011

In the highly-partisan political and legal battle over implementation of the Affordable Care Act, the US Circuit Court of Appeals for the Sixth Circuit offered America a glimmer of reason yesterday. A three-judge panel delivered a 2-1 ruling upholding the constitutionality of the individual mandate, or the requirement that everyone who can afford insurance must obtain it by 2014 or pay a penalty.

Shaking up partisanship: a win for legal objectivity
The majority opinion in Thomas More Law Center v. Obama caused a small earthquake in conservative blocs as Republican-appointed Judge Jeffrey Sutton joined with his Democrat-appointed colleague Judge Boyce Martin to affirm the legality of the individual mandate. While no hand-holding was sighted, the decision’s sweet smell of non-partisanship was a welcome surprise.

For supporters of the Affordable Care Act (ACA), the verdict is a resounding victory. Meanwhile opponents of health care coverage for all Americans are dismissing the verdict simply as “wrong” and irrelevant. However, it is relevant and here is why: Judge Sutton’s affirmation of the individual mandate specifically and the ACA generally shows that there is living space above partisan politics.

While this suit is one of a handful of candidates likely to end up before the Supreme Court (4th Circuit/ Virginia and 11th Circuit/ Florida are both awaiting decisions), yesterday’s 6th Circuit decision may offer a blueprint for winning conservative support for the individual mandate. Its author, Sutton, is a respected conservative Judge who formerly clerked for Supreme Court Justice Antonin Scalia.

What is in the decision?
There are many key take-aways from Wednesday’s ruling; however, the most important is how Judge Sutton unravels the issue of economic “activity.”

The lawsuit’s plaintiffs asked the court to determine if a person who declines to purchase health insurance and opts to self-insure is engaging in an “economic activity.” This is an important legal question because the Commerce Clause grants the federal government authority to regulate economic activity if it substantially affects interstate commerce.

Sutton meticulously dissects the activity question: “no one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk. Each requires affirmative choices; one is no less active than the other; and both affect commerce.” Everyone is an active participant in the health care economy and therefore, the federal government has the authority to regulate this activity, such as by requiring all Americans to have some minimum level of health insurance coverage.

Finally, Sutton’s opinion clearly states that the individual mandate passes constitutional muster – even for those who do not like the idea, “Call this mandate what you will—an affront to individual autonomy or an imperative of national health care—it meets the requirement of regulating activities that substantially affect interstate commerce.” The decision is a reminder to all of those who attempt to stand in the way of implementation that the Constitution may not be available as their personal road block.

What comes next?
The plaintiffs in the 6th Circuit case have two options – they can ask the 6th Circuit for a full panel of nine judges to review the decision (called a review en banc), or they can appeal their loss to the Supreme Court. In the interim, we await two other rulings out of the 4th and 11th Circuits. Legal analysts still believe, despite the ruling Wednesday, that the 11th circuit case is more likely to end up in the Supreme Court. However, most legal analysts agree that a case will be on the Supreme Court docket next term, which would likely result in a decision by June of 2012. Yet there are optimists who believe that a series of decisions similar to that of the 6th Circuit would keep the case from ever reaching the high court – hope springs eternal.

– Eva Marie Stahl, Policy Analyst

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Posted in Affordable Care Act implementation | 1 Comment »

States of Innovation

Wednesday, June 29th, 2011

states of innovation logo

Saving Money, Saving Lives:
Maryland Paves the Way on Payment Reform

As policymakers across the country look to balance their budgets, some are turning to Medicaid, recycling the same harmful policies they’ve used year-after-year: eliminating coverage for vulnerable Americans, restricting critical benefits like prescription drug coverage, imposing premiums on those who can’t afford them, and slashing already-low provider reimbursement rates.

Community Catalyst and Georgetown University Health Policy Institute Center for Children and Families created the States of Innovation blog series to shine a spotlight on states that are trying to find a better way. We will highlight states that are pioneering new approaches to making Medicaid more sustainable without harming – and often by improving – care for the millions of vulnerable seniors, people with disabilities, children and low-income parents that rely on Medicaid. Our inaugural blog focuses on an initiative in Maryland to reduce the incidence of costly hospital-acquired infections and other medical errors.

SOI intro line

By improving how Medicaid and other health insurers reimburse hospitals, Maryland dramatically lowered its rates of costly, potentially avoidable events (PAEs) such as hospital-acquired infections. Maryland’s initiative is far more exciting than that sentence would lead you to believe, and we’ll tell you why.

What’s Really at Stake
Wonky terms like “potentially avoidable events” – and even wonkier acronyms like “PAEs” – obscure what this is really about: the hundreds of thousands of people each year whose lives are shortened and who endure needless pain or lengthy hospital stays because of preventable medical errors.

Indeed, “PAE” takes on personal meaning to people like Ginny Harvey. In 1996, Ginny broke her ankle stepping off a curb and had surgery at a prominent hospital in Boston. That’s where her story should have ended.

But during her hospital stay she acquired a staph infection, which quickly escalated into a fast-moving bone infection. After enduring 28 surgeries over the course of five years – including painful bone and muscle graphs – Ginny was forced to amputate her leg to save her life. “The staph infection did not ruin my life,” she says, “but it has altered my life forever.” For more on Ginny’s story, click here.

Maryland vs. Medical Errors
Maryland is tackling this type of hospital-acquired infection and other medical errors head on. Before we talk about how the state is doing it, let’s start with why we selected Maryland for our debut blog in the series. The state achieved tremendous results across the health care system (not just in Medicaid) in just the first year of their initiative:

  • – A nearly 20 percent reduction in hospital-acquired infections, like the type that Ginny suffered from.
  • – A 12 percent drop in overall hospital-acquired complication rates. This includes infections but also other harmful preventable events like accidental punctures during invasive procedures.
  • – More than $60 million in savings. Because the health care needed to treat these types of preventable complications is extremely costly, as Maryland’s complication rates dropped so did its health care costs.

How Did Maryland Do It?
Maryland’s reforms build on a common-sense concept: hospitals should get paid more for providing higher quality care, and less for providing harmful care. This may seem obvious, but many states’ Medicaid payment methodologies fully reimburse hospitals for the costs associated with treating harmful conditions that could have been prevented. Those payment systems fail to reward hospitals for investing in preventing the types of infections Ginny endured.

The Affordable Care Act will soon require all states to take the first step: stop paying for the costs associated with a handful of medical errors that are virtually always preventable, such as operating on the wrong body-part. But these particularly egregious and extremely rare medical errors represent only a tiny sliver of the potentially preventable hospital-acquired complications that alter families’ lives and drive up our nations’ health care costs every day.

Maryland is the first state to tackle a broader list of 49 adverse events including ones that are usually – but not always – preventable, such as the type of infection that invaded Ginny’s bones. Because these infections are not always preventable, and no hospital could be expected to lower its rate to zero, Maryland did not eliminate payment altogether for the costs associated with them. Instead, it adjusted a portion of hospital payments based on the rates of these complications; hospitals that do a good job at avoiding these events relative to their peers get a little extra money, and hospitals with a relatively high rate get a little less. This provides hospitals with the incentive to lower their overall rates of complications – saving money and saving lives.

The Real Question: Why Aren’t Other States Doing It?
Remarkably few states are following Maryland’s lead. And while they leave this cost-saving option on the table, Republican Governors are flocking to Capitol Hill and insisting that they need to cut vulnerable Americans off Medicaid to get their budgets under control. For example, Governor Christie is requesting that CMS allow New Jersey to freeze Medicaid enrollment for parents earning more than $439 a month. This proposal would result in 23,000 people being denied health coverage, and would save the state only nine million dollars.

Harmful eligibility cuts like these are unconscionable, particularly when New Jersey – and other states like it – could save even more money through payment reforms like Maryland’s that improve health care quality and better families’ lives.

To learn more about moving payment reform in your state’s Medicaid program, please read Community Catalyst’s policy brief. Over the summer, Community Catalyst will also be releasing model Medicaid payment reform legislation, as well as a state-by-state report card to help you track which states are following Maryland’s lead.

-Katherine Howitt, Policy Analyst
Community Catalyst

This blog was based partly on an interview with Robert Murray, Executive Director of Maryland’s Health Services Cost Review Commission.

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Posted in Medicaid | 2 Comments »

Cross-Post: A Disappointing Rollback of Consumer Protections on Appeals

Friday, June 24th, 2011

June 23, 2011

The Affordable Care Act (ACA) established many consumer protections, but it was only the first step.  As decisions are made about implementation and regulations, the need for consumer engagement is critical. As an example of where protections could have been stronger, the Department of Health and Human Services just released regulations that relax a number of requirements on health plans and insurers, making it more difficult for consumers to successfully pursue appeals against them.

This is just a reminder that there will be many opportunities in the coming months and years to weigh in on federal regulations as the ACA is implemented – and it’s important for consumers to respond.  Community Catalyst will continue to provide updates about these opportunities and to work with consumer advocates to ensure consumer voices are heard, and state experiences inform the federal debate.

This blog was originally posted on Georgetown Center for Children and Families’ Say Ahh!

Imagine you’re a parent and your child has been diagnosed with cancer and is going through painful, debilitating treatment. You can imagine the sleepless nights, the worry, the exhaustion, the fear. Now imagine that your insurance company denies some of the claims for your child’s treatment – treatment that the doctors assure you are essential to saving your child’s life. If not paid by the insurer, the bills amount to tens of thousands of dollars – putting you at risk of bankruptcy. At a time when your sole focus should be – has to be – your child’s health, you are forced to spend hours on the phone, fighting with health plan bureaucrats.

For President Obama, it was exactly this type of situation that sparked his passion for health care reform. He watched his mother, dying of ovarian and uterine cancer, battle the insurance company from her hospital bed to get insurance coverage for which she’d faithfully been paying premiums. As he said in a 2009 speech to AARP: “That happens all across the country. We are going to put a stop to that.”

And he did. With passage of the Affordable Care Act, for the first time consumers across the country, no matter what plan they’re in, are empowered to appeal their health plans’ decisions to an independent, external review panel. This critical consumer protection is designed to stop the worst of insurance company abuses and was a great win for consumers. In fact, a recent study by the General Accounting Office found that when consumers appeal denied claims, the health plan has to reverse its decision as much as 50% of the time.

Yet, as with everything health reform related, the devil is in the details. And how the appeals provision is implemented matters just as much – if not more – than having the right in the first place. Unfortunately, in a regulation quietly released late yesterday, the Administration relaxed a number of requirements on health plans and insurers, making it more difficult for consumers to successfully pursue appeals. Here are a few specifics:

• Scope of Review. The Administration has significantly narrowed the range of issues consumers can appeal. Originally the rules allowed consumers to seek external review of any adverse benefit decision (except eligibility for the plan). In the new version, consumers can only seek review for claims that involve “medical judgment” or a rescission of coverage. This means that any decision that’s considered “contractual” cannot be appealed to the external reviewer. For example, a plan’s determination that a particular service, drug, or supply is not covered would probably be considered contractual. Unfortunately, according to a recent AMA study, that’s one of the top reason patients’ claims are denied.
•Urgent Care Claims. Originally insurers were required to make a decision on an emergency care claim within in 24 hours of receiving it. In this latest rule, in response to complaints from industry that the time frame was too “burdensome,” the Administration is giving plans up to 72 hours to make a decision. This, in spite of many comments from consumer groups and providers highlighting the need for fast turnaround in emergency situations.
•Translations for Patients with Limited English. The law is clear: plans must provide enrollees with information about their appeal rights in a “culturally and linguistically appropriate manner.” Yet the Administration has significantly weakened this requirement. First, in only 6 counties in the country will plans be required to translate materials into any language other than Spanish. Second, plans only need to provide translations orally. If an enrollee wants translated materials in writing (kind of important if you’re going through the legalistic process of pursuing an appeal), they must proactively request them. Third, the Administration eliminated a requirement that plans keep a record of an enrollee’s language preference. That was, you guessed it, deemed too “burdensome” for the plans.
•Allowing Plans to Forum Shop. Perhaps the craziest part of the new rules is that they allow plans to choose their own judge and jury. Thankfully, this won’t be true in all states. State laws that already have strong laws that ensure an independent, impartial review will not be preempted by the federal rules However, a significant number of states do not have adequate external review laws, and will be preempted by a federal process. The problem is, under the new rules, plans in states subject to the federal process will be allowed to choose their own external reviewer. This is at odds with the recommendations of the National Association of Insurance Commissioners (NAIC), whose model state law on external review requires that external reviewers be randomly assigned (not handpicked by plans) to ensure and independent, impartial process.
•Giving Patients Less Time to File an Appeal. The earlier rule allowed consumers to have 120 days before filing the appeal. In response to complaints from insurance companies that this was too long, the new rule gives consumers only 60 days. Yet for someone struggling with pain, a recent surgery, rehabilitation, or other after-effects of an injury or illness, this time can pass in the blink of an eye. Many patients are likely to miss the deadline, and thereby miss their opportunity to correct an insurer’s bad decision.
•Delaying Implementation. Finally, many of the new appeals protections were to have gone into effect next week.  But in March new rules gave plans until January 1, 2012 (some even later), to comply. For consumers, these delays effectively deny them access to an impartial, fair review of their claim.

Sadly, all of these changes add up to some unfortunate administrative hurdles that will prove challenging for those parents fighting with their health plan to pay for the care essential to cure their child’s illness. Or for sons who must watch their mother battle cancer and her insurance company at the same time. On the other hand, the health reform law provides many of these same families with rights they didn’t have before. I hope that as we transition to 2014, and people gain more experience with their new appeal rights, we can convince policymakers to enact the necessary rules to make them real.

- Sabrina Corlette, Research Professor
Health Policy Institute, Georgetown University

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Posted in Affordable Care Act implementation, Health disparities, private insurance, Uncategorized | No Comments »

Solving the Specialty Care Issues for Medicaid and CHIP Children

Wednesday, June 22nd, 2011

The New York Times ran an article last week on the results of a new study published in The New England Journal of Medicine (NEJM) on access to outpatient specialty care for children on Medicaid and the Children’s Health Insurance Program (CHIP). The study found that children with public health insurance are much more likely to be denied specialty care or forced to wait for long periods of time for a specialist appointment than children with private health insurance. Medicaid and CHIP have been very successful in other important ways, but this study is concerning—particularly in the context of current proposals under discussion in Congress that would undermine these vital programs that provide a lifeline to millions of children as well as other vulnerable populations.

To conduct the study, research staff posed as parents and called specialty practices in Illinois to schedule appointments for their children. The two major findings from the study were:

  • – More than 66 percent of callers who said they had a child on Medicaid or CHIP were denied an appointment, compared to only 11 percent of callers who said they had a child on private insurance.
  • – The average wait time to see a specialist who accepted both public and private insurance was 22 days longer for Medicaid and CHIP children than for children with private insurance.

This study’s findings are consistent with the United States Department of Health and Human Services’ (HHS) 2010 literature review on access to care for Medicaid and CHIP children. HHS succinctly summarized its findings this way: “. . . access could be improved substantially for specialty care services (e.g., dental, mental health).” Reasons cited in the NEJM article for providers’ decisions not to treat patients covered by Medicaid and CHIP include: disparities in insurance reimbursement rates, delays in payment, and cumbersome payment procedures.

Access to specialty care for children on Medicaid and CHIP is clearly an issue that needs to be addressed. This begs the question of what effect current Congressional proposals to turn Medicaid into a block grant program, cap federal expenditures, or allow states to cut Medicaid and CHIP eligibility through repealing the Affordable Care Act’s maintenance of effort requirements (MOE) would have. The short answer is that all of these proposals would make this problem even worse. Block granting or a spending cap would result in reductions in Medicaid and CHIP spending, which would inevitably lead to provider rate cuts. Repealing the MOE provisions would result in reductions in overall coverage levels—leading to more uninsured children. Either way, these proposals would result in even less access to specialty care (not to mention to other essential health services as well).

Overall, Medicaid and CHIP serve our country’s children immensely well by providing cost-effective coverage for children that improves health outcomes and protects low-income families from financial ruin. For example, Medicaid and CHIP children actually fare very well when it comes to access to primary care. According to HHS, “Considerable evidence indicates that children enrolled in Medicaid/CHIP have much better access to primary care services than uninsured children and comparable access relative to privately insured children.”

In areas like access to specialty care, where further progress needs to be made, the answer is not to undermine these programs by reducing our investment in them. Instead, we need to implement innovative policy proposals that create savings in Medicaid by improving the health care delivery system, and that can be used to address outstanding issues like access to specialty care as well as for deficit reduction. And it’s up to all of us to make sure that members of Congress understand that we need thoughtful solutions to our nation’s problems, not mindless cuts.

—Patrick M. Tigue, Children’s Health Care Coordinator
New England Alliance for Children’s Health

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Navigators: Charting the Course Through the Exchange

Friday, June 17th, 2011

It seems like no matter where you turned this spring, everyone was talking about health insurance Exchanges. These competitive marketplaces for health insurance are intended to provide individuals, families and small businesses with better options and information to choose the best health plan for them. But most of us who have had to research and buy health insurance on our own know that it’s no easy task.

The majority of people who will be using the Exchange to find health insurance will be low-income and accessing subsidies. A recent study found that people in Exchanges are more likely to have low literacy rates, more limited English proficiency, and be more likely to have been uninsured in the past than the population outside of the Exchange. So, how will Exchanges ensure that people with barriers to health insurance find a path through the red tape to get the coverage and the care they need?

Consumers need a guide – and that is a “Navigator.” The Affordable Care Act included a provision for state Exchanges to fund Navigators to help people in Exchanges find the right coverage for them. There are a variety of groups that the ACA proposes as Navigators, including chambers of commerce, brokers, and community-based organizations. Our work now is making sure that states choose Navigators that are appropriate to serve the needs of the people who will get insurance through Exchanges.

As states continue to wrestle with creating Exchanges, we need to keep talking about the role of Navigators – and which groups are most likely to be trusted guides for consumers in the Exchange. Navigators should be guides who reach people in their own communities, who speak their language and understand cultural differences. Navigators should be guides who understand how difficult it can be to get and keep health insurance and who want to work one-on-one with consumers.

Community Catalyst has developed new resources to help advocates continue to talk about Navigators in your coalitions and with other stakeholders and policymakers. The Navigator role was included in the ACA to help make the Exchange marketplaces real for people. It’s our responsibility to make sure Navigators are truly representative of the people they will serve.

– Christine Barber, Senior Policy Analyst

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A blueprint for health

Thursday, June 16th, 2011

The unveiling today of a National Prevention Strategy marks a new level of federal coordination aimed at improving American’s health and reducing health care costs. The plan goes far beyond vaccines and blood-pressure tests to stress the importance of addressing underlying factors, such as the environment where we live, work and play. It’s great to be hearing this message repeatedly from our leaders in Washington and to see the importance attached to eliminating health disparities, which is one of four “strategic directions” in the plan.

Seventeen federal agencies collaborated with stakeholders and experts to create the 122-page blueprint for action by the federal government as well as states, communities, businesses, nonprofits and individuals. Required under the Affordable Care Act, the National Prevention Strategy will guide spending from the National Prevention Fund, also created by the ACA, as well as spending from other sources.

The blueprint also sets out seven priority areas, including two that have historically gotten short shrift — enhancing mental health and preventing substance abuse.

What does all this mean for our work? Foremost, it helps bolster the third leg of the three-legged stool that we believe is the smart way to control health costs – along with reducing waste and occasional bad care in Medicaid and Medicare, and cutting prices and high administrative costs in the private sector. To cite a statistic in the blueprint, increasing use of preventive services, including tobacco cessation screening, alcohol abuse screening and aspirin use, to 90 percent of the recommended levels could save $3.7 billion each year in medical costs.

Secondly, it identifies specific activities – from policy and environmental changes to communications and clinical care and provides the evidence to back them up. This is a useful guide for everyone working in prevention, whether they focus on clean air, healthy homes or the cultural competence of health care providers. It also sets out measures of progress, such as reducing the number of Americans who die from major preventable illnesses, that can help us hold everyone accountable.

For those eager for more details, here are the four strategic directions:

  • –  Building Healthy and Safe Community Environments: Prevention of disease starts in our communities and at home; not just in the doctor’s office.
  • – Expanding Quality Preventive Services in Both Clinical and Community Settings: When people receive preventive care, such as immunizations and cancer screenings, they have better health and lower health care costs.
  • – Empowering People to Make Healthy Choices: When people have access to actionable and easy-to-understand information and resources, they are empowered to make healthier choices.
  • – Eliminating Health Disparities: By eliminating disparities in achieving and maintaining health, we can help improve quality of life for all Americans.

And here are the seven priority areas:

  • – Tobacco free living
  • – Preventing drug abuse and excessive alcohol use
  • – Healthy eating
  • – Active living
  • – Injury and violence-free living
  • – Reproductive and sexual health
  • – Mental and emotional wellbeing

– Alice Dembner, Deputy Policy Director

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Cross-Post: Got Coverage? 1,479 More Kids in MA Do Now!

Wednesday, June 15th, 2011

Massachusetts health advocacy organization Health Care for All (HCFA) sponsored a month-long campaign to enroll as many uninsured children in health coverage as possible. HCFA enlisted 66 organizations across the state to participate in its Statewide Enrollment Challenge, part of U.S. Health and Human Services Secretary Kathleen Sebelius’s “Connecting Kids to Coverage” campaign. Three of the state’s major insurance providers donated awards for the six most successful Challenge participants.

This blog was originally posted on Health Care for All’s A Healthy Blog.

It’s been a whirlwind month, but the first phase of the “got coverage?” Kids Enrollment Challenge is DONE! And thanks to the tireless efforts of 66 enrollment organizations statewide, HCFA is proud to announce that 1,479 previously uninsured children now have health coverage!!

The end of the first phase was celebrated today at an event at the State House Grand Staircase, where state and federal leaders extended their gratitude to each of the participating organizations for their devotion and hard work over the last month to find and enroll at least 500 uninsured children. Nearly tripling our goal, we couldn’t be more grateful to these groups for standing up for kids.

Christie Hager, Regional Director of the U.S. Department of Health and Human Services, Senator Sal DiDomenico, and Representatives Tackey Chan, Russell Holmes, Elizabeth Malia, Ellen Story and Alice Wolf were all in attendance to show their appreciation.

In speaking to the organizations, Rep. Story said that state leaders are asked to do a lot of hard and sometimes impossible tasks, but that she knows it is not too hard or impossible to get twelve-month eligibility for families and children. “It’s a no-brainer!” she exclaimed.

But the best appreciation came from the children and families who finally find themselves with insurance after years of no health coverage. Dennis Chang, father of two girls, told us that even though you cannot see his daughter’s illness, it is still there and he is grateful for the coverage he now has to pay for her doctor’s visits. Sonia Costa’s child was born prematurely and she says getting health care coverage made all the difference. Vilma Donis, who found out about the program through church, merely sighed “Thank God!” once she, her son and daughter were enrolled in coverage. Obviously, the work of each of the 66 enrollment organizations will yield healthier outcomes for generations to come.

Today’s event was multipurpose, as it allowed HCFA to both celebrate these organizations and to also kick off the next phase of its enrollment challenge: helping kids retain their health care coverage.

Many participating enrollment groups found that the reason children lack health insurance is because parents are often not sure how or when to reenroll their kids each year. In an effort to address this issue, HCFA has asked these organizations to continue to help keep those kids connected to care by advising parents about the best ways to stay enrolled. For the second phase of the challenge, HCFA has provided participating organizations with educational outreach materials, including bookmarks and magnets, which detail the steps of how to maintain health coverage. These materials feature actionable reminders, such as informing MassHealth about changes in employment status or address, and when their family’s health insurance renewal is due.

We were so pleased with the organizations’ enthusiasm to sign on to the next phase to focus on coverage retention! Got coverage? 1,479 kids do now!!

-Katy Capers, Health Care for All

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The Complexity of Covering Children

Tuesday, June 14th, 2011

Positive trends in children’s coverage made the news last week, with the Urban Institute reporting that 1.1 million children gained health coverage through Medicaid and CHIP between 2007 and 2009. While these coverage gains are quite impressive, they may soon be overshadowed by less desirable developments. A number of different factors could result in children’s coverage rates heading in the wrong direction in years to come.

First and foremost, the proposed Medicaid and CHIP cuts and program changes currently being debated (such as eliminating the maintenance of effort (MOE) requirement that protects eligibility standards or converting Medicaid funding into a block grant) would undoubtedly result in children losing coverage. The Congressional Budget Office estimates that repealing the MOE requirement would result in half of all states eliminating their CHIP programs and 1.7 million children losing access to CHIP by 2016.

A second and somewhat lesser-known challenge for keeping kids covered will be dealing with “complex coverage situations” when the Affordable Care Act (ACA) is fully implemented in 2014. “Complex coverage situations” are scenarios in which children are not covered by the same insurance program as their parent(s) or do not live in the same household as at least one parent. These circumstances can make finding, enrolling in, and retaining health coverage for children complicated and confusing – especially in 2014 when millions more people qualify for Medicaid, state insurance Exchanges officially roll-out, and parents are held newly accountable for obtaining coverage for their children.

According to a recent Urban Institute report, almost 42 million children fall under at least one of these “complex coverage” categories:

  • – 20.7 million children are eligible for different insurance programs than other family members (either because a parent’s employer-sponsored insurance does not cover dependents or because children qualify for Medicaid or CHIP and their parents do not)
  • – 27.7 million children live apart from at least one of their parents
  • – 6.5 million children fall into both categories

Many questions about how specific situations will be handed in 2014 remain unanswered. For example, if a parent has employer-sponsored coverage for herself but needs to buy a child-only policy in the Exchange, will her contributions to the employer policy be considered in determining the amount deemed affordable for the child-only policy? And will a parent who claims a child on his tax forms be penalized for not covering this child if a medical support order (a form of child support provided as health insurance under a parent’s policy) deems a different guardian responsible?

Policymakers must begin working now to answer these questions and ensure that children in complex coverage situations benefit from the ACA. Subsidy determination processes must be clarified, outreach and enrollment strategies for children who qualify for different programs than their parents must be developed and implemented, and medical support orders must be made more consistent with the ACA’s coverage requirements. Failure to resolve these issues now may mean future coverage losses for some children—something none of us want to see.

—Maia Fedyszyn, Program Associate
New England Alliance for Children’s Health

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A Loophole in the ACA on Association Health Plans: It’s Time to Pay Attention

Monday, June 13th, 2011

No one ever said the ACA was perfect – any time you try to reform a system that’s as fractured, opaque and confused as our current insurance system – you’re going to stumble across some crazy stuff, like association health plans (AHPs). These odd creatures of our insurance system are often totally unregulated by state insurance departments. Luckily, for the most part the ACA treats health insurance sold through associations just like other health plans – they have to implement the September 23 reforms just like everyone else. But last month, for the first time, the Obama Administration raised the possibility that health insurance sold through associations might be exempted from one of the ACA’s most important consumer protections – rate review that examines premiums on insurance. And, if AHPs are exempted from rate review, it raises some scary questions, such as whether they’ll be subject to the 2014 reforms, like the essential benefit package and adjusted community rating. Regardless, you can be sure that if they get any breaks at all, we’ll see a rush of insurance companies trying to get into the AHP business.

What’s an AHP, and why would it be exempted from rate review?
Millions of people buy insurance through associations – and they can be a way for a self-employed person (i.e., freelancers, real estate agents, independent contractors) to access insurance. AHPs are often sold to individuals or small groups, and some are formed by professional organizations. But some AHPs are created by insurance companies and exist solely to sell insurance. And in many states, AHPs exist in a gray area of regulation – even though individuals and small businesses are buying the coverage (and are often individually underwritten), they’re considered “large group” coverage, and subject to less regulation. And some aren’t subject to any regulation at all – according to a 2006 study by my colleagues at Georgetown, approximately 24 states don’t claim any jurisdiction over “out-of-state” AHPs, even if the policies are sold to their own citizens.

Of the states that conduct premium rate review in the individual and small group markets, the study also found that a significant number of states don’t require AHPs to submit their rates for review. So, unless HHS explicitly extends the rate review regulation to AHPs there will be a loophole in the law that insurance companies will rush to take advantage of. AHPs are highly concentrated in states that exempt them from rate regulation. This will only accelerate if insurers can use an AHP structure to escape the new federal requirements in the ACA. In addition, if AHPs are allowed to be considered “large group” coverage for purposes of the ACA, they’ll not only get a pass from rate review, but there’s a risk they could also escape critical 2014 reforms like the requirement to cover the essential benefits package, and the elimination of health status rating.

What can we do about it?
HHS has asked for comments on whether AHPs should be subject to rate review. Those comments are due July 18th. It’s important that HHS hear about why ALL consumers deserve rate review protections, whether they’re in a traditional health plan or a plan sold through an association.

Note from Community Catalyst: Stay tuned for more resources to help state advocates comment on AHPs and rate review. Or contact Christine Barber (cbarber@communitycatalyst.org) if you are interested in commenting to HHS.

– Sabrina Corlette, Research Professor
Health Policy Institute, Georgetown University

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Posted in private insurance | 1 Comment »