Saturday, August 1, 2015

Obamacare Glitches Were Predictable - And Easily Solved

The Affordable Care Act (ACA) rollout continues and every few weeks another problem arises seemingly without warning. However, those who follow health policy closely aren't too surprised because every system is perfectly designed for the result you get. Unfortunately, it's not always the result you want. The glitches and gotchas are largely the foreseeable result of the convoluted process that created the ACA in the first place.

Obamacare Glitches Were Predictable - And Easily Solved

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The Affordable Care Act (ACA) rollout continues and every few weeks another problem arises seemingly without warning. However, those who follow health policy closely aren’t too surprised because every system is perfectly designed for the result you get. Unfortunately, it’s not always the result you want. The glitches and gotchas are largely the foreseeable result of the convoluted process that created the ACA in the first place.

The ACA (aka Obamacare) builds on the existing private health insurance system but bans egregious practices such as charging more or denying coverage for pre-existing conditions and risks; canceling policies just as the bills add up; and capping lifetime payouts. The goal is to let people keep policies that meet acceptable minimum standards and give those who want or need new insurance affordable options. In practice, this hybrid amalgam needs complicated rules to ensure people don’t game the system or get taken advantage of. The simpler alternative of just canceling all health policies and enrolling everyone in standardized plans (single payer) was never given serious consideration.

So far, two inevitable complications have come to light, and a third’s about to.

First, there are the website issues. The Healthcare.gov design goal was to allow the direct comparison of various plan features, costs and subsidies using the applicant’s own information and one-stop enrollment. This is a lot more complicated than buying a pair of socks on Amazon unless Amazon has to verify your identity, income, citizenship, family status, etc. with a dozen or so government and private databases before sending you the new argyles.

Deliberate foot dragging by some states—“maybe we’ll run our own exchange, maybe we won’t”—significantly delayed the development effort. Since the law’s authors never anticipated total non-cooperation by so many states, the federal exchange effort was woefully underfunded. Throw in a detour through the Supreme Court that made the Medicaid expansion optional as well as restrictive government contracting rules, and it’s clear that things were not likely to go well no matter who was in charge.

Glitch number two. Some folks are getting cancellation notices because their current policy doesn’t meet the ACA minimum standards for complete health coverage. In all but a small percentage of cases, the new option is a much better value. But, like Wile E. Coyote, who doesn’t fall until he realizes he’s got nothing beneath him, people don’t know what’s missing in their coverage until they need it. Insurers have piled on by blaming the ACA for any changes they make to their offerings. Since you can’t fix bad insurance by allowing bad insurance policies to be sold, this was totally predictable, despite what the President said.

The next shoe to drop is a big one: restricted provider networks. Since, the traditional means of reducing payouts are prohibited, insurers are negotiating deeply discounted contracts with smaller networks of providers trading lower rates for greater volume. Not knowing much about these newly insured people, providers are also waiting before signing onto exchange-offered plans. As a result, patients are less likely to find all their providers and top hospitals in the networks of exchange plans. The danger is that better-off healthy people will buy plans with broader provider networks outside the exchange, leaving exchanges—and their subsidies—for sicker and poorer people, driving up premium and subsidy costs.

This last glitch can be fixed by new regulations setting standards for provider network size or forcing companies to limit the differences between exchange and non-exchange plans. Of course, this will add one more layer of complexity to an already complex system.


From Obamacare to Medicare to managed care, read more of The Field Clinic here »

Director of Health Policy Program at the Jefferson School of Population Health
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The Field Clinic reports and analyzes health care laws, government policies, and political trends that are transforming the care we receive and the way we pay for it. Read more about our panel of bloggers here.

This blog is produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health-policy research and communication organization not affiliated with Kaiser Permanente. Portions of this blog may also be found on Inquirer.com and in the Inquirer's Sunday Health Section.

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Robert I. Field, Ph.D., J.D., M.P.H. Professor, School of Law & Drexel School of Public Health
Jeffrey Brenner, MD Founder of the Camden Coalition of Healthcare Providers, Medical Director of the Urban Health Institute at Cooper University Healthcare
Andy Carter President & CEO, The Hospital & Healthsystem Assoc. of Pa.
Robert B. Doherty Senior Vice President of Governmental Affairs & Public Policy American College of Physicians
David Grande, MD, MPA Assistant Professor of Medicine at the University of Pennsylvania
Tine Hansen-Turton Chief Strategy Officer of Public Health Management Corporation
Drew A. Harris, DPM, MPH Director of Health Policy Program at the Jefferson School of Population Health
Antoinette Kraus Director of the Pennsylvania Health Access Network
Laval Miller-Wilson Executive Director of the Pennsylvania Health Law Project
David B. Nash, MD, MBA Founding Dean of the Jefferson School of Population Health
Mark V. Pauly, Ph.D. Professor of Health Care Management, Business Economics and Public Policy at The Wharton School
Howard J. Peterson, MHA Managing Partner of TRG Healthcare, a national healthcare consulting firm
Paula L. Stillman, MD, MBA Healthcare consultant with special expertise in population health and disease management
Elizabeth A. W. Williams Senior Vice President & Chief Communications Officer for Independence Blue Cross
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