Tag Archives: health care exchange

It’s not news when the train doesn’t wreck

With the central element of the Affordable Care Act (ACA) — the health care exchanges — slated to go online in October, there’s been a lot of concern about how these exchanges will be implemented.  17 states (including Minnesota) have elected to build their own exchanges, 27 states are defaulting to the federal exchange, and seven states are doing a hybrid model based on the federal exchange.

Opponents of the law, naturally are going all gloom-and-doom on the implications (even going so far as to take a quote by Democratic Senator Max Baucus where he worried about a “train wreck” out of context to further their cause).

But what if it doesn’t turn out to be a train wreck after all?  There have been some interesting developments in recent weeks that lead one to believe that strong, proactive management of exchanges by states can lead to positive results.

In Maryland, the largest insurer in that state (Care First) proposed a shocking 25% increase in premiums for 2014, which was widely cited as a troubling statistic for the ACA.  But nearly every other insurer in the state has proposed premium increases below 10%.  Care First either stands to lose a significant amount of market share, or they’re going to have to lower their rates.

In California, meanwhile, proposed premiums on their health care exchange have come in significantly lower than predicted.  2009 Congressional Budget Office projections anticipated that a “silver” plan (one that covers 70% of expected health care costs) would have a yearly premium of $5,200, while an actuarial firm projected an annual premium of $5,400.  When the actual prices were released yesterday, the actual average yearly premium for a “silver” plan is going to be about $3,300, or 35% lower than the CBO projection.

Oregon’s health care exchange is seeing similar patterns to Maryland.  After releasing the costs for all of the plans that will be on its exchange earlier this month, two large insurers have asked to come back and lower their prices after discovering that some competitors were pricing the same coverage for less than half the cost.

Meanwhile, we’ve seen evidence that health care inflation has been slowing substantially.  Provisions of the ACA have contributed to this trend and further policies, such as increased use of competitive bidding for Medicare-paid medical equipment slated to roll out between now and 2016, should only continue it.

These sorts of things should provide us here in Minnesota with hope that our health exchange — named MNSure — will be able to deliver coverage to citizens at a reasonable cost.  Minnesota has always worked hard to give our citizens access to health care and that should only get better under the ACA.

From a political perspective, we too should also remember that what voters tend to value about these sorts of programs is the real-world impacts on their lives.  Opponents of Medicare thought that implementation problems (that did happen) would end up undermining the program and resulting in its repeal.  Opponents of Medicare Part D thought the same thing.  In both cases, what opponents of those programs discovered is that voters ultimately liked the fact that they were guaranteed health care as a senior citizen and that they liked programs that helped them pay less for their prescriptions.  Outright repeal of these programs today is essentially unthinkable.

Ultimately, I think we’ll find the fact that the ACA ensures that you’re always going to have access to our health care system in a reasonably affordable way is going to outweigh any implementation problems at the beginning of the program. In fact, if states that are actively managing their exchanges end up producing better results, it may become a political liability for states that have chosen to actively fight implementation of the law.  After all, if dysfunctional California can build a working exchange with lower-than-expected health insurance premiums, why can’t Texas?

[Image courtesy of the Alexandria Echo Press, is of a 1904 train wreck in Osakis.]

2013 Legislative To-Do List [UPDATED]

The 2013 legislative session kicks off next week, and there’s a long list of things that the newly-minted Democratic majorities should look at as their top priorities.

#1:  Fix the budget.  It’s long past time for the folks in St. Paul to get on with it and take care of the structural problems in the state budget.  No more stalling, no more half-measures, no more one-time fixes or gimmicks to solve this year’s $1.1 billion projected deficit.  This means:

1a.) Get a plan in place to pay back the school shifts.  My talks with local school district officials indicate that they are more interested in certainty at this point, so we need not necessarily pay back the entire $1.1 billion still remaining (this is on top of the $1.1 billion deficit) in one budget cycle.  A bipartisan commitment, though, to repaying $275 million a year for the next four years should be sufficient.

1b.) Real tax reform.  The elements required here are pretty simple, but the devil is in the details.  First, broaden the base of the sales tax by removing distorting exemptions on some categories of goods and services — it should be possible to broaden the base, lower the rate, and still end up revenue-neutral to revenue-positive.  Second, recognize that the sales tax changes are regressive, so cut income taxes on lower- and middle-income taxpayers.  Third, remove unnecessary tax expenditures (credits and deductions) that essentially function as handouts via the tax code.  This should free up additional revenue that can be applied to across-the-board rate reductions in both the individual income and corporate income taxes.  And that’s all before addressing our overly complex property tax system.  It may be too much to ask legislators to fix that in 2013, too, but we can hope.

1c.) Accountability in state spending.  State government needs to do a much better job of measuring effectiveness of state programs, and requiring reforms for programs that don’t measure up.  Additionally, there are programs that just aren’t needed any more.  It’s time to end them, now.  That said, we should be wary of sound-bite proposals like legislative Republicans proposed last session that imposed across-the-board cuts without an analysis of the work required.

#2:  Improve the job-creation environment in the state.  An odd-year bonding bill seems unlikely at this point, but the Legislature can take some concrete steps to improve conditions for job creation in the state.  A commitment to infrastructure is paramount.  For starters, the legislature can begin indexing the gasoline tax to inflation in order to maintain its buying power. (Minnesota’s gasoline tax, even with the increase passed after the 35W bridge collapse, has less purchasing power than it did 20 years ago and our road and bridge construction needs are much more significant.)  Renewing our commitment to our public universities is vital as well.  Even though enrollment is up 23,000 over that time, funding for the University of Minnesota system and MnSCU has declined back to Ventura Administration levels.  This is a significant factor in the doubling of college tuition over the last decade.  In return, those institutions should provide concrete plans on how they can reform their operations and become more efficient.  The U of M, in particular, has some administrative bloat that needs to be addressed.

#3:  Support implementation of the Affordable Care Act.  Minnesota’s health insurance exchange, required as part of the Affordable Care Act, is scheduled to go live in October to enable enrollment in plans starting on January 1, 2014.  It is critical that the Department of Commerce have the necessary resources to finish development and provide ongoing support for the exchange.

#4:  Government accountability, campaign finance and election reform.  There’s a gaping hole in the finance disclosures that our elected officials have to provide.  If they work as an independent contractor or consultant, legislators don’t have to disclose who they work for.  That’s a problem, as demonstrated during the campaign in the case of Senator David Hann.  Unlike some, I don’t have a problem with Hann chairing the committee with critical oversight on health insurance while being licensed to sell it.  But I do have a problem with not knowing who’s paying Hann’s salary outside of the Capitol so I can fairly judge his actions in the legislature.  Same goes for anyone else.  It’s time to require folks in those categories to disclose who they’re getting paid by (over a limit, say $2,500).  From a campaign finance perspective, it’s time to bring some additional sunshine into the process and require additional disclosures.  I would recommend moving to a four times per year model (quarterly in odd years, then Q1, pre-primary, pre-general, and year-end in even years).  Finally, even though the Voter ID constitutional amendment failed, there are things that can be done in the realm of election law to improve perceptions of fraud incidence and improve access to the polls.  Such provisions should include the introduction of early voting (how about the two Saturdays before Election Day), automatic voter registration of holders of drivers licenses and identification cards, and a close look at the electronic poll book concept as an alternative to voter ID requirements.

Certainly, these won’t be the only items that come up — social issues like a push for recognition of same-sex marriage will undoubtedly be discussed (and eventually, I believe it should and will be passed) — but these are what should be at the top of the list.

[UPDATE, 1/4]:  Let me clarify a few points regarding Hann’s relationship with Boys & Tyler Financial.  Hann has completed his licensing requirements with the state of Minnesota, but has not been enrolled as an agent by an insurance company.  Until that has been completed, Hann cannot sell insurance in the state.  Hann works on a contract basis with Boys & Tyler, and claims to earn no compensation for that relationship. (Under current law, Hann would not be required to disclose any income earned on a contract basis.)  This seems to be an arrangement designed to fight efforts at disclosure, and leads me to believe that all contract employment/consulting relationships should be disclosed instead of those surpassing the dollar limit originally indicated in the post.

[State Capitol picture courtesy of Minnesota House of Representatives Public Information Services.]

Taking the health care exchange for a test drive

One of the primary elements of the federal health care reform passed in 2010 was the establishment of health care exchanges — marketplaces designed to facilitate the purchase of health insurance for individuals and small businesses.  In real terms, individuals will interface with the exchange through a website.  People who are eligible for subsidies or credits through existing law or provisions of the health care reform bill will have those subsidies or credits built into their profiles and will have those automatically included in their premium calculations.

Under the terms of the health care reform bill, states are supposed to have their exchanges up and running by January 1, 2013 with policies purchases on the exchange effective beginning January 1, 2014.  The state of Minnesota received federal grant money this year to begin planning and development of its exchange.

The first fruits of that grant money are now available for viewing on the Commerce Department’s website.  The state is working with five private partners to design and build the exchange, and those partners have presented exchange prototypes that you can go out, view, and interact with.  There’s no personal data on the website, but it’s interesting to go in and try out different options.

For instance, here’s a shot from the Deloitte Individual Enrollment module, showing some 33 health insurance options for the data I entered:

The idea, obviously, is to try and take a complex subject like health insurance and simplify the process so that it’s easy for everyone to evaluate and purchase the right policy for them and their family.  After looking through the different modules, citizens are encouraged to give their feedback via an online survey.

Whether you supported the health care reform bill or not, it’s important that the pieces of it that are implemented are done well.  Creating our own state exchange, too, keeps Minnesotans out of a federal exchange system and enables us to address health concerns in a state-specific way.  And even if the entire bill were to be found unconstitutional, one could argue that the creation of such an exchange might be worthwhile anyway.  Utah, perhaps the reddest of the “red” states, has been enrolling citizens in health insurance via an exchange since 2009.


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