Posted by CHPRE Staff
Testimony
Thursday, May 27th, 2010
Introduction:
My overall assessment is that the legislation recently passed by the Congress and signed by the President is an imperfect but good start in the direction we need to head, toward making our health system sustainable for all Americans. Frankly, we do not really have a choice. We cannot afford the health system we have built, for even though parts of it are truly outstanding and the envy of the world, we get very low clinical value for our many dollars on average and we exclude too many from care that most of us still take for granted. We are on a path that will force us to either improve our system’s overall quality and efficiency, or else look away as more and more Americans go without care that is expected and widely available to the entire population in every other industrial country in the world.
“An Economic Case for Making Health Reform Work,” North Dakota legislature, Industry. Business and Labor Committee, May 27, 2010.
Click here to view the testimony.
Posted by CHPRE Staff
Latest News
Monday, May 24th, 2010
May 24, 2010
Written by Shuchita Madan
Len Nichols, along with Jon Kingsdale (Executive Director of Massachusetts Commonwealth Health Insurance Connector) and Joel Ario (Insurance Commissioner for Pennsylvania Insurance Department) presented to the members of the American Hospital Association’s at the Annual Meeting on April 26, 2010. The three participants gave their presentation on the importance of exchanges being established as a result of health care reform. It provided the audience with a good variety of perspectives-a health economist, one who was successful in expanding coverage, and an insurance commissioner.
Dr. Kingsdale, who had a huge part in implementing Massachusetts’ Health Care Exchange and offering universal coverage-the national health reform plan is based on MA’s design. Being surrounded by such a knowledgeable group of people was inspiring to someone like me who is just learning different aspects of the health care industry. Len’s PowerPoint is linked below and I will talk about some of his main points as well. Here are some highlights I listed from the presentations on exchanges from Joel Ario’s and Jon Kingsdale’s presentations.
Joel Ario’s Presentation:
Insurance Reforms focused on Access and Consumer Protections:
Access: The purpose is to end discrimination (guaranteed issue and rating reform), make people recognize their personal responsibility (individual mandate), provide affordability and streamlined access (sliding scale of subsidies up to 400% FPL) and streamlined access (exchanges for individuals and small businesses)
Consumer Protection:Protects consumers from rescission, lifetime caps, transparency around benefit options and “unreasonable” rate increases, many more reforms in conjunction with exchanges in 2014, essential benefits package with 4 standard options, uniform enrollment form(easy to compare plans, like HealthConnector) and multiple forms of transparency and accountability on cost and quality
Some basics on Exchanges:
- They are state run-unless states do not meet standards, federal will help
- Health and Human Services (HHS) and National Association of Insurance Commissioners will establish standards (NAIC)
- By January 1, 2013, states must be certified by HHS
- Exchanges up and running by January 1, 2014
- For individuals and small groups-up to the states to put these two together or operate separately (Massachusetts has combined the groups)
- Start up grants-self sustaining by 2015
HHS will set up regulations for states to follow and I will post those once they are available.
Jon Kingsdale’s Presentation:
An update on what has worked for the state of MA:
- 2.7% uninsured after 3 years, down from 10%
- Of those recently insured, 35% private pay
- 98% compliance with taxpayer filings, individual mandate
- 59-75% voter approval rating
- Net new state costs, about $ 350 million
Dr. Kingsdale listed the key elements of reform and the shared responsibility that is required for success
Residents: Individual mandate
Government: Provides premium assistance, expanding the eligibility of Medicaid
Employers: Need to make a “fair” contribution and set up section 125 plan
Policy Objective: “Make health insurance work for the sick as well as the healthy”
Primary functions of Exchanges:
1. Determine eligibility and subsidy flows
2. Sell to other target market segments
3. Specify plan designs & cost-sharing
4. Select, contract & market health plans-very critical part, what plans offer
5. Public education & Outreach
These are just a few of the things that I wanted to share from the presentation on exchanges. Quote from Dr. Kingsdale:
“Everyone now recognizes that near-universal coverage is unsustainable without cost containment, Access is easy, cost is not.”
Len M. Nichols’ Response:
“cost growth reduction with coverage expansion is more likely to succeed”
Changing the way businesses operate-instead of:
risk selection–>help everyone find value
Fee For Service (FFS) pay for volume–>pay for value
So what are Exchanges “Supposed” to do is what Len explains here:
- Organize least organized insurance markets-small groups and individuals achieve some economies of scale , risk pool-large groups
- Promote competition with rules
- track enrollment and facilitate financial flows
- Promote transparency for consumers
- Promote and demand accountability among the insurers
- Assist with enrollees finding value in products and the delivery itself
Finally, Len M. Nichols outlined who will be in the Exchanges:
-Everyone who is without employer coverage
-Small businesses with <100 employees
-Those who work for firms that offer coverage, but-actuarial value is too low or out of pocket premium larger than 8% of income
-If one is not grandfathered in
-States/exchanges can meld/keep Small Group Coverage and Non-Group Coverage markets the same
These are a few things that I wanted to mention, but Len M. Nichols entire PowerPoint is available for you to read.
Len M Nichols presentation at the American Hospital Association Annual Conference
