Managed Care - December 2008 - (Page 6)

LEGISLATION & REGULATION AHIP chief. “Massachusetts is the only state with a mandate, and they enforce it through the tax system. That’s one strategy. You could tie it to a driver’s license, like they do with auto insurance. You could do it as people get public services. But the tax system is one of the most effective ways.” Getting everybody in Guaranteed issue just doesn’t work without an individual mandate, notes Alissa Fox, vice president for legislative and regulatory policy at the Blues association. In states where insurers have to provide insurance to all comers, MCOs have seen repeated examples of people who wait until they’re sick to buy coverage. “You don’t want young, healthy people opting out,” she adds. “That’s a problem.” Also, you can’t make any universal plan work without public subsidies. Ignagni cites refundable tax credits as one of the best potential tools to support the purchase of insurance. “People at the low end of the income scale would still get help — that’s why it should be refundable — with a sliding scale up to 400 percent of the federal poverty line. AHIP also calls for strengthening the health care safety net by making every uninsured American living in poverty eligible for Medicaid and expanding the Children’s Health Insurance Program. “We don’t know what structure we’re in so we can’t be more specific,” says Ignagni. One proposal that doesn’t get a thumbs-up from the Blues is Obama’s plan to create a connector agency, or national insurance exchange — especially if it involves a federal plan that would compete with the private side. “The biggest concern of health insurers is the idea of a public plan competing against private plans,” says Epstein. “What would be the provider payment rates by a public plan?” he asks. “Would they be comparable to what private payers pay or to what Medicaid pays? Traditionally, it’s much lower, and that would put the private plans at a disadvantage.” The industr y’s high-profile proposal attracted an almost instantaneous backlash among consumer advocates. A universal plan would need public subsidies and would require all people to be in the system, says Alissa Fox of the Blue Cross & Blue Shield Association. “If consumers can’t afford coverage or refuse to pay for a junk policy, they’ll face tax penalties,” remarked Jerry Flanagan of Consumer Watchdog in a written statement. “Turning the U.S. government into a collection agency for for-profit health insurers is not universal health care; it’s full employment for HMO executives.” “It’s an important step, but not a sufficient one,” blogged Ezra Klein, an associate editor at the American Prospect, about the move to offer guaranteed issue. “The question is not whether they’ll offer to sell coverage at all, but at what price? Selling insurance products that no one can afford may mean you’re not technically denying people access to insurance, but it doesn’t guarantee accessibility, which is a necessary precondition for a universal system. For that, you need ‘community rating,’ which would force insurers to offer coverage at the same price to everyone, spreading risk equally and ensuring that coverage is no less affordable for the sick than the well.” Some of the leaders in the insurance industry say community rating is a logical approach to addressing the cost issue. “If there is an effective mandate that gets everybody into the game,” says Epstein, “they’re certain to have some form of community rating.” Logical With everybody in the same pool, it would be logical that the rates would not vary enormously. But public subsidies, says Ignagni, would go a long way to achieving affordability, which is what community rating would be aimed at. “You can do it in many different ways,” says Ignagni. “You subsidize by income and you also have a targeted approach, with high health care costs or over a certain age. You don’t have to do it in community ratings. You can do it in the subsidy. There has to be assistance with price to make it affordable.” For the Blues association, this is one issue that has yet to be decided on. “We’re looking at what rating rules are appropriate in a mandatory environment,” says Fox, promising to “get back to you soon.” MC 6 MANAGED CARE / DECEMBER 2008

Table of Contents Feed for the Digital Edition of Managed Care - December 2008

Managed Care - December 2008 Editor's Memo Contents Legislation & Regulation News and Commentary Medication Management Compensation Monitor ICD-10 Offers Huge Opportunity, Challenge Part D at a Crossroads Plans Can Weather the Financial Crisis DM vs. Medical Home? Tackle Prediabetes Reasonable Approach to Morning Sickness Formulary Files Tomorrow's Medicine Outlook

Managed Care - December 2008

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