Missouri voters have apparently approved a ballot measure prohibiting the governor from using an executive order to authorize the creation of a Missouri health insurance exchange under the Affordable Care Act. Mindful that the vast majority of the eighteen states that have begun health insurance exchange formation have done so under legislative authorization but that three states are proceeding under executive order, the ballot measure is apparently designed to foreclose the latter option in Missouri.
I cannot help but be intrigued by the question of whether a ballot measure can tie the executive powers of a Constitutionally elected official in this way (Art. III, Section 51 of the Missouri Constitution does specify that a ballot measure may not be used to advance an unconsitutional purpose) but today's post is more along the lines of, "Say, how's that going to work?"
This makes it likely Missouri will be part of the federal health insurance exchange. What do we know about what that will mean? We know (from press reports on the content of the draft statement of work used in the federal government exchange building bidding process) that federal exchange development proceeds and that at least one major contract has been awared to build a federal data services hub to help run the federal exchange. We know that the contractor will handle technical and systems requirements to develop and deliver plan management services, including certifying and decertifying of health plans offered on the federal exchange. We know (from an HHS bulletin in May) that the federal exchange will allow all qualified plans to offer coverage in the exchange, contemplating a wide open health insurance market.
What does Missouri gain or lose from passing on the opportunity to structure and operate its own health insurance exchange? It looks like Missouri loses or lessens the power to influence the choice of the state benchmark plan for the exchange, a choice that could be more or less sensitive to the health insurance needs and preferences of Missouri citizens and Missouri health insurance markets. It also looks like Missouri loses any authority over certifying or de-certifying participants in the health insurance exchange that will serve its citizens. Without a look at forthcoming federal exchange operations regulations, it is difficult to say more.
Health insurance regulation is an area traditionally reserved to the states. This is why we have state health insurance commissioners. How the traditional state authority to regulate health insurance on the state level — which will continue undisturbed for health insurance products sold outside the health insurance exchange that will serve Missouri– will dovetail with the federalization of health insurance exchange operation in Missouri promises to be interesting to watch.
All of these developments at least raise the spectre of a multi-layered regulatory structure of health insurance in Missouri. And those who purchase in the federal exchange that will serve Missouri may benefit from richer benefits and a more consumer-protective health insurance regulatory framework. Time will tell.
Inside baseball — inside the fairly insular world of hospital finance — one of the most widely discussed ACA provisions has always been the re-invention of the treatment of disproportionate share hospitals (DSH) under the ACA. Often referred to as the end of DSH, the ACA might more accurately be described as an attempt to re-invent DSH. Of course, the Supreme Court's re-invention of the ACA's Medicaid expansion provisions has highlighted the way this re-invention of DSH was supposed to be executed.
What is DSH? Well, there are really two flavors of DSH: Medicaid DSH and Medicare DSH. Generally, DSH is a system of Medicaid and Medicare triggered payment adjustments, designed to offer federal funds to partially offset the high cost of being a hospital that disproportionately serves the uninsured, the underinsured, and the low income. Pegged to Medicaid eligbility, Medicaid DSH payments always bore the mark of that program: incredibly uneven geographic distribution.
Under the ACA's planned federalization of Medicaid's eligibility standards, this was to stop. DSH payments were to be drastically cut back under the ACA, producing a considerable amount of anxiety in hospital circles everywhere but particularly in states considering opting out of the ACA Medicaid expansion.
Why the fear? The federalization of Medicaid was specifically struck down in NFIB v. Sebelius. Even if you are among the camp that thinks a majority of states will eventually opt-in to Medicaid expansion (as am I), you may not think this will necessarily be speedy or pretty. In the meantime, the squeeze will already be on Medicaid DSH payments.
So, hospital administrators in Kansas and Missouri must be afraid. Very afraid.
Last week, the Insurance Department of the State of Kansas held a three-hour hearing to collect public input on what should constitute the state's essential health benefits benchmark plan under the ACA. No, Gov. Brownback did not attend. But some of the staff of Insurance Commission Sandy Praeger was present as were a number of interested parties. I did not attend but was struck by the number of providers who submitted written testimony or asked to speak.
What's at stake? A great deal, apparently.
Under the ACA, the states may choose to participate in the creation of the models or templates for minimum essential benefits to be offered through their state exchanges or the federal government will perform this function for them. Each state has until September 30th to indicate what their benchmark plan recommendations are, though there are rumors of some give on that date.
A number of states have been busy benchmarking existing coverage in their states and developing recommendations on minimum essential benefits. This is because they believe health insurance markets are best understood on a local level and health insurance infrastructure is best crafted on a local level.
If you're interested in seeing the work being done on this in other states, you could look here (scroll down to the spreadsheet, about half way down the page):
States have some leeway in designing their core benefits plans, though they must meet certain federal guidelines and benchmark off of certain popular basic insurance plans found in the state. For Kansas, this would likely mean looking at a basic health insurance plan significantly richer than its current Medicaid benefit. That may be the rub.
Late last week, a Missouri state court ruled that the Missouri Secretary of State-produced ballot measure summary on health insurance exchanges was not a fair and sufficient summary of the ballot measure submitted. The court ordered that the following ballot summary be used instead: "Shall Missouri law be amended to prohibit the Governor or any state agency, from establishing or operating state based health insurance exchanges unless authorized by a vote of the people or by the Legislature?" The ballot summary found wanting asked if "Missouri law be amended to deny individuals, families, and small businesses the ability to access affordable health care plans through a state-based health benefit exchange unless authorized by statute, initiative or referendum or through an exchange operated by the federal government as required by the federal health care act?"
What's the difference? Everything.
The rejected ballot summary emphasizes the inevitability of health insurance exchange establishment in Missouri under the ACA, explicitly noting that the federal government is prepared to establish a health insurance exchange in any state that does not establish one (with or without a vote of the people). The replacement ballot summary frames the issue in a narrower way: should anyone other than the people or the legislature retain the authority to decide to launch Missouri's health insurance exchange.
Both seem to me to be pretty accurate. They are just talking about two different things. The out-moded ballot summary about the inevitability of an exchange and hard choices about trying to shape Missouri's exchange or take what the federal government gives. The replacement ballot summary about the necessary role the state legislative process would have to play in creating the health insurance exchange. It is, in fact, this process that adds considerable time to the exchange roll out process and why any state planning on do-it-yourself exchange building will need to get legislation in place very soon.
That said, maybe turning all of this into a ballot measure is the real decision itself. By the time of the November 2012 vote, it may well be too late to launch the first and necessary exchange-building steps.
Maybe Missouri has already opted-out of a state designed and operagted health insurance exchange under the ACA.
The RWJ Foundation and the Urban Institute have produced some interesting data idenitfying the uninsured adults who could gain health insurance coverage under the ACA Medicaid Expansion opt-in. The data on Missouri is particularly compelling: Missouri has a particularly stringent Medicaid eligibility standard so it is not surprising that Medicaid eligibilty would flex substantially under the ACA's Medicaid opt-in.
So, who are these people, these newly Medicaid eligibles?
Nationwide, the newly Medicaid eligibles would be disproportionately young — more than half of the newly eligible insureds are estimated to be under the age of 35. And just over half of the newly eligible insureds would be male. The most striking characteristic about the national group of newly eligible insureds would be that they are not parents living with dependent children.
This striking profile resonates with all of our deepest beliefs about who is worthy of public assistance. The able-bodied poor have long endured programmatic moral stigma attached to their status. And we intuit, even without sophisticated data manipulation, that merging the program for the able-bodied poor with one for the near poor and working class (up to 138% of the FPL) will make it harder to enforce the poor-law model of separating the worthy from the unworthy poor. Only what we're worried about is de-stigmatizing the able-bodied poor, I suspect.
Missouri also has a historic legacy of relatively low Medicaid participation by parents with dependants as well, however. That will be my next topic.