Major Health Affairs Conference Discusses What's next for PPACA Implementation

A few weeks ago, many of the country’s leading health experts gathered in Washington D.C. at a Health Affairs sponsored conference entitled “What’s Next for the Affordable Care Act (PPACA) Implementation.”

Experts focused on how the recent Supreme Court decision on the constitutionality of PPACA will impact various facets of the health care industry.  Among the attendees were co-chairs Donald Berwick, M.D., former Administrator for the Centers for Medicare and Medicaid Services (CMS), and Mark McClellan, M.D., who held key leadership positions for several Republican Administrations and now heads the Brookings Institution Engelberg Center for Health Reform.

The conference featured experts drawn from state government, major health systems, think-tanks and consumer groups with both liberal and conservative party affiliations. Panel topics included Exchanges, insurance market reform, payment and delivery reform and cost. The need to address rising costs was a constant theme throughout the day-long event.  This blog highlights just some of the speakers at the Health Affairs conference.

Changes to Reform Predicted

Opening remarks forecasted that although the Supreme Court has upheld PPACA, Congress will likely make further changes to the law.  Dr. McClellan predicted there will “certainly be further reforms to ACA” from the Obama White House, the Department of Health and Human Services (HHS)/CMS and legislators.  He believes Congress will make changes - especially to address rising costs - through the budget or reconciliation process.  Likely, Congress will address the rising costs as early next year as health care spending currently represents 17% of the Gross Domestic Product (GDP), and is projected to rise to 19% in the next decade.

Congress faces a long to-do list in terms of the health care reform bill, and will need to address the adverse selection issue.  McClellan also believes the individual mandate may be the first provision of PPACA that is removed after November. Whatever happens at the federal level, Dr. McClellan suggests we are heading for a time when states will have more flexibility, and concluded by stating “no matter how reform progresses, we must address costs.”

Dr. Berwick similarly echoed Dr. McClellan’s statements in that PPACA reform is far from over.  Dr. Berwick stated that the Supreme Court ruling leaves Congress’ spending authority in question and makes Medicaid expansion more complex. He summarized the outlook for implementation as a list of seven worries including mechanisms of coverage. The most difficult aspect of implementation has now arrived: setting up the Exchanges and creating an individual market “at tempo confounded by political polarization.”

The Impact of Insurance Market Reform under ACA   

Karen Pollitz, former Deputy Director of the Office of the Corporate Chief Information Officer (OCCIO) at CMS, and now a senior fellow at the Kaiser Family Foundation, spoke about market reform changes to require individual market coverage to be more like employer-based coverage. Polling shows that the most popular consumer provision in PPACA is the requirement for plans to provide a short, easy to understand explanation of coverage and summary of benefits.  Other consumer advocates agreed; the provision takes effect in September.

Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), wants several issues addressed before January 2014 to ensure Exchanges will be sustainable by attracting the right enrollment mix. She offered two examples that will affect affordability of coverage:

• Premium tax: a number of actuarial studies underway to look at the impact on costs for small business, Medicaid plans and Medicare Advantage plans.
• Rate compression: reducing the number of allowable rating factors will “move from 5 to 1 to 3 to 1, overnight.” State insurance commissioners will need to review “material benefit” as it will benefit those older but challenge younger consumers.

The Challenge of Essential Health Benefits (EHB)

It is important to study the impact of the Essential Health Benefit (EHB) requirements (including state mandated benefits) on cost, according to Ignagni. She questioned how most individual consumers currently buying catastrophic coverage would move to buying coverage with ten categories of benefits.

The decision to turn over the task of defining EHBs over to the states does “nothing but harm” affordability, according to Helen Darling, President and CEO of the National Business Group on Health. Darling relayed her concern about defining habilitative services and offered the example of intensive behavioral therapy for obesity. Twelve to twenty-six visits might be required, based only on results from small clinical studies. Darling suggests when we talk about anything we need to talk about cost, including providing price transparency on all goods and services.

It’s The Cost

At the end of the daylong conference, no matter whether in support or opposition to PPACA provisions, most speakers expressed concern about cost. They only differed on reasons and approach to solving the problem. 

We will continue to keep you up-to-date on these and other developments in our ever-evolving marketplace. Please visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources, or you may visit www.benefitmall.com to view past Legislative Alerts.

The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.