Tag Archives: health and human services

Is There an Answer to Opioid Crisis?

What a difference two words make.

Last week, President Trump declared the opioid epidemic a “national public health emergency.” The declaration will speed up how quickly specialized personnel can be hired, expand access to treatment for some addicts and make some HIV/AIDS programs more flexible.

But many people wish he’d left out the words “public health.” That’s because a “national emergency” would have freed up money, and lots of it. The Public Health Emergency Fund at Health and Human Services currently contains only $57,000. And the president did not ask Congress to refill it.

But we shouldn’t entertain the idea that the federal government, or any other entity, is going to “fix” the opioid epidemic, just as you can’t pin blame for the crisis on a single entity. The epidemic is all-encompassing, far-flung and complex, and it unfolded over two decades and millions of bad decisions.

See also: 6 Shocking Facts on Opioid Abuse  

Pharmaceutical manufacturers are partly to blame because they marketed opioids as safe when taken as prescribed. Doctors and medical institutions compounded the problem because they didn’t adequately question and research these false claims. Drug distributors shipped massive amounts of drugs to places that obviously didn’t need them, and pharmacists looked the other way when filling prescriptions that were clearly too large. The Drug Enforcement Administration allowed manufacturers to make more and more opioids, even as overdose death rates skyrocketed. And many patients and drug users didn’t take responsibility for their own health.

There’s no one person or organization responsible for the crisis, and there’s no easy fix, no magic bullet.

I was disturbed by the recent reports that the Trump administration was “scrambling” to formulate an opioid plan. This epidemic didn’t have simple causes, and the response to it should not be rushed out. Meaningful change will require a response that recognizes millions of addictions have been created that aren’t going anywhere.

Each of the parties that took part in creating of this epidemic must be a part of the solution.

For instance, doctors and medical schools need to develop drastically different prescribing protocols to avoid creating addictions. Their far-more-challenging task will be to develop ways to deal with all of the patients who have been prescribed high doses of opioids for many years and are understandably terrified that they will be taken off their meds, even though the drugs are probably sapping their lives of vitality. How do you treat those patients so they don’t turn to street drugs?

The federal government does have one big stick in its arsenal that hasn’t been used, which is the fact that the DEA is in charge of setting manufacturing quotas for all controlled substances. The DEA could use this power to force drugmakers to better track where their opioids are ending up. This hasn’t happened, and in fact, the DEA permitted hike after hike in manufacturing quotas, finally cutting the rates only in the last two years.

See also: Opioids: Invading the Workplace  

In the end, I think the gathering tsunami of lawsuits against the drug companies may prove to be more effective than the federal government’s response. The eventual settlements could dwarf the $206 billion in Big Tobacco settlements from 1998. We need to make sure that any settlement provides lots of money for research and treatment.

But neither the federal government nor plaintiffs’ lawyers are going to “solve” this epidemic. Addictions, once created, don’t die easily. The opioid crisis is going to be a part of life in the U.S. for a long time.

Can Trump’s Math Work in Healthcare?

When it comes to healthcare reform, it’s all about the math.

The First Element: Trump and Winning

President Trump hates to lose. He’s about winning until we’re all sick of winning. (His words, not mine.) The American Health Care Act, Republicans’ attempt to replace the Affordable Care Act, also known as Obamacare, failed. Support was so scarce that Speaker of the House Paul Ryan and the president didn’t even bring it to a floor vote in March.

The press said Trump lost. Given his vocal support and strong lobbying for the bill, this assessment was accurate, but one the president cannot, and, apparently will not, accept. He sent his team to try to salvage the bill before the April recess. They failed. Which was a bit surprising given that Trump seems more focused on passing a bill – any bill – than on the substance of legislation.

This is the first number in our healthcare reform equation: Trump wants to win and doesn’t care how.

The Second Element: Divided Republicans

It takes a simple majority to pass a bill out of the House. With 434 current members (the elevation of Jim Price to Secretary of Health and Human Services leaves one seat vacant), 218 votes are required to pass legislation. There are currently 246 Republicans in Congress. Having already shut Democrats out of the process, Trump needs all but 28 members of the GOP caucus to pass a bill; a 29th Republican “no ” vote, and the bill fails.

There are about 40 members of the House Freedom Caucus, a group of the chamber’s most conservative lawmakers. The majority of the caucus united in opposition to the AHCA. In March, Trump blamed them for the bill’s defeat. In April, he sent his emissaries to get their votes.

The Freedom Caucus demanded elimination of some of the ACA’s most popular provisions as the price of their support. These provisions prevent carriers from excluding coverage for pre-existing conditions and require health plans to include certain essential benefits, like maternity coverage. The White House reportedly considered acquiescing to these demands.

The problem, however, was that accepting the Freedom Caucus’ demands resulted in (relatively) moderate GOP members abandoning the AHCA. Gaining conservatives votes doesn’t help if the cost is an equal number of moderate votes. There may be a path to pass the AHCA solely relying on solely on Republican votes, but, given the divide between conservative and mainstream Republicans, it’s hard to find it.

Which provides the second number for our equation: Republicans can’t pass healthcare reform on their own.

See also: The Math of Healthcare Reform  

The Third Element: Democrats Want Repair

Democrats believe the ACA has been good for America, especially for those who, but for the ACA, would have no healthcare coverage. Most liberal Democrats think the ACA doesn’t go far enough. They won’t be satisfied with anything less than a single-payer system.

Many Democrats, however, think the ACA is generally fine, but in need of critical tweaking to keep it working. Some liberals will hold out for their dream of “Medicare for All,” but even many in their ranks will take a repaired ACA over a broken system or what Republicans are offering.

Which is why Democrats united against the Republican plan. Not that it mattered. Republicans never sought Democratic votes for the ACA.

Democrats want to fix the ACA. That’s the third and final number in our healthcare reform equation.

The Math of Healthcare Reform Compromise

If Trump wants to win, he needs to move beyond a purely Republican formulation. Otherwise, as shown above, the math doesn’t work. Republicans need the larger numbers that Democrats provide to pass healthcare reform legislation.

How does this math work? Let’s say a healthcare reform package reaches the floor of the House that attracts 164 Republicans – just two-thirds of their caucus. However, it gains support from 54 Democrats – only one-third of their caucus. The bill moves on to the Senate. In short, it’s easier to find 218 votes among 434 members than from among 246.

This path makes the challenge before the president straightforward, if difficult: find a legislative package that attracts enough Democratic votes to offset the Republican votes it loses. In the old days (before Washington because hyperpartisan), pragmatists from both parties would meet and hammer out a compromise. That’s what’s needed now. Significantly, there’s plenty of common ground to be found.

There are ACA taxes that neither Republicans and Democrats like. Eliminate them. The Shared Responsibility Payments that penalize Americans for going without coverage are universally acknowledged to be ineffective. Fix it. Both Democrats and many Republican want to keep the ACA’s Medicaid expansion. Preserve it.

The path to a compromise won’t be easy, but the equation is simple addition: Trump wants to win and doesn’t care how PLUS Republicans can’t pass healthcare reform on their own PLUS Democrats’ want to fix the ACA. The result: compromise.

See also: Stigma’s Huge Role in Mental Health Care  

Political Cover

The biggest obstacle to achieving healthcare reform is not the math, it’s the politics. Incumbents in both parties dread being “primaried” – Republicans fear being challenged from the right, Democrats from the left.

This is not paranoia. The extremes of both parties will seek vengeance on their less pure teammates. Party leaders and the administration will need to give these members extensive cover in terms of messaging, campaign money and resources to beat back these attacks. Or they will need to convince the public that failing to achieve healthcare reform is a worse outcome than the compromise.

This is where Trump proves he deserves to win. He must demonstrate his self-proclaimed negotiating prowess and his proven marketing acumen to create a political environment where compromise on healthcare reform doesn’t doom incumbents.

In other words, for Trump to win he needs to make sure that members of Congress win, too.  Otherwise, he loses. That’s politics—and math.

For curated articles on healthcare reform, check out the Alan Katz Health Care Reform Magazine on Flipboard.

health

Endangered Individual Health Market

And then there were none?

The individual health insurance marketplace is endangered, and policymakers need to start thinking about a fix right now, before we pass the point of no return.

Health plans aren’t officially withdrawing from the individual- and family-market segment, but actual formal withdrawals are rare. What we are witnessing, however, may be the start of a stampede of virtual exits.

From a carrier perspective, the individual and family health insurance market has never been easy. This market is far more susceptible to adverse selection than the group coverage market. The Affordable Care Act’s (ACA) guarantee of coverage only makes adverse selection more likely, although, to be fair, the individual mandate mitigates this risk to some extent. Then again, the penalty enforcing the individual mandate is simply inadequate to have the desired effect.

Then add in the higher costs of administering individual policies relative to group coverage and the greater volatility of the individual insured pool. Stability is a challenge, as people move in and out of the individual market as they find or lose jobs with employer-provided coverage. In short, competing in the individual market is not for the faint of heart, which is why many more carriers offer group coverage than individual policies. The carriers in the individual market tend to be very good ; they have to be to survive.

In 2014, when most of the ACA’s provisions took effect, carriers in the individual market suddenly found their expertise less helpful. The changes were so substantial that experience could give limited guidance. There were simply too many unanswered questions. How would guaranteed issue affect the risk profile of consumers buying their own coverage? Would the individual mandate be effective? How would competitors price their products? Would physicians and providers raise prices in light of increased demand for services? The list goes on.

Actuaries are great at forecasting results when given large amounts of data concerning long-term trends. Enter a horde of unknowns, however, and their science rapidly veers toward mere educated guesses. The drafters of the ACA anticipated this situation and established three critical mechanisms to help carriers get through the transition: the risk adjustment, reinsurance and risk corridor programs.

Risk corridors are especially important in this context as they limit carriers’ losses—and gains. Carriers experiencing claims less than 97% of a specified target pay into a fund administered by the Department of Health and Human Services; health plans with claims greater than 103% of this specific target receive refunds. Think of risk corridors as market-wide shock absorbers, helping carriers make it down an unknown, bumpy road without shaking themselves apart.

While you can think of them as shock absorbers, Sen. Marco Rubio apparently cannot. Instead, Sen. Rubio views risk corridors as “taxpayer-funded bailouts of insurance companies.”

In 2014, Sen. Rubio led a successful effort to insert a rider into the budget bill, preventing HHS from transferring money from other accounts to bolster the risk corridors program if the dollars paid in by profitable carriers were insufficient to meet the needs of unprofitable carriers. This provision was retained in the budget agreement Congress reached with the Obama administration late last year. Sen. Rubio, in effect, removed the springs from the shock absorber. The result is that HHS was only able to pay carriers seeking reimbursement under the risk corridors program 13% of what they were due based on their 2014 experience. This was a significant factor in the shuttering of half the health co-operatives set up under the ACA.

Meanwhile, individual health insurers have taken a financial beating. In 2015, United Healthcare lost $475 million on its individual policies. Anthem, Aetna, Humana and others have all reported substantial losses in this market segment. The carriers point to the ACA as a direct cause. Supporters of the healthcare reform law, however, push back. For example, Peter Lee, the executive director of California’s state-run exchange, argues that carriers’ faulty pricing and weak networks are to blame. Whatever the cause, the losses are real and substantial. The health plans are taking steps to stanch the bleeding.

One step several carriers are considering is leaving the health insurance exchanges. Another is exiting the individual market altogether—not formally, but virtually. Formal market withdrawals by health plans are rare. The regulatory burden is heavy, and insurers are usually barred from re-entering the market for a number of years (five in California, for example).

There’s more than one way to leave a market, however. One method carriers sometimes employ is to continue offering policies but to make it hard to buy them. Because so many consumers rely on the expertise of professional agents to find the right health plans, a carrier can prevent sales by making it difficult or unprofitable for agents to do their job. Slash commissions to zero, and agents lose money on each sale.

While I haven’t seen documentation yet, I’m hearing about an increasing number of carriers eliminating agent commissions as well as others removing agent support staff from the field. (Several carriers have eliminated field support in California. If you know of other insurers making a similar move or ending commissions, please respond in the comments section).

So, what can be done? In a presidential election year, there’s not much to be done legislatively. Republicans will want to use an imploding individual market to justify their calls for repealing the ACA altogether. Sen. Bernie Sanders will cite the situation as yet another reason we need “Medicare for all.” Former Secretary of State Hillary Clinton, however, has an incentive to raise the alarm. She wants to build on the ACA. Having it implode just before the November presidential election won’t help her campaign. She needs to get in front of this issue now to demonstrate she understands the issue and concerns, to begin mapping out the solution and to inoculate herself from whatever happens later this year.

Congress should get in front of the situation now, too. Hearings on the implosion of the individual market and discussions on how to deal with it would lay the groundwork for meaningful legislative action in 2017. State regulators must notice the endangered individual market, as well. They have a responsibility to ensure competitive markets. They need to examine the levers at their disposal to find creative approaches to keep existing carriers in the individual market and to attract new ones.

If the individual market is reduced to one or two carriers in a region, no one wins. Competition and choice are consumers’ friends; monopolies are not. And when consumers (also known as voters) lose, so do politicians. Which means smart lawmakers will start addressing this issue now.

The individual health insurance market may be an endangered species, but it’s not extinct … yet. There’s still time to act. There’s just not a lot of it.

Important Guidance on ACA Health Plans

The new FAQS About Affordable Care Act Implementation, published Nov. 6, 2014, confirm that employers can’t reimburse employees for purchasing individual coverage, even though various vendors are promoting that approach in lieu of group health plan coverage.

FAQ XXII makes clear that the departments of Labor, Health and Human Services and Treasury object to this practice. FAQ XXII makes clear that the departments consider ACA’s market reforms to outlaw any arrangement pursuant to which an employer provides cash reimbursement to employees for the purchase of an individual market policy, regardless of whether the reimbursement is paid on a pre- or after-tax basis.

This position is consistent with previous guidance that the departments have published, that health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer and union health care arrangements where the employer promises to reimburse health care costs are: considered group health plans subject to the Public Health Service Act (PHS Act) § 2711 annual limits, PHS Act § 2713 preventive care with no cost-sharing and other group market reform provisions of PHS Act §§ 2711-2719 and incorporated by reference into the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code).

HRA or other premium reimbursement arrangements do not violate these market reform provisions when integrated with a group health plan that complies with such provisions. However, an employer health care arrangement cannot be integrated with individual market policies to satisfy the market reforms. Consequently, such an arrangement may be subject to penalties, including excise taxes under section 4980D of the Internal Revenue Code (Code). (See, DOL Technical Release 2013-03; IRS Notice 2013-54; Insurance Standards Bulletin, Application of Affordable Care Act Provisions to Certain Healthcare Arrangement; IRS May 13, 2014 FAQs.)

FAQ XXII reinforces this prior guidance, stating, “Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, will violate PHS Act sections 2711 and 2713, among other provisions, which can trigger penalties such as excise taxes under section 4980D of the Code. Under the departments’ prior published guidance, the cash arrangement fails to comply with the market reforms because the cash payment cannot be integrated with an individual market policy.” (See, DOL Technical Release 2013-03; IRS Notice 2013-54; Insurance Standards Bulletin, Application of Affordable Care Act Provisions to Certain Healthcare Arrangements, Sept. 16, 2013.)

FAQ XXII also confirms the departments’ view that arrangements where a vendor markets a product to employers claiming that employers can cancel their group policies, set up a Code section 105 reimbursement plan that works with health insurance brokers or agents to help employees select individual insurance policies, and allow eligible employees to access the premium tax credits or other HRA dollars to pay for Marketplace coverage are illegal.

According to FAQ XXII, these arrangements are problematic for several reasons, including:

The arrangements themselves are group health plans. Therefore, employees participating in such arrangements are ineligible for premium tax credits (or cost-sharing reductions) for Marketplace coverage. The mere fact that the employer does not get involved with an employee’s individual selection or purchase of an individual health insurance policy does not prevent the arrangement from being a group health plan. Department of Labor guidance indicates that the existence of a group health plan is based on many circumstances, including the employer’s involvement in the overall scheme and the absence of an unfettered right by the employee to receive the employer contributions in cash.

Under DOL Technical Release 2013-03, IRS Notice 2013-54 and the two IRS FAQs addressing employer health care arrangements, such arrangements are subject to the market reform provisions of the Affordable Care Act, including the PHS Act § 2711 prohibition on annual limits and the PHS Act § 2713 requirement to provide certain preventive services without cost sharing. Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, will violate PHS Act §§ 2711 and 2713, among other provisions, which can trigger penalties such as excise taxes under Code § 4980D.

FAQ XXII also confirms the department’s position that an employer violates the ACA provisions of PHS Act § 2705, ERISA § 715 and Code § 9815, as well as the Health Insurance Portability & Accountability Act (HIPAA) nondiscrimination provisions of ERISA section 702 and Code § 9802 prohibiting discrimination based on one or more health factors if it offers selectively only to employees with high claims risk a choice between enrollment in its standard group health plan or cash.

FAQ XXII clarifies that while the departments’ regulations allow more favorable rules for eligibility or reduced premiums or contributions based on an adverse health factor (sometimes referred to as benign discrimination), in the departments’ view this position does not extend to cash-or-coverage arrangements offered only to employees with a high claims risk. Accordingly, FAQ XXII states such arrangements will violate the nondiscrimination provisions, regardless of whether (1) the cash payment is treated by the employer as pre-tax or post-tax to the employee, (2) the employer is involved in the selection or purchase of any individual market product or (3) the employee obtains any individual health insurance.

Beyond these concerns stated in FAQ XXII, employers and others contemplating offering such a choice also should discuss potential exposures under the Americans With Disabilities Act (ADA) and, depending on the nature of the condition, Medicare law.

In light of this new guidance and previous guidance published by the departments, employers and others sponsoring or contemplating engaging in these arrangements are encouraged to contact competent counsel for assistance in understanding the potential concerns raised by involvement in these practices and their resolution.