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“The opportunity to secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself.”—Sun Tzu
Explore This Issue
ACEP Now: Vol 35 – No 11 – November 2016Since the enactment of the Affordable Care Act (ACA) on March 23, 2010, and the creation of commercial health exchanges, there has been a growing stream (that has now become a torrent) of health plans leaving the exchanges. The insurance exchanges are where health plans like Blue Cross Blue Shield, Aetna, and UnitedHealthcare (UHC) have sold subsidized health care policies to individuals pursuant to the insurance mandates of the ACA. Citizens between 138 and 400 percent of federal poverty level (FPL) receive premium subsidies, and there are cost-sharing subsidies for folks who are at or below 250 percent of FPL. (Premium subsidies continue for folks from 250 percent of FPL up to a maximum of 400 percent of FPL, while the cost sharing [eg, coinsurance and deductible] subsidies phase out at above 250 percent of FPL.)
Also consider as an overall environmental assessment the full frontal assault by these same health plans at the federal and state level to ban or severely restrict out-of-network (OON) balance billing by hospital- and clinic-based physicians and in some cases specifically targeting emergency physicians.
You might be tempted to ask, how are the health plans’ participation (or lack thereof) in the ACA exchanges and the largely state-level efforts to ban and/or restrict OON balance billing related? Although it may seem that we’re talking about two different subjects, they’re more closely interwoven than you might think.
Staying “In Network”
Let’s take one case in point: Aetna’s announcement on Aug. 15, 2016, that it will withdraw from 11 of 15 states where it participates in the ACA exchanges.
In July 2015, Aetna announced that it would purchase Humana in a $37 billion cash and stock deal. In April 2016 while on a quarterly earnings conference call with analysts, Aetna CEO Mark Bertolini said of the ACA exchanges, “We see this as a good investment.” In May, Bertolini reiterated that Aetna planned to stay in the exchanges in response to questions regarding UHC’s decision to leave the exchanges in 2017.
After being asked to respond, however, Bertolini wrote to the US Department of Justice (DOJ) on July 5, 2016, saying, “If the DOJ sues to enjoin the transaction [with Humana], we will immediately take action to reduce our 2017 exchange footprint.”1 (Under the federal antitrust laws, the DOJ and the Federal Trade Commission have jurisdiction to review, revise, and/or legally oppose mergers and acquisitions.)
Now let’s look at the dynamics from the larger perspective of the United States as a whole. According to a report from Aug. 19, 2016, in The New York Times and an analysis that the Times commissioned, there is exactly one ACA health plan selling policies in the exchanges in Alaska, Arkansas, Kansas, Oklahoma, South Carolina, and Wyoming. While small portions of these states have more than one plan, Missouri, North Carolina, Tennessee, Utah, and West Virginia have largely one ACA health plan per state.2 In contrast, in 2016, Wyoming and most of Utah had only one ACA plan. So what does that mean for the future of the ACA and the future of the broader health plan agenda?
The health plans can and will leverage their positioning in the exchanges on future federal and state administrations in an attempt to make OON balance billing prohibited by federal fiat (a legal, authoritative decision that has absolute sanction), as the Obama administration threatened to do in November 2015.
Using Leverage
Much of it depends on the outcome of the presidential election. Hillary Clinton seeks to expand and defend the ACA, according to her policy papers on her website and her public statements. According to independent analyst Charles Gaba, the national average year-over-year (YOY) requested ACA premium increase is 23.9 percent for 2017.3 What would occur in the future if the health plans remaining in the exchanges didn’t receive their YOY premium increase requests from the Centers for Medicare & Medicaid Services (CMS) and state insurance officials?
The answer is that the health insurance exchanges would collapse, barring federal intervention—and isn’t that begging the question for the future of a single-payer system? The cynic would say that this was the goal all along: Make it look like a market-based solution for a few years and then sweep in with the “Medicare for all” proposal.
Finally, the dynamics of the ever-growing leverage a small number of health plans has over political leaders has major impact on the OON issues. The health plans can and will leverage their positioning in the exchanges on future federal and state administrations in an attempt to make OON balance billing prohibited by federal fiat (a legal, authoritative decision that has absolute sanction), as the Obama administration threatened to do in November 2015.4 Aetna proved this summer that it wasn’t below “leveraging” (threatening) the administration. Aetna has also been one of the loudest voices to drive OON reimbursement to at or about 125 percent of the Medicare fee schedule in states considering OON restrictions.
The collective opposition from ACEP, the Emergency Department Practice Management Association (EDPMA), and the new Physicians for Fair Coverage against further health plan consolidation, flexing their market power, and “lose-lose” health plan OON proposals will have to make the difference in several areas: 1) drafting model OON legislation with minimum benefit standards tied to fair health; 2) establishing or supporting existing multispecialty physician coalitions to enact that legislation, including local fund-raising to support government relations (GR) and public relations (PR) initiatives; and 3) developing and launching PR and GR strategies to oppose health plans’ messaging and enact that proposed legislation.
Mr. Gaines is chief compliance officer, emergency medicine division, at Zotec Partners, LLC, based in Greensboro, North Carolina. He is also chair of the ACEP/EDPMA Joint Task Force on Reimbursement Issues, which cover both OON and Medicaid issues.
References
- Mathews A, Armour S. Aetna warned U.S. before exiting health exchanges. Wall Street Journal website. Accessed Sept. 14, 2016.
- Abelson R, Sanger-Katz M. Obamacare options? In many parts of the country, only one insurer will remain. The New York Times website. Accessed Sept. 14, 2016.
- Avg. unsubsidized indy mkt rate hikes: 256.6% (46 states). ACASignups.Net website. Accessed Sept. 14, 2016.
- Final rules for grandfathered plans, preexisting condition exclusions, lifetime and annual limits, rescissions, dependent coverage, appeals, and patient protections under the Affordable Care Act. Federal Register. Nov. 18, 2015:72191-72294.
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One Response to “Opinion: Affordable Care Act Consolidation Increases Health Plans’ Market Power”
November 21, 2016
Joseph Mooney MD, MBA, FACEPAt this point in time the bad actors in all of this are the CMS and the Insurances. We in the EM field are really sharp end of this inequity in health care coverage. Due to present legislation we see all comers, obviously the more insured the better ( as they say in the business, ‘self pay’ equals ‘no pay’). However, it would seem that although the ACA may have been well intentioned, it was still a bandaid to a already mortally wounded creature. Maybe our efforts should be toward a restorative solution to healthcare, both in cost and scope. I am not opposed the a single payer system ( although I doubt that it would be single, as seen in several countries that have a national systems) but I am only one and this is a nationwide issue. Present remedies to healthcare have been presidential decrees, politically motivated incomplete fixes that have been applied, however seem only to shift the holes in care. I am also not sure that the present patrician mandates that the government have in place and keeps expounding, are anything but propaganda as none tackle the issues to definitively repair of the problem. When I last looked at the cost of healthcare, a few years ago it, was up to 2 trillion dollars annually and the governments healthcare safety net, The Medicare Trust, had been in warning for a couple of years as the principle had been breached each year. At this cost, this is a national issue, and corrective measures may need a more defined approach. To that end, why not an amendment to the Bill of Rights to include healthcare. Although not specifically mentioned and unlikely to have been included as such in this document,( health care wasn’t something anyone wanted at that time as, well..it wasn’t of good or of value) and support an amendment specifically for health care. I believe such a move would be warranted as nationally we could clearly say how we want tax dollars to be spent towards our healthcare. I think that it would be beneficial to the citizenry to cut the cost of care. Either way, I believe that the costs would be greatly improved. With a national system, there would less gray area and cost and services would be more inline with a market economy where users and payers directly interact. The non-payers would vanish, as either it is all covered or if you can’t afford it, you don’t get it. I am not saying that physicians would be better off, as I don’t see that going forward in any of the present scenarios. I think that this is a downward slide for us, from our independence in the past to our earning potential, whatever course is chosen. However it turns out, it would be the people who decide and a mandate for a definitive plan would be made clear, not the present minimalist approach by the political machinery that only makes it appears that they care about the issue!