Better Off With a Federal Exchange

As the December 14^th and February 14^thdates draw near for states to say whether they will create Affordable Care Act health insurance exchanges and what they will look like, the world seems upside down.

Traditional “states’ rights” advocates such as South Carolina, Georgia, Alabama, Louisiana, and Texas all say they will let the federal government set up their exchange.  Historically “strong federal government” allies like Connecticut, Massachusetts, California, New York, and the District of Columbia are setting up their own exchanges.

In all, sixteen states so far have said they want the federal government to set up their exchange, while eighteen states and the District of Columbia have decided to run their own.  The rest are either undecided or looking to partner with the federal government.  No states are considering a multi-state exchange – so much for “selling insurance across state lines.”

The states that are deferring to the federal government cite a number of reasons.   Cost, uncertainty, and too-tight deadlines are the most common.

Politics is also a factor.  Of those sixteen states, only two – Missouri and New Hampshire – have Democratic governors.

But there’s another reason why people living in those states should be pleased that they are deferring to the federal government.  Historically, reluctant states don’t make the health and mental health of their citizens a governmental priority.

In this year’s list of the ten Best States for Your Health, five – Connecticut, Massachusetts, Minnesota, New York, and Vermont – are moving forward with state exchanges.  Three – New Jersey, Pennsylvania, and Utah, are still undecided.  Only two – New Hampshire and Maine – are opting for a federal exchange.

However, in this year’s list of the ten Worst States for Your Health, the results are subtly reversed.  Four – Texas, Alabama, Oklahoma, and Louisiana – are opting for the federal exchange.  Only three – New Mexico, Nevada, and Mississippi – are planning for state-run exchanges.

That may not seem like a big difference.  But when you look at all the states that have decided, those currently opting to run their own exchanges have an average ranking of just over 20^th in protecting the overall health of their citizens.  Meanwhile, states deferring to the federal government have an average ranking of over 29^th in protecting the overall health of their citizens – over nine places worse.

The difference is just as clear when it comes to spending to protect the mental health of their citizens. 

States opting to run their own exchanges also have an average ranking of just over 20^th when it comes to funding mental health services.  States deferring to the federal government have an average ranking of almost 30^th – nearly ten places worse.

Keep in mind that if all 50 states chose one or the other and divided equally, the best possible average ranking would be 13^thand the worst possible 38^th.

You can view all the states in two new tables here.

Where health and mental health are concerned, “states’ rights” often means state-sanctioned neglect.

There are individual exceptions, of course.  Maine and Alaska historically spend well on mental health, but are opting for a federal exchange.  Nevada and New Mexico do poorly on protecting the overall health of their citizens, but are embracing state-run exchanges.

The take-home lesson, however, is clear.  If your state doesn’t want to create its own exchange, then you are probably better off with the federal exchange.

And if your state is still undecided, be careful about what you wish for.  Floridians, for example, would probably be better off with a federal exchange.  The state ranks 33^rd in overall health and 49^th in mental health spending.

On the other hand, undecided Pennsylvania is 8^thin overall health and 4^th in mental health spending.  There’s a much better chance that a Pennsylvania exchange would be better for its citizens than any the federal government could offer.

The reason for worry in the reluctant states has to do with the flexibility all states will be granted in setting up exchanges. 

Last week, the federal government published a new set of proposed rules governing the “essential benefits package” – the key components of all health insurance plans to be offered through the exchanges beginning in 2014.  States running their own exchanges will be given a great deal of latitude in determining just how rich these benefits will be.

And as the clock ticks toward the Valentine’s Day deadline, it’s hard to imagine new love coming from the states that have rejected our health and mental health so many times before. 

If you would like to schedule Paul Gionfriddo to speak to your group or meeting, please email gionfriddopaul@gmail.com.

ACA and the Collapse of Capitalism

Here is a question I’d love to see candidates answer before the election.

Source: NY Times

Does the continuing activity around the implementation of the Affordable Care Act signal the collapse of American capitalism – at least as it pertains to health and health care?

The myth of American capitalism is so powerful that I imagine they won’t touch this one with a ten foot pole – or even a ten-foot long poll!  In the politics of our $2.6 trillion healthcare economy, however, capitalism takes a back seat.

The recent activities of the Connecticut health exchange board explain why capitalism in health care is about as relevant as a Democratic voter in Utah. 

Connecticut is one of the dozen or so states embracing ACA, and is making an impressive effort to implement its health insurance exchange on time in 2014.  By contrast, more than half the states have yet to even declare their intentions, even though the deadline for doing so is mid-November.

According to a recent, well-written article in CT News Junkie, its health exchange board, tasked with the job of approving the “essential benefits package” for the state, did so last week.  The essential benefits package will become the standard in each state for what must be offered by insurers after the law takes effect.

The board voted to base Connecticut’s essential benefits package on one of its most popular health insurance plans.  The plan is offered by ConnectiCare, an HMO.  ConnectiCare has offered good health insurance packages for many years – I was insured by ConnectiCare for many years when I was a resident of Connecticut.

So far, so good.

But here’s the ironic twist that makes you wonder if capitalism can survive health care, and if health care can survive capitalism. 

The one member of the board voting against the package was the former CEO of ConnectiCare.  His reason was that the plan will provide to be too rich for many small businesses and individuals to afford.

He was quoted as saying that small businesses would have to drop insurance.  According to the report, here is how he put it:  The essential benefits were supposed to set a floor for insurers “but it’s like we’ve taken an elevator to the 12^th floor.”

Think about it.

If an insurance plan that provides fair coverage for emergency services, mental health services, prescription drugs, pediatric services, pregnancy services, and rehabilitation has become too rich for all the people who need those services the most to afford – even with thousands of dollars in tax credit subsidies – then what kind of an insurance market is that?

And if Connecticut’s comprehensive, but essential, benefits cost too much, then what’s your alternative?

As a Florida Congressman once got in political trouble for asking, “dying quickly?”

If the ACA essential benefits approach doesn’t work then there are really only two options left to consider.

The first is to regulate the price of healthcare as aggressively as you can. 

The second is to create a Medicare-for-all system with the leverage and muscle to decide how much it will pay for healthcare services no matter what a provider wants to charge.

Both require significant governmental intervention.  And neither is an endorsement of the kind of market-driven capitalism favored by some candidates this year.

So why can’t all this still be part of our national campaign dialogue about health care?  Is the myth of capitalism and “free” enterprise so strong that politicians can’t even talk about how important the role of the government is in subsidizing our care and regulating and managing the marketplace?

I’m just asking.