Response: HHS Skewing Report to Paint Rosy Picture about HIEs

by webadmin on September 26, 2013

HUC-thumb2Yesterday, we wrote about the report from HHS that highlighted the benefits of the new health insurance exchanges and how consumers will be facing lower premiums under healthcare reform. It was a rather optimistic picture in a debate that has been fraught with many dire predictions of economic and Constitutional disaster because of the Affordable Care Act.

It’s only fair, then, to take a second to look at some of the more intelligently reasoned challenges to the HHS report.

Don’t worry. We won’t be quoting from “Green Eggs and Ham.”

Tom Miller, senior fellow at conservative think tank the American Enterprise Institute, makes a thought-provoking point when he “warned that sometimes the lowest-cost plans are ones that people won’t want to buy,” writes Jessica Zigmond at Modern Healthcare.

Miller believes the Obama administration has tried “to model a set of assumptions, instead of reporting on real actions from real people with real prices.” He added that the HHS report was nothing more than “a political exercise” designed to “put the best face forward before anyone looks under the hood.”

Beyond the bubble of speculative and agenda-driven punditry is Joel Ario, who formerly directed HHS’ office of health insurance exchanges and remains largely optimistic about HIEs.

He, however, is warning that “people consistently underestimate their cost-sharing. There will probably be people buying bronze plans thinking they will not have cost-sharing, and it will be more than they thought,” something with which a report from Avalere Health concurs.

According to Avalere’s report, “Consumers buying plans on the exchanges can expect to pay higher out-of-pocket costs in deductibles, drug coinsurance, and primary-care visits. The findings showed that for an individual enrolled in a silver plan, the average annual deductible before any plan coverage begins is more than twice the average deductible in employer-sponsored coverage.”

Caroline Pearson, Avalere’s vice president, presents another thought-provoking observation: “Consumers will need to balance lower monthly premiums against the potential for unpredictable, expensive, out-of-pocket costs in plans with higher deductibles. Furthermore, there is a risk that patients could forgo needed care when faced with high upfront deductibles.”

Amy Gordon, a partner at McDermott Will and Emery in Chicago, zeroes in on a fact we referenced yesterday. The report only focused on premiums.

“Premium is only one piece of the pie,” she said. “When you’re talking about your total spend, you have to figure in your copays, deductibles, coinsurance—all of this is coming out of pocket.”

There will also be a limit on the providers that can be seen, something that people “who previously purchased individual coverage or employer coverage who move into the exchanges” might find confusing and prohibitive. Gordon said insurers will limit options in their network in order to better “manage the cost of care,” since “the risk involved in the first year of the exchange is so unknown.”

Then, there’s the “long, hard slog…on enrollment”…

Well, that’s enough for now. We’ve been talking about the uncertainties of healthcare reform for many years now. No one ever said this would be easy. Of course, many may not be prepared for how tough the next few years are going to be.

As healthcare executives, how does the unpredictability of open enrollment and the plans that come with the exchanges affect you directly? Do you share the concerns of those quoted in the article? What was your opinion of the HHS report from yesterday?

-by Pete Fernbaugh

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