“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
Since 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.
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.
- 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.