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Healthcare Challenges Not Limited to Obamacare

Healthcare Challenges Not Limited To Obamacare

While the administration and Congress continue to focus on the future of Obamacare, executive and legislative branch officials are also struggling with a series of other looming healthcare challenges.

Obamacare

A quick update on the current status of Obamacare:

  • Repeal remains far from certain.
  • Key senators are dubious that the Senate will get 50 votes for repeal and replace.
  • Senators are very concerned about the paucity of tax credits for many, especially the low income and elderly.
  • It is highly unlikely that the Senate will pass a plan this year.
  • The Senate is largely in favor of preserving the Medicaid expansion or at least winding down the expansion over a much longer period of time.
  • The uncertainty, especially around cost-sharing subsidies, is causing steep increases in rates by remaining health plans across the nation.
  • The House bill would cut $880 billion over 10 years from Medicaid.
  • The Congressional Budget Office (CBO) as expected indicated that 14 million would lose coverage within 1 year and 23 million would lose coverage within 10 years.
  • While the CBO states that 5 of 6 Americans would be in stable insurance markets, it is also clear that many with chronic or complex conditions would see steep increases in premiums and out of pocket costs if they are not actually frozen out of coverage.

Tackling chronic condition management in the elderly

The Senate Finance Committee recently acted on legislation that would seek to target those with chronic illnesses in Medicare and reducing costs. Unlike other recent actions, the legislation gained bipartisan support. The bill would expand access to telehealth services, promote care coordination between providers and expand value-based payment models.

The bill, passed out of the Senate Finance Committee and awaiting floor action, builds on other existing programs in place, including physician reimbursement reform, Accountable Care Organizations, the Medicare Advantage Value Based Insurance Design, and a Medicare care management pilot.

The current pilots and the bill’s additional initiatives are important, as today Medicare beneficiaries who have two or more chronic conditions account for more than 90 percent of spending. The bill for chronic care will only continue to increase as the aging of America continues.

Deinstitutionalization delayed but remains a huge challenge for states

Since the 1999 Supreme Court Olmstead decision as well as subsequent related court decisions, states have struggled with the costs of deinstitutionalizing individuals and serving them in community settings. This applies not only to younger individuals with disabilities but to the elderly essentially warehoused in nursing homes as well because assisted living and home care options were limited or non-existent for the poor and lower income. Recently the Centers for Medicare and Medicaid Services (CMS) gave states three extra years to comply with moving the elderly and disabled on Medicaid from nursing homes back to the community and ensuring those at risk of institutionalization can remain in the community. Federal requirements will now take effect in 2022 instead of 2019. But states will have to get their implementation plans approved before 2019 is out. When the rules take effect, they will be broader than simple living arrangements. They will include self-direction of care services by the elderly or disabled as well.

States applauded the move as most simply are not ready for the transformation, despite the almost two decades of court decisions and emerging policy. Some states have begun making the transition and spend as much or more on alternatives than on nursing homes. Others are lost in time, with a huge concentration on nursing homes and few alternatives. But the day of reckoning will come and recalcitrant states need to plan.

Two things are clear here. The first point to consider is that states will increasingly turn to private managed care plans to deliver consolidated acute and long-term care services. Managed care promises the best way to insulate states from risk and bring efficiency and quality to the overall delivery of medical and custodial care to these individuals. States cannot manage tens of thousands of medical providers in their antiquated fee-for-service programs and would make a literal mess of adding tens of thousands more as long-term care offerings burgeon. Expect a flurry of requests for proposals (RFPs) from states to private plans in the next few years.

The second point to consider is that the proposed phase-out of the Medicaid expansion and reduction in overall Medicaid funding at the national level (aka cost shift to states) threatens to undermine the initiative. Getting private plans to service Medicaid members is tough enough in already tight rate environments. Getting them to play with high cost institutional and alternative services will be even harder with huge funding cuts at the national level.

Policymakers would be wise to heed the following: as America ages, acute and long-term healthcare costs will skyrocket. Reasonably funding Medicaid now will help build an efficient Medicaid program for acute and long-term care going forward. If massive cuts go through, innovation will disappear and costs will likely soar as aging Americans rely ever more heavily on high-cost acute and long-term care services.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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