healthsignals new york

Risk segregation

A couple of years ago in an effort to lure more health insurers back into its market, New Hampshire allowed its insurers to establish premium levels based on subscriber risk, i.e., age, health status, etc.

Here's the Concord Monitor on what happened and why New Hampshire has just reversed direction:

Before SB 110 took effect, the state operated on a "community rating"system that forbade insurers from rejecting an applicant for health reasons or from basing rates on health status or geography. Once community rating ended, insurers began returning to New Hampshire, just as supporters of the change predicted. They came, however, to cherry-pick, signing up the healthy while using exorbitant quotes to drive away those most likely to need care.

Prices dropped considerably for a small group of employers, primarily those with young and healthy workforces that lived in an area where health-care costs were relatively low. But, according to the state's insurance department, 80 percent of the state's small businesses saw increases, and the rates for nearly half rose by 30 percent or more in one year. Some saw rates rise by 80 percent.

Is there any reason to believe that health savings accounts won't have the same effects?

 

Political philosophy & Medicaid asset rules

New Hampshire, like many states, is moving toward tightening its policies regarding the relationship of asset transfers and Medicaid eligibility.

Here's a report from the Concord Monitor regarding yesterday's action in the Legislature:

The bill would expand the time the state can review certain assets in determining a person's eligibility for Medicaid. If a Medicaid applicant makes a gift within that time, he or she would not immediately qualify for assistance. A gift of money or investments would affect eligibility if it occurred within five years of applying for Medicaid. If the gift was real estate or a contribution to a trust, the "lookback" period would extend to 10 years. Currently, those windows are three and five years, respectively. Even with lawmakers' support, extending the lookback periods will require federal approval. The plan also would allow people to protect their assets if they have a qualifying policy for long term care insurance.

This is an issue everywhere and it sometimes cuts politically in unconventional ways. "Liberals" want to protect Medicaid's original purpose and "conservatives" want to reduce the costs of Medicaid. That may be leading to an emerging concensus for more restrictions.

However, to the degree that it's Republican constituencies that have assets worth protecting, there's considerable potential for political missteps here.

Years ago when I staffed health and welfare issues for the Committee on Ways & Means in the New York State Assembly, it was two quite conservative Republican members of the Assembly who absolutely pummeled me for presenting and arguing on behalf of a more rigorous asset test for Medicaid eligibility. One of them used their mother-in-law and the other their own mother as the prime examples. In other words, they would have been the ones who would have benefited from the estates to be passed on while Medicaid paid the nursing home bills. The same was likely true for their supporters.

Ever since, I've been careful not to assume  what position people would take on this based on party affiliation or political philosophy.

Atul Gawande gets paid

Atul Gawande is reason enough to subscribe to the New Yorker. Here's his latest, Medicine's Money Problem, on how doctors are paid.

Be sure to read it through to the history of New Hampshire's Matthew Thornton Health Plan. That seems like the history of all of managed care in a nutshell.

In the meantime, elsewhere in Medicaid

In the meantime, the new Governor of New Hampshire is backing off the plans that were being developed during the prior administration. Part of that plan is to focus on community based services in lieu of nursing home care. Another part was reported to be something along the lines of health savings accounts (HSA).

While New Hampshire is holding off, the word is the Jeb Bush, in Florida, facing Medicaid costs himself, is going to push some form of health savings account as well.

I don't know the details of either HSA proposal, but it'll be worth looking into. I'm skeptical upfront though. Afterall, by Medicaid definition, we're talking about a poor population. So the ability to effectuate the "savings" in Health "Savings" Account should be challenging. Less well known, but perhaps even more important is that most people are on Medicaid for short spells. In New York, the average length of time on Medicaid is a bit over nine months. While the bulk of spending is made on behalf  of those  enrolled for longer periods, it will still be interesting to see how poor people are supposed to "Save" for significant care or coverage in a short period.

And in Tennessee, their innovative TennCare program is caught in a brutal fight, with the Governor proposing substantial cutbacks.

New York's Budget Day

The Governor's Budget will be released in a couple of hours. You can do your own analysis by going here and following the bread crumbs. Then get the documents and fire away. You can also call (518) 473-0580 for a copy.

There've been lots of leaks and lots of pre-Budget coverage throughout the State. The Governor will attempt to control Medicaid costs and will attempt to provide some financial relief to counties. But since we're so close, let's wait for the actual proposals and the details and respond to those. In addition to watching Medicaid, we'll need to watch HCRA developments. After all, that's another $4.7 billion, mostly off budget. But just because it's off budget doesn't mean that nobody has to pay it. And it doesn't mean that there's no political fight to get it.

Lots more to come.