Jill Weschler

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	HealthCare.gov-serving 36 states-is supposed to provide 7 million individuals with coverage, but meeting that goal will be very difficult based on paltry early enrollment and faulty back-end technology. Such a failure will supply ammunition for health reform critics, many still smarting from their inability to kill the law by shutting down the federal government.

	Initial problems were blamed on higher-than-expected opening-day traffic-14.6 million unique visits in the first 10 days of October, according to Health and Human Services (HHS) officials. The explanation crumbled when traffic dropped precipitously, as thousands of potential customers faced “try again later” messages.

	System capacity was expanded, but half the 700,000 applications officials reported four weeks later were attributed to state sites.

	Initially, the federal website required individuals to set up a personal account before they could shop for coverage information. HHS had decided that consumers should know if they qualified for subsidies to avoid “sticker shock” from high premiums when investigating coverage options. When registration turned out to be so difficult, HHS added a process that permits consumers to review plans and prices in the local community without being registered.

	Still, the federal exchange doesn’t provide details on which doctors and medicines are covered by individual plans, information important for patients with serious conditions.

	Enrollment issues prompted community organizations to switch to paper applications. Advocacy groups delayed campaigns to promote enrollment. Plans directed individuals to their own websites. Issues with programs for calculating subsidies prompted insurers to advise brokers to hold off signing up customers who might qualify for tax credits.

	Even more troubling are reports that insurers could not obtain accurate information on individuals who managed to enroll. Batches of data sent to insurers from the federal exchange contained corrupted files that would not open and files missing key information.

	Plans reported multiple enrollments for the same customer and problems matching lists of enrollees from the federal system to their own information. Some errors could be fixed by hand, but that could work only with dozens of applications-not thousands.

	With all the glitches, insurers fear that individuals might find out they lack coverage only when they visit the doctor in January.

	Analysts blame the program breakdown on the relatively short time frame available for system development and functionality testing. The House Energy & Commerce Committee launched an investigation of the technical problems, seeking details from IT contractors on the causes underlying these problems. The Sunlight Foundation also identified Serco, Maximus Federal Services and General Dynamic’s Vangent as leading contractors involved in building and supporting the marketplace and criticized HHS for contracting with firms good at navigating the federal procurement process, but not in providing cost-effective IT services.

	Consumers have until mid-December to sign up for coverage to begin Jan. 1, 2014 and will face penalties if they don’t apply for a plan by March 31. To meet these deadlines, HHS has promised that the system will be “running smoothly” by the end of November. Insurers certainly hope so.

Articles

System flaws, software problems deter beneficiary enrollment, undermine new coverage.

Insurers rankled by health exchange launch

The Centers for Medicare and Medicaid Services (CMS) seeks to make it easier for beneficiaries to select appropriate coverage by reducing the number of low-enrollment plans and those with indistinguishable benefit options, according to Jonathan Blum, acting director of CMS's Center for Drug and Health Plan Choices, which governs Part C and D programs. 

Two sponsors discontinued private fee-for-service (PFFS) offerings last spring, and more are expected to follow suit as new curbs on PFFS plans kick in for 2011. Even so, all parts of the country will have some Part C plans next year, Blum reported at last month's Medicare conference, sponsored by America's Health Insurance Plans.  

A top CMS priority is to eliminate discriminatory enrollment and marketing activities. CMS is looking hard at insurer cost-sharing policies that impose high copays for services used by chronically ill patients. Plans have to communicate coverage and cost changes "in the most responsible way," Blum said, adding that CMS has its eye out for "bait-and-switch" sales ploys and has "diminished tolerance" for fraud and abuse.  

The agency wants to ensure that capitated payments support high-quality benefits and appropriate coverage, and that benefits paid for are actually received by patients. More regulations governing Part C are in the works, with an eye to finalizing more consumer protection rules next year.  

A related initiative is to evaluate payment policies to ensure that plans are paid accurately and fairly. While reform legislation could make significant changes in payments to MA plans, CMS intends to collect more data to determine how payment influences delivery of services and to ensure that appropriate payment policies lead to better outcomes. 

Despite efforts to help seniors learn about appropriate plan coverage, CMS officials fear the abundance of coverage choices offered each year makes it difficult for beneficiaries to navigate the system. Blum said that CMS Web site tools provide too much information or may not provide the right information. The agency wants to assess what factors help a beneficiary understand coverage options and lead to enrollment in a certain plan, including the role of brokers and Web sites.  

Seniors also may benefit from proposals to begin the annual open enrollment period earlier to avoid the end-of-year rush. Such a change would put pressure on CMS to distribute plan information earlier and would alter marketing and enrollment operations by insurers.  

Efforts to improve the Medicare Web site and beneficiary information services on Part C and D coverage options provide a model for developing more extensive government-sponsored insurance exchanges, as proposed in reform legislation. CMS essentially operates an "exchange" for seniors, which illustrates the importance of accurate payment and benefit information and useful plan quality measures for beneficiaries to be able to navigate choices.   

CMS wants to reduce low-value plans and improve information systems to help seniors shop for the best coverage options

CMS making changes for Medicare plans

The cost of family coverage under a PPO hit $10,000 this year, boosting concerns about the growing unaffordability of healthcare and future increases in the number of uninsured. Healthcare once again is a hot political issue, fanned by several developments: 		

BLAMING MCOs				The Bush administration also acknowledged that a good portion of the Medicare premium hike (about $1.75 of the $11.60 increase) was because of higher payments to Medicare Advantage plans. The rate hike is allowing MA plans to offer additional benefits while reducing out-of-pocket fees, but critics complain that seniors in fee-for-service (FFS) Medicare bear the added cost.  

That figure prompted some members of Congress to urge a delay in the planned increase in payments to MA plans for 2005. Democrats also backed legislation to delay or reduce the sharp Medicare premium boost. One proposal is to limit next year's premium increase to the rise in Social Security payments, which would mean about a 3% premium hike. A related plan is to link Medicare premium increases to a percentage of an individual's Social Security check. McClellan warned that such moves would only require an even bigger increase for 2006.  

Meanwhile, seniors who don't want to pay higher Medicare premiums and copays might decide to try managed care again. Instead of plans dropping out of Medicare and stranding thousands of seniors, as in recent years, insurers anticipate increased participation in the MA program, Karen Ignagni, president of America's Health Insurance Plans, told the Senate Finance Committee. MCOs filed Medicare offers for 2005 last month, and she predicted that "our members are planning for growth in all products: HMOs, PPOs and managed FFS plans."  

MA enrollment, however, has not increased significantly this year despite moves by plans to cut premiums and boost benefits. Policy makers expect MA plans to provide better care to seniors at rates comparable to FFS care; if health plans fail to deliver, criticism and cuts are sure to follow.  

The cost of family coverage under a PPO hit $10,000 this year, boosting concerns about the growing unaffordability of healthcare and future increases in the number of uninsured.

Rising healthcare premiums challenge MCOs to cut costs

-Employers continue to experience double-digit premium hikes, but they have few proposals for solving the healthcare cost crisis, according to a recent employer survey. This situation is making health insurance increasingly unaffordable to many Americans. Even though premiums rose "only" 11.2% on average in 2004-vs. 13.9% last year-that increase still far exceeds the rate of inflation (2.3%) and rise in workers' earnings (2.2%) for the current year. In fact, the cost of health insurance has jumped 59% since 2001, prompting fewer employers to offer coverage and fewer workers to pay for health benefits when offered, notes Jon Gabel, vice president of the Health Research and Educational Trust (HRET).  

A survey of about 3,000 large and small employers sponsored by HRET and the Kaiser Family Foundation (KFF) found that the average PPO premium for a family of four hit $10,217 this year. HMO premiums averaged a "low" $9,504, but that still is unaffordable for many families, which now have to contribute an average $2,661 a year to employer-provided health coverage.  

PPOs continue to be the most common form of health coverage, serving more than half (55%) of all employees with health coverage. Slightly more workers (25%) enrolled in HMOs this year, possibly because of lower premiums and out-of-pocket costs. 

Employers also are switching insurers in their search for less-costly coverage. More than half (56%) of firms shopped for a new plan this year, and about one-third made a change. But with little overall shift in type of plan coverage, most employers end up more or less where they started, the survey indicates.  

With inflation and wage rates remaining low, the public is unlikely to accept continued hikes in health costs. If premiums continue to rise, Altman notes, payers will be looking more closely to see if such increases merely reflect higher HMO and insurer profits than actual provider costs.  

PPOs continue to be the most common form of health coverage.

Jill Weschler

Articles

Insurers rankled by health exchange launch

CMS making changes for Medicare plans

Rising healthcare premiums challenge MCOs to cut costs

No easy solutions to continued rise in health premiums