Sticking your neck out for ACA extensions?

March 5, 2014

Plans have opportunities to bridge the transition for non-grandfathered plans and PCP payments under ACA

Two do-overs for health plans in 2015:

Continued extension of non-grandfathered plans

Officials in Washington this week said the White House is asking insurers to further extend old 2013-model-year plans in the individual market through 2016. No doubt the extension will help reinforce the idea to Americans that, as the president said, “if you like your health plan, you can keep it.” This redo is more about timing than anything else, according to the Wall Street Journal. Most observers believe the allowance is a protective political measure to avoid a second round of plan cancellations, which would occur just before this year’s election season. Health plans are obligated to send notification to members 90 days in advance of the plans being discontinued.

The Backstory: Late last year, when insurance carriers had to discontinue certain plan products that would not meet minimum standards for the Affordable Care Act (ACA), as many as 6 million consumers had to be notified and mapped to new, compliant products or offered options. The public outcry from consumers losing their skinnier plans led the administration to grant leeway for insurers to extend the existing plans through 2014 as a transition. Extending the non-compliant plans was a suggestion-not a mandate from Washington. However, the timing left plans that opted to participate scrambling to undo the cancellations not just for the enrollment but in their claims and analytics systems as well.

The Reaction: The ultimate effect of allowing non-grandfathered plans to extend into 2016 will be small, according to Sara Collins of the Commonwealth Fund in her blog. Although 24 state insurance commissioners allowed health plans to continue the old, noncompliant policies in 2014, the respective insurers weren’t obligated to offer the continuation to members. Because there is a small number of plan-keepers right now, Collins estimates the additional extension of their plans will have little effect on the balance of risk pools between the prevailing market and the new exchanges. Therefore, the rule will have little effect on exchange premiums. She cites RAND estimates that indicate a 1% potential increase.

Continued pay hike for primary care

The administration’s 2015 budget proposal aims to keep the ACA’s provision for a primary care payment bump through 2016, costing an additional $5.4 billion. Physician groups have pressed to have the provision become permanent, meanwhile, private payers such as WellPoint have followed suit and provided PCPs some type of additional pay. In the case of WellPoint, increases vary across and within markets, but the average is 10% for every fee for every service unit of care.

The Backstory: Under ACA, primary care providers would receive Medicare rates for their Medicaid patients through 2015.

The Reaction: David Pittman on Medpage Today notes that the extension of PCP payment is going to do little to fix the ongoing shortages of primary care providers in this country. Obama’s 2015 budget calls for an addition $5 billion to train more residents as well as additional support through National Health Services Corps, according to USA Today. Physicians should note, however, that the policies above are just proposals at this point.