Obamacare struggles, even where it’s succeeding

Welcome to Health Reform Watch, Jason Millman's regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Jason with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, or sign up here to receive it straight from your inbox. Read previous columns here.

SEATTLE— One of the early ironies that emerged from Obamacare's first year of expanded coverage is how much some of the states most enthusiastic about the law failed miserably. Washington state, which was one of the first to embrace a state-run exchange, isn't one of those states — but it's experienced its share of frustrations putting the Affordable Care Act into place.

I traveled last week to Seattle with other health-care journalists through the Kaiser Media Fellowship, which gave me a chance to meet with state and health-care industry officials on the front lines of Obamacare implementation in Washington. Throughout the week, a consistent theme emerged through our conversations: Washington did much better than some of the disaster states — think Oregon, Maryland and Massachusetts — but it didn't do good enough.

"We identified a lot of problems - we did not resolve them all," said Gov. Jay Inslee's top health policy adviser, Bob Crittenden. "We're still having them, and that's what's driving me crazy."

First, what went right. More than 327,000 Washington residents are newly insured, according to the state's insurance office. The average rate increase requested by insurers for 2015 health plans is 8.3 percent — better than recent years — while four new insurers have asked to join the state's exchange, known as Washington Healthplanfinder.

Now, the challenges. Thousands of people are having trouble with paying for their new coverage; there are concerns about access to care; and funding the exchange once the federal support goes away remains a huge question mark.

Amid these challenges, no one in Washington is questioning the state's decision to run its own exchange or expand the Medicaid program. But my week in Seattle helped illuminate how much work remains to set up the health-care law, even in a state that was at the forefront of ACA implementation.

Washington has tech problems, too

Richard Onizuka, chief executive of the Washington exchange, recalled the first few rocky days of enrollment beginning Oct. 1. The massively complex enrollment system wasn't fully hooked up for the first time until 4 a.m. that morning, and it took about three days until the exchange staff was confident in the online system to sign people up for coverage.

That was still better than a lot of states, but Washington officials are less confident in the back-end systems enabling people to actually pay for their new coverage. In some cases, people are being billed the wrong amount or there's no record of them paying their premiums.

"It's a vocal percentage, and it's embarrassing that we're still having these problems," said Democratic state Rep. Eileen Cody, a health-care policy heavyweight who offered a tough-love assessment of the exchange's first-year performance.

Premera Blue Cross, which won the largest share of Washington exchange enrollment in 2014, estimates about 10,000 of its 92,000 enrollees are having payment issues. About 2,100 of those people are beyond a 90-day grace period allowing them to stay enrolled without paying their premium, but Premera said it doesn't want to terminate their coverage just yet.

"They're kind of sitting in no-man’s land," said Kitti Cramer, Premera's vice president of government affairs and public relations.

The problem, Premera officials say, stems from the exchange's decision to collect the premiums itself, instead of sending enrollment files to the insurers to bill the new customers. Onizuka said the exchange staff believed acting as a so-called "premium aggregator" would make things easier for Medicaid health plans entering the commercial market for the first time, but Premera said the decision has only made the process more complicated.

Ron Sims, the incoming chair of the exchange board, said he has one major goal for the next enrollment period, which starts in November: "If I had a magic wand, we'd have a perfect Web page."

Premera is a little less confident in that timeline. Company officials said they anticipated early problems and that the exchange staff is focused on solving them, but they're expecting more of the same during the next enrollment period and perhaps beyond.

Insurance is one thing. Getting care is another.

More than 328,000 newly eligible adults have signed up for expanded Medicaid in Washington state. That beat the enrollment estimate by about 78,000 — for January 2018.

The surge in enrollees raises the question of whether care providers can actually handle the unexpectedly large wave of newly insured individuals. Medicaid officials say it's too early to gauge this, but they add that the state has a long history of managing expanded access to public insurance for low-income adults and children as a hopeful sign.

What's more, David Fleming, public health director of Seattle and King County, noted a phone survey conducted by the county found that about half of primary care doctors in April were accepting new Medicaid patients, up a few percentage points from December. Yet the median wait time for an appointment remained steady at seven days.

But a couple of health clinics serving low-income patients in the Seattle area say they are struggling to keep up with pent-up patient demand for care. Anita Monoian, chief executive of Yakima Neighborhood Health Center, said her clinics are booked solid every day. Mark Secord, chief executive of Neighborcare Health, said people are lining up early each morning at his clinics seeking dental care after getting turned away from emergency rooms.

The state's insurance commissioner also took action this year to address complaints about narrow provider networks under ACA health plans. Commissioner Mike Kreidler issued new rules earlier this year requiring timely access to essential care providers and greater disclosure about which doctors are actually in a health plan's network.

Kreidler, who said he expects the Washington state standards around narrow networks could influence action at the federal level, said he'll soon consider improving the rules for 2016 health plans. "We didn't get it 100 percent right," he said.

Exchanges don't come cheap

Like all state-run exchanges, Washington has to figure out how to operate starting in 2015 without significant financial help from the federal government. After using almost $230 million in federal grants over the past two years, the exchange is expecting a huge funding dropoff next year — just $40 million is expected to be budgeted from an existing state premium tax and an assessment on exchange health plans.

The exchange has asked the federal government for a no-cost extension of its exchange grants, and it expects to ask the state legislature for a budget increase next year. Cody, the state lawmaker, signaled that the legislature will review the request with a skeptical eye.

"We're all upset without how much the exchange wants to spend," Cody said.

Onizuka, the exchange chief executive, said officials are still trying to nail down the funding request based on the first-year enrollment experience. He points to the exchange's recent determination that it needed to fund about 300 call center positions — more than the 140 that it originally budgeted for — after the flood of questions that came in during the previous enrollment period.

"How we're funded, and how much we're funded, is going to be a huge challenge," Onizuka said.

Top health policy reads from around the Web:

America's health-care ranking still stinks. "A report released Monday by a respected think tank ranks the United States dead last in the quality of its health-care system when compared with 10 other western, industrialized nations, the same spot it occupied in four previous studies by the same organization. Not only did the U.S. fail to move up between 2004 and 2014 — as other nations did with concerted effort and significant reforms — it also has maintained this dubious distinction while spending far more per capita ($8,508) on health care than Norway ($5,669), which has the second most expensive system." Lenny Bernstein in the Washington Post.

Another health-care deal looks to avoid U.S. corporate taxes. "Medtronic Inc.'s agreement on Sunday to buy rival medical-device maker Covidien PLC for $42.9 billion is the latest in a wave of recent moves designed—at least in part—to sidestep U.S. corporate taxes. Covidien's U.S. headquarters are in Mansfield, Mass., where many of its executives are based. But officially it is domiciled in Ireland, which is known for having a relatively low tax rate ... Such so-called 'tax inversion' deals have become increasingly popular, especially among health-care companies, many of which have ample cash abroad that would be taxed should they bring it back to the U.S." Dana Cimilluca, Dana Mattioli and Joseph Walker in the Wall Street Journal.

The Brits have questions about Sovaldi. "The U.K.’s health-cost regulator said it may reject Gilead Sciences Inc. 60,000 hepatitis C drug Sovaldi, and asked for more data before deciding whether the British government should pay for the treatment. Gilead lacks evidence on Sovaldi for some patient groups, the National Institute for Health and Care Excellence said in an e-mailed statement today. The agency said it has asked Foster City, California-based Gilead for more information, including about Sovaldi’s cost-effectiveness in patients with and without liver damage and HIV." Simeon Bennett in Bloomberg.

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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