Insure the Uninsured Project’s goals for California’s implementation of the Affordable Care Act are:
Â 1) To cover as many uninsured as possible;
Â 2) To build a strong and successful exchange to buy more affordable coverage for small employers and privately insured and uninsured individuals; and
Â 3) To develop integrated safety nets that compete on a level playing field on the basis of their price and quality.
The Basic Health Plan could be valuable in meeting one, and possibly two, of these three ITUP goals, while weakening the third (the exchange). Lower BHP premiums could attract more participants, and the BHP may be attractive to local health plans, allowing them to integrate safety-net delivery systems. There could be too little competition in a BHP and thus less incentive for plan networks to excel on price and quality. A BHP that pays Medi-Cal rates would have a weak network of private physicians. A BHP may weaken the exchange by diverting almost a million subscribers out of the exchange.
ITUP has four suggestions.
First, the exchange should eventually administer and integrate all health insurance programs for people with incomes over the bright line (133% of FPL). The Department of Health Care Services should administer all programs for patients with incomes below 133% of FPL. If California decides to develop a BHP, it should be administered through the exchange. Programs like Healthy Families and AIM (Access for Infants & Mothers) should eventually be moved from MRMIB (Managed Risk Medical Insurance Board) and integrated into the exchange. This system will be easier to understand and navigate for subscribers, providers, plans and the general public.
Second, local safety-net health plans and networks should work to develop BHP-like coverage and compete for subscribers with commercial plans in the exchange. More competition should produce better products. To avoid the underpayment issues that plague Medi-Cal, we believe a BHP should pay at least Medicare rates to physicians.
Third, it is important to keep new programs simple and to preserve continuity of coverage, of provider choice and of plan options, as individuals inevitably shift back and forth between Medi-Cal and the exchange as incomes and family composition change. California has long had a pattern of developing incremental niche programs that work for the few, but create endless complexities for the many. The ACA offers the opportunity to simplify. In California we absolutely must avail ourselves of this.
Fourth, the discussion of the BHP option highlights the very real challenges facing the exchange to develop models of coverage that are substantially more affordable to individuals and small employers. In our view, delivery systems integration, prevention and primary care, reimbursement reforms focused on outcomes and cost effectiveness, transparency of plan and provider prices and outcomes and competitive bidding with strong financial incentives are among the menu of options the exchange should embrace.