Insurers Called ‘Essential Partner’ in Reform

WASHINGTON — Jay Angoff, the federal government’s health care point man for consumers and insurers, made nice with the insurance industry last week, only briefly mentioning high-profile spats over premium hikes, while reminding insurers that health care reform offers the industry considerable growth potential.

“Reforms we’re putting in place now are not meant to punish insurance companies,” Angoff said during America’s Health Insurance Plans’ 15th Annual State Issues Conference last week. “The changes we’re putting in place now will bring millions of new consumers into the market for insurers.”

Angoff, director of the Office of Consumer Information and Insurance Oversight at HHS, told health insurers that they are “an essential partner in extending access and controlling costs.” He said, “You’ll have a profound influence on the direction our country takes with health care.”

Angoff, who did not take questions or speak to the media after his address, only made passing reference to a well-documented squabble between his boss and AHIP.

HHS Secretary Kathleen Sebelius, in a sharply worded and widely reported letter, called on AHIP’s members last month to stop using scare tactics and misinformation to blame premium increases on the Affordable Care Act.

While thanking insurers for cooperation on some fronts, such as the industry’s quick response to getting adult dependents up to age 26 covered before the Sept. 23 deadline and ending policy rescissions, Angoff said other areas did not produce such good reviews.

He said there hasn’t been much cooperation in covering children with pre-existing conditions, and he criticized “isolated instances of [insurers] blaming premium increases on reform.

“It isn’t true. ACA is not to blame. We need to prevent misleading information and misinformation from the start,” Angoff said.

New Government Website Launched

Although his audience was not particularly pleased with the news, Angoff said he took great pleasure in announcing new features on a government website that allows people to compare health plan prices and coverage.

Angoff said new the new tools, launched Friday at healthcare.gov, give people the power for the first time to directly compare premiums, deductibles, coverage limits, and other aspects of most health plans available in their area. Publicly funded plans, including Medicaid and Medicare, are also included.

The Affordable Care Act required health insurers to submit information for the site, which deals with plans available to individuals and small businesses but does not include information covering plans offered by large employers.

“This is a very important new tool for consumers,” Angoff said.

Angoff’s efforts to put positive spins on his remarks were consistent and met with mixed success, but they paled in comparison to the spin applied by Scott Pattison, executive director of the National Association of State Budget Officers.

“We’ve hit bottom … and that’s good,” Pattison told the conference. “We’ve got nowhere to go but up. It’s going to be slow going, and we won’t get back to the kind of growth we used to have, but I do think we’ve hit bottom.”

States Approaching ‘Crisis Point’

States are facing fiscal hard times like never before, and while most experts agree we’ve probably hit bottom, the ride back up is going to be painfully slow and will level off at a considerably lower level than most states are used to, according to Pattison.

The arrival of major health care reform at a time of such austerity may “bring us very close to the crisis point where we start making policy decisions in health care that would have been politically unpalatable before,” predicted Matt Salo, director of the National Governors Association Committee on Health and Human Services.

Salo, along with Pattison, painted a bleak picture for AHIP attendees.

“Some states have an amazing ability to continue kicking the can down the road and not facing up to hard issues — like California,” Pattison said. “But I think that’s going to change soon. We’ll see.”

For the “first time in history, states had actual declines in growth for two years in a row,” Pattison said. He said 43 states had to go back into their budgets to cut more last year after passing often contentious, pared-down budget plans.

“That was unprecedented,” Pattison said.

“We need to put all health care reform issues in that context,” Salo said. “States are in a very difficult situation with reduced staffs, dwindling resources and higher expectations.”

Simplify, Streamline for Efficiency

Although health reform arrives with new federal money attached, other changes — particularly state-run health insurance exchanges and reduced staffing because of state austerity — will probably be bigger drivers of change, Pattison and Salo said.

“It may finally be time for agreement that we can simplify the Medicaid process,” Salo said. “We don’t need 50 different ways of doing it. There’s going to have to be a different way of looking at this — from a technology aspect and maybe in the exchanges as well. There are ways to do things more efficiently,” Salo said.

Salo said maintenance of effort provisions in the health reform law will “make Medicaid largely untouchable in state budgets.” He predicted many states would see “enormous downward pressure on reimbursement rates for Medicaid in the coming years.”

State Changes Coming in November

A common thread through AHIP’s conference last week was anticipation of political changes in November. Not only in Congress, but in many governors’ chairs and state legislatures.

“This will be one of the biggest turnovers in governors in memory,” Salo said. “There are elections in 37 states and 25 are guaranteed to change.”

Those changes and potential changes in state legislatures characterized as the single largest turnover in state leadership in decades come “at a very crucial time for health care,” Salo said.

Karen Ignagni, AHIP’s president and CEO, agreed.

“We all know that what really happens as a result of this legislation doesn’t happen in Washington,” Ignagni said. “We can look ahead to these elections and see potential large shifts in leaderships from governors to insurance commissioners.

“These are very interesting times on many levels,” Ignagni said. “We’re having conversations in this country now that will shape things for years to come. We need to take this opportunity to educate stakeholders and legislators,” Ignagni said.

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