Affordable Care Act Update

There’s been as much drama around the Affordable Care Act(ACA) this year as there was the year it was created. There’s some irony in that, as the divided public opinion when it launched has tipped the needle toward a general approval of Obamacare (from 42% of Americans in early 2016, to 55% this year, according to Gallup – hardly a mandate, but a significant and quick change).

As part of its ongoing effort to keep Americans on their toes, the current presidential administration is attempting to act against this majority opinion and short-circuit the ACA by whatever means possible. They’ve made no secret of this – attempting to force a rushed alternative plan through congress earlier this year, and shoehorning ACA-related changes into the recently passed tax bill. They’ve also undercut what they could through non-legislative administrative channels. That included shortening enrollment periods this year, an instance where RI’s decision to have its own exchange, independent of the national one, helped us out because we were able to extend the deadline further than the shortened national one.

The recently passed tax law will definitely change some aspects of how health care is provided and insured – how much of a difference remains to be seen. Among the major factors is the retraction of tax penalties for those who do not get coverage. Effectively, starting in 2019, you no longer are required by law to get coverage.

Blue Cross’ reaction, in a statement from president and CEO Kim Keck, was naturally one of disappointment on that point. “The tax bill passed by Congress effectively repeals the individual mandate, a key tenet of the Affordable Care Act. The individual mandate is a critical component of an effective healthcare system, as broad enrollment supports a more balanced risk pool creating more affordable premiums. Without that balance, health insurance premiums are likely to increase, effectively limiting access to care, especially for underserved communities. We reaffirm our pledge to support the adoption of an individual mandate in Rhode Island, which, we believe, is necessary to maintain a balanced risk pool to ensure more affordable premiums. This is consistent with Rhode Island’s historic commitment to access and the state’s adoption of ACA regulations prior to the ACA becoming law.” Within that statement is a clear prediction that health insurance costs should be expected to rise, as some people opt out.

We took a minute to talk to Zach Sherman, director of HealthSourceRI, to explore what’s changed at the RI Health Exchange.

Mike Ryan (Motif): How does the new tax law affect what HealthSourceRI does, or your plans for the future?

Zach Sherman: The number one message we’re trying to get out is that the penalties for not having health insurance did not go away for 2018. The penalties are repealed starting in 2019 … This year, Rhode Islanders would pay a fine of $695 per adult and $385 for children, or 2.5% of household income, whichever is higher.

Looking ahead – what does this mean in 2019 and beyond? We’re pretty concerned about the impact this will have on health insurance premiums. The Congressional Budget Office, a non-partisan policy shop that scores legislation, took a look at the impact and they estimated that in the individual market health insurance premiums would go up 10% year over year.

MR: What percentage of people have signed up?

ZS: We have 96% coverage in RI, which I believe is the 5^th highest in the country. Our goal, of course, is universal coverage.

MR: Who are the 4% who are not signing up? And who do you anticipate losing if there’s no mandate?

ZS: We have a little data on the people who haven’t signed up. The largest pool is the “young invincible” – 18- to 34-year-old – younger men who think they’ll be healthy forever and are least worried about unknown or unforeseen health events. Those we would be worried about leaving are the younger and lower income people. The [fewer] healthy people who stay in the risk pool, the more other premiums will go up.

MR: Part of the plan for the exchanges was that the budget would go down each year – for both marketing, where the original goal was to establish awareness, and for administrative costs, where I have to presume you have fewer calls where you have to explain everything, and fewer glitches. Have you found your mojo and rhythms over the last few years?

ZS: Absolutely. Five years in, we’ve got a good handle on what we’re supposed to be doing and how to serve our customers… I’ve been the director since November 2015. During that time – our 2015 budget was $50 million. The next year was around $30 million. The next year was about $15 million. And this year our budget was $9 million. We’ve seen the technology stabilize, and a lot of the previous funding was federal money, which we expected to reduce. A lot of that is the natural transition from the building phase to the maintenance phase. We’ve been maturing and have a better handle on what it takes to manage our operations. As of this open enrollment period, we had 33,000 individuals signed up for a plan, and that includes 7,800 new people, more than twice what it was in 2016. 2017 was a year with a lot of national rhetoric around the ACA and a lot of debate. We were able to get out in front of that and capitalize on that, starting our awareness campaign early. We handled 95,000 calls this year, and the average on hold time was 30 seconds. That’s a pretty dramatic improvement over some of the earlier years. We held 16 community events around the state that helped raise awareness as well. And we launched a new tool to help people assess total cost of care and we started doing appointment scheduling online.

MR: It’s no secret that the current administration is doing what it can to undermine this system that was created by the previous administrator. It’s almost like, ‘Daddy doesn’t love me anymore.’ How do you deal with that?

ZS: We’re really glad that we made the decision several years ago to set up a state-based marketplace, which was established by Governor Raimondo, which gives us state-based control of our

exchange and makes us directly responsible to Rhode Islanders. That doesn’t really exist in the 36 states that went with the national exchange and don’t really control their own operations. Under the previous administration, we had a partner in the Obama administration. They were a real resource for us. That has very much changed. The current administration has taken steps to make our job harder, and to limit the ability for customers to come in and ask for affordable health coverage. At the national level they cut the open enrollment period in half. What previously ran from November 1 to January 31 was cut to 45 days. We had some ability to set our own open enrollment period and extended it to December 31. Anyone who came in our doors – virtual or otherwise – still had until January 23 to complete the process. That’s one way in which we’re autonomous from the federal administration. Another is that we manage our own marketing efforts and messaging. The Trump administration dramatically cut their marketing budget, right before open enrollment, but that didn’t impact us. We have our own state-funded budget, including marketing and outreach, which gave us the ability to really hone our message and reach our target market.

MR: There’s been discussion of an RI individual mandate to replace the national one in 2019 or beyond. What are your thoughts on that?

ZS: We have to understand better what the impact will be specifically on RI, and have to know more about the wishes of the public, of the business community, of the medical community and what the public appetite for that would be. It bears further analysis and consideration.

MR: What motivated you to take on this job?

ZS: I’ve been involved with HealthSourceRI since the beginning and pretty much had every job there is to have during my time here. What motivated me was first and foremost the mission. I get to come to work every day and try to ensure that all Rhode Islanders have access to affordable care. That, and I work with a great team.

MR: What else should people be aware of?

ZS: Even though open enrollment is over, that doesn’t [exclude] someone who has a qualifying event in their life – getting married, having kids, changing employment or moving to the state – all those are what we call qualifying events, and trigger a special enrollment period that lasts 60 days. Open enrollment is our busiest time of year, but affordable insurance options are available throughout the year in those sorts of circumstances.

Other changes in the local health care landscape are less directly related to the national drama. Recent events have seen Memorial Hospital in Pawtucket getting shut down – a painfully protracted demise that, while not a surprise, may leave a serious vacuum for emergency care in that part of the state. CharterCare, which runs the Roger Williams and Our Lady of Fatima Hospitals and promised a raft of improvements and upgrades when it moved in three years ago, has instead executed significant layoffs (CharterCare could not be reached for comment).

On the insurance front, Blue Cross has tightened a partnership with LifeSpan which they expect to reduce costs for certain plans, and they’ve continued to push resources toward establishing “Primary Care Teams” that make the most efficient use of both a short supply of primary care physicians and the often under-utilized team of nurses, counselors and pharmacists who support them, converting a top-down management structure into a more level health service plain.

Both HealthSource and Blue Cross continue to see success from their walk-in “stores,” where they endeavor to make health care shopping a cross between personal consultation, retail shopping and a new-age yoga studio.

“It’s what I tell all of my friends,” explains Blue Cross Blue Shield Spokesperson Jill Flaxington. “When they’re asking me healthcare questions – ‘I don’t know, if this is covered or that is covered’ – I tell them to go into one of the stores. Talk to somebody. Because almost nobody knows. I work for Blue Cross, and I don’t know. There are specialists who can figure these things out. That’s why we built the stores – because health care right now is so confusing, and customers wanted to talk to someone face-to-face. It’s bucking the trend of online shopping somewhat, going back to brick and mortar.”

Blue Cross opened a third location in 2017, in East Providence (71 Highland Ave). More than 70% of RI’s population base now resides within 5 miles of one of these stores, which saw nearly 32,000 visits last year. HealthSource’s walk-in location saw another 8,500 customers last year. The Blue Stores also offer free (for members) fitness classes, educational programs, yoga, kickboxing, Zumba, stretching, meditation and tai ji quan classes.

As Trump’s war on health continues to evolve, we expect a riotous next few years in the industry, but hopefully positive evolution will also continue in this complex industry on both the local and national levels.