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Thu Mar 24, 2016, 04:35 AM

How to Stop the Bouncing Between Insurance Plans Under Obamacare


Consider a young construction worker, a patient of mine, whose hours are cut during the winter. His income drops slightly, and now his family no longer qualifies for financial assistance through marketplace subsidies and must sign up for Medicaid. He had finally managed to control his diabetes with his primary care doctor, but when scheduling his next appointment, he is told his doctor doesn’t accept Medicaid.

When the summer rolls around, he picks up more hours, and starts making too much for Medicaid. He has to go back on a marketplace plan, a different one from before. Meanwhile, providers and insurance plans rack up administrative costs as they accommodate these changes.

Because of fluctuations in income, millions of Americans move back and forth between Medicaid and the Affordable Care Act’s insurance marketplace
, leading to significant health and financial costs for individuals, states and insurance companies.

Published Comment:by Don McCanne of PNHP:
Tweaking the alignment of Medicaid and the private ACA exchange plans still leaves in place a fragmented system of incongruous provider networks, and unstable cost sharing depending on plan actuarial values and sliding-scale subsidy qualifications. These efforts result in wasteful administrative excesses, inefficiencies and inequities in care.

A well designed single payer system - an improved Medicare for all - would provide stable health care coverage for life - totally eliminating churning. The savings from the administrative efficiencies would be enough to eliminate current financial barriers faced by the uninsured and the underinsured, while reducing inequities and ensuring access for all.

Tweaking a highly dysfunctional system just won't get us there.

Further Comment by Don McCanne of PNHP: Dhruv Khullar has provided us with an important policy lesson. He seems to be amongst those who believe that we should accept Obamacare (ACA) as a given and build on it through incremental reform. Amongst the multitude of problems with ACA, he has selected as an example the issue of churning in and out of Medicaid and the private ACA exchange plans. What does he propose?

He suggests reducing churning by offering twelve-month eligibility for Medicaid, and he suggests aligning benefits and provider networks between Medicaid managed care and private ACA exchange plans - a proposal with obvious profound administrative complexity. Further, when these anti-churning measures are implemented, he concedes that “the patchwork of health care in the United States may make some amount of churning unavoidable.”

This is the policy lesson. Our fragmented, dysfunctional financing infrastructure is so highly flawed that patches to it will have very little impact in moving us closer to the ideal of a quality health care system that serves all of us well. In contrast, the patches themselves lead to further administrative waste with associated higher costs.

The obvious answer to churning is to have a single, well-designed Medicare for all program in which individuals are enrolled for life. That would also take care of most of the multitude of other health care financing problems that Dhruv Khullar nor I could address here.

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