As I write this, it’s clear that PPACA World is here, but it’s not too clear whether there’s any dry land, or whether we can take our spacesuits off.
Is that odor I smell poison gas, or just a whiff of what happens when a human being faces too many 1,000-page regulations?
Regardless, this does seem to be a good time to think about the meaning of the term “success” in connection with the Patient Protection and Affordable Care Act (PPACA) public exchange program and commercial health insurance market rules. Conspiracy theorists will say that what most of the people in the Obama administration really want to do is to destabilize the health market and herd everyone into a souped-up managed Medicaid program.
Personally, I think those conspiracy theorists are right.
When PPACA supporters get really angry, their answer to complaints about how the PPACA exchanges work often is, “If we’d gone with the traditional-Medicare-for-all, single-payer option, we wouldn’t have exchange problems.” But we do have exchanges, and exchange problems. The PPACA exchange managers eventually got enough websites, and enough live human workers, helping to enroll millions of people in qualified health plans (QHPs).
We’ll now move through many stages of QHP horror story coverage, such as:
- Basic administration problems.
- Provider-on-QHP network directory wars.
- Provider-on-QHP reimbursement rate wars.
- Insurer-on-insurer risk-management program cash allocation sword fights.
- Insurer-on-Congress risk corridor funding Sumo wrestling.
- Hysteria over QHPs that raise their rates in 2015.
- Hysteria over state insurance commissioners that hold QHP rates too low and leave some state markets without any QHPs at all.
- Hysteria about Connecticut exchange managers lurking like a hungry crocodile and snapping up the exchanges that don’t watch out.
- Hysteria about hysteria.
But, of course, media firestorms happen. That’s how the world is.
A Web-based health insurance broker, eHealth, may have a better indicator of success: A Daily Health Insurance Price Index that shows the spread between what the average monthly health insurance premium was in 2013 and the current market price of commercial, PPACA-compliant coverage.
On the one hand, to make the index a little more sophisticated, maybe eHealth could adjust the 2013 monthly premium base rate for general inflation each year.
On the other hand, the size of the gap between the price of PPACA coverage and pre-PPACA coverage may very well be equivalent to the size of the gap between government bond rates and corporate bond rates.
The corporate bond rate spread expresses investors’ level of confidence in borrowers’ ability to pay their debts. The health insurance price spread could express insurers’ level of confidence in PPACA’s ability to reduce and control health care costs.
The younger and healthier all individual commercial health insurance buyers are, the more they decide to get covered rather than paying the bad consumer penalty, and the better the PPACA risk-management programs work, the narrower the spread is likely to be.
The public exchange spread is bound to widen from now until early 2015, because QHPs will have to set 2015 rates without access to 2014 QHP claim payment data. The QHPs may be more likely to seek pricing guidance from astrologers for 2015 than to have any credible 2014 data to feed into 2015 rate-setting models. But, in theory, if PPACA and the QHPs work, the spread could narrow in 2016.
On the third hand, here’s another possible indicator: How often Republicans bring the next Health and Human Services secretary to Capitol Hill for PPACA hearings per month. If many times, that may be a sign of consumer hostility toward PPACA. If the Republicans move on to other topics, that would be a sign PPACA is holding its own.
If the Democrats start bringing health insurers and brokers in to skewer them for having the chutzpah to still be in business, that would be a sign of success — for National Underwriter readers, anyway.
That’s an indicator I hope to see.