On the Third Hand: Three R's certification

At press time, CCIIO had not changed the public website describing the PPACA “premium stabilization programs” in weeks. CCIIO has given more information about what forms to file, and when, through paperwork review processes, and on the semiprivate Regtap website. But GAO, HHS OIG and congressional committees do not seem to be making even as much of an effort to keep tabs on the birth of the three R’s programs as they did on tracking the gestation of the exchange enrollment system, even though it seems reasonable to think that shifting cash from the rich insurers to the poor insurers will be more controversial and more complicated than getting a family of health insurance enrollment websites up and running.

State insurance regulators seemed to be hinting in footnotes in risk-based capital (RBC) reporting drafts that they are not at all sure how the three R’s will work.

Meanwhile, federal regulators want health insurers to file their 2016 rates by May 15, at a time when it seems as if the effects of the three R’s, and the effects of just about all other cost drivers that the federal government has the ability to influence, are being set by a monkey shaking dice inside a Tilt-a-Whirl.

About all a health trends forecaster can honestly say about what the U.S. health insurance policy environment will be like in 2016 is that it will probably be on Earth, and involve human beings. Just about every other parameter is subject to random change.

One lesson of the HealthCare.gov glitch crisis was that officials who brush away questions about their agencies’ work may just be trying to stay out of political trouble, but may also be in way over their heads.

On the one hand, some aspects of the PPACA exchange program and commercial health insurance underwriting rules have clearly been a success. Whatever problems there may be with the exchange system and exchange plans, many moderate-income consumers clearly want access to subsidized health coverage, and will pay a modest amount of cash out of pocket to buy it. 

On the other hand, whether people who were broke want cheap health coverage, and whether sick people are willing to pay market rates for decent health coverage, was never really all that much in doubt. Of course they do. The big question has been whether the sheer size and scope of the PPACA World system, combined with the risk-management programs, would be enough to keep the system from imploding, the way many earlier “health insurance purchasing cooperatives” have imploded in the past.

On the third hand, the only way to get a valid answer to that question is for HHS to set up decent three R’s programs, to see how PPACA World works when the machinery is running about as well as it can run.

Given the stakes, getting cryptic messages from CCIIO on Regtap about three R’s filing requirements is not enough. Someone who knows what good reinsurance, risk corridors and risk-adjustment programs look like needs to physically go into CCIIO’s offices and make sure qualified people are making reasonable efforts to set up the programs. 

Otherwise, how do we have any way to know whether those programs will ever exist, let alone that they will work properly?