Despite Federal Law, Some Insurance Exchange Plans Offer Unequal Coverage for Mental Health

By Kelsey Berry

One of my previous blogs discussed how potentially discriminatory practices in insurance design may continue to dissuade people with high-cost conditions from enrolling in insurance plans, even in a post-ACA world. Last week, colleagues Haiden A. Huskamp, Howard H. Goldman, Colleen L. Barry and I published new findings in Psychiatric Services on the same issue, except with a focus on an area that has historically been subject to considerable regulation: mental health benefits.

The Affordable Care Act shows considerable promise for extending mental health benefits with federal parity protections to several million Americans, which has been a main aim of mental health policy advocates for decades. However, insurers may still have an incentive on health insurance exchanges to avoid enrolling individuals who use mental health services because their care is more costly than average. In the study, we examined benefits information available to consumers shopping on state health insurance exchanges to assess whether the new insurance offerings were living up to the promise of mental health parity laws. We found that some plans may still be offering people with mental illness insurance benefits that are less generous than benefits for other medical conditions. Specifically, one-quarter of the health plans being sold on health insurance exchanges set up in two states through the ACA offer benefits that appear to violate the federal parity law requiring equal benefits for general medical and mental health care. Such benefit designs may dissuade people with mental health and substance abuse treatment needs from enrolling in the plans, furthering concerns about adverse selection and suggesting that some discriminatory practices persist despite efforts to equalize insurance offerings for individuals with behavioral health conditions. Read More

King v. Burwell: Appreciating the Stakes of the Case

By Rachel Sachs

Yesterday, the Supreme Court heard oral arguments in King v. Burwell, and the Justices seemed split on the central issue of whether the Affordable Care Act (ACA) permits health insurance subsidies to flow to citizens of states that have chosen not to establish their own insurance exchanges.  Trying to predict the outcome of a case like this is notoriously difficult, but I do want to highlight briefly an important difference between the Court three years ago, when it decided NFIB v. Sebelius, and the Court yesterday.

In NFIB, seven Justices declared that the ACA’s Medicaid expansion was unconstitutionally coercive, concluding that the Secretary of Health and Human Services could not condition existing Medicaid funds on a state’s failure to expand Medicaid.  However, the Secretary was instead permitted to offer additional funds to states choosing to expand Medicaid, effectively making the expansion optional.  The Court at the time understood that this outcome could result in a national patchwork, in which certain states would adopt the Medicaid expansion and others would not. Read More

Discrimination, by what yardstick?

By Kelsey Berry

It’s time to talk about discrimination again — this time, in insurance benefit design.

A recent study in NEJM by Jacobs and Sommers has coined the term “adverse tiering” to describe the use of drug formularies by insurers “not to influence enrollees’ drug utilization but rather to deter certain people from enrolling [in the plan] in the first place.” [emphasis mine] Evidence of adverse tiering includes the placement of all drugs for certain condition in the highest cost-sharing tiers of drug formularies. This practice, it turns out, occurs fairly frequently – at least when it comes to a common HIV medication, nucleoside reverse-transcriptase inhibitors (NRTIs). Jacobs and Sommers analyzed the placement of NRTIs on formularies for 48 plans in 12 states using the federally facilitated insurance marketplaces, and found evidence of adverse tiering in 25% of plans. Their conclusion? Many insurers may be using benefit design to dissuade sicker people from enrolling in their plans. This raises concerns about adverse selection, as well as discrimination on the basis of health status – a practice the ACA was meant to address via community rating and guaranteed issue requirements, among others.

The study provides an important data point as we continue to assess whether the ACA is living up to our goals for health care reform. I believe we’ll see several more studies of this nature coming down the line, drawing attention to insurer practices that fail to comply with regulations, that are creative interpretations of vague requirements, or that aren’t addressed in existing regulations and may require new scrutiny. As we digest these, I’ll raise two important points for consideration:

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Monday 2/9: HLS Health Law Workshop with Liran Einav

HLS Health Law Workshop: Liran Einav

February 9, 2015 5:00 PM
Griswold Hall, Room 110 (Harvard Law School)
1525 Massachusetts Ave., Cambridge, MA [Map here.]

Download the Presentation: “The Response of Drug Expenditure to Non-Linear Contract Design: Evidence from Medicare Part D” (co-authors, Amy Finkelstein and Paul Schrimpf)

Liran Einav is Professor in the Department of Economics at Stanford University. His current research focuses on empirical work in insurance and credit markets. Other interests include industrial organization, micro-economic theory, and applied econometrics.

Raising the King v. Burwell Stakes

By Nicolas Terry

Today, the Washington Post ran an interview with Laurence Tribe about the King v. Burwell subsidy litigation (recall that oral arguments are scheduled for March 4). Tribe speculated that Chief Justice Roberts will once again be the swing vote, as he was in Nat’l Fed. of Independent Bus. v. Sebelius. Tribe seems to predict another pragmatic Roberts opinion (and one that might bring Justice Kennedy along), finding the subsidy provisions are at worse ambiguous and that the executive is owed deference as argued by the eminently reasonable Nick Bagley.

Even though Tribe wouldn’t label Roberts as a consequentialist, he does believe that the pragmatic Roberts would be influenced by the impact on the States, the disruption of insurance markets, and the consequences for the newly insured. If the Chief wants more data on those issues he could do no better than to consult two excellent reports from the Urban Institute. The first estimates that a declaration that the subsidies are invalid “would increase the number of uninsured in 34 states by 8.2 million people… and eliminate $28.8 billion in tax credits and cost-sharing reductions in 2016 ($340 billion over 10 years) for 9.3 million people.” Perhaps as important, the Urban Institute’s model also predicts general turmoil in private, non-group insurance markets as the young and healthy would disproportionately drop coverage, causing a predicted 35% increases in premiums.

The second and most recent brief from the Urban Institute begins to put faces on those who will suffer: “Over 60 percent of those who would become uninsured are white, non-Hispanic and over 60 percent would reside in the South. More than half of adults have a high school education or less, and 80 percent are working.”

The executive shouldn’t need such help given the ACA’s clear intent as to how the federal and state exchanges were meant to function. But, if a dose of pragmatism is required to secure a majority of the Court, the stakes couldn’t be any clearer.

Concussion laws lead to increase in health care utilization

By Christine Baugh

Between 2009 and 2014 all U.S. States and the District of Columbia implemented concussion legislation. Generally modeled after Washington State’s Zachery Lystedt Law, most of these statutes require that youth and adolescent athletes are provided with information about concussions prior to sports participation, that they are removed from play if they are suspected of having sustained a concussion, and that they receive clearance from a medical professional prior to returning to sports participation. One of the main purposes of the Zachery Lystedt Law, and presumably those laws modeled after it, is to prevent the catastrophic neurological injury that can occur when a youth athlete returns to play too quickly following a concussion.

Gibson and colleagues recently published their study “Analyzing the effect of state legislation on health care utilization for children with concussion,” in JAMA Pediatrics. This study compared concussion care utilization for adolescents age 12 to 18 in states with and without concussion legislation using an insurance claims database. After controlling for potentially confounding factors such as median income and number of insured individuals per state, Gibson et al. found that states that had implemented concussion legislation had increased concussion care utilization (92% increase) compared to those without legislation (75% increase). The increases in care utilization were driven primarily by increases in visits to the doctor’s office and to a neurologist, not through increases in emergency department care, which the authors described as encouraging.

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Cost Containment and Cost Shifting

By David Orentlicher
[Cross-posted at Health Law Profs.]

With Harvard professors protesting their increased responsibility for health care costs, we are seeing just the most visible aspect of the recurring cycle described in “Tragic Choices.” As Guido Calabresi and Philip Bobbitt observed in that book, society tries to defuse societal conflict by hiding its rationing choices through implicit forms of rationing. Thus, for example, health care insurers relied on managed care organizations in the 1990’s to contain health care costs with the premise that managed care would preserve health care access and quality while squeezing the fat out of the health care system.

But after a time, the public realizes what’s going on and rebels against the implicit rationing policy. Hence, managed care’s effective cost containment strategies, such as limited networks of physicians or primary care gatekeeping, were dumped, and health care costs began to climb again.

What did health care insurers turn to after abandoning serious managed care? Shifting more of the costs of health care to patients through higher deductibles and higher copayments. Insurers didn’t need to identify limits on their coverage because individuals would respond to their higher out-of-pocket costs by hesitating to seek care. Costs would be contained by “market forces” rather than rationing. But the Harvard professors and other Americans are now rebelling against the shifting-of-costs policy, just as Calabresi and Bobbitt predicted in 1978. (Indeed, they even included the shifting of costs as an example of an implicit rationing strategy.) Read More

First Circuit Upholds ACA’s Medicaid Maintenance-of-Effort Provision Against Constitutional Challenge

By Rachel Sachs

Last week, the First Circuit Court of Appeals upheld the ACA’s maintenance-of-effort provision against a constitutional challenge brought by the Maine Department of Health and Human Services. The court’s opinion has received relatively little media attention, but it should be of interest to all in the health policy space. Its post-NFIB v. Sebelius Spending Clause analysis will be relevant to scholars who are interested in King v. Burwell, challenging the grant of subsidies on health insurance exchanges run by the federal government. Its procedural posture will fascinate those who are interested in plural executive systems. And its fulsome discussion of the Medicaid program and its history will be of broader interest to health policy scholars.

States participating in Medicaid must agree to cover certain groups of people up to certain income thresholds, but states may choose to expand these groups in various ways. Relevant to this case, most states have increased the income thresholds for covering children or pregnant women through the SCHIP program (sometimes quite substantially), and some have extended SCHIP to include low-income 19- and 20-year-olds. Maine had done both, providing coverage to 19- and 20-year-olds since 1991. The ACA subsequently included a maintenance-of-effort provision (42 U.S.C. § 1396a(gg)), requiring states participating in Medicaid to maintain their eligibility standards through 2019. As such, in 2012 HHS denied Maine’s request to stop providing coverage to 19- and 20-year-olds.

Maine’s Department of Health and Human Services sought review in federal court. Maine’s executive branch was not united in this choice: the Attorney General declined to represent the state and even intervened on the side of HHS Secretary Burwell. This mirrors a phenomenon that was often observed in the context of the Medicaid expansion, in which several states whose Attorneys General joined the legal fight against the expansion in NFIB subsequently expanded anyway, as that separate power was exercised by Governors and legislatures.  Read More

HLS Health Law Workshop with Leemore Dafny

HLS Health Law Workshop: Leemore Dafny

November 10, 2014 5:00 PM
Griswold Hall, Room 110 (Harvard Law School)
1525 Massachusetts Ave., Cambridge, MA [Map here.]

Download the paper: “More Insurers Lower Premiums: Evidence from Initial Pricing in the Health Insurance Marketplaces” (co-authors, Jonathan Gruber and Christopher Ody)

Leemore Dafny is a Professor of Management and Strategy and the Herman Smith Research Professor in Hospital and Health Services at the Kellogg School of Management at Northwestern University. Her research examines competitive interactions among payers and providers of healthcare services, and the intersection of industry and public policy. Dafny’s work has been published in journals such as the American Economic Review and the New England Journal of Medicine, and featured in The New York Times, BusinessWeek, Bloomberg, and The Washington Post.

Current projects include studies of consolidation in the U.S. hospital industry and the kidney dialysis industry, organizational form of provider practices, copayment coupons for prescription drugs, and the implications of for-profit ownership of insurance companies.

Limited Access to Contraceptives in Illinois

By Alexandra Gross

What does “access” really mean for the purposes of PPACA’s contraceptive coverage mandate?

For two years, I’ve been enrolled in Loyola University of Chicago’s Student Health Insurance Plan, provided through a Blue Cross Blue Shield Illinois (BCBSIL) PPO plan. During this time, I have had to pay out-of-pocket for my contraceptive method every month. As a student studying health law, I was aware of the ACA’s contraceptive coverage mandate, § 2713 of the Public Health Services Act, which requires non-grandfathered health insurance plans to provide access to a full range of Food and Drug Administration approved contraceptive methods without cost sharing. The contraceptive coverage mandate reflects Congress’ determination that “access to preventive services without cost sharing is necessary to achieve access to basic health care,” particularly for women, as they have unique health care needs. The contraceptive coverage mandate also states that plans and insurers may impose “reasonable medical management techniques” to control costs and promote efficient delivery of care. For example, plans may cover a generic drug without cost sharing, but impose cost sharing for the equivalent brand name drug. Even with the imposition of medical management techniques, I still could not figure out why every single woman I talked to who was on my plan had a copayment of twenty dollars or more a month.

My colleagues and I assumed our issues with contraceptives were a result of attending a religiously affiliated institution. We were wrong. Loyola has properly sought a religious exemption from providing contraceptive coverage and communicated to the students and employees that BCBSIL should be accommodating us directly, without Loyola’s involvement. However, in practice, the accommodation is failing the students and employees at Loyola University of Chicago.  Read More