Jackson Jambalaya

Starting to get a little deeper into the bill now. I am just reading this bill page by page and posting my observations here. Feel free to clarify or correct in the comments section. Fire away. For a collection of all readings, see the section on the right side of the page.

Page 130. Part II- Consumer Choices and Insurance Competition Through Health Benefit Exchanges.

Page 130. Section 1311: Affordable Choices of Health Benefit Plans. Section 1311 sets up the Health Benefits Exchanges. Section (a) on page 130 is "Assistance to states to establish American Health Benefits Exchanges". Section (a)(1) states the government will award money within a year after the bill's passage to states to set up exchanges. The grants can be renewed but can not be awarded after January 1, 2015.

Section (b) mandates "each state shall, not later than January 1, 2014, establish" an exchange. I see one problem with this section and its called New York v. U.S. (1992) where the Supreme Court ruled the federal government could not order states to regulate or perform certain functions. It said the federal government could place conditions on grants or take over the function itself, but it could not treat the state as a division of the federal government. The question here is can the federal government order the states to set up exchanges if they refuse the grants. Interesting.

This section is pretty vague on what an exchange actually does. Just states it will "facilitate" the purchase of "qualified health plans" and offer a program that helps small employers enroll their employees. It decrees the exchange shall "ensure a sufficient choice of providers" (Hmmm... what if the providers shrugged and left the business?). The exchange must include "essential community providers where available, that serve predominantly low income-medically-underserved individuals"

Section (F) standardizes the paperwork by requiring a "uniform enrollment form" employers can use. Section (3) on page 135 states the government will establish a rating system for health plans in terms of "quality and price". Section (4) states the government will establish an "enrollee satisfaction survey system" for patient feedback for insurance plans. Section (5) on page 136 states the government will operate internet portals and provide a template to the states for their portals as well. Internet portals will help employers and individuals find health plans for which they qualify and determine eligibility. This link is an example of how such portals as used in Massachusetts. The exchange shall offer an open enrollment period by July 1, 2012 and will be offered annually (page 137).

Section (d) on page 138 states it will be a government agency or nonprofit. Can't outsource that to the private sector. Section (d)(3)(b) on page 139 allows a state to require more benefits than is required by the Secretary.

Well, we've discussed exchanges for awhile now, but what exactly is it they will do? Section (d)(4) on page 139 answers this question. The exchange will
1. certify, recertify, and decertify health plans as qualified for the exchange.
2. Operate a toll-free hotline to for consumer help.
3. Maintain an internet website for enrollees and prospective enrollees.
4. Assign a rating to each qualified health plan.
5. Use a standard format for "presenting health benefits plan options"
6. Inform individuals of eligibility requirements for Medicaid, CHIP, or any other public program. The exchange will enroll such qualified individuals in those programs
7. Make available online a calculator to determine the application of any premium tax credit. Hmm.... all this online stuff, what about the people who don't have internet access or don't know how to use a computer? The elderly, the poor, disabled. I wonder what little solution they have cooked up for that problem.
8. Can issue exemptions to individuals who can not find a qualified, affordable health plan on the exchange
9. Requires the exchange to notify the Secretary if an employee was exempted because the employer did not offer a qualified plan or it was not affordable.
10. "Provide to each employer" the names of employees who terminated their coverage.
11. Publish the average costs of licensing, regulatory fees, administrative costs of exchange, any other payments required by exchange online. Page 144-145.

Section (5) on page 143: No federal funds for continued operations. Requires the State shall ensure the exchange is self-sustaining by January 1, 2015. This requirement includes "allowing the exchange to charge assessments or user fees to participating health insurance issuers" or to "otherwise generate funding, to support its operations." So the exchange will likely be one more cost added to health insurers. If that doesn't work, then the state will have to cough up the money. Uh-oh.

Hmmm... I see a HUGE New York problem here as its a direct unfunded mandate to the states and potentially unconstitutional.


Section (B) on page 144 bans "wasteful use of funds". It states no "staff retreats", "promotional giveaways", "excessive executive compensation", or lobbying.

Suppose the health insurer needs to raise premiums? Section (2) on page 146 requires health plans seeking certification to "submit a justification for any premium increase prior to implementation of the increase." This information must be posted on the website.

The state can also establish exchanges that operate across state lines pending approval by other states or exchanges that serve a "geographically distinct area". The state can also "elect" to "authorize an exchange" to "enter into an agreement with an eligible entity to carry out one or more of the responsibilities of the Exchange". Oh, I can see the pigs lining up at the trough right now for that one. Oops, not pigs, but companies like Healthsystems of Mississippi that get millions of dollars a year to review Medicaid claims. Such entities can be a state Medicaid agency, a private corporation with experience in health benefits coverage but can not be a health insurer.

There is even a section for "Rewarding Quality Through Market-Based Incentives". Section (g) on page 148. The bill (Section 1 on page 148) states the exchange will set use "increased reimbursement" or other incentives (wonder what those could be. Could they be punitive in nature?) to improve "health outcomes" The exchange will thus monitor case management, reporting, chronic disease management, and "medication initiatives" The exchange can offer incentives for activities designed to "prevent hospital readmissions" or reduce medical errors by using "best clinical practices". Ah, is the government going to determine what the best practice of medicine is instead of the doctor? Apparently so as Section (2) on page 149 states "the Secretary, in consultation with experts in health care quality.. shall develop guidelines". Yup. The helath care plans are required by Section (3) to report the activities they've implemented for this so-called market-based strategy. I love it. Congress calls this market-based but the government determines what the "best practices" for health care providers should be.

Think I'm through with exchanges? Nope, because there is a section for NAVIGATORS. Thankfully, the navigators require no spice but Section (i) on page 151 states "an exchange shall establish a program under which it awards GRANTS to entities described in paragraph (2) to carry out the duties described in paragraph (3). What exactly are these "entities"?

The entity must "demonstrate" to the exchange it has "existing relationships" or could "readily establish" them with "employers, employees, consumers, and others likely to be "qualified to enrolled in a qualified health care plan". Hmmm.... WHAT lobbyist stuck that section in the bill? I can see it now: unions, the NAACP, trade associations, Chamber of Commerce, etc, everyone can get in on the gravy train if they are a "navigator".

Kingfish, you are making this up. Actually, I did come up with that list off of the top of my head because I see in section (2)(B) it states "Entities described in subparagraph (A) may include trade, industry, and professional associations, commercial fishing industry organizations, ranching and farming organizations, community and consumer-focused nonprofit groups, chambers of commerce, unions, small business development centers, other licensed insurance agents and brokers.."

Everyone can get in on the gravy train. The insurance industry even brags about its work to get insurance agents included in this provision. What exactly are these "entities" supposed to do?

Section (3) on page 152 states they shall promote the "availability of qualified health plans", "distribute fair and impartial information" concerning enrollment in said plans, the availability of premium tax credits, and information on copays and deductibles. The navigator shall "facilitate enrollment", and provide the information "in a manner that is culturally and linquistically appropriate to the population being served". Ok, instead of Miami, what about the coonasses in Morgan City?

However, don't worry, the Secretary is looking out for you as in Section (4) on page 153 it states the navigator can't be a health insurance company or receive any compensation from health insurance companies for signing up individuals in a health care plan. BUT they can still get a grant. Nice grub if you can get it.


Got all that? Sorry. Wanted to cover the section in one post. I know its long but I thought it would be harder for the reader to understand if I broke up a long post about exchanges into several smaller ones.

Copy of bill