Transcripts For CSPAN3 Brookings Institution Hosts Discussion On The Affordable Care Act 20170214

And mrs. Clinton. If you use it, everybody will know that i was the source. And ways ve i was very worried about that. But i trusted them. Sunday night on q and a. Real j care experts recently outlined how the Affordable Care act works in their state. The Brookings Institute in washington hosted the twohour discussion on the Health Care Laws successes and failures. Good morning and thank you for coming. Welcome to this session is can which is a joint session of the Brookings Institution and the Rockefeller Institute of government. And were going to talk about the results after fivestate study on how competition is working in the Affordable Care act marketplaces. And what we might learn from this study and how we think about competition in the marketplaces Going Forward and to officially open us up. I welcome my colleague Richard Nathan from the Rockefeller Institute to the platform. Thank you, alice. I dont work at brookings so maybe i shouldnt welcome people. But i worked here 11 years, and this is a while ago, and this is one of my Favorite Places to work with colleaguees. It is pleasure today to welcome to to this conference, as alice said. The Brookings Network study of the competitiveness, she mentioned this, of marketplaces aeb Health Insurance nongroup Health Insurance marketplaces in five states. California, florida, michigan, North Carolina and texas. And we have a summary report and we have five reports almost big enough for a book from the five author groups of the individual states that i just mentioned. Each of the author of the summary report is michael more pips mike is. Mike is at texas a m, about Field Research, and this is my plug, mike he, is auj author of a widely use webd it is current, informative and helpful textbook on Health Insurance. He is my teacher. I know a lot about the subject which isnt the subject i grew up on but i learned a lot. He is the lead on our report and alice, codirector with the network on Rockefeller Institute, and head of the Rockefeller Institute is here. Worked there too. Alcisco director with me of the rockefeller brookings Field Network research and is the second author of the summary report that mike is going to present. The writing Group Includes other people. Me, and mark hall, and mark hall is here. Hes the author of the North Carolina report. You will hear from him twice. Mark is the fred d. And Elizabeth Turnage profess hor of law at Wake Forest University in North Carolina. Copies of the summary report are here today and i want to add as i tell you that,cate lin brandt and the staff of the Brookings Institution center on Public Policy research have done a wonderful job on organizing this conference and producing these reports in a report that, in a form that i think is very accessible. I hope you will download all of the reports and read the summary report. And itll be helpful and contribute in this turbulent time for Health Insurance policy making. Ive nef he seen the like of it. The five states that were studying and there are 40 states in our whole network, the five states that were studying are different. What is happening in the country, throughout the country in states that not only as states as michael wineburg our california colleague often reminds me, in local markets. Tip oneill said all politics is local. Is, he said. And indeed Health Insurance markets are local. Even within markets. There are differences that weve learned about and written about. Were out in the field, indepth, using experts, using every piece of economic demographic and he program data we can bring to bear to understand institutional change which something happens, institution change, State Government change rules, federal governments, providers change their roles. Advocates change their roles. So you need to not only know the numbers but you need to know the numbers and put them together with understanding of what is happening and implementation and thats a big subject that ill just touch on. But anyway, this is typical of american federalism. We will have a chance today to hear next from mike. Present our summary findings. And that will be followed by a panel of individual Field Researchers. What they see, what they wrote about, how their story fits in to the overall story. That panel will be moderated by my colleague, weve spent a lot of time working together, tom gates of the Rockefeller Institute. Alice will chair a second panel of National Experts on Health Insurance. People who can look at our work and help us think about what were learning. Along with two of our associates. Michael luke from colorado who is head of the Colorado Health institution which is a very strong fwrup. Many states have Health Institutes and theyre very available resources for the kind of work we do. They have all the expertise and all of the local, state and regional knowledge he to understand what is happening to any policy as it plays out in a country as big and complicated as ours with a federal structure. Our new studies focus on the changed role particularly of insurance companies. They are doing Something Different now. Youve got a moment in which they are banned from doing medical underwriting, so everyone can come in, preexisting conditions and guaranteedi guaranteed issues. It is fundamental to the Health Insurance and Health Insurance is big, if not bigger than any other sector in our economy. So for five years, i started this five years ago, and i thought i retired. My wife said, no, you really didnt, we set up the network. We have 40 issue fretd website. We have followup reports non what states decided to do. We figured most of them would say, were not letting the feds in here, were going to do it. But indeed the feds are operating most of the marketplaces. So this gets to the heart of how American Health care has changed institutionally, institutionally and relying heavily on many sources of data and many peoples expertise. We have examined 25 local markets. Five in each of the states. And you have read in them the reports. Can you read about that. So i turn next to my teacher. He will design what we have learned about competition. In local economic democratic and Financial Data and exclusive interviews with different people in different places in the world of health care in america. How have the exchanges worked . How are they working now . How are they not working . What do we know about the exchanges . That affect cost and nature of health care which of course affects millions of people who are in these mammoth systems which isnt the hole of it. Theres a lot more to Health Insurance thanner what looking for to individual nonmarkets but thats where the big changes are. So mike, the platform is yours. Thank you, dick. Im delighted to be here. If i knew would you do that sort of introduction, i guess i would have prepared a mid term. What we like to do is walk you through sort of the highlights of what we have done with the five state study. As dick said, this is a team effort. It relies on alice to keep us focused and keep our feet to the fire in answering the questions we were charged with. I cant say enough about dick nathan and his ability to sort of put together a network of field rehe searchers across 40 states. Calling people up out of the blue to say, were doing this interesting project, would you like to be with us. And people have just joined right in. Then we have a strong set as indicated across all the states. So we want to describe the potential indio sin consideratic nature of the marketplaces in each of the states and it was our prezungs going in that the states were going to be very different. And thirdly how the exchanges might evolve, how they might evolve, give that informing to other researchers and serve as a roadmap for all of us as we look at repeal replace and repair. There isnt much background that i think i have to provide for this audience but there are a couple of key things that i think are worth focussing on. As we all know, aca marketplace just completed their fourth open Enrollment Period. What field investigators did is examine all of the open enrollment from the beginning through the opening of this, the fourth one. It is important to appreciate that within the aca, there are rating areas in each of the states. Rating areas are geographic areas in which, if they offer coverage in that area, must quote the same premium to people of the same age and smoking status. But the thing to appreciate is how states are configure rating their areas. Some are using metro areas are their unique rating areas and Rural Counties make up the last in the states and others use geographic sections of the state. But its important to appreciate that all of the states approach their definitions of the market somewhat differently and insurers dont have to participate in all of the rating areas more participate in all of the counties within a given rate area. It is important to appreciate just from that, that states are potentially very different and very different kind of insurance responses within the states. Because of the flexibility dwranted think about rating area approach. So why these states . We chose california because its a Democratic State that expanded medicaid. And it adopted a statebased exchange of the act of purchaser variety and the fact its the only state that has done that. We chose michigan. Its a state with Republican Leadership that expanded its Medicaid Program in late 2014. And adopted a Partnership Model of exchanges. Florida is an oppositional state that didnt expand medicaid and use he the facilitated ex he change. And the particularly interesting thing going in is that it is two states in which each county is its own rating area. North carolina, another state thats politically opposed to the aca. Didnt expand medicaid. Tutu used a federally facilitated exchange. The reason for including North Carolina is that there is early evidence there that insurers were working with local providers to cobrand product that would allow them to compete with the dominant insurers. We wanted to see how that was working out. Texas is an oppositional state. It didnt expand medicaid either. It used the federally facilitated exchange. It is one of the few states that doesnt approve premiums or for that matter assist exchanges in any way. Early evidence suggested that there was the potential at least for some substantial competition and he in some areas of the state. And so we wanted to see how that all played out. So overall we have looked for some geographical diversity. As you see from the states there is also racial and Ethnic Diversity and all of this. And we look for places where we have Strong Research teams. So weve got, what i think, is a very good set of places he to observe. A little bit on methods. Im an economist and do a lot of aggression sort of things. Field research isnt like that. Field research actually asks people who potentially know something about, and they do know, something about the questions at hand to talk to people in the communities who know something about whats going on. And so its an opportunity to sort of build on local expertise. The team developed discussion options. It looked at issues of structuring the networks within the insurer plans. And it looked at changes in the environment that potentially took place as we watch the four years unfold. But having said that, its not just sort of a set of questions that we follow by rudoute. It discusses into where the issues are from the point of view of the people on the ground. So we come away with i think a very nuanced and rich sense of what the states look like. Conducting 15 to 90minute interviews, some in person, some by phone, with Health Insurers, with Insurance Agents and brokers and navigators and with other policy experts. Sometimes the media in the states. Now of course theres a point of generalize ability here. You cant generalize from five states and in particular from five states when one of your key conclusions is they are all very different. There are a number of themes that emerge from what we found. Thats what i want to tell you a little bit about now. First as dick indicated, the key findi finding in all of this is that Health Insurance markets are local. Now ive been looking at Health Insurance markets for 20 years or more and it is only in last three, four years and certainly through the field work that weve been doing here that ive appreciated just how local these markets are. Its a mistake to sort of think of idaho as a market. A mistake to think of texas as a market. The Insurance Markets are much more local than that and what that means he is what we found is that there is a lot of divergence within states. Certainly the case that the extent of competition differers between urban settings and rural settings. But thats just the beginning of it. There are big differences between urban areas. As our individual report shows, in san, francisco it is much ls intense than it is in los angeles. Miami is much more competitive than tampa. Detroit more competitive than flint. The nuances matter and the nature of the local markets matter. And the reason they matter is because insurers, you know, are managed care entities. They form networks. And to be able to be successful in a local market, you have to have a network of hospitals and physicians and other providers who agree to prices that you believe did make you competitive. So if its the case that you cant establish a network, its, you know, well not impossible to be able to offer an insurance product in that setting. Clearly thats the case in modern america and modest urban areas. Theres a single network. Sometimes a single hospital. You decide you want to come in and compete against the dominant carrier in the state. Youve got to be able to negotiate meaningful prices with that provider. And that turns out to be difficult to do to give you a competitive advantage in the insurance side. It also turns out to be a problem sometimes in large metro areas. In texas for example we talked to one insurer who said we were pretty successful in putting together what we think was a very good network in houston. We would never get something to work in dallas. So it is not just matter of sort of we are here, in the state, and because we can provide it on the eastern side of the state we can provide it on the western too. It depend on the loek he al market. Some big impli kagcations there. It is unrealistic to expect to find results or indeed there are Similar Solutions everywhere. Second, premiums as we have found are lower in areas where there are greater numbers of hospital and other providers. Without that competition at the provider level, its difficult to see lower prices at the insurer level. And indeed we are told from our interviews that the decades of consolidation that weve seen going on in the provider market have made it difficult for insurers to compete. Having said that, if indeed these markets are local, that suggests theres opportunities for regional insurers and other insurers who cobrand with local providers to establish a successful niche in their local market where they can compete pretty successfully. Or at least we think they can. And weve seen some evidence of that. The other point though is that if indeed these market are local and they depend on the nature of those local networks of providers, that says that at least to us, that meaningful interstate Competition Among Health Insurers may be very difficult to achieve. Its not enough that that regulatory barriers are reduced. It is putting together the networks and thats the difficult thing. Soerkt second major finding. In the first year or two of the exchanges, the insurance have very little information. They had been insuring this pool of individuals at all. They had some information perhaps from their existing individual market. They had some information from the group market. Maybe went to a data like meps. They had little on these individuals. As a consequence a lot of them were timid about entering the market. But after that first year where they saw that premium drove enrollment and that enhe rollment was relatively low, we saw lots of new enfultry in 201. On the expectation they could experiment in the market. We saw entry and potential for real competition there. But then in 2016 rolled around and insurers had data and they believed and that data was scary. High lutization likely across board. That led to concern about high universal selection. Led to withdraw from local markets and states and it is important to point out that it is Just National carriers withdrew from full states. It is also the case that curious who remained withdrew from some markets, counties in rating areas and withdrew some of the products they were offering while still remaining in the exchanges. And also the case, as you all know, we have seen substantial premium increases as a consequence to all of that p. M. Implications to this is that there is certainly an open question as to whether those rather large premiums we have seen in 2017 are getting ahead of losses that they anticipated. There is concern about the adverse selection relative to the general sickness of the risk pool and what carriers are able to do about it. And theres an open question about those special late it open enrollment as im sure youve all heard, there are opportunities where people can enroll in the Exchange Plan after the open Enrollment Period closes. And some insurers he have argued that was an enormous drain on them. That late enrollees were extraordinarily expensive and administration, past and present, are working at al tern piffs to tightening those. It is an openended question as to how meaningful those claims are. In terms of the original insertions and whether or not changes would make a difference. It turns out that there were, from our review, mounting losses that stem from high utilization. And that those losses can overwhelm competition. In all of our states we saw the withdraw of insurers. In North Carolina and texas, some metro areas went from five and nine insurers to suddenly having only three. Florida had three insurers withdraw. California and michigan also saw this was not as big a problems as elsewhere. We saw the plateauing of alternative forms of insurance innovation. And certainly insurers have viewed themselves as having enrolled super folks. That suggests an issue of Risk Mitigation. And across our states the risk adjustment mechanism and short term other transitional mechanisms were dealing with the adverse selection that they saw. Particularly true in florida and texas. As one insurer told me in texas. So in the first year we set our premiums relatively high and weve got, in my words, sick draw of the population. So weve lowered our premiums to attract more people at healthier draw and we did but six months and we made money, and six months later we got the risk adjustment fee and we lost money. So we set our premiums high and lose money. Set our premiums low and they lose money. The Risk Mitigation matters issues matter. I think the point there is if we want to prohibit insurers from using preexisting conditions to set premiums as aca does and as many have said must continue to be the case in the future, that means we have to somehow deal adequately with the risk adjustment, Risk Mitigation problems. Maybe thats the bitter funding of existing mechanismes. Maybe that means looking at other mechanisms like high risk pools. Another finding is clearly what we have seen in all this is a shift in Narrower Networks. All of this is well under way. There is very good evidence over the last 20 years that Narrower Networks allow insurens to negotiate lower prices with providers by essentially Trading Volume for price. Clearly that is in the mind of insurens as they moved largely from ppos to hmos. Theres an underlying threat in all of this as well though. That has to do with whether or not moving to a narrower network can affect adverse selection. Or your fear of attracting high risk folks. So if one excludes premium providers, potentially that leads people with those related diseases to seek insurance elsewhere. There is some evidence of that and also evidence that premier providers are some of those that have been working with insurens to cobrand and certainly the case that Medicaid Managed Care plans have, while they have their own relatively unique nature of their networks, they have also sort of provided access to coverage in some of the premier networks, premier providers, excuse me. So neyoarrower networks continu. There there is concern among brokers, agent and policy experts that consumers are only beginning to be aware of what the neyoer networks mean to them. There is pretty good well, actually very good evidence that Narrow Networks are costreducing. But in some sense he this can be misleading given the nature of the local marks that the weve talked about. As one provider said to us, so you know, were the only hospital in town. The insurer moved from ppo to hmo. Didnt have much of an impact here. Consumers may be critical to enhancing enrollment. Insurance is complicated. Even those of us with plan sponsored coverage. Consumers have been largely focused on price but increasingly the navigators tell us that they are able to appreciate the nature of deductibles and copays. New challenges have to do with Narrower Networks, balanced billing and planned withdraw and having to move from one plan to another. Some states have been very good at outreach, florida in particular. California and North Carolina as well. It is important to us also to appreciate that it wasnt just navigators that provide information. Safety net providers play a Critical Role in opportunities like enrollment fairs to encourage enrollment. And brokers and agents feel they have, you know, lacked incentives to participate. The ability to increase enrollment in plan as we have conclude depend critically on the ability to have informed set of consumers and to provide mechanisms to do that. An additional point is that insurers may indeed be waiting in the wings. Yes, we have seen a lot of withdraw from the exchanges. But for most part, insurers who have withdrawn from the exchanges have remained in aca off exchange compliance. Much has to do if you withdraw from the state entirely, it is five years before getting to come back. And so there is a sense in many of the communities weve looked at that insurers have hedged their bets and withdrawn from the Exchange Product but kept Exchange Products there so that they can sort of rejoin the fray if the economic and political circumstances change. And is what that suggests is a replaced repaired aca may see relatively rapid reentry of insurers. And indeed that if that the case, much of that new growth may be local and regional insurers rather than national players. Other finding has to do with managed type care for insurers. They have been particularly successful where the more conventional insurers have struggled. It is an open question as to why thats the case. It may the medicaid type insurers tend to have Narrower Networks made up of special safety net providers. They also have a pool of enrollees who often transition back and forth from medicaid. And the relative question is, to what extent that kind of experience can be generalized to the rest of the populations and indeed whether or not it can. Finally, while the individual states dont sort of talk about the effect of medicaid expanse per se, when you look across the five studies, what you see is those states where there was Medicaid Expansion, the role of that expansion and the exchanges was not discussed. But in the other three states, it was. And the assertion by people in the field was that a Medicaid Expansion would have helped. It would have taken those people at the hundred to 138 will of the poverty line, put them into medicaid and argue pli takably m out of the risk pools. And it may be the case that provision of Medicaid Expansion brought people in. They discovered they werent eligible for medicaid but were eligible for a subsidy and rolled. In any event, there seems to be a strong sense that Medicaid Expansion matters. There is also a point in North Carolina that was emphasized about, as you may recall in the first year of the exchanges, states had the option to allow noncompliant plans to continue or not. And the argument is by preventing those from continuing, that mitigated some of the potential adverse selection problems. So future research for us. We think we need to know more Going Forward about how insurance competition will fair post repeal, replace, repair. If they can offer a wider range of coverage, how does this affect availability in availability, premiums, enrollment. How well do new Risk Mitigation approach work . Do more flexible interstate insurance opportunities enhance competition . Not too much. How do local markets involve in do local insurers grow and prosper . Does a continued provider consolidation inhibit competition . What about acos . Do they enhance competition or retard it . Whats the future of Narrow Networks networks . To say the obvious, there is much more to do and little time. Thank you. Thank you very much. Im tom gays, director of Rockefeller Institute and we will have our state panelists. All right, thank you very much. Theres always been a disgugs about the Field Research network and how they operate. We have been doing this okay. Were getting adjusted right now. Operate. We have been doing this okay. Were getting adjusted right now. And how they operate. We have been doing this okay. Were getting adjusted right now. Thank you very much. Okay. Were getting we are adjusted. The i do want to thank brookings. Thank you to alice, dick, kaitlyn, matt lin, bob, in putting this together. Lin, bob, putting this together. The Rockefeller Institute does have a long history. Thank you to dick nathan for putting together these field works which we have done in medicaid, reform, health care development, many other areas as well. We have often had some very good researchers in our Research Teams across the country when we have the multistate systems. But this team is particularly great. We have some very distinguished folks and and they are all quite diverse, too. Thats one of the nice things about it as well. You know, this is an inductive Research Approach and nice to have people with different backgrounds, different disciplines, to be able to have developed insights, different types of insights in understanding and observing how these National Initiatives are implemented on the ground. This team in particular and especially the five people here, do have a lot of differences. Weve got differences in disciplines. We have two economistes. Political scientist. Lawyer and Public Health specialist. Their careers have been different as well. Three of them are traditional k academics. Not too traditional. They have been very applied, very active people. One Nonprofit Research advocacy organization. One former top government exec piff now leading the Research Center at major university. So all of them bring different sensitivities, different trainings actually to bear in their thinking. What i want to do since you do have your bios, everybody, you have already been listed in terms of the the major titles. I will just simply say that we will start off in just a few minutes of a summary of their major findings. Just a few for each one of them. Then we will have a series of questions. Ill ask a few questions. At some point i will let everybody else ask questions as well. And your questions will be brief and he to the point. When we when i give you that opportunity. We are going to start off with a the blue state of california. We are going to end with the red state of Michael Morrisey in texas. Michigan will be second. Third will be florida. Fourth will be North Carolina. Michael wineburg is president Bay Area Council of economic institute. For michigan we will have mary ann phillips, executive of Health Care Transformation at university of michigan. Trisha borne will talk about florida. Charlotte hodges eminent scholar in Risk Management and assure unat Florida State university. Patty, since we have already used 15 second of your time, you get a little more North Carolina, mark hall. Director of health law and policy program. Fred d. And professor of law Wake Forest University and nonresident senior fell heo aow brookings and same for you and we have mike. So micah, start off. All right. Im intending on winning the oscar for best presenter today. And to do so im going to tell a story about la la land. Now, in this case, by la la land, i mean region 16 of cover california, californias aca marketplace. That is the western half of los angeles. And when i talk about will really reinforce conclusions that michael just shared with the entire group. I will give you some local flavor. So los angeles has 5 Million People who live in it. As large as many states. Diverse population. Very urban area. And there is both a lost providers competition in los angeles as well as a lot of insurer competition. On the provider side and the Los Angeles Area there are 80 hospitals. Not as much hospital consolidation in los angeles as there is in places like San Francisco and other urban areas. And on the insurer side there are seven different insurers competing in this area. And of many different types. Kaiser me kaiser pe kaiser permanente, our Network Delivery system. Conventional insurens with ppos and hmos, sort of anthem plan, blue shield plan. You have oscar, the plan sort of new wave were going to use a lot of tele health and run by jared curbeners brother, and hasnt done very well. Im sure we will get a tweet pretty soon buzz that because ts a totally legitimate thing to do. Ecause that is a totally legitimate thing to do. Then, very interesting, couple of medicaid plans. The exchange did a lot of things. Active exchange isnt just negotiating for prices, it is really thinking about do the marketplaces work. Do they have enough competition. Is there something to do to bring for competition into the marketplace. Funny thing about california, since a bunch of people would be prefer to implement a singer payer system and did the best job at implementing a marketbased perform. They said all right, i guess we like this now and thought about if were going to have competition we need competitors. No competitors no competition. Hsas dont make competition where there is one hospital in your town. A lot of competition in los angeles. One of the really interesting things is, so you hear these big headlines, insure urs raising premiums 45 . Of course almost everybody doesnt pay that because they are subsidized. Because in los angeles a big issue is that last year malina lowered its premium. Malina is a primarily Medicaid Managed Care plan. Competing in the individual marketplace in california and actually lowered their premiums. Now the issue with hering your premium is that means that all of your competitors, you know, who are raising their premiums, and the people who are purchasing through your competitors, actually see a, like real substantial premium increase. And we have seen that, consumers increasingly, are shopping on price and the first couple of years in california they didnt do it because they didnt know what was going on. Lets just default to brand we heard of. But in the last couple of years they started shopping price. They will buy malina. They will buy l. A. Care. They dont need blue shield of california just because thats a name they are familiar with and they seemed pleased with the networks. Thats something folks are finding. Most health doesnt care work and you die. No matter what facility you choose, right . Ultimately you will be disappointed with this Consumer Product because youll be dead. Right . So they choose malina or l. A. Care and they seem carely happy with this product and it is s substantially lower priced. This is creating a tremendous amount of pressure on the higher cost hospitals in los angeles. And we are seeing them negotiate absolute race concessions with the insurers to remain competitive in these networks. This is actually bending the cost curve. Theres a mot more to say but the thing that makes me completely want it tear my hair out, you know, ran into mark hall yesterday, he is like, mike, your beard is a lot more gray than the last time i saw you. Thanks, mark. The reason he it is more gray is that i see, like shocker, you implement a law and it works, right . So one of our conclusions is, if you just dont do this huge part of the law, Medicaid Expansion, maybe it doesnt work that well. Well sb surprise. If you are an oppositional state and do everything you possibly can to keep a law from working then you complain that the law isnt working, it makes no sense. Youve got somebody, you want them to run a hundred yard dash and you cut their legs off at the knees and youre like, they arent running quick enough. This a failure. If you actually focus on making the aca worth then shocker it might actually work. And if we repair and replace and do whatever but then the blue states decide were not doing this, were fighting it in courts, it is not going to work there either. You need to choose a system and implement that system. When do you it in a place like california it could work. But the important thing that ill just conclude on is again local market. Local competition. So you cant put together competing networks in an area with only one hospital system. Right . If we really care about competition we need to care about competitors. And the competitors we care the most about are actually not the insurance plans but rather the providers. So you know, youve got somebody like david brooks who should know better, writing a column about, can you shop in health care and talking about like do hsas work or dont they work. Thats beside the point. You cant shop in health care if you have no choices to shop them. Thats what we should care about if we care about shopping and markets and all the rest of these things. And thats something that is totally not ill logical. It is important for the aca and for whatever kind of policy framework you put in place. And los angeles shows it. Thats my comments. I just have to say, can you tell whos not the ak dem nick this group. Ak demming by training but thought i would have some fun. Im not competing for the oscar because im from the heartland, right . Purple state of michigan. You may not blame us from where we are today. We may have had a contribution. So i want to add something too. I thought micahs summary was fantastic and micah, i totally agree. I want to add something to the perspective that mike gave you because i think is really fundamental to understand in part why it is unfortunate we are in the change discussion that were in right now. Because Health Insurance markets take time. Where we are today is built on the history of where i think all of our states have come from and to see what is happeng now you have to understand that history. I want go back a little bit in history for you to understand about michigan. In many ways i would say it is the middle of what it was intended for the health care to look like. We are state with a republican governor and all Republican Legislature we are a state that approached implementation of the Affordable Care act tremendously prag hatically. We are not a state, like others, that was oppositional. We were a state that wanted to make it work. Our governor, Governor Snyder is a businessman by background. He said later on about the rhetoric of how terrible the law was and if it were up to him he would have created an exchange because of he understood that it would make Health Insurance easier for consumers and wasnted to make the market work bet her for consumers. So he and his administration always approached the Health Insurance Exchange Mark fret that standpoint and in a similar way they approach the Medicaid Expansion from that standpoint. It was controversial with the legislature. They approach the m expansion from that standpoint. It was controversial with the legislature. Passed by one vote. That vote was switched fra a no vote to yes vote. But we did get the Medicaid Expansion in april 2014. There was a little bit gach bof but early on one of the first republican states to go for Medicaid Expansion and again a very pragmatic decision based upon the economics. There was a Coalition Built across the state that included all the business leaders. All the providers. All the consumer advocates. All the health plans. Just widespread support because of economics. It is state that got the Affordable Care act. As a result, we have actually fair amount of competition even today. We have ten insurers. In 2014 when the act passed we had 13. So none of us ever thought the coop would succeed to begin with. We lost a couple of the National Insurers from the exchange but they were very small in the marketplace to begin with. They were sort of irrelevant to the market. Frankly, aetna, united, they dont know how to work with the individual market. We never expected they would be successful. So we continue to have a robust market. We now have, we started with Something Like 70 different plan options among the 13 insurers. Today we have 167 plan options. It is a rebust market. Yes, not every in the state. Upper peninsula, which some people think is federal lined with wisconsin, but they are part of michigan today. Trade for toledo. They have twoi issuers. They have two blues. Blue cross blue shield, ppo, and premiums are higher. Thats how it works, right . But they still have chase choices of plans. We just completed at our center some consumer surveys we have been surveying consumers since 2009. And Consumer Satisfaction on the individual mark set higher than its ever been with the plan choices they have. I think theres been some sort of collective memory loss about how bad markets were before the Affordable Care act for people in the individual market. Two words about the history of michigan so you can understand why we in the place were we are today and then i will turn over to my colleagues. So michigan has always been a state that provided coverage on a guaranteed issue basis for the individual market. Actually if you want to know what will happen with the requirement for preexisting conditions to be covered with guaranteed issue, without a mandate, look at michigan. Because blue cross and blue shield of michigan, since it was formed in 1939, was required to be the insurer of last resort. Had to cover all comers. Could not reject anyone based oon Health Status. They ahad a failing market. They were losing millions of dollars. Were lobbying legislation for years to change their structural status to become a nonprofit mutual insurer which they achieve in 2014 with implementation of the coverage expansions of the Affordable Care act. So they dominated the individual market. It was very old and very sick market. The age prior to Affordable Care act was 55. As i said they were losing millions in that market. 72 of the individual market. With the add vent of Affordable Care act, many new entrant came into the market predominantly as mike said vantage care plans. Many who had been predominantly serving the medicaid market. I think thats important to understand in michigan. Michigan was prom dominantly medicare in 1990s which heavily gone to managed care in medicaid so those plans were ready with the networks they needed to serve a population like the individual market. I think is why theyve been successful. Many of them are making money in this market. Blues are not. Blues have lost market share. They are happy about that in the individual market. The health plan, hmos gained market. So blues are Something Like 60 of the individual market while the managed care entities have gone up quite a bit. But they all staying in the market. We can talk a little bit and make questions about what will happen in 2018. Very pessimistic about just because of the chaos that is happening in the market right now and some of the utilization trends were seeing of consumers who are afraid they will lose coverage in the mark the. I can answer your question now. Rates set for 2017 market, michigan went up 16. 7 prior to subsidies. 87 get subsidies in michigan. Those are underpriced now for the utilization we are seeing because of the fear that has been sewn in the population. Lots to talk about for 2018. But a bit of a picture for michigan. Thank you. Happy . Okay. Nppy . Okay. Ippy . Okay. Y . Okay. Y . Okay. . Okay. I want to give context from florida as well. States that supported implementation to opposition state and give you first the main take away from my research in florida is that despite the support of the state with the Affordable Care act and any real active efforts by the regulator in florida its been a real Success Story over most of the state. So i want to tell you a little bit about the main points and things that i think have led to that, have drawn out this kind of success. But i will give you history of what is going on in the state, little bit about the market. I will talk about my pain points and you can tell im a lecturer. I tell what you im going to tell you here first. Then i want to go through some of the concerns i got from the stake holders that i interviews with. So in florida, the fithird largt state, population of over 20 million and 8 of the population is receiving insurance through the marketplace. Thats a pretty big percentage. We opposed the implementation of Affordable Care act and expansion of medicaid. By default the rating areas selected for the federally facilitated ex he change are the counties so we have 67 counties, that the most rating areas in any state. I think South Carolina is next with about 4 6 rating areas. I have 67 markets to evaluate and just in case you are wondering had they ever thought about trying to combine these, the regulators said no. He is really not interested. Passive approach to this. That the default. They stuck with the default. Never went back to ry visit whether adjacent areas would make a better market. So the stated, prior to implementation and Affordable Care act, one of the highest uninsured rates in the country and although the rate is higher than the National Average it dropped from 20 to 15 . At least by 2015. The market, we have seven carriers participating statewide but only one carrier he that participates on all exchanges, thats Blue Cross Blue Shield of florida through various different names. Florida blue, florida select, different plans that they are offering. Most of these carriers are also offering coverage in the individual market off the exchange. Blue cross of blue shield i want to say a few things about them. They have been the dominant carrier in florida for seven years operating in the group market as well as in the individual market. And they also rank highest in Consumer Satisfaction in studies. People are really happy with the theyre getting from blue cross and blue shield. They have report etledly, in my conversations, they have been happy with their experience he on the exchange with the ability to form networks. They add lot lready had a lot o networks in place. Relationships with providers all over the state for individual members. It was easy to expand that and say we will offer offer on the Exchange Plans. So this wasnt really big question as it was for other insurers that didnt have as many of a presence in the individual market. There are four other carriers in florida that did not have a very big parties were not real active in the group market or individual market but very active in Medicaid Managed Care. Those plans have become key players in the exchanges. So i know this is a point thats come up several times now, these plans that have medicaid experience and plans that have a lot of individual coverage experience in the state are the ones best suited for the exchange and maybe experience the best success there. There have been some major withdraws in exchanges. So between the first year and second year, there was several carriers that joined and the next year some carriers backed out again. Significan ciga, u nated health care and all withdrew. And blue cross is the only carrier operating everywhere statewide. Let me goat majet to major poin. Blue cross blue shield had advantage in negotiating with providers. I think that points to success there in florida that may not see in other places. Another major point, maybe this comes across from specific conversations i had with navigators is the importance of the navigator network. There was a lot of money put in through grants through university of south florida where there is a particular person there, joe d. Ray, a shining star with implementing exchanges, getting people enrolled. De d. Ray, a shining star with implementing exchanges, getting people enrolled. Ie d. Ray, a shining star with implementing exchanges, getting people enrolled. D. Ray, a shining star with implementing exchanges, getting people enrolled. D. Ray, a shining star with implementing exchanges, getting people enrolled. Ray, a shining star with implementing exchanges, getting people enrolled. Ray, a shining star with implementing exchanges, getting people enrolled. She has made alliances with all of them to reach out to people. And i think thats probably one of the key reasons why weve had so many people sign up for the exchanges in florida. My other major point i touched on too had to do with medicaid providers. Major concerns with the stake holders, let me just come back around to some of these, the navigators are not that concerned about whats happened with competition. They said they are plans available everywhere. There are 13 plans. All offered by one carrier but navigator said people are satisfied with being able to choose one of those. The prices are high. But navigators did not express a lot of concern about that. Regulator is not that concerned about the number of carriers that are in the market. Not doing anything actively to try to encourage them. He has had conversations, most carriers say we cant make money. He said okay, i understand. Thats been maybe a problem and maybe problem Going Forward. However the regulator and some of the stake holders argued they did not think that even though they see a potential for a death spiral with prices rising and more carriers dropping out, that it will level off. Most of them in regulator especially said he thought this next year we would start it see the premiums leveling out and utilization as well leveling out. Tit see the premiums leveling out and utilization as well leveling out. Oit see the premiums leveling out and utilization as well leveling out. T see the premiums leveling out and utilization as well leveling out. See the premiums leveling out and utilization as well leveling out. I think im running out of time. I will move on. I think i touched on the main concerns i today address. Thank you. Htoday address. Thank you. Atoday address. Thank you. Dtoday address. Thank you. Today address. Thank you. Today address. Thank you. Otoday address. Thank you. Oday address. Thank you. Day address. Thank you. Ay address. Thank you. Y address. Thank you. Address. Thank you. When i made the crack about academics, i didnt mean substance or style. To read my notes, i will put on my glasses here. So North Carolina is similar it florida, only about half the size but many of the features are the same, including oppositional state. No Medicaid Expansion. High uninsured rates previously. But very effective navigator outreach and so florida North Carolina are often ranked side by side in terms of the largest percentage of eligible population who have enrolled. Also, very high prices. So to paraphrase dickens, i think North Carolina sbest is tt of markets and worst of markets. Despite having very high prices and sort of puzzling so, because the Health Care Cost index is not among the highest in the country but the aca premium brakes are among the highest. Much of that is bufferered. Almost two thirds of those are below 250 of poverty. So receiving substantial. So some of those you just heard from patty, i heard as well. I want no focus in terms of entrance and exits. Particularly to add to the dialogue a bit more. So blue cross is the only statewide carrier, similar it florida. Prior to the reform, 90 , 85 of the individual market and other carriers had less than 5 . There was effectively no significant competition he previously people would say blue cross owned the market and dominates and what have you. Post aca, blue crosss share dropped from 85 to 65. Still, the largest. But aetna and united each rose up into the middle of the high teens in terms of market share. Sort after similar market share become quite significant. Oaftere become quite significant. Gafter share become quite significant. Share become quite significant. Share become quite significant. Share become quite significant. Share become quite significant. E become quite significant. R simi become quite significant. Simil become quite significant. Fg s s become quite significant. S sim become quite significant. As sim become quite significant. Simil become quite significant. So charlotte, raleigh, greensboro, winstonsalem, then aetna which had national stayed on the side lines the first year entered the second year. And interestingly, they each entered with quite distinctive Market Network structures. So aetnas strategy was to partner with named Health Care Systems. Cobranding that mike referred to. So initially with duke and the raleigh area, and then with one of the premier systems in the charlotte area, carolina is not at the center of the also covers part of South Carolina. But sold as coventra duke slash and i forget the name. They went back to old style 1990s plan structure. And in part, as a way of creating a network. They were able to do that, focussing on the physician contracts by selecting certain groups of primary care physicians they thought would be good gate keepers and putting in referral requirements for specialists. And didnt have to go out and renegotiate networks and hospitals that way. That was an interesting move. So you had these standard ppos, Group Standards side by side by an Affordable Care structure. The idea was to embrace the new thinking of Population Health management and valley based payments and such. I heard stories of really using the aca as an opportunity to create this new type of aco based type of product. With a Critical Mass where can you put it out there and sort of if you priced it right, be pretty confident in getting you know 20, 30,000 lives which is enough to get the thing up and running and then start it sell it to smaller groups and individually large groups. Really, sort of a, you know, Health Policy dream come true. I almost called up alan and said, hey, manage et competition is working just the way you competing Health Care System driven by sort of define contribution shopping. And it all sort of fell apart. S contribution shopping. And it all sort of fell apart. C driven by sort of define contribution shopping. And it all sort of fell apart. Aetna pulled out i mean, united pulled out nationwide first. Then aetna pulled out nationwide. And of course there is controversy about aetnas reasoning. Many people feeling it had to do with the merger review by the department of justice. But in any event, i heard sort of puzzling about why aetna didnt selectively remain in some parkets including North Carolina. But as mike said, they were still on the side lines suggesting the potential of reentry and some networks still existed in the group market. So you have this positive kind of a negative word to convey positive ideas, like spillover sounds bad but it is actually good. When something good happens and when one market spills over to the other you see that happening in the other networks. The other spillover that happened is in creating its own limited networks, and one strike force price discounting and other in the aco type model designated with health centers. That said all this vibrant competition was happening primary in open areas. You dont see this in the rural areas where there is one system or one specialist to deal with. Even in ushian areas, it wasnt consistently through. Most so in raleigh and charlotte earth other areas. Those all resonate with what mike said. One of the things about competition in North Carolina is that principally, aside from the blues, the carriers were national carriers. We dont have local regional carriers. These Health Systems havent yet formed insurance companies. That might change. So when decisions were made nationally they impacted our state market across the board. Prior to that you saw them expanding and they werent contracting. So united started with about half of the states and expanded and half the counties and expanded to three quarters. Coventry started with about a quarter then went to a third. There werent any local regionals to fill that void but many people i spoke to said that thats intesti thats inevitable. As long as the mark set stable, as long as there is potential to remain profitable, so were the two years of steep prices efficient to stabilize the market . We will find out soon enough i think. R maybe rather not soon yuenough, but soon. So aetna still poised to reenter. Importantly, medicaid hasnt expanded but traditional hasnt been managed care but we recently embraced managed care and we have a waiver proposal with cms right now to implement statewide Medicaid Managed Care. Theres a lot of activity now forming new carrier entries and the thought is they enter the state before the managed care market and theres a good chance to enter into the Exchange Market given what weve seen else he where given that opportunity. If there is little or no Competition Among carriers but everybody thinks there is potential competition he, this poise for, in fact, significant cigna did enter the ral raleigh market. \cigna did enter the ral raleigh market. Ci enter the ral raleigh market. No one said the market isnt viable. Rate increases proposed were generally approved. It does pair to appear to be an access catching up with utilization. The point mike made about not knowing the population at first then the next year put in your raise before data and third year your risk corridor payments were froze by rubio and the fourth year your reinsurance phased out. Every year there is Something Else to catch up with. The points you already know, there is reason to believe it is found, equilibrium but also concern to be that it hasnt. So i heard both stories but i think the idea is that prior to trump election people were you know, curious, looking, continuing to watch the market carefully and remain sort of flexible in terms of reentry or new entry. Meanwhile, what developed was most encouraging. Okay, mike . So i suppose the best single line about texas that really played off of marks comments is and then it all fell apart. Texas is certainly an oppositional state. It doesnt expand the Medicaid Program. It enacted legislation requiring traditional training for navigators before going into the field. And indeed there are only a handful of formal navigators throughout the state. But i want it make one point before going into the collapse. And that is that, the nature of those individual markets truly are sometimes very unique. One of the features with texas is we have a number of border counties. And there the challenge is, is so, lets see, im an insurer and im selling a bronze or maybe a silver product with a rather large deductible and access to u. S. Providers. And the majority hispanic population in mccallen for example, many can cross the border where there is a vibrant health care market, get a favorable ex kaej rachange rate prices are lower. It is difficult with that sort of opportunity for alternative cour sources of care to make an Exchange Product we have talked about today really work. I want to throw that as an example of the sometimes very different markets that insurers are trying to function in. Then to talk about sort of the nature of the collapse in texas. Alice keeps saying to me, youre too negative, youre too negative. I was very enthusiastic about what was happening in texas in the first two years. As i indicated more globally, there was some reluctance toant here in the market. Blue cross blue shield is the dominant, present in all 254 counties. But after that first year, we saw substantial entry into markets. We saw expansion by those who are already there. We saw carriers lower their prices relative to the Blue Cross Blue Shield prices and to appear to be competing pretty significantly. Least m some markets. Certainly in houston and austin where we saw carriers in the eighth and ninth year. But then data became available. When data became available as mark indicated, there were indications there were losses. And those losses together with the perceived inadequacy of the risk adjustment neck miss ems that led to withdraws. So houston, depending on how you count, third or fourth largest city in the country, had eight insu insurers. They now have three. Blue cross blue shield and two Medicaid Managed Care plans. The other thing that went on is the shift from a variety of ppo offerings. Blue cross blue shield offered ppos in all of its markets along with hmos. Very quickly, it decided to withdraw from the ppo offerings. As did all of the other carriers. You cannot buy a ppo product in texas. Hmos are the only ones there. There is certainly a view of adverse selection. And the folks who enrolled and as consequence that undermines the premiums that the carriers accept with a high degree of uncertainty. And i would say, given the plish began michigan experience where there is not a sense of a death spiral, there is a sense of a death spiral in texas. Had the election not occurred and additional complications layered on top, there was from my sort of back of the envelope calculations, sort of a 50 50 sense among the people we talked to that Blue Cross Blue Shield would still be in the market next year. And blue cross raised premiums rather substantially. 40 to 50 plus percent. In the first year they appear not to have known what the utilization experience was. They announced that they had lost 440,000. They responded by moving from ppos to hmos, which is a classic response an insurer would make to deal with those kinds of cost problems. And they lost 770,000 on the individual market. So clearly there is concern. And they have spoeresponded wit rather large premium increases. And as we have said, its an open question. Whether or not those are adequate to deal with, with the uselization experience theyve even. Now having said that, the Medicaid Managed Care plans truly are a surprise. A surprise even athong themselves. We have succeeded far beyond our wildest dreams. With the results they were able to garner. They said, we basically didnt know how to price particularly. We followed blue cross. May have been a mistake. But their premiums remained low. They actually rose up in the middle year and have come back down. Malina, as others have indicated, have lowered prices every year. Least in some markets in texas. There are bright spots. And there are those carriers potentially waiting in the wings to reenter. But texas is a market that i had great hopes for early on because i saw lot of entry and i saw price competition and sorts of things that an economist would say. This is all moving the way you would hope it to move. And i guess better data across that. What can i say, alice . Thats the best i could do. Okay, very good. Even though its not the case that it works, it seems to be, the system seems to be working in all these situations, it does seem that, from what you have been saying, that the aca model seems to work best in urban areas with nonconcentrated provider communities. Now i wonder, and not that it works in all urban areas with nonconcentrated areas, but i wonder what can be done to make this model work better in the other communities. The Rural Communities or smaller city communities that might have more concentrated providers or small number of hospitals. Or increasingly since the industry seems to be consolidating anyway, a lot of our cities, even pretty sizeable cities will have a pair fair amount of concentration. Is it something that can be done within the aca itself . Or should we be doing something about really building up our provider he infrastructure with a set rat set parate set of polo what do you think . Anybody . I think it is clear. I think all of the issues we have experienced and i think all of our states are fixable issues. That is whan is happen riegt now. As i said, a lot of chaos in the market. This is clear on what we could have done if we had the political will to do it. Thats the political option. You cannot overcome, and i cant remember which of you said, when you have limited number of providers in a community, the health plans dont have market leverage to negotiate lower rates, right . Yeah. You need to give them leverage. Look what happened with Medicare Advantage pip it is because they had the leverage of medicare rates. I think that would have been a way to fix it. Were not going anywhere near that at this point. Mark . We did most of the interviews in late summer, early fall. Prior to the election we thought there would be discussion of public option. So we asked people and what we heard about and he in North Carolina, saying eastern part of the state, thinly populated and are wr the and where there is least competition, more often thane expected in a fairly conservative state, not just from liberal advocates, i suppose theres nothing left than the public option. And you just buy into the state health plan or state employees and much left up in the air. But sort of more openness to think about some version after public option thane expected to hear. Oafter public option thane expected to hear. Ofgafter public option tha expected to hear. Ofafter public option thane expected to hear. After public option thane expected to hear. After public o expected to hear. Fter public op expected to hear. Ater public option thane expected to hear. Er public option thane expected to hear. R public option thane expected to hear. Public option thane expected to hear. It isnt mentioned in the final report because it is seemed to far off the relevant policy field. So thats one answer. If this model of manage d competition, which i think is what we are talking about, isnt viable then thats the logical alternative. Yeah, i dont know. Swing to the other side maybe in your perception of my political preferences. Public option is giving up on this system and blowing it off, right . If we allow one of the quote unquote competitors in the marketplace to have a completely different, you know, essentially set of rules and it leverage the, you know, combined purchasing power of this state aep all t and all the mechanisms of it state, its not a compare tore at all. It doesnt address your question, right . You look around the world. You know, theyve got single payer system. Couldnt find a more, you know, market leverage. Yet theyve seen substantial trends he upward trends in their Health Care Premiums and utilization and so on and so forth. The issue is still competition. Right . Not of provider. Not of plans but of providers. This is real hey important issue. Whether we go to angle payer system or very interesting ideas from folks on the right wing essentially blowing up employer sponsored Health Insurance and exchanges for all. What do you do in noncompetitive marketplaces. You could be serious about antitrust in urban areas but antitrust doesnt work that well when there is one hospital. I dont know if you can put a tape down the middle and like you guys are over here. But it is real hey important. Tele health may be one way it get traction on that issue. And there are others. But this is these are like will realish ice. Not the imaginary ideological policies but the real issues that will matter if we want to be with any system we use. I agree. If the ib u is lack of competition, one thing we have seen the last couple of decades is the willingness to allow providers to consolidate. So lets revisit antitrust, revisit consolidation, and see to what extent we can unscramble the egg. Some n some areas we can do that. There are middle sized urban areas that have consolidate need single networks that presumably could be at least revisited. Because the issue is competition. Its not the other stuff. Let me say one other word since i spent 25 years of my career at a health plan doing all of this, negotiation et cetera. The other way to think about this problem is, actually a point you raised about the specificity of the rating areas, right . So when we were when i was blue cross and blue shield and we looked at market as statewide market rather than individual market, rural areas were not as big a problem because we were essentially letting them be cross subsidized by other regions, right . They have a relatively small impact on profit margin in total and so we could afford to pay higher rates to providers and still keep premiums lower if we look at it from a statewide basis. Each market stands on its own. The other way it look at problem is to think about rating area structure and statewide plans where there could be subty ziization. Area structure and st plans where there could be subty ziization. Is to think about rat structure and statewide plans where there could be subty ziization. When we came up with our 16 rating areas, and do we have a hundred counties oor four or whatever, and a lot of the balance was specifically about this cross subcy dags. The county point is if you have a too broad area, you dont reward the plans that do diskoupt cou discount with more areas. That is the tradeoff. I mentioned that at beginning of my tdiscussion with florida. 6 7 ratings areas may be too many. The one i chose is the poorest in florida. But it borders tallahassee and leon county which is where the legislature is is where the Capital Health plan is has Great Networks of providers. People in gasden can drive 25 miles to the best hospitals and providers in the state but the network there offered them one hospital over on that side of their county. And the consideration here of merging counties on some way and the fact it is not being considered just yet and that surprises me. Another thing, i mean, one major thing out of discussion, when you do have Something Like the ica, complex marketbased initiative, that is going to take a while for all the different actors, consumers, providers, insurers, regulators, everybody, to sort of adapt to one another, and sort of understand things, and but it also seems that the consumers in particular are still need quite a bit of health. In this system. And i know patty talked a bit about the, what sounded like a very good program coming out of university of south florida, but i was wondering if you would have other suggestions about how you know, are there ways in which we can actually sort of help consumers not only understand how to get into the system but how to use the services in a way that is more efficient and more effective than they have so far. So any particular good practices you think that aught to be spread or you know, do we need a lot more person power in doing this sort of work . And how do we improve consumers in dealing with this complex system . Well, one approach is the agents and brokers have largely been excluded from all of this. When they were participating, admittedly most of the focus is in the small group market, not individual market. But these folks have a depth of knowledge he on how insurance works and thousand could how it pup so you. So in the broader of, how do you do it, is reconsider the roles of brokers and give them more skin in being willing to help people make informed decisions. And indeed in the market on the heal health side. Well, mark and i are going to spend the panel agreeing with each poerj i spent all this time lobbying cover california. So im like, so, youre setting up an insurance sales marketplace. Maybe work with insurance sales people. Crazy idea. We did compensate them a little bit in early going. Compensation has gone down. Brokers and agent in california are almost doing this as charity at this point. They are they are considering a lot of the enrollment in the system. Thats a piece of it. Yeah. Tie me in to the situation. It came up a lot in discussion, like in North Carolina and other states, when united decided to get out they cut commissions. Particularly during special enrollment. They said no more commissiones. Once they did that, then blue cross did the same. When blue cross zeroes he that commissioners, it really worked up. They only did it during special enrollment but because you know we cant be the only ones in the market paying commissions. During a period when we think were get heing they were going to stay in commissioners during open enrollment but at a different level. So brokers who had been engaged which were minority, were pulling out. That is a problem and i think does cause concerns for ongoing you know, it becomes more profitable and there is more competition there is no reason the commissions couldnt go back up. Meanwhile, you know, the role of navigators has been critical. I think one of the things i learned from this is that navigators werent important just to get people educated about insurance and deductibles and things like that. Year it year because of the shift in prices micah where you referred to, the plan one year is a when price and another plan drops lower and that price becomes relative and the Subsidy Amount shifts and the people in the room know that dynamic. Suddenly they have to take another loom. That gets confusing. Can you call it turmoil. You can call it active purchasing, you know, pricedriven. But whatever it is, it requires more than punching it up and seeing who has the best price this year and you know one more thought to that dialogue. It comes back to something mike said earlier about the states that expanded medicare and states that did not. In states that expanded medicaid, theres a Robust Network of organizations and individuals helping people get enrolled in medicaid and they are actually serving the same function for the exchanges, right . So i think this is another case where you can see when you expand medicaid it has spillover effects into the individual markets. Okay. Good. Before i turn it over to everybody, im going to just ask one question and you can or one combination question. And i want you to answer briefly. Lightning round. Lightning round question. All right. So i have heard some discussion about the aca, some interest in possibly changing the aca at the national level. So i was wondering if you could offer your suggestions or thoughts on what element of the aca do you think is absolutely necessary to sustain . Or what element should be strength thend . Or what element could be jet sinned without too much trouble trouble . And you dont have to answer y three of these, anyone, but based on your own states research. Marianne . So i think the employer mandate could be jettisoned. It was a tlhrowin at the end i is an irritant. They are maintaining coverage. We have not seen a drop of coverage from employers despite the prediction. I that i could be jet soentison. You have to to enroll. You have to have a mix. We can spend quite a bit of time talking why highrisk pools will not work, why Health Savings accounts are not the answer. You have to get healthy and sick people in the market. That is how Health Insurance works. So if it is not going to be an individual mandate that people hate, i am very concerned about the continuous coverage requirement or, frankly, the idea that we can do it like Medicare Part b. We need to strengthen, i think, the individual mandate, clamp down on special Enrollment Periods and some other things that have really caused problems. Wellgrounded in michigans experience. Very good. I am guessing im going to pull these from the main concerns that stakeholders i talked to conveyed. We got to find ways to keep enrollees from opting in and out of coverage. There seems to be a sense, especially among regulators that people are signing up during open enrollment, theyre using the first few months to get things taken care of and then stop paying. Trying to convince individuals youre still bearing risk if youre not insured and you should consider paying for the whole year. So some ways to incentivize people to stay in. As far as something i dont have anything about jettison but i think the risk adjustment mechanism needs to be reconsidered so that we can encourage those carriers that are taking getting adversely selected against somehow their some time period in which they can recover and stay in the system rather than feel like they didnt get duly compensated for the risk that they bore in a given year and decide to leave the market all together. Before somebody takes my one idea, let me jump in on that. That would be me, i guess. I do think that the the three rs. We could spend all day talking about what each one means. 2 of the three rs are transitional risk corridors and reinsurance. The threeyear transition was too short. Risk corridors were never adequately funded. Even with reinsurance, i think the market needs another year or two to get caught up and get comfortable with the level of risk and pricing for the reasons that weve talked about. You can look to Medicare Part d and Medicare Advantage where the three rs are actually permanent. You had a very similar managed type competition idea where it was not hostilely opposed and it was embraced and all elements worked together to try to make it work. But importantly the Risk Mitigation things i dont know that they need to be permanent, but only three years in a hostile oppositional environment and only partly supported, versus the other experience with Medicare Part d. Good. I would put two things on the list to worry about and keep. One is the exchanges themselves. They dont have to be run by states in the federal government. But this idea of a single place where you can go and see what all of your options are is worth preserving. It can be preserved privately. EHealth Insurance. Com, prior to the aca, was able to do that sort of thing. There is no reason that private entities couldnt do it as well, maybe better, than federal entities. But the idea is to insist that everybody who is offering coverage be on the exchange and be explicitly described as what theyre doing. Secondly is improving somehow the issue of dealing with adverse selection. As both patty and mark have talked about, thats a really big issue. If youre not going to allow people to charge insurers to charge a higher premium for sicker folks and lower for healthy folks, then youve got to find some mechanism to account for that difference in expected utilization. Maybe it is the three rs being improved. Very well may be. Maybe its looking creatively at things like highrisk pools. But in any event, that issue has to be dealt with if any of this is to succeed. I guess very quickly, guaranteed issue and Community Rating are i hope what gets preserved. As long as if we do those, then you can move the pieces around a little bit. I think what can be get sonned is a lot of jettisoned is a lot off the complexity. Secondlowest silver plan with the percentages and cost sharing subsidies and everything. I talk to so many reporters, theyll be like premiums are going up. Im like, no, theyre not its actually way more complicated than that. Theyre like, well, yeah, we cant possibly explain that to our audience. Right . So if you have a law that you cant possibly explain, that might not be a feature. Certainly looking at how we can simplify this and maybe simplify the broader Health Care System more generally. Excellent. Well, thank you very much. And now anybody brief ill get to you in a moment, dick. Yes, maam. Im from the americas speech language sharing association. Earlier it was mentioned that interstate sale wasnt really a viable option, but could you explain a little bit more why it is not a viable option . Well, its a testable hypothesis that it isnt. And i early on thought that indeed there as a lot of potential there. Problem is that if im an insurer and i want to be successful, ive got to negotiate prices with providers and those providers exist in local communities. And so if im in if im headquartered in tennessee and im offering insurance in texas, ive still got to go to midland to negotiate a contract, and thats time consuming and i dont know what kind of market. I just dont think you see much of that happening, at least very quickly. The sale of insurance across state lines either does nothing or does something we dont want it to do. Right . If it is just like people being able to sell in other markets, they kind of can already do that. Theyd have to abide by the state regulations and they have to figure these things out. However, if sale of insurance across state lines means theres a sthatate that allows you to s junk insurance and you can now anywhere in the United States sell a plan that has a yearly maximum. That will get you to a lower premium, but in a disastrous way. So it is either nothing or a big problem. Next question. Thank you very much. Id like to ask a question about the impact of dominant employers in states or regions. If you were in wisconsin, it would be potentially kimberly clark. Ford, potentially in michigan. They had employer plans. R. J. Reynolds in winstonsalem, if they still have their headquarters. They still offer, yahoo or facebook, they still offer their employees health plans. 20 years ago they would have offered them kind of one kind of health plan, whether you were an engineer or a janitor. So, two questions. One, to what degree did having a dominant employer impact these various districts and states. I mean houston and dallas have some dominant employers. And second of all, if there were a repeal of the aca, how would that impact these employer plans . I can comment on the dominant employer because i think it goes to what i was trying to communicate earlier about the history of the states and how important that is and what got set up under the Affordable Care act. So for example, in michigan, which was for many years dominated by the Auto Companies and the uaw in terms of the way Health Benefits were designed. Because they concentrated their Insurance Market in to blue cross and blue shield of michigan, it gave blue cross and blue shield of michigan tremendous leverage in negotiating with the providers in the state. Thats what set the ground level and thats what kept premiums relatively competitive and relatively low in michigan. So theyre less important now because, for variety of reasons. But i think that they set up the foundation of what were dealing with in the states and became very important. I dont think they are directly affected very much by the repeal. I mean they may be, but they are 100 offering benefit coverage. Most of them are moving to highdeductible health plans. That send pent. People are confused about this. It is independent of the aca. I think theyre still on that journey. Yeah. Just one more question quickly. Actually, the acas been fantastic for employers. Particularly in states that did the Medicaid Expansion. So in california as an example, twothirds of the adults who were enrolled in medicaid are actively engaged in the labor force. Theyre employed full time, parttime. They are a he people who werent necessarily on the employersponsored health plan. What happens when you have medicaid . You are more productive. Your Health Status is better. There are lots of positive impact for the employers and the economy of having these plans in place. For people who may not be covered by employer sponsored insurance, they have family members that are covered by individual, so its not costless for employers if we get rid of the aca. Thank you. Dick . I was pleased, patty, that you mentioned florida is number two in enrollment, despite the politics. Vermont is the only state that has higher enrollment. I was pleased because we both were there. The navigator, jodi ray, you mentioned her, shes quite special. Second point that i would just like to make as a quick point is that in regard to rural areas and lowdensity areas alice will remember, mike will remember we did a fivestate study for the assistant secretary in hhs, esincluding alaska. We have a Field Researcher there now and we know the field people and the state people, and he was a state official, like maryann. They are trying to do something new in alaska. Thats one of the kinds of things that didnt come out as much here because alaska in fact, when they asked us to cover alaska, we thought, my goodness, its so different. But all states are different. The final point i want to make, sort of a philosophical point. Mike mentioned you mentioned david brooks column where he talked about Kenneth Arrow saying people should choose. They should decide what they want. Whats really here, the competition thats really here. And then you mentioned Competition Among the plans. Its more than just insurers, more than just carriers. There are a lot of ways in which entities are playing a new role. In his book, which i like, at the end there is a section about how fundamentally, eventually, insurer roles are going to change. It goes way beyond anything were seeing here. But they are changing. We Start Talking about institutional change. Talking about institutional change on the part of insurers is not just a government not just government stuff. It involves both sectors. Public and private. I thought you guys did a great job, by the way. We have im sorry. Just a couple of minutes. So please i want to ask you to each say your state your question very briefly, and then ill let them talk. Okay. Yes, sir. Im just wondering, would we all be sitting here had the aca been universally embraced by all the states . And what would that have done for competition premiums and risk pools . Thank you. Yes, sir. Other to the other side. Lou gagliano. To the extent that the premise is wrong that the current pricing properly adjusts for the risk pool, what should federal policymakers take away from the higher utilization rate and the impact it had early on in terms of structuring a replacement bill . Thank you. Right over here. This will be third. Okay. Two more. Fiona grey. Just quickly, what do we know about the impact on outofpocket expenses for families . Obviously utilization might have gone up but theyre now paying a premium and maybe deductibles. Just what is the state of play from the consumer budget standpoint . Very good question. And one last one. Im just wondering when the discussion or essentially the broader focus moves to effectively lowering the cost of service and essentially making the talk of premiums and subsidies which are essentially cost shifts irrelevant . Okay. Some of these will have to be answered i think in the next session maybe or be addressed. But does anybody have any quick comments on any one of these questions . Theyre all great questions. Just quickly, like were talking about the actual cost of care. When you are talking about Competition Among providers. If youre just talking about Health Insurance and cost sharing and so on, you are just moving the deck chairs around on the titanic if you are not actually dealing with the big issue which, is there competition in your marketplace. Thats what were focused on and what any policy approach is going to have to focus on. The question about out of pocket costs, the irony here is that the one thing that consumers have said they absolutely do not want more of in whatever the replacement plan is, is higher out of pocket costs. The only move that the republicans have proposed is higher out of pocket costs. So theres a disconnect thats going to have both policy and political consequences. On that point, the cost sharing subsidies were extremely important. So many people who are at very low income scales have really benefited tremendously, which are under attack in the courts at the moment. Well see what the republicans do with that. That is fundamental to the health plans that those cost sharing subsidies stay in effect. They really we really have underreported the financial help people have gotten through the tax credits and those cost sharing subsidies. They are really important. A comment on if anybody had embraced the plan, i think we would have such a different conversation today because there are so many elements of this plan that are fixable and were really not focused on what is fixable. These issues about people coming in to coverage for short periods of time, in our case people getting sovaldi and then they drop their coverage, that has had significant impacts on affordability for everyone. Thats raised premiums for everyone. There are a lot of things that are fixable if wed have embraced it as a country. Wed be in a very different conversation. I would also like to say, if wed have addressed it, the Affordable Care act addressed financing issues. We are talking about costs being kind of high still. What needs to be considered still is what we are doing in the health care community, pushing for more Efficient Health care services. Affordable care act did not address incentives to providers. There are some, but i think we could go further in that direction. Even if we were sitting here saying everyone got insurance wed still be wondering, everyones got insurance, everyones paying for it, the prices are high. What are we doing next . Now we have to find out why everyones spending all this money on Health Insurance. I dont think we can. I think we have to cut it off. But i really appreciate i do appreciate the extra eight minutes we had. Thank you very much. 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