Risk adjustment is necessary in a market-based insurance system because some plans—maybe because of benefit design, maybe by chance—are going to attract sicker (more expensive) beneficiaries, and shouldn't be punished for that. Punishment encourages cream skimming.
For my own notekeeping purposes (and for any journalists who might find it useful), here is the mid-2016 press release where CMS announces updates to the risk adjustment formula cms.gov/Newsroom/Media…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
-Some figures I'm pulling from Mark's AEA presentation, rather than the WP itself
/2
First, some background: Prior to the ACA, Massachusetts had an exchange (CommCare) that looks very similar to present-day ACA marketplaces for households < 300% FPL.
Plan choices were more standardized, though, and people had a limited choice set, a maximum of 5 products. /3
There's a specific quirk about how this plays out—which @dylanlscott references in his write-up—that is worth, I think, elaborating at more length. It helps explain why the "marginal" patients here are actually older-but-healthier, not those we'd conventionally label "high-risk"
Upon acquiring nursing homes, PE firms don't appear to universally scale back nursing staff. RN time actually increases. But so-called "frontline" nurses—CNAs and LPNs—their staff hours fall, more than offsetting the increase in RN effort.
RNs are, plausibly, the nurses you'd imagine to be most important for medically complex patients. But LPNs and CNAs play a critical role for patient health in supporting ADLs, doing things like bed-turning and infection prevention measures.
Every policy person I know who thinks about health insurance is on board with "smart defaults."
I see the primary problems as political (concerning carriers more than individuals) and logistical (including legal questions), not broader public opinion.
Even with soft-defaults, like indicating that a certain plan is someone's probable "best" option, will get pushback from carriers.
That's because if these nudges worked well—and my prior is that they would—they'd have considerable influence over market share.
I'm not merely speculating here: the Obama administration tried to do an extremely weak version of these nudges, prioritizing standardized "Simple Choice" plans on HealthCare.gov.
I hadn't read last week's Lancet paper on M4A, but thought I would today since Bernie cites it in his newish-mostly-old set of pay-fors. thelancet.com/journals/lance…
Now that I've read it, I wonder—quite sincerely—how this article got past peer review.
The thing that jumped out to me most glaringly was the stipulation that utilization will ONLY increase among the 24% of Americans who are currently uninsured or underinsured (the yellow box has the underinsurance criteria from the cited Commonwealth Fund)
The implication here is that going from modest cost-sharing to zero cost-sharing will have no impact on utilization. None.
This is not a tenable assumption. The RAND HIE is dated, but it's not obsolete—it's backed up by a whole canon of health economics research now.
"The Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid." ecf.dcd.uscourts.gov/cgi-bin/show_p…
"The Secretary never provided a bottom-line estimate of how many people would lose Medicaid with Kentucky HEALTH in place. This oversight is glaring, especially given that the risk of lost coverage was 'factually substantiated in the record.'"
Guys, Judge Boasberg is extremely not impressed: "For starters, the Secretary never once mentions the estimated 95,000 people who would lose coverage, which gives the Court little reason to think that he seriously grappled with the bottomline impact on healthcare."