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Kaiser Health News published an interesting article describing how more states are planning on running their own insurance exchanges. The motivation seems to largely come down to financial savings: apparently, states pay the federal insurance exchange a surcharge of around 3% of the premiums collected. For larger states, that surcharge can amount to over one hundred million dollars per year, and some states think they can operate their own exchange for less. States that run their own exchanges might also advertise enrollment more, perhaps leading to fewer uninsured individuals.

Kaiser Health News published an interesting article describing how more states are planning on running their own insurance exchanges. The motivation seems to largely come down to financial savings: apparently, states pay the federal insurance exchange a surcharge of around 3% of the premiums collected. For larger states, that surcharge can amount to over one hundred million dollars per year, and some states think they can operate their own exchange for less. States that run their own exchanges might also advertise enrollment more, perhaps leading to fewer uninsured individuals.

The article reports that some states encountered technical difficulties and ended up reverting to the federal exchange, so it remains to be seen how successful these efforts will be. It is interesting how many tens of millions of dollars (or more) it takes to run these changes.

Physician compensation has changed over the years. For example, decades ago, compensation changed from fee-for-service (where physicians are paid per procedure or per service) to capitation (where primary care physicians are paid a monthly fee for each patient they see). The idea behind capitation was that physicians who were successful in managing the health of their patients would end up having to work less since healthier patients need fewer services; at the same time, healthier patients would mean that insurers would need to pay less, thus, theoretically leading to a win-win situation (plus a win for patients who themselves were healthier). Under the capitation payment model, doctors could be penalized if they had an excessive number of patients who needed more services. Many physicians complained about this risk, citing cases that were both out of their control and very expensive (e.g. a patient ends up with cancer). Physician compensation then moved back towards fee-for-service. Unfortunately, under this model, physicians frequently have a financial incentive to favor expensive treatments over inexpensive preventative measures. Over the last decade, Medicare has been trying to introduce more risk-based payments so that doctors with healthy patients could receive financial rewards for healthier patients. Some physicians rightfully have had reservations. Kaiser Health News reported on how the pandemic might be changing some physician attitudes.

Physician compensation has changed over the years. For example, decades ago, compensation changed from fee-for-service (where physicians are paid per procedure or per service) to capitation (where primary care physicians are paid a monthly fee for each patient they see). The idea behind capitation was that physicians who were successful in managing the health of their patients would end up having to work less since healthier patients need fewer services; at the same time, healthier patients would mean that insurers would need to pay less, thus, theoretically leading to a win-win situation (plus a win for patients who themselves were healthier). Under the capitation payment model, doctors could be penalized if they had an excessive number of patients who needed more services. Many physicians complained about this risk, citing cases that were both out of their control and very expensive (e.g. a patient ends up with cancer). Physician compensation then moved back towards fee-for-service. Unfortunately, under this model, physicians frequently have a financial incentive to favor expensive treatments over inexpensive preventative measures. Over the last decade, Medicare has been trying to introduce more risk-based payments so that doctors with healthy patients could receive financial rewards for healthier patients. Some physicians rightfully have had reservations. Kaiser Health News reported on how the pandemic might be changing some physician attitudes.

Notably, many physician offices have had to shut down during the pandemic, but instead would have fared better financially if they received per-member per-month payments that doctors received under capitation payment models. Medicare will be launching a Primary Care First program in this vein, offering bonuses and penalties depending on how a doctor's patients rate on various criteria. The risk-based payment model may have its own risks, such as physicians becoming pickier when deciding whether to accept a patient (a patient mix that skews unhealthy could have a substantial financial impact). Nevertheless, the current trend lines appear to point towards risk-based payments.

About a month after Oklahoma voters approved of Medicaid expansion, Kaiser Health News reports that residents of Missouri also voted to approve Medicaid expansion. While the federal government would pay for 90% of the cost of expansion (at least initially), it appears that opponents are concerned about the 10% of the cost that the state is liable for, and how that might grow over time. Part of the opposing rhetoric was reported to tap into fears that Medicaid expansion would attract illegal immigrants.

About a month after Oklahoma voters approved of Medicaid expansion, Kaiser Health News reports that residents of Missouri also voted to approve Medicaid expansion. While the federal government would pay for 90% of the cost of expansion (at least initially), it appears that opponents are concerned about the 10% of the cost that the state is liable for, and how that might grow over time. Part of the opposing rhetoric was reported to tap into fears that Medicaid expansion would attract illegal immigrants.

An interesting comment from a health policy expert was that people support giving low-income families access to Medicaid coverage, although a number of people may oppose similar measures when labeled as Medicaid expansion or Affordable Care Act. Another interesting detail that was reported is that voters in the three counties with the highest uninsured rates in the state rejected the expansion.

Kaiser Health News reported on insurance premiums, explaining why premiums might not be dropping even though insurance companies may be experiencing greater profits than before the pandemic. While many might have thought that insurance costs would risen this year because of the pandemic, it turns out that many people delayed medical care, so insurers have had to pay out less in medical costs. Based off of that, one might expect that premiums for the next year might fall. The article points out, though, that medical costs could surge next year if people who were delaying medical care choose to be treated then. If health insurance companies price their premiums too high, they can give money back; however, if health insurance companies price their premiums too low, they cannot easily ask for the difference and can only adjust premiums upwards for the following year.

Kaiser Health News reported on insurance premiums, explaining why premiums might not be dropping even though insurance companies may be experiencing greater profits than before the pandemic. While many might have thought that insurance costs would risen this year because of the pandemic, it turns out that many people delayed medical care, so insurers have had to pay out less in medical costs. Based off of that, one might expect that premiums for the next year might fall. The article points out, though, that medical costs could surge next year if people who were delaying medical care choose to be treated then. If health insurance companies price their premiums too high, they can give money back; however, if health insurance companies price their premiums too low, they cannot easily ask for the difference and can only adjust premiums upwards for the following year.

The Affordable Care Act stipulates that insurance companies must spend a certain percentage of their premiums on medical costs. Profits above a certain margin are supposed to be redistributed back to the plan members as a rebate.

NPR reported that the president signed executive orders to manage drug prices, a sore point for many for several years. Apparently, the most notable executive order was one requiring Medicare to pay the same prices on drugs received in hospitals as other countries pay. However, it is unclear whether that executive order will take effect, given that the president seems to be using it as a threat to convince pharmaceutical companies to come up with a more palatable alternative.

NPR reported that the president signed executive orders to manage drug prices, a sore point for many for several years. Apparently, the most notable executive order was one requiring Medicare to pay the same prices on drugs received in hospitals as other countries pay. However, it is unclear whether that executive order will take effect, given that the president seems to be using it as a threat to convince pharmaceutical companies to come up with a more palatable alternative.

Another of the executive orders allow certain prescription drugs to be imported from Canada. The impact of that executive order will depend greatly on how broad the list of drugs that can be imported will be, and whether Canada welcomes exporting such drugs.