Leavitt’s Take on ObamaCare Mirroring Medicare Part D

Former UT Governor and Bush HHS Secretary Mike Leavitt had a terrific op-ed recently in the Washington Post examining similarities and differences between the launch of ObamaCare’s health insurance exchanges and implementation of Medicare Part D in 2006.  As always, Mike’s insights are on-point and a rare constructive voice from the right on how to actually improve the program’s takeoff.

Leavitt says at one point, “I’m not hoping for a wreck.  That outcome would hurt ordinary people, not just politicians.” That’s a bold statement from a GOPer these days.  When was the last time you heard an elected Republican official say anything other than “wreck and repeal” about ObamaCare?  To the point, the Post had another piece on how many House Republicans, like Reps. Tim Huelskamp and Jason Chaffetz, have said flatly they will deny any assistance to constituents who call their offices looking for assistance with the law.  So from that standpoint Mike offers a fresh perspective that will hopefully change some minds in the lower chamber and maybe a few statehouses.

Mike points out the extensive parallels between ObamaCare and the launch of Part D.  Both were the result of fierce fights on the Hill and involved the creation of a heavily-regulated insurance market from a green field.  Both suffer from an uninformed public and heavy opposition.  Both involve data exchange on eligibility and enrollment that are enormously complex.  The team writing the ObamaCare regulations are mostly folks from the Medicare Advantage and Part D offices of CMS, and they’re building a system based on that experience.  But the similarities end there, and Leavitt offers some insights into how the Administration can avoid the “train wreck” we’ve been hearing about is coming.

Leavitt is right that the challenge of a misinformed public and insufficient education and outreach is enormous: “With the ACA’s initial enrollment period three months away, 78 percent of Americans lack awareness about the law and the changes it will bring. Four in 10 don’t even know the law is set to take effect.” He then details the PR effort he engaged in on Part D as HHS Secretary.  But he’s understating things here.  The education push on ObamaCare will be hampered by unprecedented political opposition at both state and Federal levels:

• At the Federal level, Congress barely appropriated 10% of the Administration’s request for Navigators, the impartial enrollment counselors, and are fighting all agencies who intend to help — like the Education Department distributing brochures through libraries.  The kinds of PR activities Mike engaged in as Secretary to support the Part D rollout would earn Secretary Kathleen Sebelius a Congressional subpoena today.
• At the state level, remember, the states were bought in on Part D as it shifted their Medicaid drug spend for dual eligibles to Medicare with only a maintenance of effort.  Roughly half the states have rejected the ObamaCare Medicaid expansion and refused to build their own health insurance exchanges.  Many of those states are actively resisting any participation in outreach or education.

So from the standpoint of public awareness, this is a huge difference between ObamaCare and Part D and it has a lot to do with the blind opposition of Leavitt’s own party.

Next, Leavitt speaks to technology breakdowns and subsidy errors, pointing out rightly that the successful launch of ObamaCare is dependent in part on the “data hub” that will connect and transfer eligibility and enrollment data among health plans and several Federal and state agencies.  He’s correct on this point, too, but again, doesn’t go far enough in illustrating the challenge.

CMS’s own data systems to manage Part D and their interaction with the plans’ systems created a hot mess that persisted through much of 2006.  It was the seemingly-simple-but-insanely-complex task of getting “the pig through the python” of health plan enrollment shops, where people and processes got overwhelmed and applications piled up or got pushed through with human errors.  The result was months of confusion and work-arounds as seniors arrived at pharmacies and couldn’t access their benefits. This was after a year’s worth of training camp in 2005 we called the Medicare discount drug card  that served as a bridge to the “real” Part D.

ObamaCare’s launch will be much more complex and therefore more prone to benefit-denying errors.  There’s no training camp for the exchanges.  The eligibility and enrollment process is much more complex than Part D given the income tests that determine the amount of your subsidy and the number of agencies involved.  And remember: Part D is a benefit; you qualify, pick a plan, get a member card, and most seniors opted to have their premiums deducted from their Social Security checks.  The exchanges are all about the subsidy, which determines which plan you can afford.  If CMS gets the subsidy wrong, it’s a confidence-sucking hassle, and they couldn’t try to claw that money back from low-income beneficiaries.  And the workaround for those who don’t have bank accounts to push the subsidy into makes your head spin.  Every quandary will have a human story — and right-wing media and social outlets like Twitter barely registered in 2006.  In 2014 the news cycle and online vitriol will make each tragic story seem pervasive — and the resulting “white noise” will get in the way of the outreach and education effort.

Finally Leavitt closes with advising ObamaCare policymakers to assume full responsibility for the mess to come.  He recalled a briefing he gave to Senate Finance members on status of the Part D rollout.  He spoke candidly about challenges and the Administration’s plans to fix them, by when — “candor bought us time,” he says.  This time around, candor will buy you a subpoena and endless finger-wagging from the talking heads.

Mike Leavitt is one of my favorite Republicans, but my friend dropped a whopper at the conclusion of his otherwise excellent op-ed: “The ACA reflects the belief that government should play a much bigger role in making our health-care decisions, while the drafters and implementers of Part D held the view that government’s role in health care should be limited to organizing a system of competition, where consumers are empowered to make choices and are protected from unfair treatment.”

Sorry, Mike, but the exchanges emerged from the conservative Heritage Foundation as just that: a system of regulated competition, modeled after Part D.  I don’t see a much bigger role for the government in making our healthcare decisions in ObamaCare, just a much bigger undertaking with a Presidency at stake.

Resources

The rapid changes to Part D regulations make the tracking and implementation of these CMS requirements exceptionally difficult. Visit our website to find out how GHG can help.

GHG’s Founder and Executive Chairman John Gorman addresses the critical issues issuers must address before the launch of the Exchanges in this recording from the 2013 GHG Forum, June 13-14 in Washington, DC.

Join us on August 13 and hear GHG’s Chief Development Officer, Aaron Eaton, and Independence Blue Cross’ Senior Vice President of Health Care Reform Implementation, John Janney, walk through an operational readiness checklist to help make sure your health plan is ready to go live on October. 1.