Lessons from Part D for ACA Implementation

It was interesting to hear Mike Leavitt and Mark McClellan compare their experiences in launching the Medicare Part D program in 2005 and 2006 to the challenges facing HHS and CMS in launching the new Health Insurance Marketplaces at a recent Brookings Institution forum. There are so many parallels and yet important differences. The lessons from Part D are also discussed in a new report from Georgetown’s Center on Health Insurance Reform funded by the Robert Wood Johnson Foundation.

Several of the parallels include:

• Outreach and Education Challenges — HHS began a public education campaign 15 months in advance of the Part D program including over 500,000 events and a bus tour by the Secretary and HHS officials. However at the start of enrollment 80 percent of beneficiaries reported they would not enroll or were uncertain about enrolling. 100 days before the Marketplace open enrollment period, HHS is just beginning its outreach program and they are using successful techniques from the Part D program, e.g. extensive use of partnerships and local events conducted by Regional Offices. However, funding for the ACA educational efforts is limited, timing is shorter, and HHS does not have a list of the target population for the individual marketplaces since they do not currently have insurance. Social media offers a shortcut to reaching a key target audience, the 18 — 35 year olds, who are essential to keep premiums affordable. However the challenge will be the messaging. HHS is hopeful that they will be able to build a culture of coverage with the offer of access to an insurance card for the first time and the encouragement from Mom.

• Public Skepticism — The lack of public support for health care reform has been consistently documented by the Kaiser Family Foundation surveys. However the recent discussions remind us that public opinion was actually less favorable for Part D where only 21 percent of beneficiaries had a favorable opinion in April 2005 compared to 35 percent with a favorable opinion of the ACA in April 2013. Mike Leavitt observed that now the sides supporting the change have reversed. A big difference in Part D was that the penalties for not enrolling carried on forever, thus spurring last minute enrollment. The ACA penalties are comparatively smaller and will not provide the same incentive. That will mean that we will need a longer window to assess ACA performance as enrollment continues to grow over a multiple year period.

• Plan Participation and Costs — CMS officials worried that stand alone drug plans that did not exist in the private markets in 2005 would not sign up to participate in Part D. There was also controversy about the cost and affordability of the premiums. It turned out that there probably too many choices under Part D and costs came in below projections. There are similar worries about plan participation in the Marketplaces. CMS reports that 120 plans applied to the Federal Marketplace, however participation in the state marketplaces is more uneven and particularly low in the SHOPs with no plans in the Mississippi SHOP and only 1 plan in the North Carolina SHOP. Most of the plan premiums have not been released, however early reports suggest that there will be variation by marketplace and the number of competitors. A study of 9 states by Avalere shows rates lower than CBO predicted. However, we have also read about an average 25 percent increase for plans in Maryland. HHS will post final rates in the FFM in September, although some states may release final rates in late summer.

• Market Readiness — Despite short timeframes, CMS was ready for enrollment in November of 2005, but we all remember the anecdotal stories of beneficiaries who showed up at pharmacies on January 1 unable to get their drugs. Fortunately, the states came to the rescue and the glitches were ironed out over time. The same concerns about operational readiness face the implementation of the ACA where the number of potential enrollees is higher, the systems more complicated and the subsidies more complex. The longer enrollment period will provide more time to iron out any problems. However, most states will not be willing or able to jump in if the federal roll-out stumbles.

Resources

Listen as Whitney St. Jean, Chief Administration Officer of Gorman Health Group, outlines the components of a successful go-to-market strategy for MA plan sponsors and their partners.

The rapid changes to Part D regulations make the tracking and implementation of these CMS requirements exceptionally difficult — to say nothing of actually managing to them, find out how GHG can help.

Gorman health group can help position you for the challenges—and opportunities—posed by health reform, designing a strategy that takes into account your service area, market environment, core competencies, and vision of the future, click here to find out how.