ACA Title I, Sec. 1332. Waiver for state innovation: “Good” – Supports innovation by states. Always a good provision, but it also comes with selected limitations including: must include 10 year budget neutrality for HHS, at least provides coverage compatible with “Essential Health Benefit Coverage”, and cost sharing levels no greater than the limits in the Law. These do represent some fairly stringent conditions for securing a waiver. However, controlled innovation is usually a good idea in matters as complex and high stakes as health care.

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ACA Title I, Sec. 1322. Federal program to assist establishment and operation of nonprofit, member-run health insurance Issuers: “Ugly” – Unnecessary and misguided. This section sets up a whole federal system for the awarding of grants, loans and contracts to stimulate consumer run, non-profit health insurance plans with the “catchy” name of “Consumer Operated and Oriented Plan” (CO–OP) program. Does anyone who knows anything about health insurance and health plans really think that these entities will produce more effective or efficient health plans? If they are such a good thing that we need a whole new $6 billion per year federal granting organization why are there not more of them already in existence? Bad idea and another prime example of the philosophical bias replete through the ACA about how innately bad “business” and “capitalism” are for Americans. I don’t agree….I think this is largely how we got to be the only viable superpower on the world stage. This section seems to be predicated on the assumption that if you take the “profit” out of the picture health care will cost less and be more effective. I see no valid empirical data supporting this premise. I believe that the problem with health care costs is not due to profits and profit taking -it is due to the fact that there are virtually no market incentives for people to shop, use health care wisely or maintain and improve their health. Also there is no entity in the U.S. health care system that plays the role of saying …no, you don’t really need that third MRI or that back surgery, or that third stent or that new knee, (because you’re 200 pounds overweight). Multiply this phenomenon by 10,000,000 and the lack of consumption discipline and the economic consequence become pretty clear. My opinion is that this section should be repealed, particularly with its $6 billion price tag.

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ACA Title I, Sec. 1321. State flexibility in operation and enforcement of Exchanges and related requirements: “Good” – Provides option for state to operate insurance “exchange” including standards and protection from federal preemption. This section of the ACA provides for states to operate an insurance exchange and that the Secretary of HHS will promulgate standards and a process for becoming an exchange. The specific requirements include: (A) the establishment and operation of Exchanges; (B) the offering of qualified health plans through such Exchanges; (C) the establishment of the reinsurance and risk adjustment programs under part V; and (D) such other requirements as the Secretary determines appropriate. States must operate their exchanges under federal standards or can choose to allow the federal government to provide the exchange (either directly by the federal government or through a non-profit.). DHHS decided to do it directly through www.healthcare.gov and unfortunately experienced a number of technical problems and delays. This section also recognizes state sovereignty in health regulation and limits preemption by federal law and regulation. Finally there is a general provision for including early versions of state exchanges until they can be evaluated by the standards. I see this provision as helping establish a national platform for developing a more “level” playing field for our health insurance markets. I believe this is necessary to allow consumers not to be confused by self-serving marketing and sales strategies of insurers and to provide a consistent national marketplace for consumers and businesses to purchase health insurance. It helps set the stage for effective price competition among health plans. However, exchanges by themselves, are not likely to lead to significant improvement in the nation’s health.

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ACA Title 1, Sec. 1313. Financial integrity: “Good” – Basic requirements for financial record-keeping, audits, reports and oversight of exchanges. This section requires that exchanges keep sound financial records, conduct periodic audits, report to the federal government, be investigated by the GAO and be monitored for patterns of abuse or filing of false claims. This is a basic requirement for all public expenditures and should be fully pursued by federal regulators. Nothing unusual here!

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ACA Title 1, Sec. 1312. Consumer choice. “Ugly” – In appropriately limits risk pool for individual and small group market. This section of the ACA inappropriately limits the use of one risk pool for all individual plan members and small employer group members. The way I read this it prohibits offering a “Wellness- oriented” risk pool for individual and small employer groups. That is very bad from my vantage point. We know that working populations that do wellness programming have lower health care costs than those that don’t do wellness. This provisions requires only one risk pool for the two groups or the formation of one risk pool for both populations. Either way this seems to prohibit the formation of a risk pool that requires the individual and or small employer to engage in wellness activity. This section needs to be repealed or eliminated. I believe we want to encourage market forces to support people taking better care of their own health. This provision works in the opposite direction – Bad! The other parts of this section define “qualified individuals”, “qualified health plans” and “qualified employers” and set some basic ground rules for how coverage will be structured in and outside of exchanges. Most of these provisions help extend the “level playing field” but also lock everyone into fixed positions which usually acts to prevent innovation.

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ACA Title 1, Sec. 1311. Affordable choices of health benefit plans. “Good” – Established the ground rules for the development and operation of “exchanges.”This section of the Law covers the provision of grants to states for the development of “American Health Benefit Exchanges” including assistance to states to establish exchanges using grant funds, including the establishment of Small Business Health Options Program exchanges (SHOP exchanges), functional activities, basic requirements, rating processes and rules for operation. This section also provides the basic requirement for “qualified individuals”, “qualified health plans”, “qualified employers”, and funding conditions. This section enables the refinements that the promulgation of federal regulations achieves. In general the establishment of basic ground rules for the operation of exchanges will ultimately improve price competition among health plans helping to stabilize future medical trend. However in the meantime, if economic “free riders” are still allowed to purchase health insurance only when they need it, health plans on the exchanges will likely experience periodic “death spirals” from adverse selection. The exchanges themselves will likely have to step in to prevent financial insolvency among the more popular health plans.

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ACA Title 1, Sec. 1304. Related definitions. ‘Good” – Defines individual and group markets and large and small employers.This section simply defines the basic terms including “Individual Market” and “Group Market” and the terms “Large Employer” (101+ employees) and “Small Employer (≤100 employees) and transitional rules for their treatment as they grow or change. States can adopt “50” employees as their benchmark if they choose to do so. This provision is definitional detail that contributes to a “level playing field” on a national basis across states and market sectors. Sound development as long as it is enforced through use.

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ACA Title 1, Sec. 1303. Special rules: “Bad”- Identifies special ground rules for handling abortion services. This provision provides general protections for consumers to have access to health plans through exchanges that cover abortion services. It also protects state laws from preemption by federal laws and established ground rules for public funding of abortion services. It also includes protections for providers to refuse on moral grounds from providing abortion services. I don’t know where you as the reader come down on the issue of abortion, but I believe that the life of every fetus, baby, child or infant is of great value and needs to be protected. I believe that all the features contained in this section are intended to handle abortion services in a distinctly different and special way which may be necessary given the controversial nature of abortion, but I wish that as a society we could somehow come to agreement that babies (or whatever you call them), once they have been conceived deserve to live. My opinion has clearly been shaped by my wife and I having two wonderful children and six wonderful grandchildren.

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ACA Title 1, Sec. 1302. Essential health benefits requirements: “Bad”- Too comprehensive and wasteful. This provision establishes the set of benefits and maximum out-of-pocket (MOOP) cost sharing limits that will now apply across all qualifying insured plans. It includes a broad range of benefits by category and on the good side includes a new provision for all health plans providing “Essential Health Benefit Package” to provide a “Preventive and wellness services and chronic disease management” component. (Yea!) However, the bad thing is that the combination of the fairly comprehensive set of benefit coverage requirements and the MOOP limits (Bronze, Silver, Gold, Platinum) work to make all qualifying health plans very expensive thus putting a significant financial pressure on insurers and payers. Specially, when we are attempting to provide new insurance coverage to some 35 million people it adds costs that are excessive and strain the whole system. I believe that this represents a real case of over-reach and jeopardizes the whole effort. I would opt for a three tiered set of benefits with a truly “basic” benefit level, a “medium” level and a “high” level with the individual and business mandates applying only to the “basic” level. On the good side this section includes a limitation on the size of deductibles at $2,000 for individual plan coverage and $4,000 for family coverage. This makes sense but needs to be linked to the personal health savings account provision funded with tax advantaged dollars to the consumer. Another provision of this section is that it prohibits cost sharing on preventive services which is a good feature. Finally, the “wasteful” nature of this provision comes from the fact that our most rigorous research shows that comprehensive health insurance coverage is generally not associated with significant improvement in health status, we may feel better with a richer health insurance plan, but we will not be appreciably healthier. Thus the “wasteful” label on these more comprehensive than needed benefit requirements.

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ACA Title 1, Sec. 1301. Qualified health plan defined: “Good” – a “good housekeeping-like seal of approval”. This section establishes a class of health plans offered by exchanges that are called “qualified health plans” which are really like the old “good housekeeping seal of approval” to provide an easy third party qualification for health plans. To be a “qualified health plan” the plan must be labeled as a qualified plan or certified as one, provide “essential health benefits” coverage, be offered by an insurer that is licensed in the state and in “good standing” implying they are financially stable and considered…”going business concerns,” offers at least two generous health plans (silver and gold levels), and agrees to charge the same premiums to all populations for the plan. (Can’t get the plan for a cheaper price anywhere else) Does not apply to self-insured health plans or MEWAs.

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