By Mike Shields
KHI News Service
TOPEKA, Feb. 5
A plan that would dramatically alter the way health insurance is provided, if it were adopted, will be touted
this week during a three-day visit to the Statehouse by its author, Heritage Foundation research fellow Edmund F. Haislmaier.
Haislmaier is coming to Kansas at the invitation of the Senate President”s Task Force on Health Care, chaired by Sen. Jim Barnett, R-Emporia. Barnett is pushing an approach that has some elements in common with Haislmaier”s model, which is called a “health insurance exchange.” Haislmaier said his plan is being discussed at some level in several states including Maryland, Virginia, Washington and Georgia.
He also said his input helped shape the
Massachussetts
“connector,” which was enacted in 2006 but is not
fully implemented. Policymakers across the country have been watching the Massachusetts reforms unfold because they are considered some of the most significant and different of any recently adopted by a U.S. state.
Haislmaier is scheduled to meet with various committees in the House and Senate on Tuesday, Wednesday and Thursday. The Heritage Foundation is a self-described “conservative” think tank in Washington, D.C., that is considered one of the nation”s most influential. It was founded by beer baron Joseph Coors and continues to rely on conservative foundations for much of its funding. But
Haislmaier said his plan in important ways resembles both the Massachussetts program
, which was approved by a legislature there that has Democratic supermajorities and the federal employees” health plan, which Bill Clinton as president and liberal Democratic U.S. Sen. Edward Kennedy have said is good enough to be extended to all Americans.
Len Nichols, director of health policy at the non-partisan New America Foundation, is a self-described “market Democrat” who worked as a health policy adviser for the Clinton administration.
He recommended that Kansas Democrats and others not be put off by Haislmaier”s conservative credentials. His exchange concept, Nichols said, is worth considering.
“They should give it a fair look. They should kick the tires,” said Nichols, who was involved in helping put together the current California reform proposal pushed by Gov. Arnold Schwarzenegger.
Haislmaier”s model act also has been reviewed by a number of policymakers and insurance experts here in anticipation of his visit. But most contacted by the KHI News Service for comment were cautious in their assessments. There currently are at least six committees and task forces studying health care and coverage issues . Gov. Kathleen Sebelius in her State of the State speech last month urged lawmakers to craft a plan for universal health care access.
“Gov. Sebelius welcomes this discussion and is encouraged with the attention access and affordability of health care has been garnering so far this session,” said Nicole Corcoran, a spokesman for Sebelius, a Democrat. “She believes it”s long overdue and looks forward to more detailed discussions on how we can best help all Kansans have access to affordable health care.”
Policy analysts for the governor have reviewed and discussed the Haislmaier plan.
Officials at Blue Cross-Blue Shield Kansas also have studied the Haislmaier plan.
“We don’t think there is a Kansan anywhere who would oppose all of our citizens having health coverage, and we think that there are ways to accomplish that using private market mechanisms with which Americans are familiar and comfortable,” said Blue Cross senior vice president William Pitsenberger in an email to the KHI News Service.
“Because the structure of health care financing is extremely complex, we have concerns that a piecemeal approach, picking some elements but leaving out other, necessarily integral elements, can have unintended consequences that do more harm than good. At a minimum, it is encouraging that the Legislature and other policy leaders are engaged in serious conversations about fundamental health care financing reform.”
The Haislmaier plan also has been reviewed by Kansas Health Institute senior research analyst Sheldon Weisgrau who has prepared a
synopsis of the plan
.
“A health insurance exchange creates a central marketplace for the buying and selling of health insurance policies similar to the way a stock exchange creates a central marketplace for buying and selling stocks,” Weisgrau wrote in his description of the plan. “The (exchange) is not a purchaser or regulator and does not replace the functions of the insurance commissioner. Instead, it acts as a neutral intermediary between buyers and sellers of health insurance policies.
“An (exchange) would replace the individual and small group health insurance markets and take over many of the administrative functions now conducted by the employer human resources departments. For example, the (exchange) would collect premium payments from individuals and employers and distribute these payments to the plans selected by individuals and employees. Because individuals, not employers, would own the plans, they would be portable and could be taken from job to job. In this situation, the employer and employee share of the premium may change, but the coverage would remain in place.”
Under Haislmaier”s plan all participants would be included in a single risk pool.
Unlike the Kansas Connector plan pushed by Barnett during his campaign for governor, Haislmaier”s includes a mandate that all individuals participate or open a self-insuring escrow account. Barnett isn”t the only Kansas lawmaker are interested in the exchange approach. But there is little enthusiasm among them for mandates.
“I support exploring the possibility of a connector program that will assist Kansans in having better access to health insurance,” said House Speaker Melvin Neufeld, “but mandates traditionally have the effect of reducing the access availability for Kansans and are economically counterproductive.
“The most important goal this session is to achieve an understanding that we must move forward to a healthier Kansas,” Neufeld said. “In my view, Medicaid reform
including Medicaid premium subsidies
is an integral part of any successful connector model.”
Assistant Insurance Commissioner Bob Tomlinson said the insurance department has been studying the Haislmaier plan and others that legislators are considering.
“We”re taking it as a very serious proposal,” Tomlinson said. “We have some concerns and the largest is that it appears they (Republicans such as Neufeld) want to push a Massachusetts plan but without mandated coverage. The problem is, if you have a connector type policy without (mandating participation) how do we account for adverse selection?”
Adverse selection is the term for what happens when an insurance pool attracts too many sick and expensive-to-treat participants. Tomlinson said without mandates, those are the sorts of participants likely to participate in a connector program.
“Folks who will grab for it are those who are sickest,” Tomlinson said. “And my guy sitting here who is working on this is shaking his head so hard (in agreement) you can hear it rattle.”
Nichols, of the New America Foundation, had the same view.
“The best world is a connector with mandates and subsidies,” Nichols said. “The mandate makes the healthy join the pool with the unhealthy who are already there. I think a mandate buys you efficiency and alsoequity. But a mandate puts you smack dab against the American individualistic impulse. I submit most mandates are bad ideas. But on balance, this one is worth it.”
Haislmaier also said it would be critical that a large existing insurance pool be used to usher in an exchange. In Kansas, the likeliest such pool would be the state employees” health plan. It”s still uncertain how willing Kansas policymakers would be to involve the state employees” plan in such a reform.
House Democrats are pushing a plan that would let small business owners insure their workers through the state employees” plan.
But Tomlinson said using the state employees plan as Democrats envision or as the Haislmaier plan would call for as a means of launching a larger pool could be trickier than some think.
“The state employee plan is extraordinarily rich in benefits,” he said, “so it may not have the cost savings you hope for” if more beneficiaries are included in it.
According to a schedule provided by Barnett”s office:
Tuesday:
Haislmaier will begin his day in private meetings with insurance and other groups. He is scheduled to describe his plan at a public meeting of the Senate Task Force on Health Care from 11:30 a.m. to 1:15 p.m. in Rm. 313-S
He will speak to a joint meeting of the House Health and Human Services Committee and the Senate Health Care Strategies Committee at 1:30 p.m. in Room 231-N. Later in the day he will meet privately with House Speaker Melvin Neufeld and Rep. Jeff Colyer and then meet with a working group to discuss possible Kansas legislation. Among those expected at that meeting are representatives of the Kansas Health Policy Authority, the Kansas Insurance Department, Revisor of Statues and Legislative Research
Wednesday:
In the morning, he will meet privately with representatives of the health policy authority and then separately with some business lobbyists, including those who speak for small business.
At noon he will speak publicly to the Senate Task Force on Health Care, Rm. 423-S.
At 3:30 p.m. he will speak publicly to the House Insurance and Financial Institutions Committee, Rm. 527-S.
Thursday:
In the morning, he will meet privately with representatives of the Kansas Chamber of Commerce and Industry.
At 9:30 a.m. he will speak publicly to the Senate Insurance and Financial Institutions Committee, Rm. 527-S.
Later he will meet privately with representatives of the Kansas Medical Society and then with officials from the insurance commissioners office.
Also
this week, a policy analyst from the conservative American Legislative Exchange Council, Christie Herrera, will meet with at least one committee to describe Medicaid reform efforts in other states.
Herrera will testify before the House Appropriations Committee at 9 a.m. Wednesday.
Mike Shields is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
mshields@khi.org
or at 785-233-5443, ext. 123.