Quote-of-the-day mailing list
-------- Original Message --------
Subject: qotd: Another ACA final rule - 335 pages
Date: Fri, 7 Mar 2014 11:50:39 -0800
From: Don McCanne <email@example.com>
To: Quote-of-the-Day <firstname.lastname@example.org>
Department of Health and Human Services
Centers for Medicare & Medicaid Services (CMS)
March 11, 2014
HHS Notice of Benefit and Payment Parameters for 2015 under the Patient
Protection and Affordable Care Act
This final rule sets forth payment parameters and oversight provisions
related to the risk adjustment, reinsurance, and risk corridors
programs; cost sharing parameters and cost- sharing reductions; and user
fees for Federally-facilitated Exchanges. It also provides additional
standards with respect to composite premiums, privacy and security of
personally identifiable information, the annual open enrollment period
for 2015, the actuarial value calculator, the annual limitation in cost
sharing for stand-alone dental plans, the meaningful difference standard
for qualified health plans offered through a Federally-facilitated
Exchange, patient safety standards for issuers of qualified health
plans, and the Small Business Health Options Program.
Final rule (335 pages):
Comment by Don McCanne
Any major legislation, once enacted, must then be subjected to a rule
making process to have guidelines by which to administer the law.
Legislation as complex as the Affordable Care Act (ACA) is expected to
have an extensive set of rules, but this 335 page final rule on just a
few aspects of the legislation demonstrates how unnecessarily complex
The rule on risk adjustment, reinsurance, and risk corridors is a good
example. Risk adjustment transfers funds from insurers who enrolled
lower-cost, healthier individuals to insurers who had higher expenses
because their enrollees had greater health problems (an almost
impossible task to do fairly). Reinsurance is paying insurers a portion
of their losses if they had higher than expected expenses for their
enrollees. Risk corridors establish two levels of spending - one below
which profits are excessive and the other above which losses are
excessive - levels used to protect against inaccurate initial rate
setting by the insurers.
The final rule is highly complex, which is not surprising since it is
difficult to adjust for fairness after health care losses have occurred.
It should be obvious that this administrative complexity is not to
protect patients, but rather it is to protect the insurers. In fact,
much of the profound complexity of ACA was based on making reform work
for the insurers while sacrificing policy improvements that would be
designed to work best for patients.
Under a single payer system, risk adjustment, reinsurance, and risk
corridors would not even be necessary since you would not have competing
private insurers that are each trying to game the system.
If you really want to understand better how our politicians selected the
wrong model for reform, read the 335 pages of this final rule. Then read
the thousands of other pages of final rules that also apply to ACA.
Yes, there would be rules under Improved Medicare for All, but they
would be administratively efficient rules selected to make the system
work better for patients, not for private insurers.