Oregon Insurance CEOs: Simplify Affordable Care Act, Don’t Destroy It

Weighing in on the Washington, D.C., “repeal and replace” Obamacare debate, leaders from Kaiser Permanente, Moda Health, Providence, Regence Blue Cross Blue Shield of Oregon, Legacy Health and PacificSource Health Plans say reforms are needed – but express concerns about future of individual insurance options

Uncertainty about the Affordable Care Act is making it hard for insurance leaders to plan and act, former Providence Health Plan CEO Jack Friedman told a crowd of roughly 150 industry insiders. They gathered Wednesday to hear from some of the state’s top healthcare decision makers at the annual CEO Forum Roundtable sponsored by the Portland Association of Health Underwriters.

But as debates unfold in Washington, D.C., about the future of the nation’s healthcare system, Oregon’s insurance companies have to do their best, said Friedman. He moderated the midday discussion, which featured six Oregon insurers and related companies that are taking a broad range of approaches to health reform and political uncertainty.

“How do you go about planning in your organization for the future? And how do you complete strategic and financial plans?” Friedman asked, kicking off the conversation. “More specifically, if you could save one piece of the Affordable Care Act, what would that be and why? If you could repeal one aspect of that, what might it look like?”

As he turned the microphone over to leaders of Kaiser Permanente, Moda Health Plan, Providence, Regence Blue Cross Blue Shield of Oregon, Legacy Health and PacificSource Health Plans, executives chose different portions of Friedman’s questions to focus on, highlighting each company’s philosophy and approach.

“The first thing that I would keep would be the individual mandate,” Dr. George Brown, CEO of Legacy Health System, said, tackling the questions first. “Any planner who approaches the problem that we have without getting all Americans coverage, he’s on – or she’s on -- a fool’s errand. “

Brown’s second priority: “I would make it simpler. Some of the complexity we’ve layered on the ACA, I would simplify that.”

Robert Gootee, CEO of Moda Health, began his response by acknowledging the harm his business experienced after the Republican-led U.S. Congress voted not to fund risk corridors that were originally written into the ACA. Moda had to significantly scale back and was put under extra regulatory oversight when the government risk-corridor payments it had counted on did not materialize.

“We are the poster child on this risk corridor program, which we’ve sued the government over, and on an interim basis we’ve won,” he said.

Without that government subsidy for insurance companies that enroll especially sick patients, insuring them becomes unaffordable, he said, noting that the ACA itself has not fully addressed that issue. “You have to do something to make it more affordable. I keep waiting to see what they are going to do. Unfortunately, I don’t think they are going to do anything,” Gootee said.

Though Donald Trump’s presidency and the Republican majority in Congress have made the future of the ACA unpredictable, Obamacare itself has made the industry unpredictable, as well, added Ken Provencher, CEO of PacificSource Health Plans.

“How do you work in that type of environment? You have to move forward with some expectation that things are going to change,” Provencher said. “It’s not ideal by any scenario, but I don’t see any way to avoid that.”

He also noted that even if Hillary Clinton had won the presidency, Congress would be faced with major reforms of an imperfect ACA that left the individual health insurance market too expensive for people unable to receive government subsidies. “We’re still struggling nationwide with the individual market”

Dave Underriner, chief executive of Providence Health and Services, cautioned that the ACA’s reforms have been slow to enact, and that repealing and replacing the law might do away with cost-saving efforts before they have a chance to take effect.

“If you recall, there was $800 billion in savings built in to the Affordable Care Act over a 10-year period of time,” with much centering around a shift in medical provider compensation from fee-for-service to fee-for-results, Underriner said.

He said healthcare companies have made a concerted effort to move toward fee-for-results, but that transition is still under way and has not fully born fruit.

“The concern I have with repeal and replace, we’re going to go back and start over again?” Underriner asked. “I really hope, in the dialog, instead of repeal, it is, how do we adapt and change what isn’t working, and continue to move us forward to the kind of savings we need to get to, and more importantly change the system. It’s not affordable. It’s not sustainable the way it’s structured.”

Despite a tendency to speculate about the political fate of the Affordable Care Act, Kaiser Permaente is trying to stay focused on improving affordability and performance, said Kaiser Oregon President Andrew McCulloch.

But he is worried about discussions of switching Medicaid block grants to states which could significantly reduce funding for insurance for the poor – especially in this state.

“I worry about Oregon and the future of Oregon, when we have such a large proportion of our population in a Medicaid population,” McCulloch said. If the state were to receive significantly less Medicaid funding, he described this risk: “We are locking in generational poverty, particularly as it relates to our young people. They are reliant – and these are the most vulnerable parts of our society – on that program.” To rescind the and go to block grants would potentially be devastating.

Jim Walton, vice president of business development at Regence BlueCross BlueShield, used his response time to turn to the audience, largely filled with insurance brokers.

“The ACA has really changed how the agent has done his or her job. It hasn’t all been positive. The kind of generalist who could do individual, Medicare or group, is disappearing. You have to specialize because of the sheer complexity. A lot of your effort is pure enrollment, getting people enrolled in the system,” Walton said.

“Does the agent-consultant have enough time to do what I call ‘top of license work’ – helping your people, navigating through the system?” he asked. He challenged brokers to seek out ways to add more value through their work.

The three-hour conversation at Wednesday’s CEO Forum also included detailed discussions of a number of other topics, including the individual health insurance market, the use of technology to improve health care and hold down costs, coordinated care organizations, the PacificSource and Legacy partnership, the shifting role of charity care., and the role of health savings accounts. In a story later this week, The Lund Report will look deeper into that additional discussion.

Courtney Sherwood can be reached at sherwood@thelundreport.org

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