Health care and the cost of care have been a driving narrative in the country in the seven years since the Affordable Care Act was enacted by Congress in 2010. Congressional Republicans passed a number of ACA repeal attempts when President Obama was in office and a veto was all but guaranteed. But following the entrance of the new administration, lawmakers have been unable to reach consensus, bringing market instability to new heights
In some ways, the Nevada market is a microcosm of the broader national health care system. As an ACA Medicaid expansion state, Nevada saw more lives insured than ever before. That same expansion makes Nevada particularly susceptible to the forces of uncertainty that now permeate the national conversation about healthcare. The state has seen market participants exit the Silver State Health Insurance Exchange and heavily modify their plan offerings. These issues are compounded by the health-care provider shortage in the state. In response, several state lawmakers proposed solutions that leave more questions than answers.
It is a dizzying array of news, both good and bad, for Nevada’s health care market. But what does it ultimately mean in the short term, and are there indicators of a long-term prognosis?
First and perhaps most important, short-term market stability in Nevada appears strong. With the recent passage of Assembly Bill 83 and the Division of Insurance’s regulatory oversight, filings and rates are complete for Plan Year 2018. Through the next 15 months, both small and large group segments should see relative stability in Nevada’s insurance markets.
In the individual health insurance market, additional legislation was passed in 2017 that could expand the ease of access to health plans for individual Nevadan consumers. Senate Bill 209 allows the Commissioner of Insurance to review and potentially approve broker commissions, a practice that has been banned in the state for some time. If the commissioner permits, people seeking individual plans outside of Nevada’s Silver State Health Insurance Exchange will have access to crucial advice and consultation from the broker community. Having someone with expertise in the marketplace provides a resource for consumers. Yes, this may subject some consumers to a new fee; however, without the ability to compensate brokers for their work, this market has been underserved for years.
Unfortunately, this same “positive” outlook cannot be attributed to long-term market stability. Health insurance carriers that currently serve in Nevada have made a series of moves in recent months that hint toward a larger problem looming on the horizon.
In order to form reasonable expectations for future health insurance market performance, it is important to understand the events that led to where we are now. In the early days of the ACA, the Nevada Healthcare Co-op was one of the major writers of Nevada’s exchange plans. But the creeping push for repeal and the lack of risk corridor payments by the federal government, which unpinned the ACA, were a destabilizing force against the Co-op, and prompted the entity to collapse. That left Anthem Blue Cross Blue Shield as the only exchange plan for Nevada’s 14 rural counties.
Over the summer, Anthem announced that it, too, could no longer sustain the uncertainty of the risk corridor payment to continue serving the rural counties, leaving much of the state without an exchange carrier. Centene, through its SilverSummit Health Plan, has stepped in to serve those counties in response. The question remains as to how the losses sustained by the Coalition and Anthem can be overcome by Centene. Rural Nevadans are counting on the answer.
Another market participant, United Health’s Southwest Medical Associates, further shook up the health-care world with its announcement that it would discontinue its traditional Medicare offerings in favor of Medicare Advantage programs. Medicare Advantage programs are run by private insurance companies and overseen by the federal government, whereas traditional Medicare is a fully federal program. Advantage Programs must cover both Medicare Part A and B and typically have higher premiums. While most Medicare-eligible Southern Nevadans are enrolled in a Medicare Advantage program, the announcement would have left nearly 7,000 people with only one remaining choice in the marketplace.
Southwest Medical ultimately reversed itself, and announced that it would continue to serve those currently enrolled in the traditional Medicare program, but going forward will no longer enroll new patients under that plan.
These announcements fit into the larger national discussion on whether and how to repeal the ACA. The questions raised about essential health benefits, Medicaid expansion dollars, preexisting condition coverage and lifetime caps affect everybody, as we all need health care at some point.
One short-lived proposed response to these issues was the Graham-Cassidy-Heller-Johnson bill that overtook congressional airwaves at the end of the summer. The plan would “block grant” Medicaid money to each state, which could allow Nevada more discretion in how it uses the funds. However, it is important to note that under the block grant structure, monies from the federal government would not increase in the same way that is currently projected under the ACA. This would mean the governor and the Legislature will need to make choices about how to spend the federal dollars it does receive, continue the current expansion, increase provider reimbursements, create a single-payer system, or something entirely different. In a block grant situation, unfortunately, these are all zero sum choices.
During the 2017 legislative session, Democratic legislators attempted to address the breach created by the unknown future of the ACA by passing a “Medicaid for All” proposal. While light on details, the bill would have mandated that the Nevada Department of Health and Human Services create a program for individuals to buy a health plan from the state that approximated the services available under the Medicaid program. A number of major concerns were raised throughout the legislative process, including: whether the Centers for Medicare and Medicaid would approve such a concept; whether health-care providers would accept Medicaid reimbursement rates for a non-Medicaid population; and whether private insurance carriers would sell the product or compete with it. These concerns ultimately prompted Governor Sandoval to veto the legislation. But the discussion and questions it raises for the future of health care are critical.
It is these questions that will plague the health-care distribution system in Nevada in the long term unless and until Congress decides which way it will go: repeal and replace or stabilize the current system.
So, while Nevada will enjoy a short-lived respite from turmoil in the health insurance marketplace, there are storm clouds that remain on the horizon, and we remain largely at the mercy of our Congress to sort out the path forward.
Jesse Wadhams is Of Counsel in the Government Relations practice group at Fennemore Craig. He represents clients before Nevada state agencies on issues related to administrative, licensing, regulatory and policy matters. He is also a lobbyist and political consultant who develops legislative priorities and political strategies for clients relative to legislative issues. Wadhams can be reached at firstname.lastname@example.org.