How 'Hoosier math' is damaging hospitals

One of the worst aspects of the implementation of the Affordable Care Act has been a stunning lack of available--and accurate--information. The Obama Administration has been loathe to discuss the ACA for fear of hurting other parts of its agenda. And the states that refused to expand their Medicaid programs or operate their own insurance exchanges are getting far less federal funding for marketing and advertising campaigns than states whose governments support the ACA.

Hospital operators are nervous, and rightly so. If their states don't embrace the ACA, they're going to lose tens of billions of dollars in payments from commercial and government insurers--funds that could be used to improve infrastructure and boost research. In essence, the U.S. is at risk of creating a two-tiered healthcare system solely due to ideology.

That lack of information isn't helping. There's the Ivy League-educated partner of a large law firm who admitted over a recent dinner he had no idea whether the ACA would affect his son's insurance policy. Or the customers at my wife's business who lack insurance and worry their chances of obtaining it will soon vanish. Or the letter I recently received from my current health insurer assuring me my policy was "grandfathered" in and I had nothing to worry about. The letter neglected to tell me something I know but few other people do: My subsidized premiums through California's insurance exchange will drop my costs about 50 percent.

Politicians and businesses in the spotlight engage in disinformation as a matter of course. That's why debate over the ACA has been peppered with assertions about death panels, skyrocketing premiums and hidden tax penalties.

But should an entire state agency be permitted to fudge facts?

That happened recently in Indiana, when its Department of Insurance very selectively announced prices for the state's health insurance exchange. According to the agency, premiums were going to rise on average a stunning 72 percent, even though regulators refused to explain their numbers or release actuarial data.

It took the dogged work of the Washington Post's Sarah Kliff to determine that the agency was comparing the lowest prices available for the most bare-bones coverage in Indiana to the entire range of premiums for all policies in the exchange. That's despite the fact that even the filings of the insurers who planned to offer plans in the exchange indicated 90 percent of their potential customers would pick lower-priced plans. And of course, the generous tax credits that would be applied at the time of purchase were not factored in at all.

"These subsidies do not change the insurance product's cost, only the price some consumers will ultimately pay out of pocket," Indiana Insurance Commissioner Stephen W. Robertson asserted in a letter recently posted on his agency's website.

Robertson conveniently forgot that his agency's constituents are consumers--and to them, what they pay out of pocket is the cost. None of them wring their hands about federal farm subsidies when they buy a $1.99 loaf of bread.

What is truly difficult to stomach is that an entire agency intended to protect consumers from price gouging, fraud and other activities commonplace in the sector without government oversight deliberately misled the public. That's not one politician fulminating about government overreach, but a public trust calculatedly sowing disinformation.

By the way, Roberston is not an elected official, but a gubernatorial appointee. He therefore needs to stay in the good graces of Gov. Mike Pence--perhaps the most rabid anti-ACA governor in the U.S. His agency's mission--which includes protecting Hoosiers "as they purchase and use insurance products to keep their assets and their families from loss or harm"-- was blatantly ignored in the process. There will be Indianans who won't buy health insurance because they were misled by Robertson. Each one bankrupted by a huge medical bill will represent a grotesque violation of his so-called mission.

The Indiana Hospital Association's role of cutting through these shenanigans is similar to those of hospital lobbies in other red states--nonexistent. It hasn't issued a statement regarding the ACA in nearly six months. Nor are there concrete plans by its hospitals to try and enroll patients into the exchange or other forms of insurance--something providers in California, Colorado and other states are plunging into earnestly.

Meanwhile, the Kaiser Foundation on Medicaid and the Uninsured just released a report noting that the rate of uninsured in the Hoosier State would drop by 55 percent if it expanded Medicaid. Pence has suggested moving those uninsured into private plans that would cap benefits--the same plans his insurance commissioner claims will blow up the individual market with exorbitant rate increases.

In Georgia, another anti-ACA state, similiar mathematical shenanigans are also taking place, again orchestrated by an agency charged with transparency and consumer protection.

Getting trustworthy information on the ACA is tougher than it should be, but is doable. But in Indiana and other anti-reform states, it's all but impossible. By not piping up, hospitals in these states are abetting financial damage to both themselves and their patients. - Ron (@FierceHealth)

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