Editor's Corner: Maybe it should be Medicaid for all

Editor's corner
Medicaid form.
Ron Shinkman
Ron Shinkman

It must be a reflex because as a lifelong Californian, Texas makes me either want to shake my head or fist.

The latest news out of the Lone Star State to provoke such a reaction is simply outrageous: It now owns the highest maternal mortality rate in the developed world.

Yes, you read that correctly: Texas' maternal mortality rate rose from 18.6 per 100,000 births in 2010 to 35.8 per 100,000 in 2014.

The maternal death rate went up because lawmakers in Texas waged war on Planned Parenthood to score political points, taking state funds away from the organization, and forcing it to cut prenatal care services. They also used regulations intended for the operation of ambulatory surgical centers and hospitals to shut down other clinics that provided abortions along with other reproductive care. It's a particularly heartening trend to see as the Zika virus may soon visit the Gulf States.

More disturbing is that this occurred during the vast expansion of insurance coverage through the Affordable Care Act. Of course, Texas never expanded Medicaid eligibility, and may never do so. That's among the reasons that its rate of uninsured hovers at 19 percent, almost double the nationwide average. With its hostility to the ACA, its callous war on reproductive services and the presence of many for-profit, doctor-owned hospitals, you could call Texas America's healthcare black hole.

For the moment, it seems the rest of the country is pondering whether to join Texas and dive into that black hole.

Aetna recently announced that it plans to exit 11 state health insurance exchanges in 2017, cutting participation from 15 to four. The insurer claims it lost $430 million from its exchange business since the start of January 2014. They join UnitedHealth, which plans to exit virtually all of the 34 state exchanges where it offers coverage next year. It said it would lose $650 million on its exchange business in 2016.

There has been a lot of hand-wringing about these moves, with many individuals suggesting this is the beginning of the end for the ACA.

Of course, my colleagues in the media have seized on the losses, making it sound like exchange participation is putting the insurers out of business. They have all but ignored that UnitedHealth's net income for the first half of this year is up 11 percent from a year ago and more than 30 percent from the first half of 2014.

Aetna's net income for the first half of this year is up more than 5 percent for the first half of this year, including a more than 8 percent bump in the second quarter. Aetna's first-half income is up more than 25 percent from the first half of 2014, the year it began operating in the exchanges.

If you bought UnitedHealth stock at the start of 2014, your investment would have nearly doubled in less than three years. Aetna's stock is up 70 percent during that same time.

In other words, the exchange losses are little more than a nuisance for Aetna and UnitedHealth. But shareholder interests--even when they're already being richly served--overrule any notion of making sure Americans have affordable health insurance.

There are some policy changes that could be made to address the issue. The U.S. Department of Health and Human Services has suggested it may revisit the reinstatement of risk corridors, a form of collective reinsurance where plans with lower-than-expected claims partially reimbursed plans with higher claims. That was recently phased out under the ACA.

But there may be a better route to encourage if not compel the health plans to remain in the exchanges. That would be through another part of their business: Medicaid managed care. Medicaid managed care is now provided by private insurers in 38 states, according to the Kaiser Family Foundation. HHS could promulgate a regulation requiring any carrier that provides Medicaid managed care coverage in a state also provide commercial coverage through that state's exchange. Given that Aetna provides Medicaid managed care in 12 states and UnitedHealth in 22 states, this might be a bit of leverage worth exploring.

It does not have to be a completely Draconian regulation: The carriers could simply enroll the exchange participants into their own Medicaid managed care plans.

Several Medicaid managed care plans already provide coverage through the state exchanges. In California, Molina Healthcare and L.A. Care Health Plan both offer policies that tend to be the least expensive and offer the lowest annual premium increases. That's primarily because they rely on provider networks that are inured to the low-reimbursement environment of Med-Cal, the state's Medicaid program. Carriers in other states offering Medicaid managed care have similar low-cost networks in place.

Of course, this is not a stellar solution for hospitals, which already chafe under the low-rent rates the Medicaid program provides. But as I have said in the past on Medicaid expansion, lowball reimbursement is better than none at all.

Another concern is that many managed care plans greatly restrict choices for doctors. But I believe “if you like your doctor you can keep your doctor” has been the most overrated mantra of the ACA. The Medicaid expansion hasn't kept millions of Americans from going to see a doctor who is a complete stranger. That they have access to healthcare services has been the key issue.

With such a requirement in place and a rather relentless trend among consumers picking their healthcare on price, it is entirely possible that Medicaid could suffice as the “public option” Hillary Clinton has said she would push for if elected President. And “Medicaid for all” could be the transition toward single-payer healthcare that this country is inevitably stumbling toward in the decades to come.

The other option is to potentially see the kind of mortality data in Texas replicate itself in other parts of the country. And that is simply no choice at all. – Ron (@FierceHealth)