Insurance Law Commons^™

Reform At Risk — Mandating Participation In Alternative Payment Plans, Scott Levy, Nicholas Bagley, Rahul Rajkumar

Articles

In an ambitious effort to slow the growth of health care costs, the Affordable Care Act created the Center for Medicare and Medicaid Innovation (CMMI) and armed it with broad authority to test new approaches to reimbursement for health care (payment models) and delivery-system reforms. CMMI was meant to be the government’s innovation laboratory for health care: an entity with the independence to break with past practices and the power to experiment with bold new approaches. Over the past year, however, the Department of Health and Human Services (HHS) has quietly hobbled CMMI, imperiling its ability to generate meaningful data …

Small Change, Big Consequences — Partial Medicaid Expansions Under The Aca, Adrianna Mcintyre, Allan M. Joseph, Nicholas Bagley

Articles

Though congressional efforts to repeal and replace the Affordable Care Act (ACA) seem to have stalled, the Trump administration retains broad executive authority to reshape the health care landscape. Perhaps the most consequential choices that the administration will make pertain to Medicaid, which today covers more than 1 in 5 Americans. Much has been made of proposals to introduce work requirements or cost sharing to the program. But another decision of arguably greater long-term significance has been overlooked: whether to allow “partial expansions” pursuant to a state Medicaid waiver. Arkansas has already submitted a waiver request for a partial expansion, …

The Affordable Care Act, Experience Rating, And The Problem Of Non-Vaccination, Eric Esshaki

University of Michigan Journal of Law Reform Caveat

Polio, the whooping cough, and the mumps, among many other communicable diseases, were once prevalent in communities within the developed world and killed millions of people.1 The advent of vaccinations contained or eradicated several of these diseases.2 However, these diseases still exist in the environment3 and are making a comeback in the United States.4 Their persistence is directly attributable to the rising trend among parents refusing to vaccinate their children.5 One proposed solution to this problem is to hold parents liable in tort when others are harmed by their failure to vaccinate. Another proposed solution argues that parents should pay …

Three Words And The Future Of The Affordable Care Act, Nicholas Bagley

Articles

As an essential part of its effort to achieve near universal coverage, the Affordable Care Act (ACA) extends sizable tax credits to most people who buy insurance on the newly established health care exchanges. Yet several lawsuits have been filed challenging the availability of those tax credits in the thirty-four states that refused to set up their own exchanges. The lawsuits are premised on a strained interpretation of the ACA that, if accepted, would make a hash of other provisions of the statute and undermine its effort to extend coverage to the uninsured. The courts should reject this latest effort …

No Good Options: Picking Up The Pieces After King V. Burwell, Nicholas Bagley, David K. Jones

Articles

If the Supreme Court rules against the government in King v. Burwell, insurance subsidies available under the Affordable Care Act (ACA) will evaporate in the thirty-four states that have refused to establish their own health-care exchanges. The pain could be felt within weeks. Without subsidies, an estimated eight or nine million people stand to lose their health coverage. Because sicker people will retain coverage at a much higher rate than healthier people, insurance premiums in the individual market will surge by as much as fifty percent. Policymakers will come under intense pressure to mitigate the fallout from a government loss …

Predicting The Fallout From King V. Burwell - Exchanges And The Aca, Nicholas Bagley, David K. Jones, Timothy Stoltzfus Jost

Articles

The U.S. Supreme Court's surprise announcement on November 7 that it would hear King v. Burwell struck fear in the hearts of supporters of the Affordable Cara Act (ACA). At stake is the legality of an Internal Revenue Service (IRS) rule extending tax credits to the 4.5 million people who bought their health plans in the 34 states that declined to establish their own health insurance exchanges under the ACA. The case hinges on enigmatic statutory language that seems to link the amount of tax credits to a health plan purchased "through an Exchange established by the State." According to …

Comparative Effectiveness Research As Choice Architecture: The Behavioral Law And Economics Solution To The Health Care Cost Crisis, Russell Korobkin

Michigan Law Review

With the Patient Protection and Affordable Care Act (“ACA”) set to dramatically increase access to medical care, the problem of rising costs will move center stage in health law and policy discussions. “Consumer directed health care” proposals, which provide patients with financial incentives to equate marginal costs and benefits of care at the point of treatment, demand more decisionmaking ability from consumers than is plausible due to bounded rationality. Proposals that seek to change the incentives of health care providers threaten to create conflicts of interest between doctors and patients. New approaches are desperately needed. This Article proposes a government-facilitated …

An Insurance Structure To Encourage Investment In Preventative Health Care, Nicholas Georgakopoulos

University of Michigan Journal of Law Reform

The incentives for investments in Americans' health are poorly aligned. Health insurers are not sufficiently motivated to invest for the long term. The structure of health insurance does not compensate insurers for investments in lasting health, such as measures preventing chronic disease. If an American changes insurers, the new insurer reaps the benefits of the good health the prior insurer's investment produced. This Essay explores insurers' incentives to invest in health, illustrates how those incentives fail, explores possible improvements, and shows that subsequent insurers should have an obligation to compensate the prior insurer for the averted expenses of expected diseases …

Can Consumers Control Health-Care Costs?, Mark A. Hall, Carl E. Schneider

Articles

The ultimate aim of health care policy is good care at good prices. Managed care failed to achieve this goal through influencing providers, so health policy has turned to the only market-based option left: treating patients like consumers. Health insurance and tax policy now pressure patients to spend their own money when they select health plans, providers, and treatments. Expecting patients to choose what they need at the price they want, consumerists believe that market competition will constrain costs while optimizing quality. This classic form of consumerism is today’s health policy watchword. This article evaluates consumerism and the regulatory mechanism …

Access To Medicaid: Recognizing Rights To Ensure Access To Care And Services, Colleen Nicholson

University of Michigan Journal of Law Reform Caveat

The Supreme Court has defined Medicaid as “a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals.” In June 2012, the Court found the Patient Protection and Affordable Care Act’s (PPACA) Medicaid expansion unconstitutional. The Court took issue with the threat to withhold all of a state’s Medicaid funding if they did not comply with the expansion, finding it coercive and a fundamental shift in the Medicaid paradigm. However, Medicaid in its current form may not always be effective at providing beneficiaries with timely access to …

Re-Thinking Health Insurance, Hans Biebl

University of Michigan Journal of Law Reform Caveat

In May 2009, while promoting the legislation that would become the Patient Protection and Affordable Care Act (PPACA), President Obama said that rising health care costs threatened the balance sheets of both the federal government and private enterprise. He noted that any increase in health care spending consumes funds that “companies could be using to innovate and to grow, making it harder for them to compete around the world.” Despite the rancorous debate that surrounded this health care legislation and which culminated with the Supreme Court’s decision in National Federation of Independent Businesses, the PPACA was not a radical piece …

Why It's Called The Affordable Care Act, Nicholas Bagley, Jill R. Horwitz

Articles

The Patient Protection and Affordable Care Act of 2010 (“ACA”) raises numerous policy and legal issues, but none have attracted as much attention from lawyers as Section 1501. This provision, titled “Maintenance of Mini-mum Essential Coverage,” but better known as the “individual mandate,” requires most Americans to obtain health insurance for themselves and their dependents by 2014. We are dismayed that the narrow issue of the mandate and the narrower issue of free riding have garnered so much attention when our nation’s health-care system suffers from countless problems. By improving quality, controlling costs, and extending coverage to the uninsured, the …

The Unaffordable Health Care Act - A Reponse To Professors Bagley And Horwitz, Douglas A. Kahn, Jeffrey H. Kahn

Articles

The Patient Protection and Affordable Care Act of 2010 has stirred considerable controversy. In the public debate over the program, many of its proponents have defended it by focusing on what is sometimes called the “free-rider” problem. In a prior article, we contended that the free-rider problem has been greatly exaggerated and was not a significant factor in the congressional decision to adopt the Act. We maintained that the free-rider issue is a red herring advanced to trigger an emotional attraction to the Act and distract attention from the actual issues that favor and disfavor its adoption. In a recently …

Free Rider: A Justification For Mandatory Medical Insurance Under Health Care Reform?, Douglas A. Kahn, Jeffrey H. Kahn

Articles

Section 1501 of the Patient Protection and Affordable Care Act added section 5000A to the Internal Revenue Code to require most individuals in the United States, beginning in the year 2014, to purchase an established minimum level of medical insurance. This requirement, which is enforced by a penalty imposed on those who fail to comply, is sometimes referred to as the “individual mandate.” The individual mandate is one element of a vast change to the provision of medical care that Congress implemented in 2010. The individual mandate has proved to be controversial and has been the subject of a number …

Crisis On Campus: Student Access To Health Care, Bryan A. Liang

University of Michigan Journal of Law Reform

College-aged adults are an overrepresented group in the uninsured population of the United States, and traditionally underserved minorities are disproportionately affected. Students with private health insurance are often functionally uninsured as well, since most schools refuse to accept this traditionally elite calling card on campus. Consequently, the large uninsured and functionally uninsured populations often rely on school-sponsored health insurance plans for access to care. These plans have uneven coverage, limited benefits, exclusions and high co-pays and deductibles, and provide little health care security for their beneficiaries. Further, schools and insurance companies have profited substantially from these student plans, raising the …

When Patients Say No (To Save Money): An Essay On The Tectonics Of Health Law., Mark A. Hall, Carl E. Schneider

Articles

The ultimate aim of health care public policy is good care at good prices. Managed care stalled at achieving this goal by trying to influence providers, so health policy has turned to the only market-based option left: treating patients like consumers. Health insurance and tax policy are now pressuring patients to spend their own money when they select health plans, providers, and treatments. Expecting patients to choose what they need at the price they want, consumerists believe that market competition will constrain costs while optimizing quality. This classic form of consumerism is today's watchword. This Article evaluates this ideal type …

Review Of Reforming Medicare: Options, Tradeoffs, And Opportunities, Jill R. Horwitz

Reviews

Medicare needs fixing. The program has its strengths; it is popular among beneficiaries, has very low administrative costs (maybe too low), and, since its inception, has greatly reduced financial risk exposure among beneficiaries. Nevertheless, it is unaffordable and inefficient. Jeanne Lambrew and Henry Aaron take up both of these challenges for Medicare reform in great detail in Reforming Medicare.

The Patient Life: Can Consumers Direct Health Care?, Carl E. Schneider, Mark A. Hall

Articles

The ultimate aim of health care policy is good care at good prices. Managed care failed to achieve this goal through influencing providers, so health policy has turned to the only market-based option left: treating patients like consumers. Health insurance and tax policy now pressure patients to spend their own money when they select health plans, providers, and treatments. Expecting patients to choose what they need at the price they want, consumerists believe that market competition will constrain costs while optimizing quality. This classic form of consumerism is today's health policy watchword. This article evaluates consumerism and the regulatory mechanism …

The Virtues Of Medicare, Jill R. Horwitz

Reviews

Most of us look forward to a heaven where people don't get sick. But if they do, health care would be traded among fully informed patients and providers in perfectly competitive and frictionless markets. In that perfect world, sick citizens simply shop for doctors the way they shop for other consumer goods. The better doctors, like the most elegant hotel rooms and fanciest cars, would cost more than inferior doctors. Patients would consult their utility meters and, with appropriate attention to discounting over an infinite lifetime, choose accordingly. After each treatment, the patients would know the quality of their outcome …

(Debate) Medicare: Did The Devil Make Us Do It?, D. A. Hyman, Jill R. Horwitz

Articles

In this lively and creative debate, Professors David Hyman and Jill Horwitz argue about the virtues and vices of the federal Medicare program. As some predict a bleak future for the American’s government’s ability (or inability) to continue paying for Medicare as the population ages, this debate shows that there is genuine disagreement about the severity of the problem. In his Opening Statement, Professor Hyman offers a satirical letter to the Devil from one of his demonic servants, describes the Medicare program through the lens of the seven deadly sins. Arguing that Medicare’s faults are represented in each sin, the …

Consumer-Directed Health Care And The Chronically Ill, John V. Jacobi

University of Michigan Journal of Law Reform

Insurance plans with consumer-controlled spending accounts are advocated as tools for reducing health costs and empowering consumers. This Article describes their recent development and argues that they are likely to fail. Instead of focusing on the small number of consumers with chronic illnesses who account for the bulk of health spending they focus on the majority of relatively well consumers. This Article proposes market-based and regulatory changes focused on high-cost patients. To best serve cost and quality goals, health finance responsibility should be divided between consumers and their employers for predictable and routine costs, and government for chronic and catastrophic …

Managed Care- The First Chapter Comes To A Close, Sallyanne Payton

University of Michigan Journal of Law Reform

Introduction to the symposium, Managed Care: What's the Prognosis: Managing Care in the Next Century.

Clearing The Way For An Effective Federal-State Partnership In Health Reform, Eleanor D. Kinney

University of Michigan Journal of Law Reform

At century's end, states have assumed a very different role in the design, implementation, and operation of health service programs than they did twenty-five years ago. In the current volatile political atmosphere particularly at the federal level, states have taken up the mantle of healthcare reform in the final years of the 1990s. Yet there remain problems and difficulties with the current federal-state relationship in health reform. The critical question is whether states can successfully accomplish genuine reform given its politically charged, complex and costly nature. This question takes on particular significance for the most important reform-expanding coverage to the …

Managed Care Regulation: Can We Learn From Others? The Chilean Experience, Timothy Stoltzfus Jost

University of Michigan Journal of Law Reform

Because the United States relies on private insurance for financing health care to a much greater degree than do other nations, and because managed care as a form of private insurance is further developed in the United States than elsewhere, it is arguable that we have little to learn from other nations about managed care regulation. This Article tests this hypothesis with respect to Chile, a country where private insurance is widespread and managed care is emerging. It concludes that by studying the experience of other nations we might gain a larger perspective on the context of our concerns in …

The Competitive Impact Of Small Group Health Insurance Reform Laws, Mark A. Hall

University of Michigan Journal of Law Reform

This Article reports on findings from an extensive study of small group health insurance market reforms in seven states, enacted during the early 1990s. After summarizing the content and purpose of these reforms, this evaluation focuses on the impact these reforms have had on the nature and degree of market competition. The principal findings are: (1) small group health insurance markets are highly competitive, both in price and in product innovation and diversity; (2) although some insurers have left some or all of these states in part because of these reforms, an ample number of active competitors remain, even in …

Chicago Hope Meets The Chicago School, Gail B. Agrawal

Michigan Law Review

Twenty-five years after the enactment of the Federal Health Maintenance Organization Act and nearly five years after the failure of proposed federal health care reform, managed care has come to dominate the medical marketplace. As a result, the relationships among patients, payers, and physicians have changed fundamentally and dramatically. In this market-driven environment, health care - how much it costs, who receives treatment, and who pays for it - may have surpassed the weather as a topic of everyday conversation at dinner tables and water coolers across the country. In the popular press, reports concerning managed care, usually derogatory, are …

Democratizing Hmo Regulation To Enforce The "Rule Of Rescue", Kent G. Rutter

University of Michigan Journal of Law Reform

Despite heightened public concern about HMOs, misguided regulatory measures have not guaranteed HMO patients access to the treatment options many consider vital. This Note recommends four changes to the current regulatory system that would preserve HMOs' ability to control health care costs while allowing patients and doctors, rather than lawmakers or HMO administrators, to set health care priorities.

The Nonprofit Health Care Corporation Reform Act Of 1980, David L. Hollister, Patience A. Drake

University of Michigan Journal of Law Reform

In recent years, Blue Cross/Blue Shield has been the subject of considerable controversy. Its critics charge the non-profit, tax-exempt corporation with being unduly secretive, arrogantly unresponsive to consumer interest and not vigorous in its cost containment efforts. These criticisms, along with a variety of other factors, led to the legislative reform I am here to talk to you about this evening.

Regulation Through The Looking Glass: Hospitals, Blue Cross, And Certificate-Of-Need, Sallyanne Payton, Rhoda M. Powsner

Michigan Law Review

A clear focus on the commitment of the public health and hospital establishments to the large teaching hospital and their belief in rationalizing the health care system through community-based planning allows us to understand the ideas and institutions that have produced our present system of hospital regulation. It can also help us to understand the structure and behavior of the hospital industry and can illuminate current controversies over health care policy.

What follows is a narrative account of the development of regional planning and certificate-of-need legislation. As part of that story, we trace the evolution of the Blue Cross, explain …

The Impact Of Michigan's Health Maintenance Organization Act, Roger Alan Petzke

University of Michigan Journal of Law Reform

Growing dissatisfaction with the shortcomings of the traditional system of health care has led to renewed interest in the Health Maintenance Organization (HMO) concept in recent years. Although some HMO's have been operating in the United States for over forty years, conditions have been less than favorable to their growth and development. Major obstacles have been opposition from the medical profession, lack of public understanding about the nature and function of HMO's, and state laws restricting or prohibiting the establishment of HMO's. In order to create a more favorable legal climate and encourage HMO development, a number of states, including …