Tuesday, July 07, 2015

Meanwhile, back in the lab

We've been fans of the 58 state laboratories model for quite a while. That is, each state should be free to design, implement and administer the type of healthcare system that works best in that state; results can then be evaluated by the others to see what might work (or not work) elsewhere.

So I am not entirely aghast at this apparently massive Natural State failure :

"[E]nrollees are asked to contribute nominal amounts to new “Health Independence Accounts,” or HIAs, which were supposed to mirror health savings accounts."

This was a result of SCOTUScare Medicaid expansion, and the basic premise seems relatively benign (if goofy):

"[E]nrollees ... are “required” to make monthly contributions to HIAs ... unlike real health savings accounts, Private Option enrollees will not use funds in their HIAs to pay for their own medical care. Instead, the money will simply sit in enrollees’ accounts until they leave the program. At that point, they can take the money with them and use it toward other health care costs."

It's not clear why this would entice careful health care shopping, but again, it seems perfectly legitimate to see how this might play out in a single state. As one might imagine, that didn't turn out so well:

"[T]he evidence is mounting: so-called “independence” accounts are actually reducing enrollees’ “skin in the game,” and costing even more money for taxpayers."

Well of course: if the money's just sitting there, and can't actually be accessed to pay for care, then it seems pretty useless. Adding insult to injury, turns out that Arkansas officials have been pretty lax about enforcing that personal contribution part:

"[T]he truth is that this “requirement” is more like a mere suggestion. If enrollees refuse to contribute to their accounts, they aren’t removed from the program."

So how's that working out?

As you might've guessed, not quite as planned:

"[J]ust 43,000 of the 250,000 Private Option enrollees have received HIA cards. Just 10,000 of those enrollees even bothered to activate their cards."

And, as noted above, there's no indication that most folks have even made any "contributions." In fact, only a few thousand (of the quarter of a million enrollees) have actually ponied up any funds. And why would they? After all, if none of the bureauweenies running the program are out beating the bushes for deadbeats, and there's no real cost-sharing penalty, then why tie up perfectly good money?

So it seems that this experiment is an $8 million bust, but there's value in seeing what doesn't work, as well. Potentially a good learning experience for the other 57 states.
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