by Jaan Sidorov
First posted on Disease Management Care Blog 9/16/2013
According to this U.S. Department of Health and Human Services: Rate Review Annual Report September 2013 from the U.S. Department of Health and Human Services’ Assistant Secretary for Planning and Evaluation (ASPE), the federal government’s scrutiny of proposed health insurance rates “saved consumers approximately $1.2 billion” in 2012
In other words, U.S. citizens: 1. Health insurers: 0. Or rather, the score is 1.2 billion to zero.
That’s a lot of money. When the DMCB reads the report, it’s a credible manuscript that resembles the peer-reviewed medical literature.
The problem: it doesn’t and it isn’t.
The DMCB explains.
Disease Management Care Blog readers may recall how Wellpoint’s tone deafness turbocharged the inclusion of federal “rate reviews” in the Affordable Care Act. In addition to hundreds of millions in state grants to bribe strengthen the states’ regulation of health insurers, the law also required that proposed increase of 10% or more must be submitted to HHS and “justified.”
While the DMCB suspects that rate approvals ultimately belong to the state insurance regulators, HHS’ new power is the threat of public humiliation from posting the health insurers’ rate requests, their actuarial justification and a determination that the rate is “unreasonable.”
It was presumably this threat that led to the initial requests being “reduced or denied” to the tune of $1.2 billion When the requested amounts were compared to the implemented amounts, there was $311 million in savings in the individual insurance market and $866 million in savings in the small group market.
As the DMCB understands it, the data was from health insurers in 47 states that were submitted on a quarterly basis. Rate submissions had to be “cleaned” to correct “filings that were out of scope, or contained similar or duplicative entries, missing or incomplete filings, or incorrect data on requested and/or approved rate changes.” 154 rates were reviewed and 43 were “modified or rejected” in the individual market, while 136 were reviewed and 38 “modified or rejected” in the small group insurance market.
The DMCB’s take:
The style and layout of the online ASPE report appears to be taken from the peer reviewed medical literature, such as the New England Journal of Medicine or Health Affairs. Unfortunately, the resemblance ends there, because everything published in the Journal or in Health Affairs is subjected to external third party review.
While peer review is certainly not perfect, it’s the best we got. As this page shows, Journal editors take the threat of conflicts of interest quite seriously while they rely on external volunteer and expert reviewers as the “lifeblood” of journalistic integrity. As anyone who has submitted a paper for refereed publication knows, medical journal reviewers can be merciless nitpicking critics. While painful and certainly not perfect, the result is greater objectivity, transparency, clarity and trustworthiness.
As far as the DMCB can tell, the ASPE report has not been reviewed by external, unbiased third-party reviewers. While claims of $1.2 billion in savings is credible, the DMCB is worried that the data analysis was consciously or unconsciously configured or manipulated for maximum “spin.” Since the folks who run HHS are understandably interested in the success of the Affordable Care Act, it’s possible that the unnamed authors of this study configured the numbers to present the most flattering aspect of the rate review process.
Case in point? At the very end ASPE report at the very end of the Appendix, there’s this disclaimer:
“A limitation to this method for estimating savings by state is that it assumes that each affected enrollee in these plans paid the statewide average premium, which may not be likely when small numbers of enrollees are affected. Another limitation is that the savings are applied to a full year of premiums, even though many rate increases go into effect mid-year.
In other words, there’s a possibility that there wasn’t $1.2 billion in savings. Had this report been submitted for peer review, that weakness would have certainly been caught up in peer review and it’s likely that another number would have been reported.
Bottom line: because Obamacare continues to be implemented under ever-increasing levels of scrutiny (for example), it’s time for outfits like ASPE to submit reports like this to independent journals for peer reviewed publication. Just because it’s the government doesn’t mean we can take its word for it.