Former Connector head wants simplified ACA subsidy eligibility process

The Affordable Care Act is here to stay until at least the next presidential inauguration, but there are some fixes that can be made to make the law work better today, the former head of the Massachusetts Health Connector, often called the template for the ACA, says.

Speaking at a recent health insurance exchange policy conference in Washington, D.C., Jon Kingsdale said the key to making the ACA work better is to “simplify, simplify, simplify.”

“We have [created] the most complicated financing system on God’s green earth,” he explains. “With the ACA, I’m a supporter, but we have made this thing incredibly complicated and it’s complicated for everybody,” including health plans, providers and consumers. But, he admits, expecting Congress to simplify anything is “almost oxymoronic.”

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Kingsdale, who is now a consultant with Wakely Consulting Group in Boston, says key among his wish list to improve the ACA is simplifying the eligibility determination for subsidies. Kingsdale says in his conversations with exchange heads, they find consumers spend hours determining their eligibility for coverage and subsidy amount and then spend little time selecting a health plan. “They just want to get off the damn machine,” he says. “They don’t spend any time on the most important things.”

To fix this, Kingsdale suggests using large buckets. For example, if you are 50% to 200% below the federal poverty line, you get X percent subsidy.

He also believes the eligibility determination should be a separate process from picking a health plan. “Separate it from the plan choice and have a national eligibility engine tell you what you are entitled to,” he says. “Then you go on Medicare or the exchange and spend some real time shopping for a plan.”

That national eligibility engine idea is quite interesting, says Katherine Hempstead, a director at the non-partisan Robert Wood Johnson Foundation. It has “the most potential to simplify the exchange by outsourcing more functions – potentially improving the consumer experience at a lower unit cost,” she says. “We can see that Healthcare.gov is very open to potentially using outside vendors for out of pocket cost calculators, and potentially other functions, and state exchanges seem to be following suit.”

If the subsidy determination were to be in a separate database, it would facilitate the outsourcing of the eligibility determination and that would be a very important development, she says. “One thing about expanding coverage is that we increase the net cost of insurance,” Hempstead explains. “The public sector clearly has a huge role to play in the emerging non-group market, so it is important to make the administrative aspects as efficient as possible.”