With the departure of Aetna from many state’s health insurance exchanges, we have entered the annual ritual of questioning the sustainability of Obamacare. But since the legislative options since passage have effectively been “keep as is” or “pull out by the root,” debate about how to actually improve the Affordable Care Act has been muted. Democrats have had to defend the program, and Republicans have had to decry it. Neither party is in a position to propose helpful tweaks to the law—a dynamic that could change after this fall’s election.

While Massachusetts served as the initial template for the Affordable Care Act, going forward we could look at a state that has had the exact opposite temperament toward Obamacare: Florida.

Florida has done more than perhaps any other state to impede Obamacare. Florida led the lawsuit challenging the constitutionality of the ACA before the Supreme Court, and has rejected Medicaid eligibility expansion, despite having one of the highest uninsured rates in the nation.

Even at an implementation level, the state forbade the insurance commissioner from reviewing rates for two years and limited consumer access to ACA navigators. The state carved itself up into QHP ratings areas by county instead of broader regions, so there are 67 ratings areas in Florida, well more than in the more populous Texas (26), California (19) or New York (eight). By setting up their exchanges this way, the state encouraged insurers to neglect the more rural counties, or stay out of counties where they did not get favorable terms with major providers.

Despite all the roadblocks, more Floridians have signed up for Obamacare than any other state.

There's little that Florida lawmakers could do to stop the program from being popular in the state. Florida has a high uninsured rate, particularly in Miami, and these people often have low income. In fact, Florida has the third-highest uninsured rate in the nation, according to 2014 U.S. Census data, at 17 percent, behind only Texas and Alaska. Miami-Dade County is one of only two counties in the nation with a population of more than two million and an uninsured rate of more than 25 percent (the other is Dallas County, Texas), according to 2013 U.S. Census data.

According to the Kaiser Family Foundation, 70 percent of Floridians make less than 400 percent of the federal poverty level—the threshold for receiving subsidies for purchasing health insurance through the exchange. Only four states have a higher percentage of residents living at less than 400 percent FPL; the national average is 63 percent.

So the demand for insurance was there, and the consumer (through subsidies) had the means to purchase.

When you have that combination, you have a seller's market.

Florida knew it had a desirable commodity to sell to managed care organizations: uninsured people with subsidized premiums and a mandate to buy. And the state wasn't going to give this away to insurers without bidding wars, protections and concessions.

At least, Florida did this for its own mandatory managed Medicaid program, which was approved for statewide expansion in 2013. Florida rolled out this program in the exact opposite manner in which it treated the Affordable Care Act.

The state was divided into 11 service regions (instead of 67), with a limited number of insurers serving each, creating a competitive bidding process, which included scoring to favor MCOs that had demonstrated competence. Medicaid MCOs had to ensure they had adequate provider networks, as well as physicians accepting new patients.

Winning insurers agreed to serve a region through the duration of the five-year contract or incur a financial penalty as well as a ban from future bidding. If an MCO pulls out of a region, it has to give 180 days’ notice, provide a transition plan, and pull out of all regions in the state.

Participating MCOs must also meet performance targets, and through the state’s achieved savings rebate process, high-performing MCOs can retain an additional 1 percent of revenue. Physicians who take Medicaid payments for two consecutive years were to have reimbursement bumped up to Medicare rates. A special category of Medicaid plan was made to handle chronic needs populations, such as HIV/AIDS, Mental Illness and Dual Eligibles.

And since the program carries an individual mandate on Medicaid beneficiaries, eligibles must select an MCO within 30 days of receiving notification or become auto-enrolled into a plan in their region.

Florida’s current managed Medicaid program took its lessons from a five-county pilot project that started in 2006. Two years after the launch, the program faced a crisis more existential than what Obamacare is seeing now with pullback from Aetna and UnitedHealth. Tampa-based WellCare, along with national for-profits Amerigroup and UnitedHealthcare—which combined handled two-thirds of the managed Medicaid enrollment—departed the program.

In response, the state placed a greater emphasis on Provider Service Networks, which were usually backed by local safety-net hospitals or federally qualified health centers—nonprofit entities that were unlikely to bail on the program. Not exactly a public option, but pretty close.

Republican Gov. Rick Scott, both in his dealings with CMS and with insurers, treated his Medicaid-eligibles as precious as Gollum treated his ring. Florida Medicaid isn’t perfect, but it has established a roadmap for a market-based individual mandate.

Imagine if Obamacare set up similar safeguards, demanded more from insurers, auto-enrolled members, established a provider-based or public option, and held an active bidding process with limited winners. But beyond the implementation of the program, the Affordable Care Act could start treating the uninsured as an investment for insurers instead of a burden.

As an idea first hatched by a conservative think tank and implemented by a Republican governor, Obamacare depends on the agility of the free-market to lower the uninsured rate. Democrats may be inclined to treat the program as an onerous public service rather than an investment opportunity. Heading into 2017, supporters of universal healthcare may want to adopt the salesmanship of Trump rather than the self-sacrifice of Bernie.

 

Follow Mark Cherry on Twitter: @MarkCherryDRG

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