New Insurance Models Created by Health Care Reform Act Provide Potential Opportunity

Family physicians have the unique ability to deliver on the promise of higher quality, lower costs and greater patient access to care. That puts them squarely in a position where they can drive and shape the creation and implementation of health insurance exchanges and consumer-operated and -oriented plans, or CO-OPs, according to speakers at a plenary session during the 2011 AAFP State Legislative Conference here on Nov. 4.

The Patient Protection and Affordable Care Act, which created state health insurance exchanges and CO-OPs to give consumers greater access to affordable, high-quality care, is ushering in health insurance market reforms that will cause "painful disruptions," according to Gordana Krkic, vice president of government relations for the Illinois AFP. But, she pointed out, these market reforms will give family physicians an opportunity to help accomplish the Academy's goal of health care for all.

Krkic stressed that primary care, when practiced properly, lowers costs and provides high-quality care, dovetailing well with the HHS goals of improving care, promoting health and reducing overall system costs. However, Krkic added, much will depend on how the exchanges are set up. "There will be navigators for consumers (within the exchanges), but who will be the navigators for the docs?" she asked.

That is where the Academy can help, said Krkic. The AAFP has developed a set of eight principles for health insurance exchanges that call for

"We have used these principles whenever we have engaged legislators and (policymakers) on insurance exchanges in Illinois," said Krkic.

According to Krkic, insurance exchanges are expected to reduce the number of uninsured in Illinois by 5 percent during the next nine years. But she also talked about how the exchanges would affect family physicians.

"As small-business owners, I think family physicians will 'shop' the exchanges for their own practices," she noted, adding that the exchanges have the potential to increase the bottom line for practices. However, the exchanges also could present challenges because patients within the exchanges are likely to be older, less well-educated and in poorer health than their counterparts in private insurance plans.

"I am reluctant to say whether the (exchanges) will be better or worse," said Krkic. "It will just be different."

Following Krkic's presentation, AAFP member David Carlyle, M.D., of Ames, Iowa, discussed the formation and purpose of CO-OPs, which were designed to foster the creation of nonprofit, member-run health insurance companies in all 50 states and the District of Columbia.

Democrats and Republicans have paid little attention to CO-OPs, and, as a consequence, they have slipped below the radar screen for the most part, said Carlyle, who serves on the federal CO-OP advisory board created as part of the Affordable Care Act.

According to Carlyle, CO-OPs are nonprofit insurance companies that can operate throughout an entire state, multiple states or within a geographic region of a particular state. Profits from these CO-OPs are used to reduce premiums or increase benefits.

Carlyle also noted that, by law, CO-OPs have to rely on an integrated care model, such as the PCMH or accountable care organization models, to deliver care. This includes a payment process that incentivizes a system of care-coordination to provide safe and clinically based quality health care in the most efficient and evidence-based manner.

For its part, the federal government is providing loans for start-up costs and has set aside reserves for the entities, according to Carlyle. He added that the first set of CO-OP applications were due on Oct. 17. The government will announce the first series of awards in January. CO-OPs can start selling policies within and outside the exchanges in 2013.