Sen. Cruz, Memorial Hermann, Hon. Carl Islett

“These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman.”

That quote comes from Thomas Paine a few centuries ago regarding the birth of America.  But, it somehow seems to encapsulate the view of advocates on either side of the Senate health reform debate. That bill, and a few other items, are What We’re Watching in Texas health care in July, 2018.

1.  Sen. Cruz’s impact on the Senate reform bill

The Senate is out today with an update to it’s reform legislation, and Senator Cruz appears to have won some significant provisions to the bill.  His definition of success has always been to bring the cost of premiums down, and by that measure he’s scored some points.  His idea of letting carriers sell non-ACA compliant plans (read: lower cost, less coverage) appears to be in the bill.  Earlier this week, it was still possible this would have been left out of the bill, but given a vote as an amendment.  However, even Sen. Cruz thought the amendment would fail as a stand alone given concerns it undermines coverage of pre-existing conditions.  He also has a provision that would allow premiums to be paid out of HSAs.

Curiously though, Sen. Mike Lee of Utah, Cruz’s co-author of the amendment, says the provision is not in the bill.  For what it’s worth, I don’t see it included in the 26-page summary document, but admittedly I’ve not yet read the full bill.  Two Republicans have already come out as no votes on the bill, from the right and center, meaning there is no more margin for error if Sen. Cruz isn’t a yes vote here.

2.  Changes at Memorial Hermann

The largest not-for-profit health system in Southeast Texas had several changes over the last few weeks.  President and CEO Dr. Benjamin Chu announced he was stepping down after a year in the position.  A week later, the system announced 350 employees (not doctors or nurses) would be laid off due to ‘escalating costs and declining reimbursements’.  A few days later, Memorial Hermann Health Plan announced it would no longer sell plans on the individual market, affecting 8,000 consumers.

Chuck Stokes was appointed as permanent President and CEO effective July 6, previously serving as Executive VP and COO.  The transition of two Emerus hospitals to MH in Tomball and Sugar Land was completed, bringing in Memorial Hermann Tomball Hospital and Memorial Hermann First Colony Hospital.  It also opens up future expansion possibilities in the areas.

3.  Governor Abbott’s vetoes and special session agenda

In our last newsletter, we mentioned how the 85th legislative session was called “one of the ugliest and least productive in memory.”  Now Governor Abbott has vetoed 50 bills, blocking some of the modest work done by the legislature. His veto count is the eighth highest since 1846 and the most by a Texas governor since 2007 (Gov. Perry, 56).

The governor vetoed three bills related to health care.  SB670 would have made the commissioner of DSHS a governor appointed position.  SB790 would have extended the Women’s Health Advisory Committee until 2019.  SB1912 would have established mental health public defender offices. All three bills passed out of the Senate unanimously and had strong majorities in the House.

The special session starts next week and legislators have already filed 94 measures.  While there isn’t much on the Governor’s agenda for health care, women’s reproductive health did make the list.  Peripherally related, Rep. Lucio has filed a bill that would legalize medical marijuana.

4.  Video: Hon. Carl Islett

Hon. Carl Islett is a retired Texas House Republican who represented Lubbock County from 1997 to 2010.  He served on the Policy Committee of the House Republican Caucus his freshman year, and served on the House Appropriations Committee and chaired Budget Oversight for the Insurance Committee.

He joins us in this edition of “What They’re Watching” to touch on incentivizing employees to become consumers.  Islett argues that by transitioning to reference-based pricing with open provider networks, employees can take initiative in comparing costs, shop around, and ultimately drive greater accountability to the system.

5.  Continued challenges to the individual market

The individual markets on the exchange are struggling nationally to offer a variety of plans to enrollees.  And while every county in Texas is projected to have at least one health insurance option for 2018, 219 counties are projected to only have one or two carriers on the Exchange.  Absent plan choice in the market, premiums will likely be even higher than normal, as has been seen in states like Wyoming.

In 2015, 91 percent of enrollees in Texas had a choice of three or more insurers.  In 2017, that decreased to 63 percent.  While CMS and TDI have not released plan applications for 2018, it’s unlikely that uncertainty in federal policy will create increased plan participation next year.