John V. Jacobi is Dorothea Dix Professor of Health Law and Policy at the Seton Hall University School of Law. The O’Neill Institute’s Lester Feder spoke with him about health reform and covering those with chronic illness.
Lester Feder: Generally speaking, what do you think of what it is looking like we’re going to get out of Congress?
John V. Jacobi: I think that there are two big clusters of issues: one is covering the uninsured, which has gotten most of the attention, for good reason. The other issues, which I’ve been most concerned about is access for the most vulnerable: people with chronic illness and disabilities. On the first part it’s anybody’s guess on how well we’re going to do at covering the uninsured. On the second part, there are lots of interesting structural pieces in the bills that will help people with chronic illness, but I think that the overall structure of the reform may end up undercutting that quite a bit.
The pieces in the bills that are helpful are the ones that create medical homes, or chronic care management, or assure coordination of care for people with chronic illness. It is the sort of change that our delivery system and our finance system really need to be looking at. The problem with getting those innovations to actually work is that much of the coverage under the plans for the chronically ill will be provided through the private marketplace.
And here’s the problem with that: Private insurance companies are more or less profitable depending on the risks that they accept. They are much more likely to be profitable if they are good at risk selection than if they are efficient and provide good service in other ways. There is such a dramatic concentration of cost in any actuarial pool that if an insurance company can avoid the 10 percent of the sickest people it is going to be doing quite well, whether it’s good or bad at delivering its services. And the ones that attract those 10 percent of the sickest are going to be in trouble unless there’s quite a good risk-adjustment program for premiums, which doesn’t seem to be available yet.