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Individual market enrollment dropping amid premium increases
Individual market enrollment dropping amid premium increases
Enrollment in the individual health insurance market — the market for people who don’t get coverage through work — has declined 12 percent in the first quarter of 2018, compared to the same period last year, according to a new analysis released Tuesday.
The analysis from the Kaiser Family Foundation showed enrollment in the individual market grew substantially after the implementation of the Affordable Care Act (ACA) and remained steady in 2016, before dropping by 12 percent in 2017.
There were 17.4 million people enrolled in the individual market in 2015, compared to 15.2 million in 2017 and 14.4 million in the first quarter of 2018.
The study notes that much of the decline is concentrated in the off-exchange market, where a number of enrollees are not eligible for ObamaCare subsidies and therefore not protected from significant premium increases in 2017 and 2018.
In this market, enrollment numbers dropped by 38 percent from the first quarter of 2017 to the first quarter of 2018.
The Trump administration last year canceled key ObamaCare subsidies for insurers, leading insurers to increase premiums substantially.
The anticipation of the repeal of ObamaCare’s individual mandate has also contributed to premium increases.
While ObamaCare enrollees who receive subsidies are mostly shielded from these increases, those who don’t are left to pay the full price.
“While the vast majority of exchange consumers receive subsidies that protect them from premium increases, off-exchange consumers bear the full cost of premium increases each year,” the analysis notes.
“In 2017, states that had larger premium increases saw larger declines in unsubsidized ACA-compliant enrollment, suggesting a relationship between premium hikes and enrollment drops.”
Despite the rises in premiums, enrollment in the ObamaCare exchanges has remained stable. There were 10.6 million people on the exchanges in the first quarter of this year, compared to 10.3 million in the first quarter of last year.
California’s ACA Rates To Rise 8.7% Next Year
Premiums in California’s health insurance exchange will rise by an average of 8.7 percent next year, marking a return to more modest increases despite ongoing threats to the Affordable Care Act.
The state marketplace, Covered California, said the rate increase for 2019 would have been closer to 5 percent if the federal penalty for going without health coverage had not been repealed in last year’s Republican tax bill.
The average increase in California is smaller than the double-digit hikes expected around the nation, due largely to a healthier mix of enrollees and more competition in its marketplace. Still, health insurance prices keep growing faster than wages and general inflation as a result of rising medical costs overall, squeezing many middle-class families who are struggling to pay their household bills.
The 8.7 percent increase in California ends two consecutive years of double-digit rate increases for the state marketplace.
“It’s not great that health care costs are still increasing that much, but the individual market is not sticking out like a sore thumb like it has in other years,” said Kathy Hempstead, senior adviser at the Robert Wood Johnson Foundation. “It’s falling back to earth.”
The future may be less bright. An estimated 262,000 Californians, or about 10 percent of individual policyholders in and outside the exchange, are expected to drop their coverage next year because the ACA fines were eliminated, according to the state. Peter Lee, executive director of Covered California, warned that the exodus of healthier consumers will drive up insurance costs beyond 2019 — not just for individual policyholders but for California employers and their workers.
“We are paying, in essence, a surcharge for federal policies that are making coverage more expensive than it should be,” Lee said in an interview. “There will be more of the uninsured and more uncompensated costs passed along to all of us.”
Critics of the Affordable Care Act say it has failed to contain medical costs and left consumers and taxpayers with heavy tabs . Nearly 90 percent of Covered California’s 1.4 million enrollees qualify for federal subsidies to help them afford coverage.
Foiled in its attempt to repeal Obamacare outright, the Trump administration has taken to rolling back key parts of the law and has slashed federal marketing dollars intended to boost enrollment. Instead, the administration backs cheaper alternatives, such as short-term coverage or association health plans, which don’t comply fully with ACA rules and tend to offer skimpier benefits with fewer consumer protections.
Taken together, those moves are likely to draw healthier, less expensive customers out of the ACA exchanges and leave sicker ones behind.
Nationally, 2019 premiums for silver plans — the second-cheapest and most popular plans offered — are expected to jump by 15 percent, on average, according to an analysis of 10 states and the District of Columbia by the Avalere consulting firm. Prices vary widely across the country, however. Decreases are expected in Minnesota while insurers in Maryland are seeking 30 percent increases.
In California, exchange officials emphasized, consumers who shop around could pay the same rate as this year, or even a little less.
Christy McConville of Arcadia already spends about $1,800 a month on a Blue Shield plan for her family of four, opting for “platinum” coverage, the most expensive type. Her family doesn’t qualify for federal subsidies in Covered California.
She’s worried about further increases and doesn’t want to switch plans and risk losing access to the doctors she trusts. “We’re getting right up to the limit,” McConville said.
Amanda Malachesky, a nutrition coach in the Northern California town of Petrolia, said the elimination of the penalty for being uninsured makes dropping coverage more palatable. Her family of four pays almost $400 a month for a highly subsidized Anthem Blue Cross plan that has a $5,000 deductible.
“I’ve wanted to opt out of the insurance model forever just because they provide so little value for the exorbitant amount of money that we pay,” said Malachesky, who recently paid several hundred dollars out-of-pocket for a mammogram. “I’m probably going to disenroll … and not give any more money to these big bad insurance companies.”
Covered California is aiming to stem any enrollment losses by spending more than $100 million on advertising and outreach in the coming year. In contrast, the Trump administration spent only $10 million last year for advertising the federal exchange across the 34 states that use it.
Also, California lawmakers are looking at ways to fortify the state exchange. State legislators are considering bills that would limit the sale of short-term insurance and prevent people from joining association health plans that don’t have robust consumer protections.
However, California hasn’t pursued an insurance mandate and penalty at the state level, which both health plans and consumer advocates support. New Jersey and Vermont have enacted such measures.
Lee said it’s up to lawmakers to decide whether a state mandate makes sense.
David Panush, a Sacramento health care consultant and a former Covered California official, said some lawmakers may be reluctant to push the idea, even in deep-blue California.
“The individual mandate has always been the least popular piece of the Affordable Care Act,” he said.
Despite the constant uncertainty surrounding the health law, many insurers nationally are posting profits from their ACA business and some plans are looking to expand further on the exchanges.
In California, the same 11 insurers are returning, led by Kaiser Permanente and Blue Shield of California. Together, those two insurers control two-thirds of exchange enrollment. (Kaiser Health News, which publishes California Healthline, is not affiliated with Kaiser Permanente.)
The Covered California rate increases are fairly uniform across the state. Premiums are climbing 9 percent across most of Southern California as well as in San Francisco. Monterey, San Benito and Santa Cruz counties faced the highest increase at 16 percent, on average.
The rates are subject to state regulatory review but are unlikely to change significantly. Open enrollment on the exchange starts Oct. 15.
The ACA’s expansion of coverage has dramatically cut the number of uninsured Californians. The proportion of Californians lacking health insurance fell to 6.8 percent at the end of last year, down from 17 percent in 2013, federal data show.
States sue Trump administration over AHP expansion
https://www.healthcaredive.com/news/states-sue-trump-administration-over-ahp-expansion/528875/
Dive Brief:
- Attorneys general from 11 states and Washington, D.C. are suing the Trump administration in hopes of putting the brakes on association health plan expansion.
- Expanding AHPs is a key plank in President Donald Trump’s healthcare platform, but critics call the plans “junk insurance” that will sidestep Affordable Care Act regulations.
- Meanwhile, the House of Representatives passed two bills last week that look to lower restrictions on health savings accounts (HSAs).
Dive Insight:
Trump, who repeatedly calls the ACA a “disaster,” said AHPs and allowing anyone to get catastrophic health insurance will offer flexibility and reduce health insurance costs.
In announcing the final rule last month, the Department of Labor said the regulation included anti-discrimination protections similar to those for large employers. It also allows states to regulate AHPs.
Though supportive of those protections, AHP critics are still concerned about the plans. They charge that AHPs will offer fewer consumer protections, lead to higher premiums in individual and small-group markets and result in fraudulent companies in the AHP market.
Tempting people with lower-cost offerings, AHPs and catastrophic plans could cause millions to flee the ACA exchanges. A recent report from the Society of Actuaries predicted between 3% and 10% of those in ACA marketplace plans will leave for AHPs. Those people are more likely to be young and healthy. Leaving the marketplace plans will result in an unstable risk pool with higher premiums in the exchanges.
A recent report from Avalere predicted individual rates would increase by between 2.7% and 4% and small group by between 0.1% and 1.9% with AHP expansion. Avalere said 130,000 to 140,000 more people will become uninsured because of the premium increases in the individual market by 2022.
Millions of people and small employers once got coverage through AHPs. However, the ACA instituted consumer protections for AHPs and said they should be regulated the same as individual and small-group market plans, such as requiring them to cover people with pre-existing conditions. The consumer protections increased the costs of AHPs, and many of them folded. The Kaiser Family Foundation said only 6% of employers with fewer than 250 employees offered health insurance through AHPs in 2017.
The Trump administration wants to make AHPs a low-cost solution with fewer regulations and consumer protections. However, the lawsuit involving 11 states and Washington, D.C. alleges the Department of Labor’s rule to expand AHPs violates the Administrative Procedures Act. The suit said that allowing for more AHPs “increases the risk of fraud and harm to consumers, requires states to redirect significant enforcement resources to curb those risks and jeopardizes state efforts to protect their residents through stronger regulation. The rule is unlawful and should be vacated.”
Meanwhile, the Republican-led House of Representatives is promoting more use of health savings accounts, which are a crucial part of high-deductible health plans and the drive toward consumerism.
One bill the House passed would allow members more flexibility to use their HSA until meeting their deductible. It also lets spouses contribute to an HSA and loosens restrictions on how members can use the account. The second piece of legislation would let people set aside more money for their HSA. That bill would also reduce the health insurance tax for two years, a change supported by the insurance lobby. The ACA created the tax as a way to pay for coverage improvements, but payers say it increases premiums.
MAINE SECURES WAIVER TO RESURRECT ‘INVISIBLE HIGH-RISK POOL’
https://www.healthleadersmedia.com/finance/maine-secures-waiver-resurrect-invisible-high-risk-pool
The reinsurance program, which the state operated in 2012 and 2013, before the ACA’s transitional reinsurance took effect, is expected to reduce insurance costs in Maine’s individual insurance market.
The federal government approved another waiver application Monday under the Affordable Care Act, giving Maine the go-ahead to reinstate a reinsurance program it had operated briefly before the ACA took effect.
Maine is the fifth state to secure a Section 1332 waiver to establish a state-run reinsurance program, following closely on the heels of Wisconsin’s waiver request being granted Sunday. Alaska, Minnesota, and Oregon won their waivers last year, and two other states—Maryland and New Jersey—have similar applications pending.
Although the Trump administration has taken a number of actions that would appear to harm the individual market, approving these waivers seems to be a positive step in the opposite direction, says Matthew Fiedler, PhD, a fellow with the Brookings Institution Center for Health Policy who served as chief economist of the Council of Economic Advisers during the Obama administration.
“Reinsurance waivers will reduce premiums in the individual market in these states and will result in more people being covered. I think they’re a reasonable way for states to spend money,” Fiedler tells HealthLeaders Media. “There may be better ways to spend money to improve the individual market, but this is certainly an actionable one and one that states can implement more or less on their own.”
Maine projects that premiums will be 9% lower in 2019 than they would be without reinsurance. Those lower premiums are expected to encourage more people to sign up for coverage, reducing Maine’s uninsured population by 1.7%, according to independent actuarial projections cited by the state and federal governments.
A modest gain in enrollment could translate to a slight benefit for insurers and could reduce the burden of uncompensated care on hospitals, Fiedler says.
‘INVISIBLE HIGH-RISK POOL’
In a letter submitted last May to Health and Human Services Secretary Alex Azar, Maine Bureau of Insurance Senior Staff Attorney Thomas M. Record said the program, which is known formally as the Main Guaranteed Access Reinsurance Association (MGARA), had “become popularly known as Maine’s ‘ invisible high risk pool.'”
Record described the program as a key feature of health reform legislation Maine lawmakers passed in 2011. The program, which was active in 2012 and 2013, successfully reduced premiums in the individual market by about 20%, he said.
Despite that success, MGARA was suspended at the beginning of 2014, when the ACA’s transitional reinsurance program rendered it redundant, according to Maine’s waiver application. The federal reinsurance program ended as scheduled on the final day of 2016.
Material released by the Centers for Medicare & Medicaid Services describe MGARA as operating a hybrid-model reinsurance program that includes traditional and conditions-based components. High-risk patients with any of eight conditions will be ceded automatically. Other high-risk enrollees will be ceded voluntarily. The program will offer 90% coinsurance for claims in the $47,000-77,000 range and 100% coinsurance for higher claims up to $1 million.
For claims above $1 million, the program will cover the amount left uncovered by the federal government’s high-cost risk-adjustment program.
Maine estimates that its program will result in a net spending reduce of more than $33 million per year, for 2019 through 2023, with that federal savings to be passed along to the state to fund the program.
The program’s total expenses are projected to cost $90-104 million annually during the five-year waiver period.
Insurers and providers have responded positively to the prospect of state-run reinsurance programs, seeing the development as good news for business and patients alike. But the benefits should not be overstated.
“The one downside of these programs is that because tax credits fall dollar-for-dollar when premiums fall, they don’t really do anything to make coverage more affordable for people with incomes below 400% of the poverty line,” Fiedler says.
“That doesn’t mean they’re a bad thing. But they can only be one part of an overall strategy for making individual market insurance affordable.”
Market Concentration Variation of Health Care Providers and Health Insurers in the United States
Over the past several decades in the United States, more and more health care providers and health insurers have consolidated, increasing their market power.1,2Highly concentrated markets have contributed to the growth in U.S. health care spending because they are associated with higher health care prices and insurance premiums, yet are not typically associated with higher quality of care.2-4 Given that states play a large role in regulating health care provider and insurer markets, it’s important to understand how concentration levels vary across the country, as well as examine the relative concentration levels between providers and insurers at the local level. Our previous research has shown that in markets with both high provider and insurer concentration, insurers have bargaining power to reduce prices, yet consumers and employers don’t usually benefit.5Regulators can use this information to determine if policies are needed to protect consumers, as well as employers that provide health benefits to their workforces.
To illustrate health care market concentration variability across the United States, we tabulated the market concentration of health care providers — hospitals, specialist physicians, and primary care physicians — and health insurers for each metropolitan statistical area (MSA) in 2016 using the methods and data described in the Appendix. Regulators classify markets into categories that range from unconcentrated to moderately concentrated to highly concentrated.6 We created a fourth category called “super concentrated,” to distinguish among the most concentrated markets (see the Appendix for details).
Market Concentration Levels Across the United States
When looking at market concentration levels across the United States, we found that, for both providers and insurers, the concentration levels varied, typically between two concentration categories (see table). For providers, the vast majority of the MSAs were at the concentrated end of the spectrum, either being highly concentrated (47.1%) or super concentrated (43.0%). By comparison, for insurers, almost all the MSAs fell into the middle categories, either being highly concentrated MSAs (54.5%) or moderately concentrated (36.9%).
When examining the relative concentration between providers and insurers, providers generally had the upper hand. Provider concentration was in a higher category relative to insurers in 58.4 percent of the MSAs, while the opposite was true in only 5.8 percent of the MSAs.
State and Federal Scrutiny Is Needed
This study shows that health care market concentration levels vary across the United States. To protect consumers and employers from high prices and premiums, state-level regulatory scrutiny — coupled with federal regulatory scrutiny — of potentially anticompetitive behavior is needed. State officials better understand the nuances of their local markets and are able to ascertain what steps, if any, may be required. For example, more populous MSAs may have lower measured concentration levels because they comprise more than one market. And even if a market is found to be highly or super concentrated, regulators should examine other competitive factors that may mitigate the potentially harmful impact of high concentration. These might include whether it is easy for competitors to enter a market or if there are economies of scale that might lead to lower costs.6 For example, as health care diagnoses and treatments become more complex, larger, more-integrated, and well-capitalized health care providers may be better equipped to lower costs and improve quality. Still, it is important for regulators to increase the likelihood that the benefits of consolidation ultimately flow to consumers and employers.
The Six Letter Word Healthcare Solutions Providers are Coveting & How to Get It
https://www.linkedin.com/pulse/six-letter-word-healthcare-solutions-providers-how-get-stamatinos/
If you’re like most people, you’re looking ahead to the New Year and thinking about what you would like to accomplish. With innovation being on the brink in healthcare the last several years, one thing has surely taken place: restricted access to the right people in order to talk about your solution.
It may sound very simple on the surface; however, navigating the murky waters of healthcare successfully towards gaining access to the decision maker is difficult. And if it’s your goal to gain “Access” in the New Year, it’s a highly coveted and ambitious one.
When the healthcare world was less commoditized, conveying trust was enough to make the sale. Today, there’s simply too much noise in the market place and erodes the ability to gain traction or trust. This leads to many solutions providers ending up swimming in the dreaded sea of similar.
3 Ways Trust Can Be Ruined In an Instant
Gaining access to a decision maker has a lot to do with compatibility and reputation. If you have a great reputation, they’re more likely to listen to what you have to say. Compatibility is not just about how well your personalities mesh. It has more to do with how the healthcare solutions provider sees you and whether or not they trust you.
Trust is vital in any relationship; especially, a sales relationship. It’s been said that trust is the foundation upon which salespeople will achieve success. It will keep your customers coming back and choosing you over your competitors. Unfortunately, trust can be lost in an instant. Here are three ways you can lose the trust of a healthcare solutions provider.
1. Having a Hidden Agenda
A lot of salespeople are focused solely on sales. While sales are important—after all, sales are the lifeline of any organization looking to survive and thrive—it shouldn’t be the only focus. A salesperson doesn’t necessarily have to blatantly show or tell the client that they’re focused solely on themselves. Subconsciously, clients can pick up on even the subtlest of signs. When they feel like they’re not as important as the sale, trust goes right out the window.
Here’s the cool thing, you can eliminate rejection forever simply by giving up the hidden agenda of hoping to make a sale. Instead, be sure that everything you say and do aligns with basic mindset that you’re there to help identify and solve their issues.
2. Moving Too Quickly
Customers, especially one’s in healthcare, don’t like to be forced to do anything. In many situations, customers feel like they’re almost being bullied by a salesperson. Trying to move the relationship too quickly is detrimental to the trusted relationship between the customer and salesperson. Relationships are complex and multi-dimensional, which means that pressure leads to resistance and road blocks in your trust equity building efforts.
Contemplate letting go of trying to close the sale or get the appointment. What you’ll discover is that you don’t have to take responsibility for moving the sales process forward.
Simply focus your conversation on the problems that you can help prospects solve. By not jumping the gun and trying to move the sales process forward, you’ll learn that your potential customers will give you the direction you need.
3. Having No Understanding or Empathy for the Customer
Everyone wants to feel understood; it’s a basic human essential. At the very least, they want those around them to feel some empathy for what they’re going through, even if they can’t completely understand the situation. Your Potential clients & customers feel the same way. They have bad days, they may be dealing with difficult life circumstances, or they may be overwhelmed by all of their responsibilities at work.
Trust will be lost if you or anyone on your sales team fails to acknowledge the challenges that your customers are going through. In essence, the customer will feel like their feelings, even their existence, have been belittled. And, when they feel this way there is no way they’re going to trust the person who is contributing to them feel this way.
How to Build Trust and Gain Continual Access to Potential Customers
What will it take for healthcare solutions provider to start gaining access to the decision makers during the New Year? There are three steps they can take.
1. Tell the Truth
There’s no better way to earn a client’s trust than with honesty. Clients want to know what you can and can’t provide for them. Stretching the truth to gain the sale will only lead to disappointment, both for them and for your wallet.
2. Embrace Transparency
This goes hand-in-hand with honesty. Keep your promises for sure, however, don’t start making promises that you can’t keep. A lack of honesty and authenticity will definitely have an adverse effect on your reputation with the decision-makers.
3. Replace “Selling” With “Caring”
Those in the healthcare field enter the field because they want to help other people. They’re constantly caring for others. They need to be cared for, too. This is where you come in. If you make your customers feel well cared for, they’re sure to become loyal customers.
Instead of burning a lead by asking “probing” questions to qualify a potential client, you might want to consider how you can add value through concrete insights and build trust beforehand.
Moving Ahead, Access Will Be Predicated Upon Building “Trust Equity”
In the world of quotas and benchmarks things have become watered down and sales conversations have somehow become surface level and NOT authentic.
The currency of the new economy is trust. And you need TRUST beforehand to even get ACCESS.
Building “trust equity” is a long-term, never-ending effort of communicating, listening, building trust and establishing credibility. My belief is that you’ll be more likely to win over customers’ trust over time and tap into a well of abundance that’ll never dry out.
Learn How You Measure Up on the “Trusted-Access” Scale
Like any business strategy, determine what measurements need to be in place to determine effectiveness. Have a strong grip on what those KPI’s are and manage towards those goals each month.
Cartoon – Going for Broke
Cartoon – Where our ROI became an IOU
HENRY KOTULA 