Number of uninsured adults reaches post-ACA high

https://www.healthcaredive.com/news/number-of-uninsured-adults-reaches-post-aca-high/546653/

Dive Brief:

  • The uninsured rate in the U.S. is at a four-year high, having reached 13.7% in the fourth quarter of 2018, according to a new Gallup poll. That rate is the highest since the Affordable Care Act’s individual mandate was implemented in 2014. 
  • Despite the rise in the uninsured rate, it’s still below the peak of 18%, recorded in the third quarter of 2013. That figure then dropped to an all-time low of 10.9% in 2016. The elimination of the individual mandate penalty, cost-sharing reductions and other policy decisions made under the Trump administration have helped boost the rate back up. 
  • According to Gallup, the uninsured rate has increased most among women, young adults and low-income Americans. Separate research has shown the number of uninsured children in the U.S. has also increased for the first time in over a decade.  

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Dive Insight:

The Affordable Care Act helped the U.S. reach historical lows for the rate of uninsured adults, but that figure has continued to tick back up as the Trump administration has undermined the law.

In all, the 2.8 percentage point increase since 2016’s low point represents about 7 million more uninsured Americans. Most of those 7 million became uninsured in 2017, which experienced the largest single-year increase (1.3 percentage points) since Gallup began polling Americans on the question in 2008.

The continued rise in the uninsured rate is reversing the gains made under the Affordable Care Act.

The ACA ushered in a time when people could buy insurance not tied to a job — without having to worry about being denied for having a pre-existing condition such as diabetes or cancer. Plus, it allowed states to expand Medicaid to low-income residents who otherwise could not afford to purchase private coverage on their own.

During that time of record-low uninsured rates, many Americans were required to have health insurance or risked incurring a financial penalty.

But once President Donald Trump was elected he began working to overturn the law. In December 2017, the GOP’s tax bill eliminated the financial penalty for not having insurance. 

A separate Commonwealth Fund report found that the uninsured rate was up significantly among working adults in states that did not expand Medicaid.

 

 

 

Can States Fill the Gap if the Federal Government Overturns Preexisting-Condition Protections?

https://www.commonwealthfund.org/blog/2019/can-states-fill-gap-preexisting-condition-protections

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Once again, the Affordable Care Act (ACA) is under threat, this time in the form of Texas v. Azar, a federal lawsuit challenging its constitutionality. This litigation, now under consideration by the Fifth Circuit Court of Appeals, took an unexpected turn in March when the U.S. Department of Justice (DOJ) sided with the plaintiffs, urging the Court to strike the ACA down in its entirety.

On May 1, the administration filed a brief in support of this action. But even before this suit, DOJ had refused to defend key provisions that guarantee coverage of preexisting conditions. If the courts agree with the DOJ, it would invalidate every provision of the 2010 law.

As many as 20 million people nationwide would lose their coverage, while millions more could face insurance company denials, premium surcharges, or high out-of-pocket costs because of their health status.

ACA Protections for People with Preexisting Conditions

  • Guaranteed issue. Health insurers are prohibited from denying an individual or employer group a policy based on their health status.
  • Community rating. Health insurers may not use an individual or small employer group’s health status to set premiums.
  • Preexisting condition exclusions. Health insurers and employer group plans are prohibited from refusing to cover services needed to treat a preexisting condition.
  • Essential health benefits. Health insurers selling to individuals and small employers must cover a minimum set of 10 “essential” benefits: ambulatory services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; and pediatric services, including oral and vision care.
  • Cost-sharing protections. Health insurers and employer group plans must cap the amount enrollees pay out-of-pocket for health care services each year.
  • Annual and lifetime limits. Health insurers and employer group plans are prohibited from imposing annual or lifetime dollar limits on essential health benefits.
  • Preventive services. Health insurers and employer group plans are required to cover evidence-based preventive services without any enrollee cost-sharing.
  • Nondiscrimination. Health insurers must implement benefit designs for individuals and small employers that do not discriminate based on age, disability, or expected length of life.

To help blunt potential fallout and prevent adverse effects for millions of individuals, several states are enacting bills to ensure that federal ACA protections become part of state law (see box). However, before the ACA, state efforts to require insurers to cover people with preexisting conditions resulted in large premium spikes and, in some cases, caused insurers to exit the market.

The ACA’s premium subsidies have had a critical stabilizing effect. If those subsidies are invalidated, states will have a hard time restoring them with state dollars. In addition, state regulation of self-funded employer plans is preempted under the federal Employee Retirement Income Security Act (ERISA), meaning the 61 percent of people with this type of job-based coverage can regain their protections under the ACA only if Congress steps in to restore them.

States Are Stepping Up, but Power to Fully Protect Consumers Is Limited

In a previous post, we found that at least four states (Colorado, Massachusetts, New York, and Virginia) had laws that would preserve key ACA preexisting-condition protections if the federal law is overturned. Since that time, seven more states (Connecticut, Hawaii, Indiana, Maine, Maryland,1 New Mexico, and Washington) have acted to preserve the ACA’s protections for their residents.

These bills take different approaches. Maine, New Mexico, and Washington passed comprehensive bills that would preserve all the protections listed above. The Connecticut, Hawaii, and Indiana laws are more narrowly focused. Hawaii and Indiana prohibit insurers from imposing preexisting condition exclusions; Connecticut aligns its benefit standards with the ACA. Maryland took a different approach, creating a workgroup to recommend ways to protect residents if the ACA is struck down. The governors of New Jersey and Rhode Island have issued executive orders directing their state agencies to uphold the ACA’s principles, by guarding against discrimination based on preexisting conditions and strengthening consumer protections to ensure access to affordable coverage.

Looking Forward

The Fifth Circuit Court of Appeals is expected to hear arguments in Texas v. Azar in July. Whatever that court decides, the losing party is likely to ask the Supreme Court to hear the case, and a ruling could come as soon as June 2020. With the future of the ACA hanging in the balance, at least 14 other states are considering legislation codifying some of the federal consumer protections during their 2019 sessions.

 

 

 

Affordable Care Act premium rates projected to increase by 10 percent

https://www.healthcarefinancenews.com/news/affordable-care-act-premium-rates-projected-increase-10-percent?mkt_tok=eyJpIjoiWkRnek5UZGlPRGsxTVRrMSIsInQiOiJPdWRXMnVoYWEyTTJmMDZxMEJGQ3ZCN3lxa1NYUTdjeWtRdlJSQUNQQmQzSStsK2RZZDJcL1NlTjVTaHd3ZzhPcHB3amloQWNUNUtWQVhIWlwvVXlKbEEzR3dNMllwaEZ4VlNTek44SVpcL0UweHdoc2IzMHhBRTg0ZDVvdXlPM05MOCJ9

An estimated 2 percent of the increase will be due to the return on the health insurance tax.

Insurers are projected to submit rate increases in the Affordable Care Act market of about 10 percent, which is higher than the roughly 6 percent increase for 2019, according to Dave Dillon, a fellow of the Society of Actuaries and senior vice president of Lewis & Ellis, Actuaries and Consultants.

An estimated 2 percent of the increase will be due to the return on the health insurance tax. Medical inflation will account for 4-8 percent of the increase, which Dillon called a normal annual trend reflecting the underlying growth in healthcare costs.

Another 1 to 2 percent will be due to the decrease in the level of the premium tax credits. A reduction in the exchange user fee for federal and state-based exchanges will allow for a .5 to 1 percent decrease in rates.

Many factors play a role in rate setting, making predictions somewhat of an educated guess. But Dillon believes one issue that won’t be a factor, unless the court hands up a decision very soon, is the question of the constitutionality of the ACA being weighed in the Fifth Circuit Court of Appeals in Texas.

The Department of Justice recently said the ACA in its entirety should be struck down, now that the individual mandate is gone.

“While there’s a lot of topics going on, they’re not necessary ones that affect 2020 rates,” Dillon said. “The Texas case hangs over everybody but not as an actionable item right now.”

Neither is the Medicare for All debate likely to influence premiums for 2020, he said.

WHY THIS MATTERS

Insurers are getting ready to file their 2020 premium rates for the on-exchange market of the ACA.

Depending on the state, such as Vermont and the District of Columbia, which have deadlines this month, the filing season kicks into high gear during the first and second weeks of June. Other states, such as Arkansas, have a deadline in July, said Dillon, who works with about 10 states on rates.

Off-exchange rates are due later in summer.

Rates will vary by state and would be influenced by a state’s implementation of 1332 waivers to allow for less expansive plans. So far, no state has taken advantage of the waivers that the Centers for Medicare and Medicaid Services began offering last fall, according to The Washington Post.

TREND

ACA premium rates stabilized for 2019 and insurers returned to the market or expanded their coverage areas.

In making his prediction for rates for 2020, Dillon looked at medical loss ratios and profit margins from the 2018 season. These were stable compared to 2017 when insurers were filing two sets of rates depending on whether cost-sharing reduction payments would be continued under the Trump Administration.

President Trump did end the CSRs. However, to make up for the loss to insurers and to lower premium increases, the Department of Health and Human Services allowed insurers in the 2019 season and again for 2020, to silver load premium increases onto silver level plans. Since most beneficiaries get the benefit of federal subsidies for health insurance through the ACA, the federal government is still bearing the cost of allowing insurers to offer lower rates.

Unlike other years, Dillon said he’s not hearing a lot about the market, which he interprets as a stabilizing trend. Insurers aren’t coming in and out of the markets as much. Regional companies may be expanding into other states, but there’s been no talk of another large insurer getting in, he said.

“I think we’re on the path to gaining some traction and stability,” Dillon said. “Obviously the ACA has put us at lowest uninsured rate ever.”

ON THE RECORD

“Consistent with previous years, insurance rates will vary widely across individual states and marketplaces,” Dillon said.

 

 

Getting Distracted by the Politics of Healthcare

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A number of interactions over the past two weeks have convinced me that the political debate over M4A in Congress, amplified by Presidential candidates jockeying for favor with primary voters, is beginning to seriously spook executives across healthcare.

At a health system board meeting in the Southwest last week, a number of physician leaders and board members had questions about the possible timing and dimensions of a shift to “single payer”, clearly convinced that M4A is an inevitability if Democrats take over in 2020. And two separate inbound calls this week, one from the CEO of a regional health system, and the other from a health plan executive, were both sparked by the hearings on M4A in Congress.

Again, the implicit assumption in their questions about timing and impact was the same: M4A, or something like it, is sure to happen if the 2020 elections favors Democrats. My response to all of them: keep an eye on the politics, but don’t get overly distracted. There’s little chance that “single payer” healthcare will come to the US—industry lobbies are simply too powerful to let that happen.

Even if Democrats do win the Senate and the White House in 2020, they’ll have to “govern to the center” to hold onto their majorities, and any major policy shifts will have to be negotiated across the various interests involved. Most likely: measures to strengthen provisions of the ACA, and perhaps a “public option” in the ACA exchanges.

As to Medicare expansion, I believe the most we’d see in a Democratic administration would be a compromise allowing 55- to 65-year-olds to buy into Medicare Advantage plans.

But for now, M4A’s biggest risk to hospitals and doctors is that it becomes a paralyzing distraction, keeping provider organizations from making the strategic and operational changes needed to re-orient care delivery around value.

Regardless of the politics, a focus on delivering value to the consumers of care will prove to be a no-regrets position for providers.

Democrats Draw up their Healthcare Battle Lines

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Now that former Vice President Joe Biden has thrown his hat in the ring for the 2020 Presidential race, the healthcare policy differences between moderate and progressive factions of the Democratic party are becoming clearer. On Monday, Biden revealed the broad outlines of his healthcare platform, coming out in favor of a “public option” that would allow Americans to buy into the Medicare program, but would leave the existing employer-sponsored insurance framework largely intact. “If the insurance company isn’t doing right by you, you should have another choice,” Biden said in a campaign rally in Pittsburgh. Although his campaign did not announce details of the proposal, Biden seems to support the idea of offering a Medicare plan to employers and individuals through the Affordable Care Act (ACA) marketplaces.

As the frontrunner in the primary race, Biden’s support for this more moderate approach to coverage expansion will surely make him the favored candidate of healthcare industry interests, who have come out swinging hard against “Medicare for All” (M4A) proposals.

But his position earned him a swipe from progressive candidate Sen. Bernie Sanders (I-VT), who’s running second among Democrats in early polling. “It doesn’t go anywhere near far enough,” said Sanders of Biden’s proposal, “it will be expensive, [and] it will not cover a whole lot of people.” Sanders instead favors eliminating private insurance altogether and moving quickly toward a single-payer system built around universal Medicare coverage.

As the Presidential race takes shape, expect candidates to orient around one of these two poles: Biden’s moderate approach (O’Rourke, Buttigieg, Klobuchar); and Sanders’s more aggressive position (Warren, Harris, Booker).

Either position will present a stark contrast in the general election, as the Trump administration looks to reinvigorate the effort to strike down the ACA entirely. The 2020 elections are shaping up to be a pivotal moment for healthcare.

Trump Administration Files Formal Request to Strike Down All of Obamacare

The Trump administration formally declared its opposition to the entire Affordable Care Act on Wednesday, arguing in a federal appeals court filing that the signature Obama-era legislation was unconstitutional and should be struck down.

Such a decision could end health insurance for some 21 million Americans and affect many millions more who benefit from the law’s protections for people with pre-existing medical conditions and required coverage for pregnancy, prescription drugs and mental health.

In filing the brief, the administration abandoned an earlier position — that some portions of the law, including the provision allowing states to expand their Medicaid programs, should stand. The switch, which the administration disclosed in late March, has confounded many people in Washington, even within the Republican Party, who came to realize that health insurance and a commitment to protecting the A.C.A. were among the main issues that propelled Democrats to a majority in the House of Representatives last fall.

The filing was made in a case challenging the law brought by Ken Paxton, the attorney general of Texas, and 17 other Republican-led states. In December, a federal judge from the Northern District of Texas, Reed O’Connor, ruled that the law was unconstitutional.

A group of 21 Democratic-led states, headed by California, immediately appealed, and the case is now before the Fifth Circuit Court of Appeals in New Orleans. The House of Representatives has joined the case as well to defend the law.

Democrats wasted no time responding to the filing Wednesday. Xavier Becerra, the attorney general of California, a Democrat, said: “The Trump administration chose to abandon ship in defending our national health care law and the hundreds of millions of Americans who depend on it for their medical care. Our legal coalition will vigorously defend the law and the Americans President Trump has abandoned.”

The government’s brief did not shed light on why it had altered its earlier position, referring only to “further consideration and review of the district court’s opinion.”

Oral arguments in the appeals court are expected in July, with a possible decision by the end of the year, as the 2020 presidential campaign gets going in earnest. Whichever side loses is expected to appeal to the Supreme Court.

The Justice Department’s request to expedite oral arguments, granted last month, suggests that the administration is eager for a final ruling. In its application, it said that “prompt resolution of this case will help reduce uncertainty in the health care sector, and other areas affected by the Affordable Care Act.”

Democrats, seizing on the health law’s popularity and its decisive role in their winning the House last fall, are already using the case as a cudgel against President Trump as his re-election campaign gets started. The law’s guarantee of coverage for people with pre-existing medical conditions, in particular, remains very popular with voters in both parties as well as independents.

But Mr. Trump has appeared undaunted, tweeting in April that “Republicans will always support Pre-Existing Conditions” and that a replacement plan “will be on full display during the Election as a much better & less expensive alternative to Obamacare.”

Instead of providing specifics, though, Mr. Trump, members of his administration and other Republicans have focused on attacking the Medicare for All plans that some Democratic presidential candidates have sponsored or endorsed as a dangerous far-left idea that would, as Mr. Trump tweeted, cause millions of Americans “to lose their beloved private health insurance.”

As the administration and Texas noted in their briefs, Judge O’Connor’s ruling turned on the law’s requirement that most people have health coverage or be subject to a tax penalty.

But in the 2017 tax legislation, Congress reduced that penalty to zero, effectively eliminating it. Judge O’Connor, the plaintiff states, and now the Trump administration reasoned that, like a house of cards, when the tax penalty fell, the so-called individual mandate became unconstitutional and unenforceable. Therefore, the entire law had to fall as well.

Mr. Paxton, the Texas attorney general, whose office also filed a brief on Wednesday, said: “Congress meant for the individual mandate to be the centerpiece of Obamacare. Without the constitutional justification for the centerpiece, the law must go down.”

Whether that position will survive judicial scrutiny is another question. Nicholas Bagley, who teaches health law at the University of Michigan Law School, noted that only two lawyers signed the brief. That is highly unusual in a case with such a high profile, he said.

“This is a testament to the outrageousness of the Justice Department position, that no reasonable argument could be made in the statute’s defense,” Mr. Bagley said. “It is a truly indefensible position. This is just partisan hardball.”

Many legal scholars have also said that even before appellate judges wade into the more obscure pools of legal reasoning, they could reach a decision by addressing the question of congressional intent. If Congress had meant the erasure of the tax penalty to wipe out the entire act, such an argument goes, it would have said so.

If the Fifth Circuit overturns the O’Connor decision, there is no guarantee that the Supreme Court would take an appeal. The court has ruled on two earlier A.C.A. challenges, finding in favor of the act, although narrowing it.

Of course, the composition of the Supreme Court has since changed.

 

 

 

Health Insurance Enrollment Trends for Year-End 2018

https://www.markfarrah.com/mfa-briefs/health-insurance-enrollment-trends-for-year-end-2018/

Mark Farrah Associates (MFA) assessed the latest year-over-year enrollment trends, comparing fourth quarter 2017 with fourth quarter 2018 segment membership based on data filed in statutory financial reports from the NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care).  As of December 31, 2018, almost 265.2 million people received medical coverage from U.S. health insurers.  This number is down from 265.6 million, or approximately 428,000 members, from a year ago. Year-end enrollment trends indicate membership gains for Medicare Advantage (MA) and Employer Group administrative services only (ASO) business while the managed Medicaid market, Individual, and Employer Group Risk segments experienced year-over-year declines.

Segment by Segment Enrollment Trends

As of December 31, 2018, the Individual segment lost over 1.0 million members year-over-year (YOY) and the Employer Group Risk segment, including Federal Employees Health Benefit Plans (FEHBP) business, experienced a decline of approximately 897,000 members. The Employer Group ASO segment persisted as the largest source of coverage in the industry, enrolling nearly 121.6 million people. Medicare Advantage experienced moderate growth in membership as over 736,000 more seniors chose an MA plan YOY.  Managed Medicaid saw a slight decrease YOY, by more than 36,000 members.  A more in-depth look at each segment follows.

  • The Individual segment experienced a significant decline of 6.7% from 15.5 million in December 2017 to 14.5 million in December 2018. Some factors that have led to a decrease in the individual market include increased costs for providers, increased premiums for members, and the repeal of the Affordable Care Act’s (ACAs) individual mandate.
  • Managed Medicaid membership marginally declined by 0.1%, or approximately 36,000 enrollees between December 31, 2017 and December 31, 2018.  Despite the decline in membership, Medicaid continues to be the largest government-sponsored health program in the United States, measured by enrollment.
  • Medicare Advantage (MA) enrollment increased from 20.7 million as of December 31, 2017 to 21.4 million at year-end 2018 according to plan-reported statutory reports. The MA segment remained the segment leader in terms of percentage increases – consistently growing YOY.

 

 

  • Employer Group Risk membership, including Federal Employees Health Benefit Plans (FEHBP) membership, experienced a 1.5% decline between 4Q17 and 4Q18. This equates to a segment decrease of over 897,000 as more employers continue to shift towards self-funded (ASO) insurance for their employees.
  • Employer group ASO (administrative services only for self-funded business) membership grew by over 814,000 members from December 2017 to December 2018.  YOY, the increase was 0.7%, nearly offsetting the decrease in the Employer Group Risk decline at a one-to-one ratio.  MFA identified 121.6 million ASO covered lives, which encompassed 46% of total health enrollment by segment for 4Q18.

Conclusion

As of December 31, 2018, almost 265.2 million people received medical coverage from U.S. health insurers, down approximately 428,000 members from a year ago. Year-end enrollment trends indicate membership declines for a majority of the health care segments. Health care will continue to be subjected to regulatory and political pressure as the upcoming presidential election approaches.

The Individual market continues to be the most volatile health care segment. Repealing the ACA remains a controversial topic that is gaining steam as 2020 swiftly approaches. While there has yet to be a popular front runner in terms of a conservative replacement plan, Medicare for All is a progressive replacement plan that aims for public sector health insurance.  In addition, managed Medicaid has expanded under the ACA but recently work requirements have gained popularity. Managed Medicaid work requirement waivers have already been approved or are currently pending in 15 states. Currently, 37 states including the District of Columbia have chosen to expand their Medicaid programs. Although Montana is counted in the 37 expanded states, a bill is currently being discussed that would extend the current expansion cutoff date past June 30, 2019.

 

About the Data

The data used in this analysis brief was obtained from Mark Farrah Associates’ Health Coverage Portal™ database. It is important to note that MFA estimated fourth quarter 2018 enrollment for a small number of health plans that are required to report quarterly enrollment but hadn’t yet filed.  Employer group ASO figures may be estimated by Mark Farrah Associates using credible company and industry resources.  Individual, Non-Group membership reported by some carriers may include CHIP (Children’s Health Insurance Program).

These adjustments may have resulted in moderate understatement or overstatement of enrollment changes by segment. Findings reflect enrollment reported by carriers with business in the U.S. and U.S. territories.  Data sources include NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care).  As always, MFA will continue to report on important plan performance and competitive shifts across all segments.

 

About Mark Farrah Associates (MFA)

Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry.  Our product portfolio includes Health Coverage Portal™, County Health Coverage™, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™.  For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.

Healthcare Business Strategy is a FREE monthly brief that presents analysis of important issues and developments affecting healthcare business today.  If you would like to be added to our email distribution list, please submit your email to the “Subscribe to MFA Briefs” section at the bottom of this page. 

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