Tag Archives: ACA

Anthem reports flat operating revenues due to exit from Affordable Care Act market

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http://www.healthcarefinancenews.com/news/anthem-reports-flat-operating-revenues-due-exit-affordable-care-act-market?mkt_tok=eyJpIjoiT1RrME5HWmxNV0kyTkRZeCIsInQiOiJzQ2N6dzlKclF2QmpZaGZraHhUYWRwZThOSit4NjFJZ003dUtnU3NKem9WSkN0QXZUdVJVcUFIRWhMRHJZQ2I3a0N6YWNiR1pLVVFTdzdcL0hvSFl3WVR5ZVpJRWFhSUM1Y3Jyd0FRZVk0YXdOYjF3bXRWUXFXMkN1VlwvMkRMTGNpIn0%3D

Net income increased 30 percent driven by premium rate increases, the return of the health insurance tax and the acquisition of MA plans.

Anthem reported a 30 percent increase in net income for the first quarter compared to the same three months of 2017, but operating revenues remained relatively flat primarily due to the insurer’s planned exits from the Affordable Care Act marketplace.

On Wednesday, Anthem reported net income for the first quarter of $1.3 billion, versus 1 billion for the first three months in 2017.

First quarter operating revenues were relatively flat at $22.3 billion year-over-year due to a decrease in its individual market business.

In 2017, Anthem announced it would cut back its ACA footprint by about 70 percent.

Revenues were helped by premium rate increases to cover overall cost trends, the return of the health insurance tax and the acquisitions of HealthSun and America’s 1st Choice.

Anthem’s acquisition of HealthSun, completed at the end of 2017, added a Medicare Advantage health plan and delivery network in Florida.

The acquisition of America’s 1st Choice was finalized in February. The privately-held, for-profit Medicare Advantage organization  offers HMO products, including chronic special needs plans and dual-eligible special needs plans under its Freedom Health and Optimum brands in Florida. The deal added 135,000 Medicare Advantage members and included a 5 star plan.

Anthem’s medical enrollment totaled approximately 39.6 million members as of March 31, a decrease of 1 million or 2.5 percent percent, from 40.6 million at March 31, 2017.

The company said it now expects medical enrollment to be between 40.1 – 40.3 million for the full year 2018.

Counteracting the individual market decline, Anthem’s government business grew 10 percent year-over-year through a focus on serving the complex social and medical requirements of the dual special needs population.

Medical enrollment declined by 616,000 during the first quarter reflecting a decrease in the individual and local group fully-insured businesses. Medicare grew by 237,000 members and Medicaid enrollment declined by 120,000 individuals.

“We are pleased with our first quarter 2018 financial performance, which reflects our commitment to strong medical cost performance by effectively leveraging community based innovative and integrated clinical and value based care models across our markets,” said CEO and President Gail Boudreaux. “Throughout 2018, we are prioritizing investments to create a more flexible infrastructure that can quickly respond to the evolving needs of our customers and the changing healthcare environment.”

 

Health Care and the Midterms

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1 big thing: health care and the midterms

Data: SurveyMonkey poll conducted April 2–23, 2018. Poll Methodology; Chart: Axios Visuals

More than half of voters in Arizona, Nevada and Tennessee want Congress to modify the Affordable Care Act, while less than a third want it to be completely repealed and only 6% think Congress should “let it fail.”

Why it matters: Arizona and Nevada are seen as the states where Democrats have the best chance in November to take Senate seats currently held by Republicans, and Tennessee is working its way up the list. One of Democrats’ most unifying and effective messages this cycle is health care, and they’ll be sure to campaign hard against the GOP’s repeal effort in these states.

Health Care’s New ‘Skinny Plans’: Winners and Losers

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https://www.wsj.com/articles/health-cares-new-skinny-plans-winners-and-losers-1524654000

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Trump’s ‘skinny plans’ offer a cheaper alternative to the Affordable Care Act, but may have far less coverage.

 

New, more-limited health plans may draw consumers away from Affordable Care Act coverage and drive up prices on insurance sold in the health law’s marketplaces. These “skinny” plans offer lower premiums, making them an attractive alternative for young, healthy buyers.

New, more-limited health plans may draw consumers away from Affordable Care Act coverage and drive up prices on insurance sold in the health law’s marketplaces.

These “skinny” plans offer lower premiums, making them an attractive alternative for young, healthy buyers.

Would Americans Accept Putting Health Care on a Budget?

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Would Americans Accept Putting Health Care on a Budget?

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If you wanted to get control of your household spending, you’d set a budget and spend no more than it allowed. You might wonder why we don’t just do the same for spending on American health care.

Though government budgets are different from household budgets, the idea of putting a firm limit on health care spending is far from unknown. Many countries, including Canada, Switzerland and Britain, pay hospitals entirely or partly this way.

Under such a capped system, called global budgeting, a hospital has an incentive to deliver less care — including reducing hospital admissions — and to increase the efficiency of the care it does deliver.

Capping hospital spending raises concerns about harming quality and access. On these grounds, hospital executives and patient advocates might strongly resist spending constraints in the United States.

And yet some American hospitals and health systems already operate this way, including Kaiser Permanente and the Veterans Health Administration. To address concerns about access and quality, these programs are usually paired with quality monitoring and improvement initiatives.

That brings us to Maryland’s experience with a capped system. The evidence from the state is far from conclusive, but this is a weighty and much-watched experiment for health researchers, so it’s worth diving into the details of the latest studies.

Starting in 2010 with eight rural hospitals, and expanding its plan in 2014 to the state’s other hospitals, Maryland set global budgets for hospital inpatient and outpatient services, as well as emergency department care. Each hospital’s budget is based on its past revenue and encompasses all payers for care, including Medicare, Medicaid and commercial market insurance. Budgets for hospitals are updated every year to ensure that their spending grows more slowly than the state’s economy.

Because physician services are not part of the budgets, there is an incentive to provide more physician office visits, including primary care. According to some reports, Maryland hospitals are responding to this incentive by providing additional support outside their walls to patients who have chronic illnesses or who have recently been discharged from a hospital. Greater use of primary care by such patients, for example, could reduce the need for future hospital admissions.

In 2013, early results found, rural hospital admissions and readmissions were both down from their levels before the system was introduced.

In the first three years of the expanded program, revenue growth for Maryland’s hospitals stayed below the state-set cap of 3.58 percent, saving Medicare $586 million. Spending was lower on hospital outpatient services, including visits to the emergency department that do not lead to hospital admissions. In addition, preventable health conditions and mortality fell.

According to a new report from RTI, a nonprofit research organization, Maryland’s program did not reap savings for the privately insured population (even though inpatient admissions fell for that group). However, the study corroborated the impressive Medicare savings, driven by a drop in hospital admissions. In reaching these findings, the study compared Maryland’s hospitals with analogous ones in other states, which served as stand-ins for what would have happened to Maryland hospitals had global budgeting not been introduced.

But a recent study, published in JAMA Internal Medicine, was decidedly less encouraging.

Led by Eric Roberts, a health economist with the University of Pittsburgh, the study examined how Maryland achieved its Medicare savings, using data from 2009-2015. Like RTI’s report, it also compared Maryland hospitals’ experience with that of comparable hospitals elsewhere.

However, unlike the RTI report, Mr. Roberts’s study did not find consistent evidence that changes in hospital use in Maryland could be attributed to global budgeting. His study also examined primary care use. Here, too, it did not find consistent evidence that Maryland differed from elsewhere. Because of the challenges of matching Maryland hospitals to others outside of the state for comparison, the authors took several statistical approaches in reaching their findings. With some approaches, the changes observed in Maryland were comparable to those in other states, raising uncertainty about their cause.

A separate study by the same authors published in Health Affairs analyzed the earlier global budget program for Maryland’s rural hospitals. They were able to use other Maryland hospitals as controls. Still, after three years, they did not find an impact of the program on hospital use or spending.

Changes brought about by the Affordable Care Act, which also passed in 2010, coincide with Maryland’s hospital payment reforms. The A.C.A. included many provisions aimed at reducing spending, and those changes could have led to hospital use and spending in other states on par with those seen in Maryland.

A limitation of Maryland’s approach is that payments to physicians are not included in its global budgets. “Maryland didn’t put the state’s health system on a budget — it only put hospitals on a budget,” said Ateev Mehrotra, the study’s senior author and an associate professor of health care policy and medicine at Harvard Medical School. “Slowing health care spending and fostering better coordination requires including physicians who make the day-to-day decisions about how care is delivered.”

A broader global budget program for Maryland is in the works. The U.S. Centers for Medicare and Medicaid Services is reviewing a state application that commits to global budgets for Medicare physician and hospital spending. An editorial that accompanied the JAMA Internal Medicine study noted that a few years may be insufficient time to detect changes. It suggests that five to 10 years may be more appropriate.

“Maryland hospitals are only beginning to capitalize on the model’s incentives to transform care in their communities,” said Joshua Sharfstein, a co-author of the editorial and a professor at the Johns Hopkins Bloomberg School of Public Health. “This means that as Maryland moves forward with new stages of innovation, there is a great deal more potential upside.” As former secretary of health and mental hygiene in Maryland, he helped institute the Maryland hospital payment approach.

Global budgets are unusual in the United States, but their intuitive appeal is growing. A California bill is calling for a commission that would set a global budget for the state. And soon Maryland won’t be the only state using such a system. Pennsylvania is planning a similar program for its rural hospitals.

Can this system work across America?

How much spending control is ceded to the government is the major battle line in health care politics. An approach like Maryland’s doesn’t just poke a toe over that line, it leaps miles beyond it.

But the United States has been trying to get a handle on health care costs for decades, spending far more than other advanced nations without necessarily getting better outcomes. A successful Maryland experiment could open an avenue to cut costs through the states, perhaps one state at a time, bypassing the steep political hurdle of selling a national plan.

 

Mainers voted to expand Medicaid last year. Could these states be next?

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https://www.pbs.org/newshour/politics/mainers-voted-to-expand-medicaid-last-year-could-these-states-be-next

Jennie Pirkl campaign manager for "Yes on 2" announces victory on 2017 Election Day in Portland, Maine. Photo by Shawn Patrick Ouellette/Portland Press Herald via Getty Images

Republicans in Congress may have relented on their attempts to repeal the entire Affordable Care Act, but the battle has shifted to states. Citizens in Idaho, Utah, Missouri and Nebraska have taken Medicaid expansion under the Affordable Care Act into their own hands via ballot initiative campaigns, hoping to force statewide votes to either adopt or reject expansion this coming November.

Medicaid provides health coverage for more than 68 million Americans with low incomes or disabilities through federal and state programs. The far-reaching 2010 Affordable Care Act law, which expanded Medicaid coverage, was lambasted by conservatives as federal overreach. A 2012 Supreme Court ruling said that rather than being forced, states had to opt into Medicaid expansion.

Since then, 32 states have done so. But 18 states have not.

It’s been politically challenging for governors and legislators “who spent years railing against the federal overreach or the assaults on individual liberty in the ACA” to now back Medicaid expansion, said Matt Salo, executive director of the National Association of Medicaid Directors.

But for many states “expanding Medicaid makes a lot of sense” since more people get coverage and the federal government pays nearly the full cost, said Ben Ippolito, a research fellow at the American Enterprise Institute who focuses on health economics.

The campaigns to expand Medicaid via ballot have varied in scope and success. After Maine voters petitioned for and passed a first-of-its-kind expansion last November, campaigns in Idaho and Utah have gained momentum to expand Medicaid coverage. In Missouri, there was a longshot effort to gather 100,000 signatures to put expansion on the state ballot. The head of the campaign, Gary Peterson, couldn’t get the state Democratic party on board, only mustering support from local church groups. He told the PBS NewsHour that he suspended his campaign in February. And in Nebraska, residents launched a petition drive to appeal to voters this November after six consecutive years of failed legislation.

Where is the fight over Medicaid expansion now, and where will it go next? Here’s what we know.

Who exactly does Medicaid affect?

In 24 states, at least 50 percent of births are financed by Medicaid, according to data compiled by the Kaiser Family Foundation. Medicaid also covers costs for about 62 percent of seniors living in nursing homes.

The ACA’s Medicaid expansion raised the income limit on the program, allowing more people to qualify, and also allowed adults without children to enroll.

In a 2016 study, the Urban Institute reported that expanding Medicaid in the 19 states who had not yet done so would make more than 13 million people newly eligible. (Maine didn’t expand until 2017.)

Maine

The issue: In November, Medicaid expansion made the ballot in Maine — the first time this had occurred in any state since Congress passed the ACA in 2010. Fifty-nine percent of Mainers who voted supported expanding Medicaid, rebuking Republican Gov. Paul LePage, who had previously vetoed five expansion bills.

On July 2, people will become eligible under the law.

What’s happening now: LePage, who called expansion “fiscally irresponsible,” had to submit by April 3 a state plan to the federal government on how it would fund the expansion. In December, LePage sent a letter to the Maine Legislature outlining demands for how to fund the expansion, stating, for example, that raising taxes or drawing money from Maine’s Budget Stabilization (or, rainy day) Fund was “not an option.”

When asked whether the administration submitted the state plan by the deadline, LePage spokeswoman Julie Rabinowitz said that “we should not make a down payment without a plan to pay for the ongoing cost” and that LePage “laid out four simple principles to guide how to pay for expansion without jeopardizing the state’s long-term fiscal health,” referring to the December letter.

What’s next: In an interview, Maine’s Democratic Speaker of the House Sara Gideon called LePage’s December correspondence “his imaginary if-I-were-king letter,” and said that it was “not really going to impact what we’re doing here.”

If the administration shirks funding duties, Gideon said the state’s existing Medicaid funds “are enough to start getting people [from the expansion] online” until January.

Idaho and the “Medicaid mobile”

The campaign: In summer 2017, Luke Mayville drove his forest green 1977 Dodge Tioga RV, dubbed the “Medicaid mobile,” across Idaho to campaign for expanded health care access.

His RV had been the rolling trademark of Reclaim Idaho, the organization coordinating the Medicaid expansion ballot initiative. The “Medicaid for Idaho” campaign began as “an awareness raising tour” with the founders touring the Medicaid mobile across Idaho to gauge and build support, Mayville said.

An estimated 78,000 Idahoans fall into the Medicaid coverage gap — people with incomes too high to qualify for Medicaid, but too low to be eligible for the ACA subsidies that help buy coverage.

By the end of the summer, the RV “was covered with signatures.”

What’s happening now: For Medicaid expansion to reach the ballot, the campaign must gather signatures from a total of 56,192 voters (six percent of the state’s 936,529 registered voters in the 2016 general election). They must also meet separate signature thresholds in just more than half of the state’s 35 legislative districts by May 1.

What lawmakers say: Most of the state’s registered voters are Republican and the GOP-led Legislature stalled on expansion in the past. Republican Gov. Butch Otter presented his own plan, but it was pulled from the House floor in February.

What’s next: So far, the campaign has accumulated about 40,000 signatures, leaving about three weeks to gather the remaining 16,000. Mayville said he believes Medicaid is a nonpartisan issue that people on either side of the aisle can sympathize with. “It really cuts across party lines,” he said.

Utah

The campaign: Advocates have been pushing for Medicaid expansion in Utah for years. In 2016, drawn-out battles in the Legislature and governor’s office led to a limited expansion. But advocates like Utah Democratic Sen. Jim Dabakis called it “less than crumbs,” according to The Salt Lake Tribune.

RyLee Curtis, campaign manager of Utah Decides Healthcare, the organization coordinating Utah’s Medicaid expansion ballot initiative, said early efforts she was involved with attracted the attention of The Fairness Project, a nonprofit organization that supports ballot initiatives on issues such as raising the minimum wage and expanding Medicaid. The organization has provided more than 90 percent of Utah Decides’ roughly $900,000 in contributions, much of which has been spent on signature gathering, according to public records.

What’s happening now: Paid canvassers and volunteers have racked up more than 130,000 signatures to date.

What lawmakers say: At the same time, the state Legislature passed a new partial expansion last month that is estimated to cover about 70,000 low-income Utahns in the Medicaid gap, The Salt Lake Tribune reported. For states that undergo full ACA Medicaid expansion, the federal government funds 90 percent of its costs while the state finances the rest. But this partial expansion, which includes a work requirement, must get federal approval for that same 90 percent federal funding.

Matt Salo, executive director of the National Association of Medicaid Directors, said that the Trump administration did not approve a similar request from Arkansas and says it’s unclear whether the administration will approve Utah’s request. Still, it could be “an attractive political compromise.”

What’s next: The campaign for a ballot initiative has exceeded the required 113,143 signatures statewide, but still has to get at least 10 percent of voters from the time of the 2016 election in 26 of the state’s 29 senate districts by April 15. All considered, Curtis said, “we are confident that we can get there.”

Nebraska

The campaign: Proposals have been introduced into the Nebraska Legislature for six consecutive years — all have failed. So one state senator and a group of Nebraskans are trying different approaches.

A petition drive kicked off last month to put Medicaid expansion on the ballot.

Insure the Good Life, the organization leading the charge, and local media outlets have said that expanding Medicaid would provide coverage for about 90,000 additional Nebraskans.

What’s happening now: Amanda Gershon, a sponsor of the petition, told Live Well Nebraska that “the governor and the legislature haven’t solved this problem, so it’s now time for the people to decide.”

Gershon, 35, has been battling chronic health problems since college and around that time lost her health coverage. She said she “went so long without [health] care” that she became gravely ill, but was eventually able to get Medicaid through disability. Even after being approved for disability it took another nine months of paperwork to qualify for Medicaid, Gershon said.

“I really don’t want to see anybody else have to go down that same road to get the health care they need,” Gershon added.

What lawmakers say: Nebraska’s governors have staunchly opposed Medicaid expansion. Republican Gov. Pete Ricketts has a slew of lengthy statements outlining his objections to Medicaid expansion and decrying attempts by the Legislature to expand coverage.

But 32-year-old state Sen. Adam Morfeld, a Democrat, proposed a state constitutional amendment that would also put expansion on the ballot. “Every year that we have tried on Medicaid expansion in this state, the people that are opposed to it have never come up with alternative solutions — the governor included,” Morfeld told the NewsHour.

“[F]or thousands of people in my district who are low-income, working-class folks, it’s [current Nebraska health care] not only making them go bankrupt, they’re starting to die,” Morfeld said. His bill was referred to a committee.

What’s next: Organizers will have until July 5 to collect about 85,000 valid signatures and meet thresholds in 38 of 93 Nebraska counties.

https://www.pbs.org/newshour/health/why-maine-voted-to-expand-medicaid-and-whats-next

 

 

Trump administration issues rule further watering down Obamacare

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https://www.reuters.com/article/us-usa-healthcare-regulation/trump-administration-issues-rule-further-watering-down-obamacare-idUSKBN1HG384

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The Trump administration took additional steps to weaken Obamacare on Monday, allowing U.S. states to relax the rules on what insurers must cover and giving states more power to regulate their individual insurance markets.

The Centers for Medicare and Medicaid Services issued a final rule that allows states to select essential health benefits that must be covered by individual insurance plans sold under former President Barack Obama’s healthcare law. The 2010 Affordable Care Act requires coverage of 10 benefits, including maternity and newborn care and prescription drugs. Under the new rule, states can select from a much larger list which benefits insurers must cover.

That could lead to less generous coverage in some states, according to Avalere Health, a research and consulting firm.

President Donald Trump’s administration has used its regulatory power to undermine Obamacare after the Republican-controlled Congress last year failed to repeal and replace the law. About 20 million people have received health insurance coverage through the program.

The new CMS rule also allows states the possibility of modifying the medical loss ratio (MLR) formula, the amount an insurer spends on medical claims compared with income from premiums that is also a key performance metric. A state can request “reasonable adjustments” to the medical loss ratio standard if it shows that it could help stabilize its individual market.

Insurers could also have an easier time raising their rates under the new rule. Obamacare mandated that premium rate increases of 10 percent or more in the individual market be scrutinized by state regulators to ensure that they are necessary and reasonable. The new CMS rule raises that threshold to 15 percent.

 

1115 Medicaid Waivers: From Care Delivery Innovations to Work Requirements

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http://www.commonwealthfund.org/publications/explainers/2018/apr/1115-medicaid-waivers#/utm_source=1115-medicaid-waivers-explainer&utm_medium=Facebook&utm_campaign=Health%20Coverage

After months of debate, the Medicaid program emerged from efforts to repeal and replace the Affordable Care Act (ACA) without major legislative changes. Now, however, the Trump administration is encouraging states to apply for waivers that place new conditions on Medicaid eligibility as well as additional costs on beneficiaries in the form of premiums and copayments at the point of service.

To better understand the continuing controversy over Medicaid, let’s take a look at the waiver program’s objectives and how states have used waivers in the past. Are recently proposed state waivers consistent with Medicaid’s underlying mission? And are federal and state authorities appropriately evaluating them for their impact on Medicaid populations?

What is a Medicaid Section 1115 waiver?

Medicaid grants states autonomy in how they run their programs. Under a provision of the Social Security Act, Section 1115, the U.S. Secretary of Health and Human Services (HHS) can waive federal guidelines on Medicaid to allow states to pilot and evaluate innovative approaches to serving beneficiaries. Most waivers are granted for a limited period and can be withdrawn once they expire.

States seek 1115 waivers to test the effects of changes both in coverage and in how care is delivered to patients. The Centers for Medicare and Medicaid Services (CMS), a government agency, reviews each waiver application to ensure not only that it furthers the core objective of Medicaid — to meet the health needs of low-income and vulnerable populations — but also that the proposed demonstration does not require the federal government to spend more on the state’s Medicaid program than it otherwise would.

However, a recent General Accountability Office (GAO) review found that, because of significant limitations, evaluations of 1115 demonstrations often do not provide enough information for policymakers to understand the waivers’ full impact.1 The GAO recommended that CMS establish procedures to ensure that all states submit final evaluation reports at the end of each demonstration cycle, issue criteria for when it will allow limited evaluations of demonstrations, and establish a policy for publicly releasing findings from federal evaluations.

How have 1115 waivers been used in the past?

States have been granted waivers throughout the 53-year history of Medicaid. Most waivers were small in scope until the 1990s, when states started to use them for a wide range of purposes, including to: expand eligibility, simplify the enrollment and renewal process, reform care delivery, implement managed care, provide long-term services and supports, and alter benefits and cost-sharing. Some states have used 1115 waivers to change the way care is delivered to Medicaid patients, like encouraging investments in social interventions. Oregon, for example, used its waiver to establish Coordinated Care Organizations — partnerships between managed care plans and community providers to manage medical, behavioral health, and oral health services for a group of Medicaid beneficiaries.

With the ACA’s enactment, a new category of low-income adults became eligible for Medicaid. After the Supreme Court ruled in 2012 that this eligibility expansion was optional for states, eight states applied for 1115 demonstration waivers from the Obama administration to test different approaches to expanding eligibility, including the introduction of premiums and copayments that exceeded federal guidelines. One of those states, Arkansas, has used Medicaid funds to purchase private health insurance for marketplace enrollees.

How are 1115 waivers changing?

With encouragement from the Trump administration, many states are applying for waivers to make employment, volunteer work, or the performance of some other service a requirement for Medicaid eligibility. The administration has also encouraged waivers to impose premiums and increases in cost-sharing.

States can take different approaches to work or service requirements. Some might require them only for the Medicaid-expansion population (working-age adults with incomes up to 138 percent of the federal poverty level), while other states might also require employment of the traditional Medicaid population.

As of early April 2018, three states — Kentucky, Indiana, and Arkansas — have received approval for work- or service-requirement waivers. Seven others have pending waivers for new applications, amendments to existing waivers, or requests for renewals or extensions.

In Kentucky — the first state to have its work-requirement waiver approved — affected beneficiaries must complete 80 hours per month of community-engagement activities, such as employment, education, job skills training, or community service. Documentation of meeting this requirement is required to remain eligible for coverage. Exemptions are granted to pregnant women, people considered medically frail, older adults, and full-time students. Indiana and Arkansas have received approval for similar waivers.

Shortly after Kentucky’s waiver was approved, attorneys representing 15 Medicaid beneficiaries sued the HHS secretary in federal court (Stewart v. Azar), arguing that the objective of promoting work is not consistent with Medicaid’s core purpose of “providing medical assistance (to people) whose income and resources are insufficient to meet the cost of necessary medical services.”2 The lawsuit’s outcome will affect whether some of the state demonstrations will be able to proceed.

What’s the bottom line?

The 1115 demonstration waiver program is intended to fulfill the primary purpose of Medicaid: to provide health care protection to poor and disabled Americans. The new waivers seeking to impose work or service requirements, as well as others that would impose lifetime coverage limits or premiums, should be fully and carefully evaluated to determine whether they meet this goal. In addition to state and federal evaluations, independent assessments of state demonstrations will be important to informing policymakers and the public about the waivers’ full impact.

 

‘What The Health?’ It’s Nerd Week

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https://khn.org/news/podcast-khns-what-the-health-its-nerd-week/

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The Trump administration this week issued the rules governing next year’s Affordable Care Act insurance marketplaces, and they make some potentially large changes that could result in higher premiums and fewer benefits.

Meanwhile, states are going different ways in addressing the health insurance markets in their states in response to the federal activity. And House Speaker Paul Ryan announced his retirement — leaving an intellectual void among House Republicans when it comes to health care.

This week’s panelists for KHN’s “What the Health?” are:

  • Julie Rovner of Kaiser Health News
  • Stephanie Armour of The Wall Street Journal
  • Sarah Kliff of Vox.com
  • Paige Winfield Cunningham of The Washington Post

Among the takeaways from this week’s podcast:

  • The federal rules for the ACA’s marketplaces could dramatically alter how state regulators determine what plan benefits must be covered.
  • Those rules also change some conditions allowing people to qualify for exemptions to the requirement to have coverage — and they make those exemptions retroactive to 2017. So, some people who opted not to buy insurance and paid a penalty for 2017 may be able to file for refunds from the government.
  • Insurance companies are concerned about a number of the new provisions, including those that might drive healthy consumers away from the marketplaces and alter how insurers are compensated for having unusually high numbers of expensive customers.
  • An announcement from the White House this week said the administration is hoping to extend the work requirements that some states are seeking for Medicaid to other safety-net programs.
  • California and Maryland are among the states looking at ways to shore up their individual insurance markets in light of the changes being made at the federal level.

 

New Jersey pushes back on ACA moves

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New Jersey pushes back on ACA moves

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The New Jersey legislature yesterday approved two big bills designed to counteract some of President Trump’s changes to the Affordable Care Act and stabilize the state’s individual insurance market.

The bills: One would begin the process of seeking a federal waiver to establish a reinsurance program. The other would create an individual mandate in the state.

  • If Gov. Phil Murphy signs off, New Jersey would become only the second state in the country to have an individual mandate, and the first state to pass one since the federal coverage requirement was repealed.
  • The mandate bill would require New Jersey residents to buy coverage that meets New Jersey’s standards — not the federal government’s. And New Jersey already bans the sale of short-term health plans, which the Trump administration is expanding.
  • Together, this means that New Jersey’s market would function a lot like the pre-Trump ACA.

Why it matters: Some ACA allies have pinned an awful lot of hope on the states to counteract the administration’s policy moves. That’s only likely to happen in blue states, and even there, the ultimate effects will probably be limited. But if Murphy signs these bills, they would likely give other blue states some encouragement to proceed.

Go deeper: Freelance health care journalist/analyst Andrew Sprung has written a lot about how these measures could preempt the administration’s priorities.

Where the ACA health insurance exchanges stand in 2018

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http://www.modernhealthcare.com/reports/180411where-aca-exchanges-stand/

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The Affordable Care Act’s health insurance exchanges have proven to be quite sturdy despite a barrage of federal actions that threatened to topple them. The picture of the exchanges that emerges from the CMS’ final open-enrollment data is far from the imploding market that the Trump administration and countless headlines over the past year warned about.

Though enrollment in the exchanges slipped and insurers hiked premiums by an average of 30%, the size of the premium tax credits available to most exchange enrollees ballooned enough that the average subsidized shopper paid a lower premium for coverage than the year before.

Even so, the individual on-exchange ACA plans remain unaffordable for millions of people who aren’t eligible for financial help. Congress has yet to pass legislation to bolster the market and bring down premiums, and is unlikely to do so before insurers must file 2019 rates later this spring. New threats, including the expansion of short-term medical and association health plans, are coming down the pike, promising to lure healthy people away and cause even higher premium hikes next year that unsubsidized enrollees may not accept. If consumers can’t afford coverage and drop it, insurers have a smaller incentive to keep selling plans in the individual market. The more people become uninsured, the more uncompensated care hospitals must swallow.

What’s left? “A weird mix of having a relatively persistent subsidized market, coupled with only the sickest nonsubsidized enrollees, which is not the way anyone would design this to work,” said Erin Trish, associate director of health policy at the University of Southern California’s Schaeffer Center.

Here’s a look at the current state of the ACA exchanges.

Enrollment dips modestly

Enrollment in the ACA exchanges dipped just 3.3% to 11.8 million this year from 12.2 million in 2017. Leading up to open-enrollment, which ran from Nov. 1 to Dec. 15 in most states, experts were expecting sign-ups to fall sharply. The Trump administration slashed funding for open enrollment advertisements as well as enrollment assistance. It also gave shoppers less time to pick a plan, truncating the open-enrollment period to 45 days from the usual 90 days.

Katherine Hempstead, who directs the Robert Wood Johnson Foundation’s work on health insurance coverage, said the fact that just 400,000 fewer people enrolled shows “health insurance is a need-to-have for most people. People who are subsidized are going to really stick with it as much as possible.”

The final enrollment tally bodes well for health insurers, who are more likely to keep selling coverage if a large group of consumers sign up. Insurers have a harder time turning a profit when selling plans to a smaller, sicker pool of enrollees with few healthy consumers to balance out the risk. If they don’t make a profit, insurers aren’t likely to keep selling individual coverage. Several large national insurers, UnitedHealth, Aetna and Humana, have already called it quits or scaled back their participation.

Where the exchanges are working and where they’re not

Some states’ exchanges are performing better than others. States that use the federal HealthCare.gov platform generally fared worse, with enrollment dropping an average 5%. Sign-ups in the 12 states that run their own exchanges were virtually flat compared with 2017. Many state-based marketplaces stepped up advertising in the face of federal marketing budget cuts, which could explain in part why they performed better.

Rhode Island, which operates a state-based marketplace known as HealthSource RI, experienced the largest enrollment growth at 12.1%. The state offered exchange plan members the lowest-cost benchmark plan in the country, according to HealthSource RI. At the same time, federal financial assistance to exchange members in the state increased by 46% to $7.5 million.

On the flip side, Louisiana, which uses the HealthCare.gov platform, saw the largest decrease in enrollment for the second year in a row at 23.5% over the previous year. Last year, Louisiana’s exchange enrollment plummeted by 33%. The enrollment drop isn’t necessarily a bad thing: Louisiana expanded Medicaid in mid-2016, so ACA plan members likely continued to switch to Medicaid for cheaper insurance.

Premiums vary widely across states

Premiums shot up more than 30% in the 39 HealthCare.gov states, averaging $621 per month, compared with $476 in 2017. An analysis of CMS data shows that the average 2018 premium across all states was a bit higher at $631 per month, but missing 2017 data for some states makes it difficult to show a comparison. Unsubsidized members across all states paid an average $522 per month for 2018 coverage. Increasing premiums—along with reducing their footprints—has helped many health insurers, such as Anthem, Cigna and Highmark Health, turn a profit on the insurance exchanges for the first time in 2017.

Many Americans who don’t receive financial assistance can’t afford those sticker-shock prices, and more and more are thinking about going uninsured or opting for a cheaper alternative, like a short-term medical plan. As the number of uninsured and under-insured rises, so does the amount of uncompensated care at hospitals.

Like enrollment rates, premiums varied widely by state. Exchange enrollees in Wyoming were hit with the highest premiums at an average $983 per month, while those in Massachusetts paid the lowest rates at $385 per month.

The effects of “silver-loading”

Most exchange enrollees didn’t pay those sky-high prices. About 83% of consumers across the nation had their premiums reduced by an advanced premium tax credit, which is one type of federal financial assistance available to people with incomes less than 400% of the federal poverty level (roughly $48,000 for an individual). The average HealthCare.gov enrollee who received a premium tax credit paid about $89 per month for coverage, down from $106 in 2016. In Oklahoma, the average subsidized enrollee paid just $37 a month—the lowest of any state.

Subsidized premiums dropped because tax credits increased. Last year, savvy state regulators and insurers deployed a strategy to offset the effects of the Trump administration’s decision to end another form of financial assistance—cost-sharing reduction payments—that lowers exchange enrollees’ out-of-pocket costs. CSRs have historically lowered copayments and deductibles for ACA plan members with incomes lower than 250% of the federal poverty level.

When President Donald Trump stopped paying the CSRs at the end of 2017, insurers built rate increases attributable to the CSR cutoff into only silver plan premiums, which are used to determine the premium tax credit. As premiums went up, so did the size of the tax credit consumers received, meaning that most subsidized enrollees never felt the effects of big price hikes.

Larger tax credits allowed some exchange shoppers to find zero-premium bronze plans or lower-cost gold plans. As a result, fewer people—62.6%—enrolled in silver plans in 2018, down from 71.1% in 2017. Enrollment in bronze and gold plans, on the other hand, increased. Metal tiers represent the actuarial value, or the average share of health costs covered, by the plan. Gold plans pay for a larger share of the patient’s health costs.

Experts worry that people switching to bronze plans may have higher out-of-pocket costs they can’t afford, prompting them to forgo care or take on debt. Bronze plans have higher deductibles and often don’t offer cost-sharing for services before the deductbile is met.

“When you enroll in plans with higher deductibles, you use less care,” Trish explained. “People dramatically reduce their use of healthcare and not necessarily in smart ways.”

Emerging threats

The zeroed-out individual mandate penalty, potential expansion of short-term and association health plans, and the CMS’ final rule allowing states greater flexibility in determining a menu of essential health benefits all threaten to destabilize the individual market and cause higher premiums and lower enrollment in 2019. Americans who don’t qualify for subsidies will bear the brunt of any premium hikes that stem from these challenges come the sixth open-enrollment period, kicking off in November.

With a federal administration and Congress unwilling to implement policies or pass legislation that would help to keep premiums lower, such as cost-sharing reduction payments or a reinsurance pool for high-risk consumers, experts say it will be up to states to bolster their markets. Some, particularly Democratic states, are considering their own coverage mandates, though such policies are unpopular. Others may work to put restrictions on short-term medical plans. But one thing is for certain: The pervasive uncertainty surrounding healthcare rules and regulations that was a hallmark of 2017 is not dissipating any time soon and will once again be a challenge for states, insurers and consumers come the sixth open-enrollment.