Tag Archives: CBO

How Would State-Based Individual Mandates Affect Health Insurance Coverage and Premium Costs?

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https://www.commonwealthfund.org/publications/fund-reports/2018/jul/state-based-individual-mandate?omnicid=EALERT%25%25jobid%25%25&mid=%25%25emailaddr%25%25

How Would State-Based Individual Mandates Affect Health Insurance Coverage and Premium Costs?

 

ABSTRACT

  • Issue: The Tax Cuts and Jobs Act of 2017 eliminated the financial penalty of the Affordable Care Act’s individual mandate. States could reinstate a similar penalty to encourage health insurance enrollment, ensuring broad sharing of health care costs across healthy and sick populations to stabilize the marketplaces.
  • Goal: To provide state-by-state estimates of the impact on insurance coverage, premiums, and mandate penalty revenues if the state were to adopt an individual mandate.
  • Methods: Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) is used to estimate the coverage and cost impacts of state-specific individual mandates. We assume each state adopts an individual mandate similar to the ACA’s.
  • Findings and Conclusion: If all states implemented individual mandates, the number of uninsured would be lower by 3.9 million in 2019 and 7.5 million in 2022. On average, marketplace premiums would be 11.8 percent lower in 2019. State mandate penalty revenues would amount to $7.4 billion and demand for uncompensated care would be $11.4 billion lower. The impact on coverage and on premiums varies in significant ways across states. For example, in 2019, the number of people uninsured would be 19 percent lower in Colorado and 10 percent lower in California if they implemented their own mandates. With mandates in place, average premiums would be 4 percent lower in Alaska and 15 percent lower in Washington.

Background

One of the Affordable Care Act’s central aims was to reform insurance markets by sharing health care risks and costs more broadly across the healthy and sicker populations. Strategies to accomplish this goal include modified community rating, guaranteed issue, and benefit standards, with the greatest changes made to nongroup insurance markets. Spreading risks tends to decrease costs for people with medical needs and increase them for healthy people. As a consequence, financial incentives to become and remain insured regardless of health status are necessary to ensure the risk pool is large and stable. The ACA established the individual responsibility requirement — also referred to as the individual mandate — to require most people to enroll in minimum essential health care coverage or pay a tax penalty. The Tax Cut and Jobs Act of 2017 sets the ACA’s penalties for individuals who remain uninsured to $0, beginning in 2019.

The Congressional Budget Office (CBO) estimated that eliminating the individual mandate penalties would lead to an additional 3 million uninsured people in 2019.1 It also estimated that premiums in the nongroup insurance market will increase by 15 percent between 2018 and 2019. Because of the elimination of mandate penalties, fewer healthy people are estimated to enroll in nongroup insurance; thus, the average nongroup insurance enrollee will be more likely to have higher health care expenses. As a result, premiums will be higher. Other pending changes, such as expansion of short-term, limited-duration plans, are expected to worsen the nongroup risk pool and increase premiums as well. The changes, taken together, may lead to some insurers ending or limiting their participation in ACA-compliant nongroup insurance markets.2 Acting on these concerns, some states have considered or passed legislation to implement state-specific individual mandates.3 New Jersey enacted its individual mandate on May 30, 2018;4 Massachusetts did so in 2006, well before the passage of the ACA.

This analysis provides estimates of the effects of state-specific individual mandates on insurance coverage, nongroup insurance premiums, federal and state government spending (including penalty revenue to states), and demand for uncompensated care. Findings are provided nationally as if every state adopted its own individual mandate and for 48 states and the District of Columbia (but excluding Massachusetts and New Jersey because they have their own mandates under current law), assuming each state adopts a penalty structure similar to that of the ACA. We do not anticipate every state taking this approach, but present findings this way for ease of exposition and as a reference point for understanding the effects of the mandate. (A full description of our methods is available below.)

Key Findings

Our central estimates assume that state mandates are implemented in each state as soon as the federal penalties are eliminated in 2019. The effect of a mandate grows over time as health care costs grow relative to incomes; we show some of our results in 2022 to illustrate this. State mandates would have two central effects. First, more people would retain insurance coverage to avoid the penalty. Second, premiums in the nongroup market would be lower because the insurance pool will not lose healthy people that would otherwise drop their coverage without a mandate. As a result, even more people will enroll because of the lower premiums.

 

 

Squeeze On Affordable Health Insurance For 50- To 64-Year-Olds

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https://www.forbes.com/sites/howardgleckman/2018/06/21/the-trump-administrations-squeeze-on-affordable-health-insurance-for-50-64-year-olds/#4ea0538b1d94

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In a series of recent decisions, the Trump Administration is taking steps that will sharply raise insurance premiums for people aged 50 to 64, just before they become eligible for Medicare. While these steps are likely to make coverage less expensive for young, healthy consumers, they will inevitably raise costs for middle-aged people with chronic conditions. For many, insurance will become unaffordable. And that lack of coverage will eventually result in higher costs for Medicare.

Trump is taking three major steps that will affect the availability of Affordable Care Act health insurance for middle-aged consumers.  

Repealing but not replacing

First, at the urging of the Trump Administration, Congress last year repealed the tax penalty that has to be paid by those without health insurance, effective for tax year 2019. The penalty is the ACA’s mechanism to push people to buy insurance. The logic: By broadening the pool of those with ACA insurance to include those less likely to incur significant medical costs, the individual mandate would keep premiums relatively low for everyone.

Then, early this month, the Trump Administration refused to defend the remaining provisions of the ACA in federal court. In the case Texas v. the federal Department of Health and Human Services, 20 red states argued that, absent the now-repealed individual mandate, the rest of the ACA will be unconstitutional. Thus, all its other provisions, including several important to those older consumers, also would be thrown out. They include premium limits for those 50-64, minimum benefit requirements,  and the ban on insurance companies rejecting potential purchasers due to pre-existing conditions.

Pre-existing conditions

Prior to the ACA, in a practice known as age-rating, 60-year-olds could pay premiums that were 11 times higher than younger buyers. The ACA capped that ratio at 3:1. AARP estimates that bumping it up to 5:1 would raise annual premiums for a 60-year-old by more than $3,000, or 22%.

Similarly, allowing carriers to underwrite for pre-existing conditions would make insurance widely unavailable for people aged 50 to 64. AARP estimates that 25 million people, or 40% of those 50 to 64, have a condition that could disqualify them from non-group insurance.

The Urban Institute’s Health Policy Center estimates that tossing out the remaining provisions of the ACA would result in 17 million people losing commercial insurance and another 15 million losing Medicaid and children’s health care under the CHIP program.

By Urban colleagues project that even those remaining  in the private individual insurance market “would likely have policies that cover fewer benefits and require more out-of-pocket spending for services.”

Rare agreement

The Texas lawsuit, and the Administration’s refusal to defend the law in court, has generated an outpouring of opposition. It created a rare moment when consumer groups, hospitals, and doctors agreed on a health policy issue.

But the story doesn’t end there. This week, the Trump Administration took one more step towards dismantling the ACA in a way that will likely harm pre-Medicare consumers: The Department of Labor adopted new rules opening the door to low cost, low-benefit health plans.  These will now be widely available to small businesses and, importantly, self-employed individuals.

The Congressional Budget Office estimates that 4 million people will buy these policies, sold by association health plans (AHPs). The consulting firm Avalere Health estimates that individual AHP premiums will be an average of $9,700 cheaper than ACA coverage, and that 1 million people will shift from marketplace plans to AHP policies. But it predicts premiums will rise by 3.5 percent for more comprehensive ACA insurance, largely because the remaining consumers will be older and sicker than AHP buyers.

President Trump promotes these plans as a less costly alternative to ACA coverage. This week he told the National Federation of Independent Business, “You’re going to save massive amounts of money and have much better health care. You’re going to save a fortune and you’re going to be able to give yourselves and your employees tremendous health care.”

Low cost, few benefits

But the plans do not include any minimum benefit requirements. Thus, they can exclude coverage for pregnancies, mental health issues, or drugs or hospital care. Carriers won’t be able to exclude buyers on the basis of pre-existing conditions but can adjust premiums based on age or sex. And, because they often exclude benefits important to those with chronic conditions, such as medications, they don’t need to underwrite: Those consumers simply won’t buy these policies.

Priced out of ACA coverage and uninterested in limited insurance that won’t cover their needs, it is easy to imagine many of those in their early 60s simply going without coverage (and care) until they become eligible for Medicare at age 65. That will not only put their health at risk, it will raise Medicare costs. Medicare spends about one-third more on medical care for those who join the program without having had insurance in the year before enrolling.

The result of all this: Trump is creating two separate individual health insurance markets, one for young and healthy people, and one for older and sick people.  Some young people may buy low-cost policies that will serve them well—until they get sick. Many older people won’t buy insurance at all, risking their health and, very likely, raising costs to government.

 

Plan to Cut $15B in Spending Squeaks Through House

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https://www.usnews.com/news/politics/articles/2018-06-07/house-takes-up-trump-sponsored-plan-to-cut-15b-in-spending

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The House on Thursday only narrowly passed a White House plan to cut almost $15 billion in unused government money, a closer-than-expected tally on legislation that’s designed to demonstrate fiscal discipline in Washington even though it wouldn’t have much of an impact on spiraling deficits.

The measure, which passed 210-206, would take a mostly symbolic whack at government spending because it would basically eliminate leftover funding that wouldn’t have been spent anyway. The bill now goes to the Senate, where it faces long odds.

The deficit is on track to exceed $800 billion this year despite a strong economy. Republicans controlling Congress are not attempting to pass a budget this year.

The package of so-called rescissions has been embraced by GOP conservatives upset by passage in March of a $1.3 trillion catchall spending bill that they say was too bloated. More pragmatic Republicans on Capitol Hill’s powerful Appropriations panels aren’t keen on the measure since it would eliminate accounting moves they routinely use to pay for spending elsewhere.

The measure includes $4 billion in cuts to a defunct loan program designed to boost fuel-efficient, advanced-technology vehicles, rescissions of various agriculture grant programs, and cuts to conservation programs at the Department of Agriculture, among others.

While Democrats blasted the cuts, the real objection to some of them, such as $7 billion from popular Children’s Health Insurance Program funding, is that it would take that money off the table so it couldn’t be used later as it was in the earlier spending bill. The CHIP cuts wouldn’t affect enrollment in the program, which provides health care to children from low-income families that don’t qualify for Medicaid.

“Targeting CHIP for a rescission prevents Congress from reinvesting in other priorities like child and maternal health, early childhood education, biomedical research and our community health centers,” said New York Rep. Nita Lowey, the top Democrat on the Appropriations Committee.

Some GOP moderates also worry that they’re casting a difficult-to-explain vote to cut CHIP funding in the run-up to November’s midterm elections.

“I don’t think the vote’s intended for people in swing districts,” said Rep. Ryan Costello, R-Pa. Nineteen Republicans, mostly moderates, opposed the bill. No Democrats voted for it.

President Donald Trump is the first President to employ the so-called rescissions tool since the Clinton administration. The obscure process is one of the few ways around the Senate filibuster, though other parliamentary problems could await in that chamber — even if resistance from moderates and Republicans on the Appropriations Committee can be overcome.

The nonpartisan Congressional Budget Office weighed in Thursday to estimate that the measure — pushed largely by White House budget director Mick Mulvaney and No. 2 House Republican Kevin McCarthy of California — would only cut the deficit by $1.1 billion over the coming decade. That’s because most of the cuts wouldn’t affect the deficit at all since CBO doesn’t give deficit credit for cutting money that would never have been spent.

Trump proposed the measure last month, but it was slow to come to a vote because some Republicans came out against it.

The White House submitted a revised package of cuts Tuesday, removing politically troublesome proposals to cut money to fight Ebola funds and to rebuild watersheds damaged by Superstorm Sandy. Trump weighed in soon after to urge Republicans to pass the plan.

It’s still unclear whether it will pass in the Senate, where pragmatic-minded Republicans are focusing on trying to get the troubled process for handling annual appropriations back on track on a bipartisan basis.

The White House and tea party lawmakers upset by the budget-busting “omnibus” bill have rallied around the plan, aiming to show that Republicans are taking on out-of-control spending.

“If this body cannot be trusted to reclaim money that will not or cannot be used for its intended purpose, can we really be trusted to save money anywhere else?” McCarthy said.

While some Democrats opposed the spending cuts as heartless, others mostly mocked the legislation.

“After spending nearly $2 trillion on tax cuts for the super-rich and blowing up the deficit, the Majority’s bill is like putting a Band-Aid on a gaping wound,” said Rep. Jim McGovern, D-Mass. “Republicans are trying to trick the American people into thinking they care about fiscal responsibility. They’re not fooling anyone.”

 

‘What The Health?’ Campaign Promises Kept, Plus ‘Nerd Reports’

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https://khn.org/news/podcast-khns-what-the-health-campaign-promises-kept-plus-nerd-reports/

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President Donald Trump managed to fulfill — at least in part — two separate campaign promises this week.

To the delight of anti-abortion groups, the administration issued proposed rules that would make it difficult if not impossible for Planned Parenthood to continue to participate in Title X, the federal family-planning program. And Congress cleared for Trump’s signature a “right-to-try” bill aimed at making it easier for patients with terminal illnesses to obtain experimental medications.

Also this week, the National Center for Health Statistics and the Congressional Budget Office issued reports about Americans both with and without health insurance and the cost of subsidizing health insurance to the federal government.

And May’s “Bill of the Month” installment features some very expensive orthopedic screws.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Margot Sanger-Katz of The New York Times, Sarah Kliff of Politico and Alice Ollstein of Talking Points Memo.

Among the takeaways from this week’s podcast:

  • The Trump administration’s proposed rule to cut Title X reproductive health funding for groups that perform abortions was designed to meet demands from the president’s religious supporters, but it could backfire by mobilizing liberal voters.
  • The changes being considered might also open the door for some religious-based groups that don’t support abortion — or perhaps even contraception — to get federal Title X funding.
  • Conservatives’ campaign to get a “right-to-try” bill through Congress has been driven in large part by individual patient stories.
  • New data released by the Centers for Disease Control and Prevention this week shows the uninsured rate did not grow in 2017, despite a number of changes that the Trump administration made to the marketplace and federal promotion of it.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too.

 

The ACA at Eight: Resilient but Still at Risk

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http://www.commonwealthfund.org/publications/blog/2018/mar/aca-at-eight?omnicid=EALERT1374267&mid=henrykotula@yahoo.com

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It’s Obamacare’s birthday. After eight years of relentless pounding, the Affordable Care Act (ACA) is still the law of the land. Its resilience reflects the fundamental decency of the American people who — when faced with the reality of taking coverage away from millions of their neighbors — refused to let that happen. They filled town hall meetings, they flooded the corridors of Congress, and support for the law surged to its current 54 percent.

That is not to say that the law’s future is assured. As part of its recent tax reform legislation, Congress eliminated financial penalties for not having health insurance — the teeth of the so-called individual mandate. The Congressional Budget Office (CBO) predicts that this will raise health insurance premiums in individual private markets by an average of 10 percent, and 13 million Americans could lose their health insurance. If Congress fails to enact recent bipartisan market stabilization proposals, these numbers could go even higher.

The current administration is also using executive authority to weaken the law. The U.S. Department of Health and Human Services has encouraged states to impose a range of new restrictions on Medicaid recipients — work requirements, premiums, copays — that may reduce the number of poor and near-poor Americans who enroll in this program.

The administration has also proposed new rules that would allow health insurers to sell plans that evade the ACA’s standards regarding preexisting conditions and minimum benefits. For example, the administration would permit insurers to market short-term plans — coverage limited to a year in duration — without the requirement that they accept all comers, and with various restrictions on benefits. These cheaper, less generous plans would appeal to healthier individuals, who would then likely choose not to purchase the more expensive, comprehensive insurance sold in ACA marketplaces. Only sicker individuals would buy ACA plans, raising their costs and making them unaffordable to millions who have come to depend on them. The net effect is to add choices for healthy Americans, but reduce options for the sick.

Efforts to curtail the ACA will likely increase the number of Americans without insurance, now at a historic low of 14 percent of working-age adults, according to the Commonwealth Fund’s Affordable Care Act Tracking Survey. These efforts will also likely increase health disparities between states. A number of the restrictions sought by the administration will go into effect only if states embrace them. States must request waivers to limit Medicaid benefits. So far, only Republican-led states are doing so. Similarly, states have discretion about whether to permit the sale of short-term plans. Many blue states are considering banning or regulating them.

Despite these threats, however, fundamental elements of the ACA remain in effect. Federal financial assistance for purchase of health insurance in ACA marketplaces remains available for individuals with incomes below 400 percent of the federal poverty level. This is one reason why 11.8 million people had signed up for ACA plans through the marketplaces by the end of January. Federal support for states to expand Medicaid persists. Thirty-four states and the District of Columbia have done so, resulting in 15 million more beneficiaries of that program.

Recent legislative and executive restrictions on the ACA will not totally reverse these gains. Paradoxically, some states that refused previously to expand Medicaid may decide to do so now that they may be able to impose work requirements, premiums, and copays, and thus give expansion a conservative stamp. This could actually increase the total number of Americans with some Medicaid coverage.

In fact, the continuing struggle over the ACA fits a decades-old pattern of steady, if erratic, expansion of health insurance coverage in the United States. Since the creation of Medicare and Medicaid 53 years ago, the federal government has periodically extended insurance to new populations: the disabled, those with end-stage renal disease, children. The federal government also massively expanded Medicare benefits to cover drugs. Once provided, these benefits have proved politically difficult to peel back — in a recent poll, 92 percent of Americans said they felt all of us should have the right to health care.

What does this mean for the ACA? While it will not achieve all its supporters’ goals, it will survive, and provide a new foundation upon which Americans can build if they choose, as they have in the past, to help their vulnerable neighbors deal with the scourge of illness. To paraphrase Martin Luther King, one might even say that the arc of history is long, but it bends toward health coverage.

 

Republicans release new plan to lower health premiums, stabilize Obamacare markets

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https://www.usatoday.com/story/news/politics/2018/03/19/republicans-release-new-plan-lower-health-premiums-stabilize-obamacare-markets/439216002/

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 Sen. Lamar Alexander and other congressional Republicans are pressing forward with their latest plan to stabilize Obamacare health insurance markets and help provide coverage for patients with high medical costs.

But while previous versions have had bipartisan support, Democrats are refusing to back the latest bill.

Alexander and three key Republicans filed legislation Monday that they said could provide coverage for an additional 3.2 million individuals and lower premiums by as much as 40 percent for people who don’t get their health insurance through the government or their employer.

Beginning in 2019, the bill would reinstate for three years the government subsidies paid to insurers that provide health-care coverage to low-income clients. It also would provide $30 billion in funding – $10 billion a year over three years – to help states set up high-risk insurance pools to provide coverage for people with high medical costs.

The proposal also would revise the Obamacare waiver process so that states will have more flexibility to design and regulate insurance plans. In addition, it would require the Department of Health and Human Services to issue regulations allowing insurers to sell plans across state lines.

“Our recommendations are based upon Senate and House proposals developed in several bipartisan hearings and roundtable discussions,” the proposal’s Republican sponsors said in a statement.

The bill is sponsored in the Senate by Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee, and Sen. Susan Collins, R-Maine. The sponsors in the House are Rep. Greg Walden, R-Ore., who chairs the House Energy and Commerce Committee, and Rep. Ryan Costello, R-Penn.

The lawmakers are hoping to include the bill in a massive spending package that Congress is expected to take up by the end of the week. President Donald Trump told Alexander and Collins in a conference call over the weekend that he wants money to lower health insurance premiums included in the spending package.

The bill marks the latest attempt by lawmakers to offer short-term fixes that could bring some stability to the volatile health insurance markets created under the Affordable Care Act and help offset the higher insurance premiums expected to result from the repeal of the Obamacare requirement that most Americans buy insurance.

Alexander and the Senate health committee’s top Democrat, Sen. Patty Murray of Washington, struck a deal last fall to extend the cost-sharing subsidies for two years. Trump has halted the payments, established under the Affordable Care Act, which are worth around $7 billion each year.

But Murray and other Democrats are refusing to sign onto the latest proposal because it includes language that they say would expand the restrictions on federal funding of abortions.

“Senator Murray is disappointed that Republicans are rallying behind a new partisan bill that includes a last-minute, harmful restriction on abortion coverage for private insurance companies instead of working with Democrats to wrap up what have been bipartisan efforts to reduce health care costs,” said Murray’s spokeswoman, Helen Hare.

Murray “hopes the unexpected release of this partisan legislation isn’t a signal from Republicans that they have once again ended ongoing negotiations aimed at lowering families’ health care costs in favor of partisan politics, and that they come back to the table to finally get this done,” Hare said.

Republicans, meanwhile, pointed to an analysis by health care experts at the management consulting firm Oliver Wyman that compared the new proposal to what people in the individual market will pay if Congress fails to act.

The analysis showed that the package would reduce premiums by up to 40 percent in the individual market for farmers, small business owners and others who don’t buy their insurance from the government or their employer.

A self-employed plumber making $60,000, for example, may be paying $20,000 for health insurance now, but over time that insurance bill could be cut up to $8,000, the lawmakers said.

Preliminary projections from the Congressional Budget Office indicated that the plan could be adopted without adding to the federal debt.

 

Nursing home study raises questions on Medicare managed care networks

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https://www.reuters.com/article/us-column-miller-medicare/nursing-home-study-raises-questions-on-medicare-managed-care-networks-idUSKBN1F71NS

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Managed care is the hot trend in Medicare, with the number of seniors enrolled in Medicare Advantage plans projected to soar over the coming decade.

These plans offer simplicity by combining all the different parts of Medicare into a single buying decision – and they can save you money.

But before you sign up, ask this question: What happens if I get really sick?

Most Medicare Advantage plans are HMOs or PPOs. When you join, Medicare provides a fixed payment to the plan to cover Part A (hospitalization) and Part B (outpatient services). Advantage is growing quickly, fueled by its value proposition of savings and simplicity – the plans bundle together prescription drug coverage and the out-of-pocket protection of Medigap plans.

But like any type of managed care coverage, there is a trade-off: you must use in-network healthcare providers. For example, one recent study found shortcomings in the quality of providers in some Medicare Advantage provider networks – one out of every five plans did not include a regional academic medical center – institutions that usually offer the highest-quality care and specialists (reut.rs/2DGIvhy).

Now, a new study raises questions about the quality of skilled nursing facilities (SNFs) that are included in Medicare Advantage provider networks.

Researchers at Brown University’s School of Public Health examined Medicare beneficiaries entering skilled nursing facilities (SNFs) from 2012 to 2014. The yardsticks for quality were Nursing Home Compare – Medicare’s own database of nursing home quality ratings – and rates of hospital readmission for those admitted to SNFs. Their key finding: Medicare Advantage enrollees appear more likely to enter lower-quality skilled nursing facilities than people enrolled in traditional fee-for-service Medicare.

Medicare Advantage plans also are subject to a quality rating system, but the researchers found that enrollees in both lower- and higher-quality plans were admitted to SNFs with significantly lower quality ratings.

The SNF quality gaps could impact a large group of people, considering the large – and growing – Medicare population. David Meyers, one of the Brown University study authors, calculates that about 315,000 patients from lower-rated Advantage plans need to use an SNF annually. “If those people had used fee-for-service Medicare, up to 13,000 more of them might have gone to a higher-quality nursing home,” he said.

UNCLEAR HEALTH OUTCOMES

The study does not conclude that healthcare outcomes are necessarily worse for Medicare Advantage enrollees – that was outside the scope of the research. Some researchers have correlated NHC star ratings with patient outcomes, but the jury really is out on this question – partly because of the shortcomings of NHC itself. Much of the data that determines ratings is self-reported by nursing homes, and reviews of this system have found numerous cases of facilities attempting to “game” the system to inflate their ratings.

A large trade group representing the private companies that sponsor Advantage plans – America’s Health Insurance Plans (AHIP) – argues that actual outcomes are better. The group points to another study that found MA enrollees had shorter lengths of stay and were less likely to be readmitted to a hospital and more likely to return home within 90 days of admission than FFS beneficiaries.

But the Brown researchers found that patients from lower-rated Advantage plans tended to go to SNFs with higher readmission rates than fee-for-service patients.

And a review by the Kaiser Family Foundation in 2014 of a large body of research comparing the quality of care provided by Advantage plans and traditional Medicare concluded that the available research is unsatisfying, and that better evidence is needed.

Even if current research is inconclusive, this much is clear: we need much greater transparency to help consumers understand at the point when they are shopping for Medicare Advantage plans using the online Medicare plan finder  (bit.ly/2DKlL0o). “It’s not very clear what SNFs are part of any given Advantage plan,” said Meyers.

Going beyond information in the plan finder also presents challenges, said Tricia Neuman, senior vice president and director of the program on Medicare policy at Kaiser. “You would need to get the provider directory from every Advantage plan she is considering – and those are not available in a uniform format,” she said.

”Then, you’d have to go compare the different nursing home providers online for their quality ratings.”  No one – including AHIP – is even tracking data on how many SNFs are offered by the typical Advantage plan.

Meyers doubts that even a good research tool would help. “Most people don’t think about a nursing facility until they need one  – and it’s really difficult to make decisions about this at a time of crisis,” he said.

Gaining a better understanding of quality in Medicare Advantage plans is going to be urgent as the aging of the nation accelerates. Overall Medicare enrollment will jump nearly 30 percent by 2027 according to projections by the Congressional Budget Office. And Advantage plan enrollment will increase from 19 million to 31 million, which would represent 44 percent of eligible Medicare beneficiaries.

And the need for greater consumer vigilance in choosing SNFs will increase as the Trump administration moves aggressively to deregulate the industry.

 

The individual market will thrive in the long run

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Not since the first year of the Affordable Care Act has there been so much uncertainty at the start of an open enrollment period. How many Americans will sign up for health coverage? As experts weigh the uncertain impact of the Trump administration’s last-minute policy moves, estimates from the Congressional Budget Office and Urban Institute range from nearly one million fewer Americans with coverage to at least 600,000 more.
As co-founders of Oscar Health, an insurance startup that will be signing up Americans for individual plans across six states this year, we anticipate the Trump administration’s actions will simultaneously aid and undermine enrollment, thanks to the mixed impact of its political and policy changes.
The bottom line: It will be hard — after four years where tens of millions of Americans have gained access to health insurance — for the administration to erase the virtues of an individual market where consumers choose their health plan and no one is discriminated against based on health status. In fact, we project that Oscar will enroll significantly higher membership across our six states this year.

Here’s why we believe the administration’s actions will both help and hurt enrollment:

  • Plans will be more affordable for millions of Americans due to the seesaw impact of cuts to cost-sharing reduction subsidies, which will actually increase subsidies for many low-income consumers. And for the first time, the IRS will be aggressively enforcing the individual mandate.
  • On the other hand, the administration’s cuts to outreach and sporadic lip service to repealing the ACA do nothing to stanch growing confusion among shoppers.
The biggest threat to a strong open enrollment period is consumer confusion. That’s why our outreach this year, themed “Get Covered,” is so focused on educating Americans on the importance of health insurance. We were the first to launch our open enrollment ads six weeks ago. And when HealthCare.gov is down for maintenance every Sunday, Oscar will be up — consumers in our states will be able to get subsidized coverage on our website.
The big picture: Our optimism about the individual market, both this year and beyond, stems from our conviction that the near-term regulatory turbulence will pass and that the individual market will thrive in the long run.
That’s because health care costs are spiraling out of control across the board, even for Americans who get coverage through their jobs. This year, premium contributions for workers increased by 8.2%, while the employer’s share increased hardly at all: 1.4%.
But Americans see the full sticker price of care in the individual market alone. To ensure that consumers who are paying out of their own pockets can still afford coverage, it’s actually the insurers and providers in the individual market who are working hardest to control costs.
The details: Indeed, we are seeing signs that sustainable strategies to keep health care costs down for all Americans are being accelerated and proven out in the individual market.
  • Our health care system, for example, must move away from expensive emergency room visits and embrace virtual care. Prices to treat many of the same exact conditions in emergency rooms — where half of all care is delivered in the U.S. — can be orders of magnitude higher than telemedicine. In the first year of the ACA, Oscar introduced the first health insurance plan in the country with free, 24/7 access to telemedicine — and today, one in four Oscar members use it.
  • The individual market has also accelerated the shift away from big hospital networks in health insurance plans that drive prices up for all Americans. Narrow networks — which most ACA plans have — can result in lower premiums for consumers without impacting their quality of care.
  • The true innovation unlocked by the smaller networks, however, is one of integration by design. By making the insurer and hospital more dependent on each other, we can finally begin to remove the friction between your doctor and insurer to result in better, more coordinated care. For example, more than one third of all first-time doctor visits for our members are routed through our Oscar app and Concierge teams, to doctors that we partner with.
  • Hospitals are now looking to become your insurance company, too. Indeed, the Cleveland Clinic, a world-renowned hospital, is offering its own jointly-run plan with Oscar next year — in the individual market.
What’s next: There is no doubt that the individual market under the ACA has stumbled out of the gate, and is in need of some fixes. But America has seen rocky private insurance markets recover before.
Between 1998 and 2002, the number of private Medicare+Choice plans — what are now known as Medicare Advantage plans — was cut in half, to less than 150. After a legislative fix in 2003, the market recovered and matured, and seniors this year will have over 3,000 Medicare Advantage plans to choose from.
We’re confident the same can and will happen with the individual market.

State Attorneys General Ask Court For Injunction Reversing CSR Payment Halt

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http://healthaffairs.org/blog/2017/10/18/state-attorneys-general-ask-appellate-court-for-injunction-reversing-csr-payment-halt/

On October 18, 2017, the attorneys general of eighteen states and the District of Columbia asked the United States District Court for the Northern District of California for a temporary restraining order and order to show cause why a preliminary injunction should not issue to compel the Trump administration to continue making cost-sharing reduction (CSR) payments until the lawsuit they have filed is resolved. The motion asks the court to make a decision by 4:00 PM tomorow, October 19, as the next cost-sharing reduction payment is due on October 20. The plaintiffs ask for a nationwide injunction as the issue it addresses is nationwide in scope.

The motion is supported by a legal memorandum and numerous affidavits. To obtain preliminary relief, a plaintiff “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” In the Ninth Circuit, where California is located, it is enough to show that serious legal questions are presented if the balance of hardships tips sharply in the plaintiff’s favor.

The brief begins by explaining the purpose of the Affordable Care Act’s cost-sharing reductions: making health care affordable to lower-income individuals enrolled in silver marketplace plans by reducing out-of-pocket limits, deductibles, and other cost-sharing. It notes that insurers are required to reduce cost sharing for eligible individuals and that they are doing so to the tune of $7 billion for 2017. The ACA requires the federal government to reimburse insurers for these costs and up until September of 2017—including eight months of the Trump administration—it did so. Only days before the October payment was to be made, and less than three weeks before open enrollment began for 2018, the administration cut off the payments.

The states argue that Congress has in fact appropriated funds to cover the cost sharing reduction reimbursement payments. It is undisputed that Congress appropriated in the ACA funds for the premium tax credits and, the states argue, this appropriation covers the CSRs payments as well. They base their argument on the text, structure, and design of the ACA. This argument was rejected by the lower court in the House of Representatives’ lawsuit, but that decision is not binding on any other federal court and the states’ argument has never been ruled on by a federal appellate court.

The states further argue that the executive branch’s sudden termination of the CSR payments was “arbitrary and capricious” and thus prohibited by the Administrative Procedures Act. They contend that President Trump has violated his constitutional duty to “take care that the laws be faithfully executed.” The brief quotes liberally from President Trump’s tweets, in which he claimed, “The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”; bragged that the ACA “is being dismantled, but in the meantime, premiums & deductibles are way up!” while health insurance stocks plunge because of his Executive action; and boasted that he had “knocked out the CSRs,” pronouncing the ACA “dead,” “finished,” and “gone.” The brief describes the President as “characteristically frank” in detailing his motives for cutting off the payments, which do not rely on legal analysis.

The brief describes in detail, with frequent cites to affidavits filed with the brief, the harm that the states and their residents will suffer because of the administration’s decision. These include destabilizing the states’ individual health insurance markets, increasing premiums, decreasing consumer plan choices, and suppressing market participation. The decision will also, the states assert, increase the number of uninsured individuals in the states and thus their uncompensated care costs. The brief notes that the District of Columbia Court of Appeals already recognized these burdens on the states when it granted them the right to intervene in the appeal of the case brought by the House of Representatives. The brief contends that the timing of the decision to terminate the CSR payments will cause consumer confusion and cause insurers to absorb multi-million dollar losses, further destabilizing the individual market.

Finally, the brief argues that the balance of the hardships tilts toward the plaintiff states. In particular, as has been noted by the Congressional Budget Office and others, terminating the CSR payments will cost the government more than it saves since it will increase premiums and thus premium tax credits. An injunction is also, the states note, necessary to preserve the status quo until the court can rule on the legal issues in the case.

Trump Acting Solo: What You Need To Know About Changes To The Health Law

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https://khn.org/news/trump-acting-solo-what-you-need-to-know-about-changes-to-the-health-law/

Apparently frustrated by Congress’ inability to “repeal and replace” the Affordable Care Act, President Donald Trump this week decided to take matters into his own hands.

Late Thursday evening, the White House announced it would cease key payments to insurers. Earlier on Thursday, Trump signed an executive order aimed at giving people who buy their own insurance easier access to different types of health plans that were limited under the ACA rules set by the Obama administration.

“This is promoting health care choice and competition all across the United States,” Trump said at the signing ceremony. “This is going to be something that millions and millions of people will be signing up for, and they’re going to be very happy.”

The subsidy payments, known as “cost-sharing reductions,” are payments to insurers to reimburse them for discounts they give policyholders with incomes under 250 percent of the federal poverty line, or about $30,000 in income a year for an individual. Those discounts shield these lower-income customers from out-of-pocket expenses, such as deductibles or copayments. These subsidies have been the subject of a lawsuit that is ongoing.

The cost-sharing reductions are separate from the tax credit subsidies that help millions of people pay their premiums. Those are not affected by Trump’s decision.

Some of Trump’s actions could have an immediate effect on the enrollment for 2018 ACA coverage that starts Nov. 1. Here are five things you should know.

1. The executive order does not make any immediate changes.

Technically, Trump ordered the departments of Labor, Health and Human Services and Treasury within 60 days to “consider proposing regulations or revising guidance, to the extent permitted by law,” on several different options for expanding the types of plans individuals and small businesses could purchase. Among his suggestions to the department are broadening rules to allow more small employers and other groups to form what are known as “association health plans” and to sell low-cost, short-term insurance. There is no guarantee, however, that any of these plans will be forthcoming. In any case, the process to make them available could take months.

2. The cost-sharing reduction changes ARE immediate but might not affect the people you expect.

Cutting off payments to insurers for the out-of-pocket discounts they provide to moderate-income policyholders does not mean those people will no longer get help. The law, and insurance company contracts with the federal government, require those discounts be granted.

That means insurance companies will have to figure out how to recover the money they were promised. They could raise premiums (and many are raising them already). For the majority of people who get the separate subsidies to help pay their premiums, those increases will be borne by the federal government. Those who will be hit hardest are the roughly 7.5 million people who buy their own individual insurance but earn too much to get federal premium help.

Insurers could also simply drop out of the ACA entirely. That would affect everyone in the individual market and could leave some counties with no insurer for next year. Insurers could also sue the government, and most experts think they would eventually win.

3. This could affect your insurance choices for next year. But it’s complicated.

The impact on your plan choices and premiums for next year will vary by state and insurer. For one thing, insurers have a loophole that allows them to get out of the contracts for 2018, given the change in federal payments. So, some might decide to bail. That could leave areas with fewer — or no — insurers. The Congressional Budget Office in August estimated that stopping the payments would leave about 5 percent of people who purchase their own coverage through the ACA marketplaces with no insurers in 2018.

For everyone else, the move would result in higher premiums, the CBO said, adding an average of about 20 percent. In some states, regulators have already allowed insurers to price those increases into their 2018 rates in anticipation that the payments would be halted by the Trump administration.

But how those increases are applied varies. In California, Idaho, Louisiana, Pennsylvania and South Carolina, for example, regulators had insurers load the costs only onto one type of plan: silver-level coverage. That’s because most people who buy silver plans also get a subsidy from the federal government to help pay their premium, and those subsidies rise along with the cost of a silver plan.

Consumers getting a premium subsidy, however, won’t see much increase in their out-of-pocket payments for the coverage. Consumers without premium subsidies will bear the additional costs if they stay in a silver plan. In those states, consumers may find a better deal in a different metal-band of insurance, including higher-level gold plans. Many states, however, allowed insurers to spread the expected increase across all levels of plans.

4. Congress could act.

Bipartisan negotiations have been renewed between Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to create legislation that would continue the cost-sharing subsidies and give states more flexibility to develop and sell less generous health care plans than those currently offered on the exchanges. Trump’s move to end the cost-sharing subsidies may bolster those discussions.

In a statement, Murray called Trump’s action to withdraw cost-sharing subsidies “reckless” but said she continues “to be optimistic about our negotiations and believe we can reach a deal quickly — and I urge Republican leaders in Congress to do the right thing for families this time by supporting our work.”

Trump on Friday urged Democrats to work with him to “make a deal” on health care. “Now, if the Democrats were smart, what they’d do is come and negotiate something where people could really get the kind of healthcare that they deserve, being citizens of our great country,” he said Friday afternoon.

Earlier Friday, Senate Minority Leader Chuck Schumer (D-N.Y.) did not sound as if he was in the mood to cut a deal.

“Republicans have been doing everything they can for the last ten months to inject instability into our health care system and to force collapse through sabotage,” he said in a statement. “Republicans in the House and Senate now own the health care system in this country from top to bottom, and their destructive actions, and the actions of the president, are going to fall on their backs. The American people see it, and they know full well which party is doing it.”

A poll released Friday by the Kaiser Family Foundation shows that 71 percent of the public said they preferred that the Trump administration try to make the law work rather than to hasten replacement by encouraging its failure. The poll was conducted before Trump made his announcement about the subsidies. (Kaiser Health News is an editorially independent program of the foundation.)

5. Some states are suing, but the outcome is hard to guess.

Even though all states regulate their own insurance markets, states have limited options for dealing with Trump’s latest move. Eighteen states and the District of Columbia, led by New York and California, are suing the Trump administration to defend the cost-sharing subsidies. But it is unclear whether a federal court could say that the Trump administration is obligated to continue making the payments while that case is pending.