Health Insurance Coverage Eight Years After the ACA

https://www.commonwealthfund.org/publications/issue-briefs/2019/feb/health-insurance-coverage-eight-years-after-aca

Fewer Uninsured Americans and Shorter Coverage Gaps, But More Underinsured

What does health insurance coverage look like for Americans today, more than eight years after the Affordable Care Act’s passage? In this brief, we present findings from the Commonwealth Fund’s latest Biennial Health Insurance Survey to assess the extent and quality of coverage for U.S. working-age adults. Conducted since 2001, the survey uses three measures to gauge the adequacy of people’s coverage:

  • whether or not they have insurance
  • if they have insurance, whether they have experienced a gap in their coverage in the prior year
  • whether high out-of-pocket health care costs and deductibles are causing them to be underinsured, despite having continuous coverage throughout the year.

As the findings highlighted below show, the greatest deterioration in the quality and comprehensiveness of coverage has occurred among people in employer plans. More than half of Americans under age 65 — about 158 million people — get their health insurance through an employer, while about one-quarter either have a plan purchased through the individual insurance market or are enrolled in Medicaid.1Although the ACA has expanded and improved coverage options for people without access to a job-based health plan, the law largely left the employer market alone.2

Survey Highlights

  • Today, 45 percent of U.S. adults ages 19 to 64 are inadequately insured — nearly the same as in 2010 — though important shifts have taken place.
  • Compared to 2010, many fewer adults are uninsured today, and the duration of coverage gaps people experience has shortened significantly.
  • Despite actions by the Trump administration and Congress to weaken the ACA, the adult uninsured rate was 12.4 percent in 2018 in this survey, statistically unchanged from the last time we fielded the survey in 2016.
  • More people who have coverage are underinsured now than in 2010, with the greatest increase occurring among those in employer plans.
  • People who are underinsured or spend any time uninsured report cost-related problems getting care and difficulty paying medical bills at at higher rates than those with continuous, adequate coverage.
  • Federal and state governments could enact policies to extend the ACA’s health coverage gains and improve the cost protection provided by individual-market and employer plans.

The 2018 Commonwealth Fund Biennial Heath Insurance Survey included a nationally representative sample of 4,225 adults ages 19 to 64. SSRS conducted the telephone survey between June 27 and November 11, 2018.3 (See “How We Conducted This Study” for more detail.)

WHO IS UNDERINSURED?

In this analysis, we use a measure of underinsurance that accounts for an insured adult’s reported out-of-pocket costs over the course of a year, not including insurance premiums, as well as his or her plan deductible. (The measure was first used in the Commonwealth Fund’s 2003 Biennial Health Insurance Survey.*) These actual expenditures and the potential risk of expenditures, as represented by the deductible, are then compared with household income. Specifically, we consider people who are insured all year to be underinsured if:

  • their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10 percent or more of household income; or
  • their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 5 percent or more of household income for individuals living under 200 percent of the federal poverty level ($24,120 for an individual or $49,200 for a family of four); or
  • their deductible constitutes 5 percent or more of household income.

The out-of-pocket cost component of the measure is only triggered if a person uses his or her plan to obtain health care. The deductible component provides an indicator of the financial protection the plan offers and the risk of incurring costs before someone gets health care. The definition does not include other dimensions of someone’s health plan that might leave them potentially exposed to costs, such as copayments or uncovered services. It therefore provides a conservative measure of underinsurance in the United States.

Compared to 2010, when the ACA became law, fewer people today are uninsured, but more people are underinsured. Of the 194 million U.S. adults ages 19 to 64 in 2018, an estimated 87 million, or 45 percent, were inadequately insured (see Tables 1 and 2).

Despite actions by the Trump administration and Congress to weaken the ACA, our survey found no statistically significant change in the adult uninsured rate by late 2018 compared to 2016 (Table 3). This finding is consistent with recent federal surveys, but other private surveys (including other Commonwealth Fund surveys) have found small increases in uninsured rates since 2016 (see “Changes in U.S. Uninsured Rates Since 2013”).

While there has been no change since 2010, statistically speaking, in the proportion of people who are insured now but have experienced a recent time without coverage, these reported gaps are of much shorter duration on average than they were before the ACA. In 2018, 61 percent of people who reported a coverage gap said it has lasted for six months or less, compared to 31 percent who said they had been uninsured for a year or longer. This is nearly a reverse of what it was like in 2012, two years before the ACA’s major coverage expansions. In that year, 57 percent of adults with a coverage gap reported it was for a year or longer, while one-third said it was a shorter gap.

There also has been some improvement in long-term uninsured rates. Among adults who were uninsured at the time of the survey, 54 percent reported they had been without coverage for more than two years, down from 72 percent before the ACA coverage expansions went into effect. The share of those who had been uninsured for six months or less climbed to 20 percent, nearly double the rate prior to the coverage expansions.

Of people who were insured continuously throughout 2018, an estimated 44 million were underinsured because of high out-of-pocket costs and deductibles (Table 1). This is up from an estimated 29 million in 2010 (data not shown). The most likely to be underinsured are people who buy plans on their own through the individual market including the marketplaces. However, the greatest growth in the number of underinsured adults is occurring among those in employer health plans.

WHY ARE INSURED AMERICANS SPENDING SO MUCH OF THEIR INCOME ON HEALTH CARE COSTS?

Several factors may be contributing to high underinsured rates among adults in individual market plans and rising rates in employer plans:

  1. Although the Affordable Care Act’s reforms to the individual market have provided consumers with greater protection against health care costs, many moderate-income Americans have not seen gains. The ACA’s essential health benefits package, cost-sharing reductions for lower- income families, and out-of-pocket cost limits have helped make health care more affordable for millions of Americans. But while the cost-sharing reductions have been particularly important in lowering deductibles and copayments for people with incomes under 250 percent of the poverty level (about $62,000 for a family of four), about half of people who purchase marketplace plans, and all of those buying plans directly from insurance companies, do not have them.4
  2. The bans against insurers excluding people from coverage because of a preexisting condition and rating based on health status have meant that individuals with greater health needs, and thus higher costs, are now able to get health insurance in the individual market. Not surprisingly, the survey data show that people with individual market coverage are somewhat more likely to have health problems than they were in 2010, which means they also have higher costs.
  3. While plans in the employer market historically have provided greater cost protection than plans in the individual market, businesses have tried to hold down premium growth by asking workers to shoulder an increasing share of health costs, particularly in the form of higher deductibles.5 While the ACA’s employer mandate imposed a minimum coverage requirement on large companies, the requirement amounts to just 60 percent of typical person’s overall costs. This leaves the potential for high plan deductibles and copayments.
  4. Growth in Americans’ incomes has not kept pace with growth in health care costs. Even when health costs rise more slowly, they can take an increasingly larger bite out of incomes.

It is well documented that people who gained coverage under the ACA’s expansions have better access to health care as a result.6 This has led to overall improvement in health care access, as indicated by multiple surveys.7 In 2014, the year the ACA’s major coverage expansions went into effect, the share of adults in our survey who said that cost prevented them from getting health care that they needed, such as prescription medication, dropped significantly (Table 4). But there has been no significant improvement since then.

The lack of continued improvement in overall access to care nationally reflects the fact that coverage gains have plateaued, and underinsured rates have climbed. People who experience any time uninsured are more likely than any other group to delay getting care because of cost (Table 5). And among people with coverage all year, those who were underinsured reported cost-related delays in getting care at nearly double the rate of those who were not underinsured.

There was modest but significant improvement following the ACA’s coverage expansions in the proportion of all U.S. adults who reported having difficulty paying their medical bills or said they were paying off medical debt over time (Table 4). Federal surveys have found similar improvements.8 However, those gains have stalled.

Inadequate insurance coverage leaves people exposed to high health care costs, and these expenses can quickly turn into medical debt. More than half of uninsured adults and insured adults who have had a coverage gap reported that they had had problems paying medical bills or were paying off medical debt over time (Table 6). Among people who had continuous insurance coverage, the rate of medical bill and debt problems is nearly twice as high for the underinsured as it is for people who are not underinsured.

Having continuous coverage makes a significant difference in whether people have a regular source of care, get timely preventive care, or receive recommended cancer screenings. Adults with coverage gaps or those who were uninsured when they responded to the survey were the least likely to have gotten preventive care and cancer screenings in the recommended time frame.

Being underinsured, however, does not seem to reduce the likelihood of having a usual source of care or receiving timely preventive care or cancer screens — provided a person has continuous coverage. This is likely because the ACA requires insurers and employers to cover recommended preventive care and cancer screens without cost-sharing. Even prior to the ACA, a majority of employer plans provided predeductible coverage of preventive services.9

Conclusion and Policy Implications

U.S. working-age adults are significantly more likely to have health insurance since the ACA became law in 2010. But the improvement in uninsured rates has stalled. In addition, more people have health plans that fail to adequately protect them from health care costs, with the fastest deterioration in cost protection occurring in the employer market. The ACA made only minor changes to employer plans, and the erosion in cost protection has taken a bite out of the progress made in Americans’ health coverage since the law’s enactment.

Both the federal government and the states, however, have the ability to extend the law’s coverage gains and improve the cost protection of both individual-market and employer plans. Here is a short list of policy options:

  • Expand Medicaid without restrictions. The 2018 midterm elections moved as many as five states closer to joining the 32 states that, along with the District of Columbia, have expanded eligibility for Medicaid under the ACA.10 As many as 300,000 people may ultimately gain coverage as a result.11 But, encouraged by the Trump administration, several states are imposing work requirements on people eligible for Medicaid — a move that could reverse these coverage gains. So far, the U.S. Department of Health and Human Services (HHS) has approved similar work-requirement waivers in seven states and is considering applications from at least seven more. Arkansas imposed a work requirement last June, and, to date, more than 18,000 adults have lost their insurance coverage as a result.
  • Ban or place limits on short-term health plans and other insurance that doesn’t comply with the ACA. The Trump administration loosened regulations on short-term plans that don’t comply with the ACA, potentially leaving people who enroll in them exposed to high costs and insurance fraud. These plans also will draw healthier people out of the marketplaces, increasing premiums for those who remain and federal costs of premium subsidies. Twenty-three states have banned or placed limits on short-term insurance policies. Some lawmakers have proposed a federal ban.
  • Reinsurance, either state or federal. The ACA’s reinsurance program was effective in lowering marketplace premiums. After it expired in 2017, several states implemented their own reinsurance programs.12  Alaska’s program reduced premiums by 20 percent in 2018. These lower costs particularly help people whose incomes are too high to qualify for ACA premium tax credits. More states are seeking federal approval to run programs in their states. Several congressional bills have proposed a federal reinsurance program.
  • Reinstate outreach and navigator funding for the 2020 open-enrollment period. The administration has nearly eliminated funding for advertising and assistance to help people enroll in marketplace plans.13 Research has found that both activities are effective in increasing enrollment.14 Some lawmakers have proposed reinstatingthis funding.
  • Lift the 400-percent-of-poverty cap on eligibility for marketplace tax credits. This action would help people with income exceeding $100,000 (for a family of four) better afford marketplace plans. The tax credits work by capping the amount people pay toward their premiums at 9.86 percent. Lifting the cap has a built in phase out: as income rises, fewer people qualify, since premiums consume an increasingly smaller share of incomes. RAND researchers estimate that this policy change would increase enrollment by 2 million and lower marketplace premiums by as much as 4 percent as healthier people enroll. It would cost the federal government an estimated $10 billion annually.15 Legislation has been introduced to lift the cap.
  • Make premium contributions for individual market plans fully tax deductible. People who are self-employed are already allowed to do this.16
  • Fix the so-called family coverage glitch. People with employer premium expenses that exceed 9.86 percent of their income are eligible for marketplace subsidies, which trigger a federal tax penalty for their employers. There’s a catch: this provision applies only to single-person policies, leaving many middle-income families caught in the “family coverage glitch.” Congress could lower many families’ premiums by pegging unaffordable coverage in employer plans to family policies instead of single policies.17

REDUCE COVERAGE GAPS

  • Inform the public about their options. People who lose coverage during the year are eligible for special enrollment periods for ACA marketplace coverage. Those eligible for Medicaid can sign up at any time. But research indicates that many people who lose employer coverage do not use these options.18 The federal government, the states, and employers could increase awareness of insurance options outside the open-enrollment periods through advertising and education.
  • Reduce churn in Medicaid. Research shows that over a two-year period, one-quarter of Medicaid beneficiaries leave the program and become uninsured.19 Many do so because of administrative barriers.20 By imposing work requirements, as some states are doing, this involuntary disenrollment is likely to get worse. To help people stay continuously covered, the federal government and the states could consider simplifying and streamlining the enrollment and reenrollment processes.
  • Extend the marketplace open-enrollment period. The current open-enrollment period lasts just 45 days. Six states that run their own marketplaces have longer periods, some by as much as an additional 45 days. Other states, as well as the federal marketplace, could extend their enrollment periods as well.

IMPROVE INDIVIDUAL-MARKET PLANS’ COST PROTECTIONS

  • Fund and extend the cost-sharing reduction subsidies. The Trump administration eliminated payments to insurers for offering plans with lower deductibles and copayments. Insurers, which by law must still offer reduced-cost plans, are making up the lost revenue by raising premiums. But this fix, while benefiting enrollees who are eligible for premium tax credits, has distorted both insurer pricing and consumer choice.21 In addition, it is unknown whether the administration’s support for the fix will continue in the future, creating uncertainty for insurers.22 Congress could reinstate the payments to insurers and consider making the plans available to people with higher earnings.
  • Increase the number of services excluded from the deductible.Most plans sold in the individual market exclude certain services from the deductible, such as primary care visits and certain prescriptions.23As the survey data suggest, these types of exclusions appear to be important in ensuring access to preventive care among people who have coverage but are underinsured. In 2016, HHS provided a standardized plan option for insurers that excluded eight health services — including mental health and substance-use disorder outpatient visits and most prescription drugs — from the deductible at the silver and gold level.24 The Trump administration eliminated the option in 2018. Congress could make these exceptions mandatory for all plans.

IMPROVE EMPLOYER PLANS’ COST PROTECTIONS

  • Increase the ACA’s minimum level of coverage. Under the ACA, people in employer plans may become eligible for marketplace tax credits if the actuarial value of their plan is less than 60 percent, meaning that under 60 percent of health care costs, on average, are covered. Congress could increase this to the 70 percent standard of silver-level marketplace plans, or even higher.
  • Require deductible exclusions. Congress could require employers to increase the number of services that are covered before someone meets their deductible. Most employer plans exclude at least some services from their deductibles.25 Congress could specify a minimum set of exclusions for employer plans that might resemble the standardized-choice options that once existed for ACA plans.
  • Refundable tax credits for high out-of-pocket costs. Congress could make refundable tax credits available to help insured Americans pay for qualifying out-of-pocket costs that exceed a certain percentage of their income.26
  • Protect consumers from surprise medical bills. Several states have passed laws that protect patients and their families from unexpected medical bills, generally from out-of-network providers.27A bipartisan group of U.S. senators has proposed federal legislation to protect consumers, including people enrolled in employer and individual-market plans.

Health care costs are primarily what’s driving growth in premiums across all health insurance markets. Employers and insurers have kept premiums down by increasing consumers’ deductibles and other cost-sharing, which in turn is making more people underinsured. This means that policy options like the ones we’ve highlighted above will need to be paired with efforts to slow medical spending. These could include changing how health care is organized and providers are paid to achieve greater value for health care dollars and better health outcomes.28 The government also could tackle rising prescription drug costs29 and use antitrust laws to combat the growing concentration of insurer and provider markets.30

 

 

U.S. Uninsured Rate Rises to Four-Year High

https://news.gallup.com/poll/246134/uninsured-rate-rises-four-year-high.aspx?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Line graph. The percentage of U.S. adults without health insurance has grown steadily since 2016.

STORY HIGHLIGHTS

  • The U.S. uninsured rate has risen steadily since 2016
  • Women, younger adults, the lower-income have the greatest increases
  • All regions except for the East reported increases

WASHINGTON, D.C. — The U.S. adult uninsured rate stood at 13.7% in the fourth quarter of 2018, according to Americans’ reports of their own health insurance coverage, its highest level since the first quarter of 2014. While still below the 18% high point recorded before implementation of the Affordable Care Act’s individual health insurance mandate in 2014, today’s level is the highest in more than four years, and well above the low point of 10.9% reached in 2016. The 2.8-percentage-point increase since that low represents a net increase of about seven million adults without health insurance.

Nationwide, the uninsured rate climbed from 10.9% in the third and fourth quarters of 2016 to 12.2% by the final quarter of 2017; it has risen steadily each quarter since that time. Since Gallup’s measurement began in 2008, the national uninsured rate reached its highest point in the third quarter of 2013 at 18.0%, and thus, the current rate of 13.7% — although it continues a rising trend — remains well below the peak level.

These data, collected as part of the Gallup National Health and Well-Being Index, are based on Americans’ answers to the question, “Do you have health insurance coverage?” Sample sizes of randomly selected adults in 2018 were around 28,000 per quarter.

The ACA marketplace exchanges opened on Oct. 1, 2013, and most new insurance plans purchased during the last quarter of that year began their coverage on Jan. 1, 2014. Medicaid expansion among 24 states (and the District of Columbia) also began at the beginning of 2014, with 12 more states expanding Medicaid since that time. Expanded Medicaid coverage as a part of the ACA broadens the number of low-income Americans who qualify for it to those earning up to 138% of the federal poverty level. The onset of these two major mechanisms of the ACA at the beginning of 2014 makes the uninsured rate in the third quarter of 2013 the natural benchmark for comparison to measure the effects of that policy.

Uninsured Rates Increase Most Among Women, Young Adults, the Lower-Income

The uninsured rate rose for most subgroups in the fourth quarter of 2018 compared with the same quarter in 2016, when the uninsured rate was lowest. Women, those living in households with annual incomes of less than $48,000 per year, and young adults under the age of 35 reported the greatest increases. Those younger than 35 reported an uninsured rate of over 21%, a 4.8-point increase from two years earlier. And the rate among women — while still below that of men — is among the fastest rising, increasing from 8.9% in late 2016 to 12.8% at the end of 2018.

At 7.1%, the East region, which has in recent years maintained the lowest uninsured rate in the nation, is the only one of the four regions nationally whose rate is effectively unchanged since the end of 2016. Respondents from the West, Midwest and South regions all reported uninsured rates for the fourth quarter of 2018 that represent increases of over 3.0 points. The South, which has always had the highest uninsured rate in the U.S. but has seen some of the greatest declines at the state level, has had a 3.8-point increase to 19.6%.

Implications

A number of factors have likely played a role in the steady increase in the uninsured rate over the past two years. One may be an increase in the rates of insurance premiums in many states for some of the more popular ACA insurance plans in 2018 (although most states saw premiums stabilize for 2019). For enrollees with incomes that do not qualify for government subsidies, the resulting hike in rates could have had the effect of driving them out of the marketplace. Insurers have also increasingly withdrawn from the ACA exchanges altogether, resulting in fewer choices and less competition in many states.

Other factors could be a result of policy decisions. The open enrollment periods since 2018 have been characterized by a significant reduction in public marketing and shortened enrollment periods of under seven weeks, about half of previous periods. Funding for ACA “navigators” who assist consumers in ACA enrollment has also been reduced in 2018 to $10 million, compared with $63 million in 2016. Overall, after open enrollment in the ACA federal insurance marketplace (i.e., healthcare.gov) peaked in 2016 at 9.6 million consumers, it declined by approximately 12.5%, to 8.4 million in 2019, based on recently released figures.

Other potential factors include political forces that may have increased uncertainty surrounding the ACA marketplace. Early in his presidency, for example, President Donald Trump announced, “I want people to know Obamacare is dead; it’s a dead healthcare plan.” Congressional Republicans made numerous high-profile attempts in 2017 to repeal and replace the plan. Although none fully succeeded legislatively, the elimination of the ACA’s individual mandate penalty as part of the December 2017 Republican tax reform law may have reduced participation in the insurance marketplace in the most recent open enrollment period.

Trump’s decision in October 2017 to end cost-sharing reduction could also potentially have affected the uninsured rate. The cost-sharing payments were made to insurers in the marketplace exchanges to offset some of their costs for offering lower-cost plans to lower-income Americans. The Trump administration had previously renewed the payments on a month-by-month basis but later concluded that such payments were unlawful. In April 2018, a federal court granted a request for a class-action lawsuit by health insurers to sue the federal government for failing to make the payments. Such lawsuits continue to be litigated.

 

 

 

 

Calls for trying again on bipartisan ObamaCare fix

https://thehill.com/policy/healthcare/418689-dem-senator-murray-calls-for-trying-again-on-bipartisan-obamacare-fix

Image result for aca cost sharing reduction payments

Sen. Patty Murray (D-Wash.) on Wednesday called for reviving bipartisan efforts to reach a deal to fix ObamaCare after an agreement she was part of collapsed last year.

“Mr. Chairman, I’m really hopeful that we can revive discussions in the new Congress and find a way past the ideological standoffs of the past,” Murray said to Sen. Lamar Alexander (R-Tenn.), her Republican partner in forging last year’s deal, at a hearing on health care costs.

The deal last year, which came to be known as Alexander-Murray, sought to lower premiums and stabilize the ObamaCare markets, but was stalled for months amid the bitter partisan divide over the health law and a dispute about including abortion restrictions on the funding in the bill.

Alexander on Wednesday expressed skepticism about the ability to reach a new agreement, but said he is willing to try if Murray wants to.

“We can revisit the so-called Alexander-Murray proposal if you would like,” Alexander said, but added that Democrats opposed the previous version, in his view, because they would not support restrictions on abortion funding known as the Hyde Amendment. Democrats countered that the measure actually would have expanded the scope of the abortion restrictions in an unacceptable way.

“I regretted that that didn’t work and maybe we can find a way to make it work in the new session,” Alexander added. “Certainly we’ll try on the issue of health care costs, which are the larger issue.” 

There is still no clear path beyond the abortion dispute, making a new agreement difficult.

The ground has also shifted since last year, making many Democrats call for bolder action, like expanding the generosity of ObamaCare’s financial assistance and overruling actions President Trump has taken that Democrats say undermine the market.

Both of those proposals would be hard for many Republicans to support.

Still, Alexander and Murray have not sat down to reopen negotiations and it is unclear what each side would be pushing for in these early stages.

One change is that Democrats will control the House next year, which could add new pressures. Many Democrats saw House Republicans as the main obstacle to a deal last year, so it could change the dynamic that House Republicans will have less power next year in the minority.  

 

Dems Won on Health Care. Now What?

 

Democrats rode a health care message to their Election Day takeover of the House. Now that the election is (mostly) over, how will they follow through on that campaign focus?

The party is still figuring out its next steps on health care, and Nancy Pelosi and her colleagues will have a lot of decisions to make and details to sort out. “The new House Democratic majority knows what it opposes. They want to stop any further efforts by Republicans or the Trump administration to roll back and undermine the Affordable Care Act or overhaul Medicaid and Medicare,” writes Dylan Scott at Vox. “But Democrats are less certain about an affirmative health care agenda.”

Some big-picture agenda items are clear, though. “The top priorities for Ms. Pelosi, the House Democratic leader, and her party’s new House majority include stabilizing the Affordable Care Act marketplace, controlling prescription drug prices and investigating Trump administration actions that undermine the health care law,” reports Robert Pear in The New York Times.

House Democrats also plan to vote early next year on plans to ensure patients with preexisting medical conditions are protected when shopping for insurance, Pear reports. And they’ll likely vote to join in the defense of the Affordable Care Act and its protections for those with pre-existing conditions against a legal challenge now before a Texas federal court.

Here are a few areas where House Democrats will likely look to exercise their newly won power.

Stabilizing Affordable Care Act markets: “I’m staying as speaker to protect the Affordable Care Act,” Pelosi said in an interview with CBS’s “Face the Nation,” calling that her “main issue.” And Vox’s Scott says that “a bill to stabilize the Obamacare insurance markets would be the obvious first item for the new Democratic majority’s agenda,” adding that a bill put forth by Reps. Richard Neal (MA), Frank Pallone (NJ) and Bobby Scott (VA) is the likely starting point. Democrats may look to provide funding for the Obamacare “cost-sharing reduction” subsidy payments to insurers that President Donald Trump ended in October 2017. And they may look to restore money for Affordable Care Act outreach and enrollment programs after the Trump administration slashed that funding by 84 percent, to $10 million, Pear says. “Another idea is for the federal government to provide money to states to help pay the largest medical claims,” he adds. “Such assistance, which provides insurance for insurance carriers, has proved effective in reducing premiums in Alaska and Minnesota, and several other states will try it next year.”

Investigating the Trump administration ‘sabotage’: “Administration officials who have tried to undo the Affordable Care Act — first by legislation, then by regulation — will find themselves on the defensive, spending far more time answering questions and demands from Congress,” Pear writes.

Reining in prescription drug prices: Trump, Pelosi and Senate Majority Leader Mitch McConnell have all pointed to this as an area of potential cooperation, But Vox’s Scott calls this “another area where Democrats know they want to act but don’t know yet exactly what they can or should do.” Some options include pushing to let Medicare negotiate drug prices directly with manufacturers and requiring makers of brand-name medications to provide samples to manufacturers of generics, potentially speeding the development of less expensive competitors.

“There are a lot of levers to pull to try to reduce drug prices: the patent protections that pharma companies receive for new drugs, the mandated discounts when the government buys drugs for Medicare and Medicaid, existing hurdles to getting generic drugs approved, the tax treatment of drug research and development,” Scott writes. But it’s not clear just what policy mix would really work to bring down drug prices, and the pharmaceutical industry lobby is likely to push back hard on such efforts. Democrats may also be hesitant to give President Trump a high-profile win on the issue ahead of the 2020 election.

Medicare for all: Much of the Democratic Party may be gung-ho for some sort of Medicare-for-all legislation, but don’t expect significant progress over the next two years. “House Democratic leaders probably don’t want to take up such a potentially explosive issue too soon after finally clawing back a modicum of power in Trump’s Washington,” Scott writes. And Democrats have to forge some sort of internal consensus on just what kind of plan they want to push in order to further expand health insurance coverage.

Montana health plan strikes victory over cost-sharing reduction payments

https://www.healthcarefinancenews.com/news/montana-health-plan-strikes-victory-over-cost-sharing-reduction-payments?mkt_tok=eyJpIjoiTWpNM05qYzVPR1k0TldKbCIsInQiOiJTd2RzaU9sS1FuKzBOaVF3RXp5RkNqc3plbXp0NFlhdkk1MFlSNGY1NUJKa2NHd3IrXC9OdlJoSW1EQ2FIM3hkVkVzZ2FuaUhkcTNXcUtNczhNQWI2NFd1ckNCOHViSzdFbjRUS2xGMTdrXC90M1BjbCtRcVVnbkxweFwvdlY5VnZGViJ9

Montana Health Co-Op. Credit: Google Street View

The insurer says it is owed $5 million in payments mandated under the Affordable Care Act.

Health insurers in the Affordable Care Act market got a major win Tuesday when the Montana Health Co-op became the first plan to win its case for cost-sharing reduction payments.

Montana Health Co-op said it is owed an estimated $5 million in CSRs for 2017.

United States Court of Federal Claims Judge Elaine Kaplan said it didn’t matter that Congress never appropriated the funds, as argued by the Department of Justice. Kaplan sided with the Montana Health Co-op that said the Affordable Care Act created the mandatory obligation whether Congress approved the funds or not.

Judge Kaplan directed the parties to file a joint status report on or before October 4.

CSRs were set up under the ACA to allow insurers to pay the deductibles and other out-of-pocket costs for lower-income consumers.

The Department of Health and Human Services began making the CSR payments in 2014.

In that same year, Republicans in the House of Representatives sued the Obama Administration over the payments, saying they and others in Congress had never approved the funds. They won and an appeal was brought, but under President Donald Trump, the appeal became moot.

In 2017, Attorney General Jeff Sessions issued an opinion that the funds were never appropriated and the government stopped the payments.

While insurers no longer received the funds, they were still mandated under the ACA to offer to qualifying consumers the benefit of lower out-of-pocket costs.

Several insurers filed lawsuits, including Blue Cross Blue Shield of Vermont, Maine Community Health Options, LA Care Health Plan and Sanford Health Plan, according to Health Affairs. Common Ground Healthcare Cooperative led a class action lawsuit.

Insurers have also filed lawsuits to get payments promised through another ACA program, risk corridors. Under the three-year, budget neutral risk corridors program, the government was to take money from plans that had fewer higher risk beneficiaries and give the  funds to those that suffered losses in insuring higher risk consumers.

In making her decision Tuesday, Judge Kaplan cited a lawsuit brought by Moda Health Plan over risk corridor payments. In that case, the Federal Circuit Court said the government was obligated to make risk corridor payments to insurers.

But that case was overturned in mid-June, when a majority of a three-judge panel of the Court of Appeals for the Federal Circuit said the government did not have to pay health insurers the full amount owed to them in risk corridors payments.

 

 

Health Insurance Premiums Are Stabilizing

http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2018/08/16/health-insurance-premiums-are-stabilizing-despite-gop-attacks

Stateline Aug16

 

Despite Republican efforts to undermine the Affordable Care Act, insurance premiums will go up only slightly in most states where carriers have submitted proposed prices for next year. And insurance carriers are entering markets rather than fleeing them.

The improvements stem from less political uncertainty over health policy, steeper than necessary increases this year, better understanding of the markets, improvements in care and a host of actions taken by individual states.

Average proposed premiums for all levels of plans in California, Colorado, Delaware, Florida, Indiana, Nevada, Ohio and Pennsylvania will increase less than 9 percent in 2019, according to the Kaiser Family Foundation.

By contrast, this year’s mid-priced plans increased an average of 37 percent nationally compared to 2017.

In some states, 2019 premiums are projected to decrease. Prices also are expected to drop for people in a number of metropolitan areas, including Atlanta, Baltimore, Denver, New York and Washington, D.C.

And unless the Trump administration launches new attacks on the Affordable Care Act in the coming months, analysts believe the average increase across the United States will hold to the single digits.

To be sure, not all areas will fare as well. Some can still expect to see big increases next year, according to the Kaiser Family Foundation. For instance, proposed premium increases in Maryland average 30 percent for 2019.

(In some states, carriers have not yet had to file their rate proposals for 2019, but will in the coming weeks.)

But after a couple years in which carriers fled many markets around the country, insurers are planning to enter exchanges in many states, including Arizona, Florida, Michigan, New Mexico and Wisconsin. In some states, existing insurers are pushing into new areas.

“That they are entering markets is a sign that the insurers are pretty confident about those markets,” said Rabah Kamal, who analyzes health reform and health insurance for Kaiser.

“After several years of big losses, insurers are actually turning a profit,” said Kamal. “They’re doing well, so overall, there’s no justification for big increases.”

To a large extent, premiums in 2019 appear to be moderating because carriers raised rates higher than necessary in 2018 in reaction to the uncertainty over how Congress and the Trump administration might undermine the ACA. “It boils down to the fact that last year’s rates were too high,” said Emily Curran, a research fellow at Georgetown University’s Health Policy Institute.

Carriers also understand the marketplace much better than they did in 2014 when the exchanges were launched across the country, Curran and others say. Carriers have a better sense of who they are covering and how to predict their health risks, Curran said. Insurers and medical providers also have better coordinated care to reduce duplication.

State Roles

States also have had a major hand in stabilizing their markets, seeking to limit the damage the federal government is doing to the ACA.

Massachusetts had its own individual mandate before the ACA, and now New Jersey does as well. Three states, Massachusetts, New Jersey and New York, have passed outright bans on issuing short-term health insurance policies, while 12 others have adopted standards more restrictive than federal policy. Some states, including Alaska, Minnesota and Oregon, have also created state-funded reinsurance pools, which protect carriers from financially crippling individual medical claims.

Finally, a number of states have done their own outreach to publicize their exchanges and promote enrollment in the absence of federal efforts.

Pennsylvania is one of those states. The insurance market has stabilized there, said Jessica Altman, the state’s insurance commissioner. She projects the average state premium increase in 2019 will amount to 0.7 percent, compared to 30.6 percent this year. She said in 31 of 67 Pennsylvania counties, there will be more carriers selling policies next year compared to 2018. And, she said, many carriers are pushing into new territories.

Her agency estimates that the increase this year would have been only 7.6 percent absent the federal government’s elimination of cost-sharing reductions, which were federal payments to insurance carriers to cushion them from exorbitant individual medical claims.

“We had pretty significant increases last year, and we shouldn’t have,” Altman said.

Julie Mix McPeak, commissioner of the Department of Commerce and Insurance in Tennessee, where premiums are expected to fall and more carriers are intending to operate, said the ACA brought more than 200,000 Tennesseans into health plans — many of whom previously had not sought routine health care — which meant higher claims in the first years.

“We had a pretty negative health score in terms of dollars spent on claims because so many people coming into primary care had health issues that needed to be addressed. Now that they’ve been in care for several years now, we aren’t seeing those claims rising any more. They are leveling off.”

Whether the stability that appears to be settling the markets in 2019 will continue beyond that largely depends on what Washington does. “No one,” said Curran, “wants to see more uncertainty.”

Undermining the ACA

A Brookings Institution study released this month estimated that insurers on the health insurance market this year will enjoy an underwriting profit margin of 10.5 percent, up from 1.2 percent last year.

The study estimated that, absent federal policies disrupting the marketplaces, premiums would have dropped 4.3 percent nationwide in 2019.

Many health care analysts agree. “In cases where we are seeing modest increases, we might have seen decreases,” said Myra Simon, executive director of individual market policy for America’s Health Insurance Plans, a lobbying arm of the health insurance industry.

Steps taken by Republicans in Washington to undermine the exchanges include Congress’ repeal starting next year of the individual mandate, which requires all Americans to obtain health insurance, and the Trump administration’s decision to end the Obama-era cost-sharing reduction payments.

The administration also eliminated most funds for outreach to encourage enrollment in the markets and shortened the periods during which people could sign up for plans. In addition, the administration has moved forward with plans to loosen regulation on association and short-term health plans that don’t have to be as comprehensive as plans sold under the Affordable Care Act.

Health insurance analysts of all stripes had said those actions would draw people away from the insurance exchanges, particularly the young and healthy. Their departure, analysts said, could drive up premiums for all those remaining and set the markets on a “death spiral” that would ultimately drive all carriers from the exchanges.

The president has been clear about his intentions. “Essentially, we are getting rid of Obamacare,” he said in April.

But as carriers file their plans with state insurance offices for next year, it appears that warnings of imminent catastrophe were, at the least, premature.

“The administration has done almost everything on its list to destabilize the market or, in their words, ‘create more choice,’” said Chris Sloan, a director at Avalere Health, a Washington-based health policy research and consulting firm. “They’ve done it all and the market is still standing.”

 

 

 

Molina still considering returning to Obamacare in Utah and Wisconsin

https://www.washingtonexaminer.com/policy/healthcare/molina-still-considering-returning-to-obamacare-in-utah-and-wisconsin

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Health insurer Molina is considering providing Obamacare plans in Wisconsin and Utah for 2019, after taking a one-year hiatus from these states, company executives said in an earnings call Wednesday.

Molina left these states for 2018 after suffering $230 million in overall losses and undertaking 1,500 planned layoffs. Company executives said in April that they would consider re-entering the market, and on Wednesday they said they were still evaluating how the plans are performing in the states where they still have Obamacare customers.

“I’m inclined to say that we would re-enter, but we have until the end of the summer to decide,” said Joseph Zubretsky, the company’s CEO.

Roughly 409,000 people are still enrolled in Molina’s Obamacare plans, and premiums for these customers increased by an average of 55 percent from 2017 to 2018, though many of them received subsidies from the federal government to cover the cost.

Zubretsky said that the current prices on their plans were “no longer corrective” but were priced about right in order to cover medical claims. Molina has customers on Obamacare plans in California, Florida, New Mexico, Michigan, Ohio, and Texas. It also has plans in Washington state but scaled back its participation by reducing the number of counties in which it offered plans.

“The strategy was to maintain [enrollment] and grow profits,” Zubretsky said of 2018, adding that re-entering Utah or Wisconsin would likely increase growth in enrollment for 2019.

Molina scaled back during a time of uncertainty, when President Trump had not yet announced he would be cutting off payments to insurers known as cost-sharing reduction subsidies, which under Obamacare help insurers offer lower out-of-pocket prices to their low-income customers. Though the payments were ended, many insurers have restructured their plans to make up for the loss by raising premiums, a move that shifts more expenses to the federal government and offers cheaper prices to Obamacare customers who get subsidies.

Early filings show that Obamacare customers will have more options for coverage in 2019, largely because of this strategy employed by insurers.

Molina’s overall performance is improving. Net income for the second quarter of 2018 was $202 million, compared with a net loss of $230 million for the second quarter of 2017. The company’s business focuses on managed care plans in Medicare and Medicaid.

Though Molina is a relatively small insurer, it drew headlines for enthusiastically embracing Obamacare. The company’s former chief executive, J. Mario Molina, was a major industry supporter of Obamacare and he has been a vocal critic of Republican efforts to repeal and replace the law. He and his brother, former Chief Financial Officer John Molina, were fired from their positions in May 2018 after poor first-quarter financial results.