Tag Archives: Cost Sharing Reduction Payments

Federal appeals court says HHS doesn’t have to make ACA risk corridor payments

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https://www.fiercehealthcare.com/payer/moda-health-risk-corridor-payments-us-court-appeals-hhs-aca?mkt_tok=eyJpIjoiTkRBMk5UWXpOemhpT1RsaCIsInQiOiIzbWdsem9qRzZ0RDJPb0pTR1pRVVA1NjgzcmNZd1dnMzNoNWh0N2xVMlwvZXlMN0EyenFKVVFEUU9ZRFFRZXZYMm9acFVcL0creEt5TWpxY3V1aUE2b2tvZU1QcHNBSHFHN1VrUEswYVkxckRoMEh6clhFZ0lsQ3lvR2RzTm5cLzdodiJ9&mrkid=959610

Legal Review

A federal appeals court ruled the federal government does not have to make risk corridor payments, dealing a blow to insurers that claim they are owed billions in payments under the Affordable Care Act.

In a closely watched case brought by Moda Health Plans, the three-judge panel for the United States Court of Appeals for the Federal Circuit reversed a decision by the Court of Federal Claims, ruling that the Department of Health and Human Services is not obligated to make risk corridor payments to insurers under the ACA.

The payments were built into the ACA as a way to protect insurers from extreme gains or losses on the ACA exchanges in a market that was still untested by insurers.

“Although section 1342 obligated the government to pay participants in the exchanges the full amount indicated by the formula for risk corridor payments, we hold that Congress suspended the government’s obligation in each year of the program through clear intent manifested in appropriations riders,” wrote Chief Judge Sharon Proust in the decision (PDF). “We also hold that the circumstances of this legislation and subsequent regulation did not create a contract promising the full amount of risk corridors payments.”

The court acknowledged the section of the ACA requiring the HHS Secretary to establish risk corridor payments is “unambiguously mandatory,” but said Congress included appropriations riders during each of the program’s three years to ensure risk corridor payments were budget neutral.

The court added that the program “lacks the trappings of contractual agreement,” rebuffing Moda Health’s argument that HHS is required to make payments.

In a statement to FierceHealthcare, Moda Health President and CEO Robert Gootee said the insurer plans to appeal the decision.

“We are disappointed by today’s decision,” he said. “If it is upheld on appeal, it will effectively allow the federal government to walk away from its obligation to provide partial reimbursement for the financial losses Moda incurred when we stepped up to provide coverage to more than 100,000 Oregonians under the ACA. We continue to believe, as our trial court did, that the government’s obligation to us is clearly stated in the law and we will continue to pursue our claim on appeal.”

In a dissenting opinion, Judge Pauline Neman argued that the appropriations riders did not cancel out HHS’s obligation to make risk corridor payments. She said the court’s decision “undermines the reliability of dealings with the government.”

So this isn’t the end of the road for insurers, and there’s some good language in the majority opinion about their statutory entitlement. But it’s a Michigan-size pothole in their path to getting paid.

Dozens of insurers have sued the government to reclaim billions in unpaid risk corridor payments. Moda Health claimed it is owed $214 million, while Blue Cross Blue Shield of North Carolina filed for nearly $150 million in unpaid payments and Humana claims its owed $611 million.

 

 

 

Premium hikes reignite the ObamaCare wars

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Premium hikes reignite the ObamaCare wars

Image result for aca higher premiums

The ObamaCare premium wars are back.

The cost of health insurance plans on the ObamaCare exchanges could jump in the coming weeks, some by double digits, inflaming the issue ahead of the midterm elections.

Democrats argue the price increases are the result of what they refer to as “Republican sabotage.” They contend that, since the GOP controls Congress and the White House, the price hikes are their responsibility — and that’s the message they plan to take into the fall campaign.

“If these early states are any indication, health insurance companies are going to ask for huge hikes in the wake of President Trumpand congressional Republicans’ repeated efforts to sabotage our health-care system,” Senate Minority Leader Charles Schumer (D-N.Y.) said at a press conference last week. “And we Democrats are going to be relentless in making sure the American people exactly understand who is to blame for the rates.”

Republicans counter that it was Democrats who passed the law, enacted in 2010, in the first place and without any GOP votes. And they blame Democrats for the failure to pass a bill that was aimed at shoring up ObamaCare’s exchanges.

Democrats wrote the Affordable Care Act, so “they should look in the mirror,” Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health Committee, said last week on the Senate floor.

“And this is the very worst. When Republicans were prepared one month ago to stabilize these markets — and according to the Oliver Wyman health-care experts, to lower rates by up to 40 percent over three years — the Democrats said no,” he said.

For years, Republicans had the upper hand on health care, with the backlash to the Affordable Care Act helping them win the House in 2010, the Senate in 2014 and the White House in 2016.

During the Obama administration, Republicans railed against ObamaCare premium hikes while pledging to repeal and replace the law.

But that repeal push ended in failure last year, and Democrats say the political winds have shifted in their favor.

Democrats argue that any higher premiums this year will be a direct result of the Republican Congress and the Trump administration. They refer to certain actions by the GOP — such as the repeal of the individual mandate to have health insurance — as acts of “sabotage” that will siphon healthy people out of the ObamaCare insurance markets, leading to sicker people on the plans and higher costs.

“Thus far, Democrats have been on the defensive about premium increases,” said Cynthia Cox, a health insurance expert with the Kaiser Family Foundation. “Now they’re starting to play offense, and from our polling we’ve seen that a lot of the public now feels that the Trump administration and Congress are responsible for any problems with the [Affordable Care Act] going forward, so it may be that the politics of premium increases has changed.”

Protect Our Care, a pro-ObamaCare group, launched “Rate Watch” on Tuesday, a media campaign and website aimed at getting out the Democrat’s message that Republicans are to blame for rate hikes.

Only a handful of states have released proposed premiums for next year, as insurers are largely still hammering out what their preliminary rates are going to be.

In Maryland, the average proposed increase among insurers and plans was 30 percent. CareFirst BlueCross BlueShield, for example, requested an 18.5 percent hike for its HMO plans and 91.4 percent for its PPO plans.

In Virginia, proposed rate hikes varied widely, from 15 percent to 64 percent. Vermont’s proposed premium increases were more modest.

It’s too early to know the full picture for what premiums will look like around the country for 2019. Insurers tend to file proposed rates in the late spring and early summer, and they’re generally not finalized until early fall — a little more than a month before the ObamaCare exchanges open for business on Nov. 1.

“It’s hard to come up with a general impression … but I think what we can expect is probably another year of double-digit rate increases driven in large part by the individual mandate repeal and the expansion of short-term health plans and association health plans,” Cox said.

The Trump administration proposed a rule to increase the length of time a consumer can keep a plan that doesn’t comply with ObamaCare’s insurance regulations from three months to nearly a year. Democrats deride those plans as “junk insurance.”

Association health plans would let small businesses and self-employed individuals band together to buy coverage that doesn’t comply with ObamaCare’s rules.

Republicans say the rules will expand choice and allow people to buy cheaper alternatives to ObamaCare plans.

Some insurers have cited the repeal of the individual mandate as a factor in their decision to propose rate hikes, and at least one also included the proposed regulations from the administration as a factor.

Some insurance commissioners across the country are approaching the open enrollment period with a level of “concern and a bit of trepidation,” said Julie Mix McPeak, Tennessee’s insurance commissioner who serves as the president of the National Association of Insurance Commissioners.

In McPeak’s home state, she’s hopeful that signs are pointing to rates beginning to plateau and that Tennessee won’t see the large hikes of years past.

“My experience in Tennessee … is not typical for all of the states in the United States,” said McPeak, who was appointed to run the state’s insurance department by Gov. Bill Haslam (R.).

“I’m hearing from some of my colleagues from the national perspective that they are looking at significant rate increases,” she said.

Dave Jones, California’s Democratic insurance commissioner, said he’s worried that some insurers may leave parts of the state.

“We’re working closely with our exchange and other California agencies to do everything we can to encourage insurers to stay and to create as much stability as we can, not withstanding all of the rocks that the Trump administration is throwing at health-care reform,” he said.

If the short-term and association health plan rules are implemented, Jones said he’s prepared to file litigation aimed at stopping the regulations.

In North Dakota, the state’s Republican insurance commissioner is more optimistic.

Jon Godfread said he expects North Dakota’s marketplace will consist of three carriers selling plans across the state — an increase from last year, when areas had only one or two insurers to choose from.

As for rate hikes, he’s hoping in the low double-digits or, worst case, in the 18 percent to 22 percent range. He believes the repeal of the individual mandate won’t have much impact on consumer behavior in North Dakota because people who couldn’t afford insurance have likely already left the marketplace in the state.

“Health insurance and health care by its very nature is demographic,” Godfread said. “We may be leading into a somewhat calm year — in North Dakota, at least that’s what we’re hoping for. But that doesn’t mean my colleagues in Iowa and Nebraska and other places aren’t facing some pretty significant challenges, and we very well, that could be us next year, or it could be us this year still, too. There’s a lot of time between now and open enrollment.”

 

 

Court allows class-action CSR payment lawsuit

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https://www.healthcaredive.com/news/court-allows-class-action-csr-payment-lawsuit/521866/

Dive Brief:

  • In a decision that could ultimately result in billions of dollars in subsidies for insurers, the U.S. Court of Federal Claims gave the OK last week for a class action suit involving Common Ground Healthcare Cooperative. The suit seeks the cost-sharing reduction (CSR) payments that the Trump administration stopped paying in October.
  • In the 18-page opinion and order, the court said Common Ground, a Brookfield, WI-based nonprofit payer that offers coverage to small businesses, nonprofits, individuals and families, “satisfied all of the requirements” to maintain a class action suit. The Department of Justice may appeal the ruling.
  • The decision to stop CSR payments had an effect on marketplace enrollment in 2018, according to a new report from the Robert Wood Johnson Foundation. The share of enrollees in bronze tier plans increased from 23% to 29%, as customers found those plans gave them a better deal.

Dive Insight:

The ACA provided CSR payments to insurers to cover Americans with household incomes between 100% and 250% of the poverty line. The payments were supposed to keep down out-of-pocket costs for lower-income Americans.

However, Trump ended the CSR payments last October with the administration arguing Congress is responsible for them. Efforts on Capitol Hill to grant those payments have since faltered.

Without those CSR payments, insurance companies in the ACA exchanges charged higher premiums for 2018. Middle class and upper middle class members in ACA plans saw their insurance premiums rise this year.

However, stopping CSR payments actually resulted in lower healthcare costs for the poorest people in the ACA marketplace. An ACA provision kicked in that provides premium-reducing subsidies if the premiums increased too much for lower-income members.

Another piece in the CSR discussion is the payer practice of “silver loading,” in which ACA insurers put all the losses associated with no CSR payments onto their silver plans. CSR discounts were only offered for silver plans and they make up more than half of ACA plans. CMS Administrator Seema Verma recently declined to say whether the administration will limit payers’ use of government subsidies, and a Robert Wood Johnson Foundation paper predicted “silver loading is likely to continue next year and will probably expand to more states.”

As the deadline for payers to set 2019 rates narrows, insurers are threatening even higher premiums without CSRs and other market stabilization efforts, such as a reinsurance program.

Alliance of Community Health Plans CEO Ceci Connolly recently told Healthcare Dive, “Losing the individual mandate, losing the cost-sharing reduction subsidies and losing any hint of reinsurance, not to mention the risk corridors that were already gone, you’re just running out of options to manage the cost of this program.”

In a recent report, the Center on Budget and Policy Priorities warned higher premiums may cause healthy members in ACA plans to flee the market and either drop health coverage or choose a low-cost plan, such as a short-term catastrophic plan.

 

 

The politics of ACA rate hikes will be 2016 in reverse

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https://www.axios.com/politics-aca-rate-hikes-2016-in-reverse-63e401ef-03b7-4c11-a2b3-7410e1322c63.html

Protester holds sign saying "ACA Saves Lives"

We are about to see a replay of the 2016 election fight over premium increases, but this time in reverse. Last time, it was the Republicans hammering Democrats for the rate hikes. This time, it will be Democrats accusing Republicans of driving up premiums by sabotaging the Affordable Care Act.

What to watch: It’s going to be a balancing act for the Democrats. They can (and will) score political points by blaming Republicans for the coming premium increases, but another campaign debate about rising premiums could also undermine the ACA by focusing on its continuing problems.

In 2016, fear of rising premiums jumped the individual market, and a majority of Americans came to believe that rising premiums were somehow affecting them when only a small share of the public was impacted. That undermined the ACA and may have affected the election.

This time, Democrats will be on the offensive, buttressed by polling that shows the public sees Republicans and President Trump owning the ACA’s problems. Democrats are sure to call out Republicans and the administration for steps they have taken to undermine the law.

These include:

  • Eliminating the penalty for not buying insurance.
  • Failing to pass stabilization legislation.
  • Developing regulations to allow the sale of short-term policies and the wider sale of association health plans.

Taken together, these actions provide more options for the healthy, but will drive up rates overall.

Reality check: Last year, far more Americans came to believe they were affected by premiums increases than the relatively small number of unsubsidized people in the non-group market who were actually affected.

Our August 2017 tracking poll showed that fully 60% of the American people believed they were negatively affected by the premium increases, when in reality, just a sliver of the public — the unsubsidized people in the individual health insurance market — were actually affected.

The numbers that matter, per Kaiser Family Foundation estimates:

  • Affected: 6.7 million
  • Unaffected: 319 million

No doubt the broader public’s fears about rising premiums fueled cynicism about the ACA. Some political scientists say it contributed to the Republican victory in 2016.  In fact, premiums for most Americans with private coverage have been growing at a 3% clip, a historically moderate level.

The bottom line: As the midterms approach, Republicans’ first impulse may be to attack the law to rev up their base as they have done before. The tradeoff they face is that they now own the ACA in the eyes of the public, including the problem of rising premiums which they will have helped to create.

And Democrats now have a chance to score political points on the ACA for the first time — but the risk is a disproportionate public reaction, much like in 2016, that undermines the law they worked so hard to pass.

 

 

Five Worrisome Trends in Healthcare

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https://www.medpagetoday.com/publichealthpolicy/healthpolicy/72001?xid=fb_o_

healthcare; insurance; drugs; drug companies; Government-run Insurance Program Sure to Backfire | iHaveNet.com

A reckoning is coming, outgoing BlueCross executive says.

A reckoning is coming to American healthcare, said Chester Burrell, outgoing CEO of the CareFirst BlueCross BlueShield health plan, here at the annual meeting of the National Hispanic Medical Association.

Burrell, speaking on Friday, told the audience there are five things physicians should worry about, “because they worry me”:

1. The effects of the recently passed tax bill. “If the full effect of this tax cut is experienced, then the federal debt will go above 100% of GDP [gross domestic product] and will become the highest it’s been since World War II,” said Burrell. That may be OK while the economy is strong, “but we’ve got a huge problem if it ever turns and goes back into recession mode,” he said. “This will stimulate higher interest rates, and higher interest rates will crowd out funding in the federal government for initiatives that are needed,” including those in healthcare.

Burrell noted that 74 million people are currently covered by Medicaid, 60 million by Medicare, and 10 million by the Children’s Health Insurance Program (CHIP), while another 10 million people are getting federally subsidized health insurance through the Affordable Care Act’s (ACA’s) insurance exchanges. “What happens when interest’s demand on federal revenue starts to crowd out future investment in these government programs that provide healthcare for tens of millions of Americans?”

2. The increasing obesity problem. “Thirty percent of the U.S. population is obese; 70% of the total population are either obese or overweight,” said Burrell. “There is an epidemic of diabetes, heart disease, and coronary artery disease coming from those demographics, and Baby Boomers will see these things in full flower in the next 10 years as they move fully into Medicare.”

3. The “congealing” of the U.S. healthcare system. This is occurring in two ways, Burrell said. First, “you’ll see large integrated delivery systems [being] built around academic medical centers — very good quality care [but] 50%-100% more expensive than the community average.”

To see how this affects patients, take a family of four — a 40-year-old dad, 33-year-old mom, and two teenage kids — who are buying a health insurance policy from CareFirst via the ACA exchange, with no subsidy. “The cost for their premium and deductibles, copays, and coinsurance [would be] $33,000,” he said. But if all of the care were provided by academic medical centers? “$60,000,” he said. “What these big systems are doing is consolidating community hospitals and independent physician groups, and creating oligopolies.”

Another way the system is “congealing” is the emergence of specialty practices that are backed by private equity companies, said Burrell. “The largest urology group in our area was bought by a private equity firm. How do they make money? They increase fees. There is not an issue on quality but there is a profound issue on costs.”

4. The undermining of the private healthcare market. “Just recently, we have gotten rid of the individual mandate, and the [cost-sharing reduction] subsidies that were [expected to be] in the omnibus bill … were taken out of the bill,” he said. And state governments are now developing alternatives to the ACA such as short-term duration insurance policies — originally designed to last only 3 months but now being pushed up to a year, with the possibility of renewal — that don’t have to adhere to ACA coverage requirements, said Burrell.

5. The lackluster performance of new payment models. “Despite the innovation fostering under [Center for Medicare & Medicaid Innovation] programs — the whole idea was to create a series of initiatives that might show the wave of the future — ACOs [accountable care organizations] and the like don’t show the promise intended for them, and there is no new model one could say is demonstrably more successful,” he said.

“So beware — there’s a reckoning coming,” Burrell said. “Maybe change occurs only when there is a rip-roaring crisis; we’re coming to it.” Part of the issue is cost: “As carbon dioxide is to global warming, cost is to healthcare. We deal with it every day … We face a future where cutbacks in funding could dramatically affect accessibility of care.”

“Does that mean we move to move single-payer, some major repositioning?” he said. “I don’t know, but in 35 years in this field, I’ve never experienced a time quite like this … Be vigilant, be involved, be committed to serving these populations.”

Poll: 44% Of Americans Skip Doctor Visits Because Of Cost

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https://www.forbes.com/sites/brucejapsen/2018/03/26/poll-44-of-americans-skip-doctor-visits-due-to-cost/#31398d56f57e

Because of the high cost of healthcare, 44% Americans didn’t go see a physician last year when they were sick or injured, according to a new survey.

The West Health Institute/NORC at the University of Chicago national poll comes as policymakers and health insurance companies are predicting a jump in health premiums and out-of-pocket costs, particularly for Americans with individual coverage under the Affordable Care Act. The $1.3 trillion spending bill signed into law last week by President Donald Trump didn’t include reinsurance programs and money to restore Obamacare funds to help Americans pay co-payments and deductibles despite bipartisan support in the Senate.

Cost continues to be a barrier to treatment with 40% of Americans who say they “skipped a recommended medical test or treatment in the last 12 months due to cost.” Another 32% were “unable to fill a prescription or took less of a medication because of the cost,” the West Health/NORC poll of more than 1,300 adults said.

“The high cost of healthcare has become a public health crisis that cuts across all ages as more Americans are delaying or going without recommended medical tests and treatments,” West Health Institute chief medical officer Dr. Zia Agha said in a statement accompanying the poll results. The survey is being released at this week’s American Society on Aging 2018 Aging in America Conference in San Francisco.

The West Health-NORC poll is the latest national survey showing Americans continued frustration with high healthcare costs even as the U.S. spends more than $3.3 trillion annually on healthcare.

Several recent polls have indicated healthcare is back on the top of voters’ concerns as they head to the polls this November for mid-term Congressional and statewide general elections. A Kaiser Health Tracking poll published earlier this month ranked “health care costs as the top health care issue mentioned by voters when asked what they want to hear 2018 candidates discuss.”

 

 

 

Medical Research, Drug Treatment And Mental Health Are Winners In New Budget Bill

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https://www.npr.org/sections/health-shots/2018/03/22/596116779/medical-research-drug-treatment-and-mental-health-are-winners-in-new-budget-bill?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202018-03-23%20Healthcare%20Dive%20%5Bissue:14589%5D&utm_term=Healthcare%20Dive

Sen. Susan Collins, R-Maine (center), is joined on Wednesday by Sen. Lindsey Graham (from left), R-S.C., Sen. Lisa Murkowski, R-Alaska, and Rep. Greg Walden, R-Ore. Collins was pushing for provisions in the budget bill aimed at lowering premiums for people purchasing health insurance in the Affordable Care Act’s marketplaces. That didn’t happen.

 

The big budget deal reached this week in the House doesn’t include a long-sought-after provision to stabilize the Affordable Care Act marketplaces. But the $1.3 billion plan, set to fund the government through September, has lots of new money for medical research, addiction treatment and mental health care.

Here’s the rundown of what’s included in the 2,232-page spending bill, now in the hands of a Senate vote, based on summaries released by the House and Senate appropriations committees.

  • $78 billion in overall funding for the Department of Health and Human Services, a $10 billion increase
  • $3.6 billion to fight the opioid addiction crisis
    • This more than doubles the money allocated in fiscal 2017 and boosts funding for treatment and prevention, as well as helping to find alternatives for people suffering from pain.
  • $3.2 billion for mental health care
    • This is a 17 percent boost from last year and goes to treatment, prevention and research.
  • $37 billion for the National Institutes of Health
    • This is a $3 billion increase over fiscal 2017 and boosts spending on research into Alzheimer’s disease and a universal flu vaccine, among other things.

Lawmakers could not agree on language designed to stabilize the Affordable Care Act insurance markets and lower insurance premiums that Sens. Lamar Alexander, R-Tenn., and Susan Collins, R-Maine, have been fighting for since last fall. That bill would have reinstated the cost-sharing reduction payments, by which the government reimburses insurance companies that give the lowest-income customers a break on their copayments and deductibles.

Last year President Trump announced that the government would stop making the payments, a decision that drove the unsubsidized premiums on insurance policies higher.

Alexander says his proposal would restore those payments and cut premiums as much as 40 percent.

“Nothing is more important to Americans than health care, and nothing is more frightening than the prospect of not being able to afford health insurance, which is the case for a growing number of Americans,” he said at a news conference Wednesday.

But Democrats refused to support the provision because it also included language that would have barred any insurance policy sold on the ACA marketplaces from covering abortion.

 

 

 

What to watch for in the individual health insurance market

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https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-policy/2018/03/08/what-to-watch-for-in-the-individual-health-insurance-market/?utm_campaign=Economic%20Studies&utm_source=hs_email&utm_medium=email&utm_content=61590808

Image result for What to watch for in the individual health insurance market

 

On Tuesday, March 6, the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy and the USC-Brookings Schaeffer Initiative for Health Policy co-hosted an event examining where the individual health insurance market is today and where it is heading. The event featured an opening presentation followed by a panel discussion featuring speakers from a variety of perspectives. The discussion examined how the individual market has evolved since the implementation of the main Affordable Care Act (ACA) reforms in 2014, the likely impact of recent policy changes implemented by the Trump Administration and Congress, and how federal policy toward the market might evolve in years to come.

Here are highlights from each of the participants.

Fiedler’s opening presentation: An overview of recent individual market trends and policy changes

The event opened with a presentation by Matthew Fiedler, a fellow at the Brookings Institution’s Center for Health Policy (slides available here). Fiedler started by showing that individual market enrollment grew significantly after implementation of the ACA’s reforms in 2014, but that individual market insurers also incurred significant losses. Those losses set the stage for a pricing correction in 2017, which he estimated returned premiums to a roughly sustainable position.

Fiedler then examined the implications of three significant policy changes under the Trump Administration: the end of cost-sharing reduction payments, the pending repeal of the individual mandate, and the proposed expansion of short-term, limited-duration plans. Fiedler argued that “the market will survive and will find a new equilibrium” because many enrollees in the ACA-compliant individual market are eligible for large subsidies that will make remaining in the market attractive.

Nevertheless, he concluded that repeal of the individual mandate and the expansion of short-term plans, will reduce the number of people covered, increase the number of people with lower-quality coverage, and reduce pooling of risk between healthier and sicker individuals. On the other hand, he argued that the Trump Administration’s decision to end cost-sharing reduction payments will have the unintended consequence of lowering premiums after subsidies for many enrollees and increasing federal spending.

Corlette: Short-term plans pose risks to consumers

A major topic for the panel discussion was the Trump Administration’s proposal to expand the definition of “short-term, limited duration” plans from a plan lasting less than 3 months (with no renewals permitted) to a plan lasting less than 12 months (with renewals permitted). Short-term plans are exempt from a broad range of federal regulatory requirements, including the ban on varying premiums based on health status and the ACA requirement to cover the so-called essential health benefits package.

Panelists noted that broader availability of short-term plans is likely to weaken the market for ACA-compliant plans since many healthier enrollees will migrate into the short-term market. Sabrina Corlette, a research professor at Georgetown University, argued that short-term plans pose significant risks not only to the market for ACA-compliant plans but also to consumers who buy them. These short-term plans are potentially harmful, she argued, because they “walk and talk a lot like traditional comprehensive health insurance” but many consumers will find themselves liable for “thousands of dollars of medical bills because these things simply don’t cover anything.”

Capretta: Recent policy changes are expanding state flexibility in beneficial ways

In discussing various policy changes implemented by the Trump Administration, James C. Capretta, a fellow at the American Enterprise Institute, noted that many of these policy changes have the effect of increasing state flexibility. He argued that state flexibility could help illuminate the path forward for federal policy. “Given the stalemate at the national level, maybe we need a two or three-year period where a lot of states try a couple of different things,” he said. “If some states want to re-impose the individual mandate they can do so. If they want to impose continuous coverage penalties they can do so. They can restrict which plans are sold on the insurance market,” he said.

Patterson: What is the next national goal for health policy?

Panelists discussed their views on next steps for federal policymakers. Kevin Patterson, CEO of Connect for Health Colorado, said that policymakers need “to think about what we are going to challenge ourselves to actually deal with.” Patterson noted that the Affordable Care Act had a national goal of improving access to care. “But what’s the next national goal? Is there one?,” Patterson asked. Patterson identified reducing the underlying cost of care as a potential priority. Patterson noted that the “big bad insurance company” often gets blamed for high premiums, “but a lot of what they have to do is just reflect the cost that they’re seeing in what the provider networks are charging.”

Geraghty: Increasing competition among providers can reduce the cost of care

Following on Patterson’s comment, Geraghty highlighted the importance of increasing competition among health care providers if the goal is to reduce costs. “We as a country have not looked at competition on the delivery side,” he said. Geraghty noted that there were particular challenges in many rural markets.  “If you’re in a rural area and you’ve got one hospital and they bought up the physician groups around them, they now set the market and they set the price,” he explained. Geraghty argued that improvements in communications technology might make it possible to deliver more care remotely, which could facilitate increased competition in many markets with a small number of providers.

 

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.

 

How Did State-Run Health Insurance Marketplaces Fare in 2017?

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http://www.commonwealthfund.org/publications/issue-briefs/2018/mar/how-did-state-run-marketplaces-fare-in-2017?

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Abstract

  • Issue: Sixteen states and the District of Columbia manage their own health insurance marketplaces under the Affordable Care Act. These states, which were broadly supportive of health reform, chose to run their marketplaces to exert greater control over their insurance markets and tailor the portals to suit local needs. Though federal policy changes and political uncertainty around the ACA in 2017 have posed challenges across the country, states that operate their own marketplaces had greater flexibility than others to respond.
  • Goal: To understand how states on the forefront of health reform perceived and responded to federal policy changes and political uncertainty in 2017.
  • Methods: Structured interviews with the leadership staff of 15 of the 17 state-run marketplaces.
  • Findings and Conclusions: Respondents unanimously suggested that federal administrative actions and repeal efforts have created confusion and uncertainty that have negatively affected their markets. The state-run marketplaces used their broader authority to reduce consumer confusion and promote stable insurer participation. However, their capacity to deal with federal uncertainty has limits and respondents stated that long-term stability requires a reliable federal partner.

Background

The Affordable Care Act created health insurance marketplaces, also known as exchanges, in each state to help people who don’t have access to insurance through an employer or public program. The marketplaces act as a gateway to coverage for residents, providing a platform through which they can compare and purchase plans. Sixteen states and the District of Columbia are responsible for managing their own marketplaces; 34 states rely on the federal government to operate their exchange.

States that decided to manage their marketplaces wanted to retain control over their insurance markets and have the authority to tailor the portal to meet local needs.2 Compared with states using the federally run marketplace, nearly all these states have expanded their Medicaid programs and have been much more likely to adopt the ACA’s consumer protections into state law — potentially making it easier to enforce these reforms.3

Since President Trump’s election, the ACA and marketplaces have faced an uncertain future. The president has been openly hostile to the ACA and sought its repeal.4 At the same time, the administration has made regulatory and other implementation changes and reduced the funding that supports the marketplaces. These decisions have all affected how the law operates in practice and have had serious repercussions across the country.5 However, the impact has not been uniform. It has varied, in part, based on the choices state policymakers have made in implementing the ACA — including whether to run their own exchange.

We sought to understand how states that have been more actively engaged in reform have perceived federal policy changes and political uncertainty in 2017, and to explore whether these states were better able to promote stability within their markets. To do so, we interviewed the leadership staff of 15 of the 17 state-run marketplaces in September and October 2017.6 This brief explores key themes that emerged from those interviews. It identifies the major challenges facing the marketplaces as they went into the fifth open enrollment period, how states responded to those challenges, and the limits on states’ capacities to act.

Key Findings

Federal Actions Made It Harder for States to Manage Their Own Marketplaces

Marketplace respondents were unanimous in suggesting that actions taken by the Trump administration and ongoing efforts to repeal the ACA have created confusion and uncertainty that have negatively affected their markets. While these marketplaces had experienced ups and downs during their first three years of operation, many respondents were relatively optimistic in the fall of 2016 about future enrollment growth and stability in terms of plan participation and premiums — a view supported by independent analyses.7 But federal developments in 2017 made the challenges of the previous year “pale in comparison,” and respondents described a far more uncertain future.

Officials highlighted four federal-level developments during 2017 that jeopardized stability. First, respondents said that the administration’s repeated threats to end federal payments supporting the ACA’s cost-sharing reduction (CSR) plans caused protracted confusion and disruption and placed states in a “real jam.” These threats were eventually carried out, after months of uncertainty, in October 2017. But as deadlines for marketplace participation and rate setting for the upcoming year (2018) came and went with no clarity on whether the administration would continue to reimburse insurers for the cost of the CSR subsidies, marketplaces struggled to get insurers to commit to participate and to develop responses to the significantly higher premiums the insurers sought to offset the lost payments.8

Second, most respondents noted that actions taken by the administration to undermine the ACA’s individual mandate had the effect of undermining their marketplaces, as well. The requirement to maintain coverage, ultimately repealed on a prospective basis in December, was the law of the land throughout 2017 (and remains so in 2018). However, officials noted that an executive order, signed by the president on Inauguration Day, cast doubt on the enforcement of the mandate and caused insurers to be more cautious when setting rates.9 Many priced higher than they would have otherwise, fearing that a weakened mandate would lead to a sicker and more expensive risk pool.10 The president’s actions and words were also perceived to have caused widespread confusion among consumers about whether the requirement to maintain coverage was still the law.

In a related vein, officials repeatedly expressed frustration at “federal noise”: ongoing but thus far inconclusive discussions about repealing and replacing the ACA, and related rhetoric by administration officials and congressional allies asserting that the health law was “dead” or “collapsing.” Respondents said it was a challenge to ensure residents had accurate information. They reported many instances of consumer confusion about the marketplaces, the mandate, coverage options, and the status of the health law, in general.

Fourth, a majority of respondents predicted that the administration’s decision to reduce advertising spending for the federal marketplace by 90 percent would have negative side effects for the state-run exchanges. Officials in both big and small states explained that because the federal marketing campaign was national in scope and used television advertising — a medium too expensive for several state marketplaces — it was effective in reaching their residents and had complemented state messaging efforts in prior years. Several respondents also lamented the perceived political ramifications of the funding cut, suggesting that the administration’s action would cause enrollment through the federal exchange to diminish, putting the entire program at greater risk of repeal.