Tag Archives: Health Insurance Exchanges

ACA Slow Enrollment as Uninsured Rate Remains Steady

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https://www.healthaffairs.org/do/10.1377/hblog20181120.831184/full/

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In most states across the country, the open enrollment period for 2019 began on November 1 and will end on December 15, 2018. As we near the halfway point for enrollment—at least for the states with a federal marketplace—recent federal data suggests that enrollment in Affordable Care Act (ACA) marketplace plans is lagging relative to last year.

In its “week 2” enrollment snapshot, the Centers for Medicare and Medicaid Services (CMS) announced that nearly 1.2 million consumers selected a plan between November 1 and November 10 in the 39 states that use HealthCare.gov. Of these consumers, about 275,000 were new consumers while about 901,000 were renewing their coverage from last year. This reflects a significant increase from the first three days of open enrollment when about 371,000 consumers selected a plan.

“Week 2” plan selections are down by about 302,000 consumers relative to last year. This can be read as between an 8 to 13 percent decline in plan selections compared to last year, when a total of 11.8 million consumers in all 50 states and DC selected or were automatically reenrolled in a marketplace plan. Enrollment remained largely stable from 2017 to 2018 despite a shortened open enrollment period and significant cuts to advertising and navigator funding.

This year, however, brings additional changes that could be contributing to what is, at least so far, depressed enrollment through HealthCare.gov. These changes include repeal of the individual mandate penalty; 2019 is the first year that consumers will no longer pay a penalty for being uninsured under the ACA. In addition, new federal rules are enabling expanded access to non-ACA plans (such as short-term, limited-duration insurance and association health plans). These non-ACA plans typically have a much lower premium than ACA plans and could lure consumers away from the marketplace.

It is too early to tell if the reduced enrollment trend will hold and if this pattern will continue. Enrollment may increase significantly before the December 15 deadline, and millions of Americans will enroll in coverage before the end of the year.

The declines are, however, significant. The former chief marketing officer for HealthCare.gov recently noted that the data “should be a wake-up call to everyone who cares about people having health care … on the need to step up efforts to raise awareness.” CMS intends to release enrollment snapshots on a weekly basis. Each snapshot also includes point-in-time estimates of call center activity and visits to HealthCare.gov and CuidadoDeSalud.gov, among other data.

The new open enrollment data comes at a time when the uninsured rate continues to remain steady. Data from the National Center for Health Statistics—in reports both from late August and November—shows that the uninsured rate of about 8.8 percent for 2018 remains largely unchanged from 2017. Although there was not a significant shift from 2017 to 2018, there has been a sizable drop in the uninsured rate since the ACA was enacted in 2010. Between 2010 and the first six months of 2018, the uninsured rate dropped from 16 percent (48.6 million people) to 8.8 percent (28.5 million people).

 

 

With Divided Congress, Health Care Action Hightails It to the States

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https://www.rollcall.com/news/policy/divided-congress-health-care-action-states

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Medicaid expansion was the biggest winner in last week’s elections.

Newly-elected leaders in the states will be in a stronger position than those in Washington to steer significant shifts in health care policy over the next couple of years as a divided Congress struggles with gridlock.

State Medicaid work requirements, prescription drug prices, insurance exchanges and short-term health plans are among the areas with the potential for substantial change. Some states with new Democratic leaders may also withdraw from a multistate lawsuit aimed at killing the 2010 health care law or look for ways to curb Trump administration policies.

But last week’s biggest health care winner is undeniably Medicaid expansion, with upwards of half a million low-income Americans poised to gain insurance coverage following successful expansion ballot initiatives and Democratic victories in key governors’ races.

“In state health policy, it was a big election,” said Trish Riley, executive director of the nonpartisan National Academy for State Health Policy. “It was a year when many candidates had pretty thoughtful and comprehensive proposals.”

Boost for Medicaid expansion

Voters in three deep-red states — Nebraska, Idaho and Utah — bucked their Republican lawmakers by approving ballot initiatives to extend Medicaid coverage to more than 300,000 people.

Meanwhile, Democratic gubernatorial wins in Kansas and Wisconsin boosted the chances of expansion in those states. And Maine’s new governor-elect is expected to act quickly to grow the government insurance program when she takes office in January.

The election outcomes could bring the biggest increase in enrollment since an initial burst of more than two dozen states expanded Medicaid under the 2010 health care law in the early years of the landmark law’s rollout.

“This election proves that politicians who fought to repeal the Affordable Care Act got it wrong,” said Jonathan Schleifer, head of The Fairness Project, an advocacy group that supported the initiatives, referring to the 2010 health care law. “Americans want to live in a country where everyone can go to the doctor without going bankrupt.”

The successful ballot initiatives require state leaders to move quickly toward expansion. In Idaho, the state must submit an expansion plan to federal officials within 90 days of the new law’s approval, while Nebraska must submit its plan by April 1, according to the nonpartisan Kaiser Family Foundation. Utah’s new law also calls for the state to expand beginning April 1.

In Kansas, where Medicaid supporter Laura Kelly prevailed, state lawmakers passed expansion legislation last year only to have it vetoed by the governor. Meanwhile, Wisconsin’s new Democratic governor Tony Evers, who eked out a win over Republican incumbent Scott Walker, has said he will “take immediate action” to expand, though he faces opposition from a Republican-controlled legislature.

Expansions in the five states would bring the number of states that adopted expansion under the health law to 38, plus the District of Columbia.

Still, Democrats fell short of taking one of the biggest Medicaid expansion prizes — Florida — after Andrew Gillum’s defeat. The outcome of Georgia’s tight governor’s race was still unclear as of Monday, with Republican Brian Kemp holding a narrow lead over Democrat Stacey Abrams. Both Abrams and Gillum made health care, and Medicaid expansion in particular, central to their campaigns.

Florida might be a 2020 target for an expansion ballot initiative, along with other states such as Missouri and Oklahoma, according to The Fairness Project.

Expansion supporters also suffered defeat last week in Montana, where voters did not approve a ballot initiative that would have extended the state’s existing Medicaid expansion, which covers nearly 100,000 people but is slated to expire next year. However, state lawmakers have until June 30 to reauthorize the program, according to Kaiser.

In Maine, Democratic gubernatorial winner Janet Mills is expected to expedite expansion implementation. GOP Gov. Paul LePage stymied implementation over the past year, despite nearly 60 percent of voters approving an expansion ballot initiative in 2017.

Medicaid’s future

The midterm results carry other ramifications for Medicaid, including whether states embrace or move away from controversial work requirements backed by the Trump administration.

Gretchen Whitmer, a Democrat who won Michigan’s governor race, opposed the idea and could shift away from an existing plan to institute them that’s awaiting federal approval.

“This so-called work requirement is not for one second about getting people back to work. If it was, it would have been focused on leveling barriers to employment like opening up training for skills or giving people child care options or transportation options,” Whitmer said in a September interview with Michigan Radio. “It was about taking health care away from people.”

Kansas, Wisconsin and Maine also have work requirement proposals that new Democratic governors could reverse.

But experts also say it’s possible some states, including those with Democratic governors, could end up pursuing Medicaid work requirements if that’s what it takes to get conservative legislators to accept expansion like Virginia did earlier this year.

Nebraska Republican state senator John McCollister, who supports expansion, predicted recently that the legislature would fund the voter-approved expansion initiative. But he indicated lawmakers might pursue Medicaid work requirements too.

Marie Fishpaw, director of domestic policy studies at the conservative Heritage Foundation, warned that states expanding Medicaid would face challenges. She called expansion “a poor instrument for achieving the goal that they’re trying to achieve.”

A number of new governors, including Whitmer, could pursue the so-called “Medicaid buy-in” concept.

More than a dozen state legislatures, such as in Minnesota and Iowa, explored the idea in recent years, according to State Health and Value Strategies, part of the nonprofit Robert Wood Johnson Foundation. Nevada lawmakers passed a “Medicaid buy-in” plan last year that was vetoed by the governor.

There are a variety of ways to implement such a program, but the goal is to expand health care access by leveraging the government insurance program, such as by creating a state-sponsored public health plan option on the insurance exchanges that consumers could buy that relies on Medicaid provider networks. Illinois, New Mexico, Maine and Connecticut are among the states that could pursue buy-in programs, Riley said. States are considering the concept as a way to increase affordability and lower cost growth by getting more mileage out of the lower provider rates Medicaid pays, said Katherine Hempstead, a senior policy adviser with Robert Wood Johnson Foundation.

“So many [people] struggle with the affordability of health care,” Hempstead said. “That is an environment in which Medicaid buy-in opportunities could flourish.”

Health care law

This month’s election also carries implications for the future of states’ administration of the 2010 health care law.

States that flipped to Democratic governors could switch to creating their own insurance exchanges rather than relying on the federal marketplace, said Joel Ario, a health care consultant with Manatt Phelps & Phillips and the former head of the federal health insurance exchange office under the Obama administration. The costs of running an exchange have come down in recent years, so it’s potentially cheaper for a state to run its own, Ario said.

Trump administration actions, such as cuts in federal funding for insurance navigators that help consumers enroll and the expansion of health plans that don’t comply with the law, may make states such as Michigan or Wisconsin rethink use of the federal exchange, he said.

“If [the administration] continues to promote policies that really leave a bad taste in the mouth for Democratic governors, I think they’ll be asking questions,” Ario said.

States where governors and attorneys general offices went from red to blue are likely to pull out of a lawsuit by 20 state officials that aims to take down the health care law, he added.

Wisconsin’s Evers vowed that his first act in office will be to withdraw from the lawsuit.

“I know that the approximately 2.4 million Wisconsinites with a pre-existing condition share my deep concern that this litigation jeopardizes their access to quality and affordable health care,” Evers wrote in a letter he said he plans to send to the state attorney general.

Hempstead said that states with both Republican and Democratic leaders will likely continue to pursue reinsurance programs, which cover high-cost patients, to bolster their marketplaces.

Republican governors could also pursue waivers under a recent Trump administration guidance that allows states to circumvent some requirements of the health law under exemptions known as 1332 waivers. But experts say it’s too soon to know exactly what approaches states might take.

“It will be interesting to see what the 1332 guidance means and whether it opens doors for some things and not for others,” Hempstead said. States that shifted to Democratic governors could also look to ban some Trump-supported policies, such as expansions of short-term and association health plans that avoid the health care law’s rules.

States are also likely to take steps to address high prescription drug costs in the coming years, with a number of new governors wanting to improve transparency, explore drug importation from other countries and target price gouging, Riley said.

“There’s a long history of the states testing, fixing, tweaking and informing the national debate,” said Riley.

 

VERMA TOUTS 1.5% DROP IN BENCHMARK PREMIUMS FOR 2019

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https://www.healthleadersmedia.com/finance/verma-touts-15-drop-benchmark-premiums-2019?utm_source=silverpop&utm_medium=email&utm_campaign=ENL_181011_LDR_BRIEFING%20%281%29&spMailingID=14415399&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1500882623&spReportId=MTUwMDg4MjYyMwS2

The data on second-lowest-cost silver plans for next year come two weeks after HHS Secretary Alex Azar praised President Trump for halting premium hikes, despite critics’ contentions to the contrary.

Celebrating the news as “especially gratifying,” Centers for Medicare & Medicaid Services Administrator Seema Verma released data Thursday morning showing that premiums for health plans on the federally facilitated exchange will drop next year for the first time since the Affordable Care Act took effect.

After years of double-digit increases, the average premium for second-lowest-cost silver plans will drop 1.5%, from $412 in 2018 to $406 in 2019, according to preliminary CMS data on the 39 states that use the federal ACA exchange. The final data are slated for release next month.

During a call with reporters, Verma said the ACA is still a broken piece of legislation that Congress should replace. Even so, President Donald Trump and his administration deserve credit for bringing these premiums down despite the less-than-ideal circumstances, she said, rejecting claims from critics who have argued Trump’s team has been sabotaging the ACA since Inauguration Day.

“Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened,” Verma said in a statement. “The drop in benchmark plan premiums for plan year 2019 and the increased choices for Americans seeking insurance on the exchanges is proof positive that our actions are working.”

“While we are encouraged by this progress, we aren’t satisfied,” she added. “Even with this reduction, average rates are still too high. If we are going to truly offer affordable, high quality healthcare, ultimately the law needs to change.”

The release of 2019 premium data comes two weeks after Health and Human Services Secretary Alex Azar said benchmark ACA premiums would drop 2% next year. Azar heaped praise on Trump for the good news, but critics noted that rates are flattening out for 2019 after a significant jump for 2018 in response to the Trump administration’s healthcare policymaking.

The 1.5% decrease follows last year’s 36.9% increase, which was significantly higher than the 25.4% increase heading into 2017, according to the CMS data released Thursday.

Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, said last month that insurers on the exchange “overshot” their premium increases last year, which explains both their high profit margins at present and the average decrease for next year. That being said, although the Trump administration has taken steps to undermine the ACA, some of the administration’s actions have promoted stability, Levitt added Thursday.

Beyond premiums, though, Verma noted also that fewer insurers are dropping out of the exchanges, and some are returning. Most counties on the federal exchange, 56%, had only one issuer this year, but that figure will drop to 39% next year. There were 10 states with only one insurer this year, but that number will drop to four in 2019.

 

 

Molina still considering returning to Obamacare in Utah and Wisconsin

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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.

 

Stabilizing and strengthening the individual health insurance market

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https://www.brookings.edu/research/stabilizing-and-strengthening-the-individual-health-insurance-market/?utm_campaign=Economic%20Studies&utm_source=hs_email&utm_medium=email&utm_content=64960143

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Stability has long been an issue for the individual health insurance market, even before the Affordable Care Act. While reforms adopted under the ACA initially succeeded in addressing some of these market issues, market conditions substantially worsened in 2016.

Insurers exited the individual market, both on and off the subsidized exchanges, leaving many areas with only a single insurer, and threatening to leave some areas (mostly rural) with no insurer on the exchange. Most insurers suffered significant losses in the individual market the first three years under the ACA, leading to very substantial increases in premiums a couple of years in a row.

For a time, it appeared that rate increases in 2016 and 2017 would be sufficient to stabilize the market by returning insurers to profitability, which would bring future increases in line with normal medical cost trends. However, Congress’s decision to repeal the individual mandate and the Trump Administration’s decision to halt “cost-sharing reduction” payments to insurers, along with other measures that were seen as destabilizing, created substantial new uncertainty for market conditions in 2018.

This uncertainty continues into 2019, owing both to lack of clarity on the actual effects of last year’s statutory and regulatory changes, and to pending regulatory changes that would expand the availability of “non-compliant” plans sold outside of the ACA-regulated market. These uncertainties further complicate insurers’ decisions about whether to remain in the individual market and how much to increase premiums.

In “Stabilizing and strengthening the individual health insurance market: A view from ten states” (PDF), Mark Hall examines the causes of instability in the individual market and identifies measures to help improve stability based off of interviews with key stakeholders in 10 states.

The condition of the individual market

In the states studied—Alaska, Arizona, Colorado, Florida, Iowa, Maine, Minnesota, Nevada, Ohio, and Texas—opinions about market stability vary widely across states and stakeholders.

While enrollment has remained remarkably strong in the ACA’s subsidized exchanges, enrollment by people not receiving subsidies has dropped sharply.

States that operate their own exchanges have had somewhat stronger enrollment (both on and off the exchanges), and lower premiums, than states using the federal exchange.

A core of insurers remain committed to the individual market because enrollment remains substantial, and most insurers have been able to increase prices enough to become profitable. Some insurers that previously left or stayed out of markets now appear to be (re)entering.

Political uncertainty

Premiums have increased sharply over the past two to three years, initially because insurers had underpriced relative to the actual claims costs that ACA enrollees generated. However, political uncertainty in recent years caused some insurers to leave the market and those who stayed raised their rates.

Insurers were able to cope with the Trump administration’s halt to CSR payments by increasing their rates for 2018 while the dominant view in most states is that the adverse effects of the repeal of the individual mandate will be less than originally thought. Even if the mandate is not essential, many subjects viewed it as helpful to market stability. Thus, there is some interest in replacing the federal mandate with alternative measures.

Because most insurers have become profitable in the individual market, future rate increases are likely to be closer to general medical cost trends (which are in the single digits). But this moderation may not hold if additional adverse regulatory or policy changes are made, and some such changes have been recently announced.

Many subjects viewed reinsurance as potentially helpful to market conditions, but only modestly so because funding levels typically proposed produce just a one-time lessening of rate increases in the range of 10-20 percent. Some subjects thought that a better use of additional funding would be to expand the range of people who are eligible for premium subsidies.Actions to restore stability

Concerns were expressed about coverage options that do not comply with ACA regulations, such as sharing ministries, association health plans, and short-term plans. However, some thought this outweighed harms to the ACA-compliant market; thus, there was some support for allowing separate markets (ACA and non-ACA) to develop, especially in states where unsubsidized prices are already particularly high.

Other federal measures, such as tightening up special enrollment, more flexibility in covered benefits, and lower medical loss ratios, were not seen as having a notable effect on market stability.

Measures that states might consider (in addition to those noted above) include: Medicaid buy-in as a “public option”; assessing non-complying plans to fund expanded ACA subsidies; investing more in marketing and outreach; “auto-enrollment” in “zero premium” Bronze plans; and allowing insurers to make mid-year rate corrections to account for major new regulatory changes.

Conclusion

The ACA’s individual market is in generally the same shape now as it was at the end of 2016. Prices are high and insurer participation is down, but these conditions are not fundamentally worse than they were at the end of the Obama administration. For a variety of reasons, the ACA’s core market has withstood remarkably well the various body blows it absorbed during 2017, including repeal of the individual mandate, and halting payments to insurers for reduced cost sharing by low-income subscribers.

The measures currently available to states are unlikely, however, to improve the individual market to the extent that is needed. Although the ACA market is likely to survive in its basic current form, the future health of the market—especially for unsubsidized people—depends on the willingness and ability of federal lawmakers to muster the political determination to make substantial improvements.

Read the full paper here

 

 

Individual market enrollment dropping amid premium increases

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Individual market enrollment dropping amid premium increases

Individual market enrollment dropping amid premium increases

Enrollment in the individual health insurance market — the market for people who don’t get coverage through work — has declined 12 percent in the first quarter of 2018, compared to the same period last year, according to a new analysis released Tuesday.

The analysis from the Kaiser Family Foundation showed enrollment in the individual market grew substantially after the implementation of the Affordable Care Act (ACA) and remained steady in 2016, before dropping by 12 percent in 2017.

There were 17.4 million people enrolled in the individual market in 2015, compared to 15.2 million in 2017 and 14.4 million in the first quarter of 2018.

The study notes that much of the decline is concentrated in the off-exchange market, where a number of enrollees are not eligible for ObamaCare subsidies and therefore not protected from significant premium increases in 2017 and 2018.

In this market, enrollment numbers dropped by 38 percent from the first quarter of 2017 to the first quarter of 2018.

The Trump administration last year canceled key ObamaCare subsidies for insurers, leading insurers to increase premiums substantially.

The anticipation of the repeal of ObamaCare’s individual mandate has also contributed to premium increases.

While ObamaCare enrollees who receive subsidies are mostly shielded from these increases, those who don’t are left to pay the full price.

“While the vast majority of exchange consumers receive subsidies that protect them from premium increases, off-exchange consumers bear the full cost of premium increases each year,” the analysis notes.

“In 2017, states that had larger premium increases saw larger declines in unsubsidized ACA-compliant enrollment, suggesting a relationship between premium hikes and enrollment drops.”

Despite the rises in premiums, enrollment in the ObamaCare exchanges has remained stable. There were 10.6 million people on the exchanges in the first quarter of this year, compared to 10.3 million in the first quarter of last year.

 

 

States Take the Lead on Reinsurance to Stabilize the ACA Marketplaces

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http://www.commonwealthfund.org/publications/blog/2018/may/reinsurance-to-stabilize-marketplaces?omnicid=EALERT1408707&mid=henrykotula@yahoo.com

 

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Recent actions by Congress and the Trump administration are likely to disrupt Affordable Care Act (ACA) marketplaces in 2019, leading to higher premiums for individuals and families. These actions include Congress’ termination of financial penalties for failing to obtain health insurance and the administration’s resistance to paying cost-sharing reductions for low-income purchasers of marketplace coverage, its encouragement of the sale of short-term policies and association health plans, and its defunding of advertising and outreach in federally facilitated marketplaces. Recent estimates suggest that there have already been small but significant declines in coverage.

A total collapse of ACA marketplaces is unlikely because of continuing federal subsidies for the purchase of insurance by individuals with incomes below 400 percent of the federal poverty level. But those not eligible for subsidies may face higher premiums in some states, and some may be forced to forgo coverage. Those who remain in the market may be sicker than average, leading to a higher-risk pool and fueling premium increases.

A key way to mitigate the adverse effects of these recent policies is by offering reinsurance, a policy that is garnering bipartisan support at the federal and state levels.

What Is Reinsurance?

Reinsurance was a critical feature of ACA marketplaces in their first three years. The marketplaces were new, and insurers faced considerable uncertainty about the health status of enrollees. The law thus offered insurers some protection against unexpectedly high claims through a reinsurance program. Reinsurance protects insurers by limiting their exposure to very high, unpredictable medical expenses incurred by their members by covering some of those expenses when they exceed a certain threshold. For example, the ACA stipulated that insurers with claims costs that exceeded a threshold amount for a particular individual — $45,000 in 2014 — qualified for reinsurance payments for 100 percent of the excess up to $250,000. The program was financed by fees on both individual and employer plans, including self-insured employers, and was thus deficit neutral. It is estimated that reinsurance reduced average premiums in the marketplaces by as much as 14 percent.

The ACA legislation phased down the reinsurance program over 2014–2016 since it was assumed that as insurers gained more familiarity with enrollees, they could price their products with greater certainty. After the program ended in 2016, premiums rose in 2017 more sharply than they had in prior years, an increase that was partly attributed to the loss of reinsurance.

Industry stakeholders and health policy experts have suggested that reinsurance could stabilize the individual market. Researchers Chrissy Eibner and Jody Liu of RAND estimated that reinstating the reinsurance program could reduce premiums in the marketplaces by 3.9 percent to 19.3 percent in 2020, depending on the generosity of the program. Because lower premiums also reduce what the federal government spends on tax credits, the researchers projected federal deficit savings of $2.9 billion to $13.1 billion. However, the researchers also assume that some of those fees ultimately would be passed on to people enrolled in private plans.

Federal reinsurance programs have appeared in a number of recent Congressional bills. Last year, ACA repeal-and-replace bills included reinsurance programs for the individual market that would be financed directly by the federal government. Senators Susan Collins (R–Maine) and Bill Nelson (D–Fla.) introduced a bill with a similarly structured reinsurance program at the end of 2017. And a recently introduced bill from Senators Jeff Merkley (D–Ore.) and Chris Murphy (D–Conn.) proposing that a Medicare plan be offered through the marketplaces and by employers also includes a reinsurance program.

Some of these proposals would fund reinsurance through upfront federal expenditures, rather than charging fees to insurers. Deficit reductions could be lower under this scenario, but may still be possible because the federal expenditures on reinsurance would be offset by savings on lower tax credit expenditures as premiums fall. However, the RAND researchers find that the cost to taxpayers would be about the same under both approaches, since insurers would likely pass on fees to their customers in the form of higher premiums.

States Take the Lead

In the absence of consensus in Congress on how to strengthen the marketplaces, several states have secured, or are seeking, approval from the federal government to establish state-based reinsurance programs through the ACA’s innovation waiver program. Under the waiver program, states can make changes to their marketplaces as long as they cover at least the same number of people and maintain the same levels of affordability. Reinsurance has been the most common innovation pursued by states.

Alaska, Minnesota, and Oregon have received federal approval to establish reinsurance programs. There are notable differences in their approaches:

  • In Alaska, medical claims for individuals with at least one of 33 high-cost conditions are covered by the Alaska Reinsurance Program. The program was responsible for preventing the state’s last remaining insurer from leaving the individual market in 2017.
  • In Minnesota, the reinsurance program covers 80 percent of claims for individuals up to $250,000 once a $50,000 threshold is passed. For the 2018 plan year, insurers submitted two sets of premiums, one assuming reinsurance and one without it. The rates accounting for reinsurance were approximately 20 percent lower.
  • Oregon’s waiver application sought approval for a program that would reimburse 50 percent of claims between a yet-to-be-established threshold up to $1 million. The U.S. Department of Health and Human Services approved the proposal in October 2017.

Six more states have passed legislation or submitted applications to establish reinsurance programs.

  • On May 9, Maine became the latest state to submit a waiver application to the federal government seeking funding for a state-based reinsurance program. Earlier this year on April 18, Wisconsin also submitted a waiver application for a reinsurance program.
  • New Hampshire and Louisiana are developing similar applications, and New Jersey and Maryland passed legislation in April to establish state-operated reinsurance programs.

Experience with reinsurance programs clearly demonstrates their efficacy in reducing health insurance premiums in the private individual market. Implemented at the federal level, such programs also reduce federal spending and deficits. Though enterprising states are moving forward with these initiatives, a more comprehensive national effort to help private insurers manage unpredictable risks in individual health insurance markets has enduring appeal.

 

 

Premium hikes reignite the ObamaCare wars

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Premium hikes reignite the ObamaCare wars

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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.

 

 

Where the ACA health insurance exchanges stand in 2018

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

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

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

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

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

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

Enrollment dips modestly

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

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

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

Where the exchanges are working and where they’re not

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

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

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

Premiums vary widely across states

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

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

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

The effects of “silver-loading”

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

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

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

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

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

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

Emerging threats

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

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