Health Insurance Premiums Are Stabilizing

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

Stateline Aug16

 

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

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

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

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

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

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

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

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

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

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

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

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

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

State Roles

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

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

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

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

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

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

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

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

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

Undermining the ACA

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

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

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

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

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

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

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

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

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

 

 

 

Nobody loves the ACA as much as New Jersey

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New Jersey leads the nation in so many important things: rest stops named for historical figures, willingness to wear track suits in public — and now, reconstituting the Affordable Care Act under President Trump.

No state has moved faster or more aggressively to shore up its ACA markets than Jersey.

  • Yesterday, the Trump administration approved the state’s proposal for a new, five-year reinsurance program — essentially a subsidy that helps insurers pay for their most expensive customers, so they don’t have to pass those costs on through higher premiums.
  • That program will be paid for, in part, by New Jersey’s newly enacted individual mandate.
  • New Jersey also bans short-term insurance plans that don’t cover pre-existing conditions. The Trump administration has loosened the rules for those plans, but states are free to enact their own restrictions.

Those three policies — an individual mandate, a reinsurance program and limits on short-term plans — are states’ most muscular options for stabilizing their individual insurance markets, especially if they want to stick to the same core model of the pre-Trump ACA.

  • Right now, Jersey is the only state that has all three.

Meanwhile: The California State Assembly passed a bill yesterday to ban short-term plans.

The big picture: As more states — mostly blue states — restrict short-term plans and win approval for reinsurance programs, expect to see a deepening red-blue divide in state insurance markets and, as a result, in average premiums within the ACA’s exchanges.

Healthcare Triage News: ACA Risk Adjustment is out of Danger. For Now.

https://theincidentaleconomist.com/wordpress/healthcare-triage-news-aca-risk-adjustment-is-out-of-danger-for-now/

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A few weeks ago, we were critical of the Trump administration’s handling of ACA risk adjustment payments. We’re fair-minded types around here, so we though you should know that they’ve taken steps to fix it.

 

 

 

Molina still considering returning to Obamacare in Utah and Wisconsin

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

Heath Overhaul Texas 080118

 

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

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

 

 

SHORT-TERM HEALTH PLANS ALLOWED UP TO 3 YEARS

https://www.healthleadersmedia.com/finance/short-term-health-plans-allowed-3-years

A final rule expands access to non-ACA-compliant plans, which the Trump administration has touted as cheaper alternatives to full coverage.


KEY TAKEAWAYS

Only about 200,000 people are expected to exit the ACA exchange market as a result of the final rule.

Gross premiums for marketplace plans are expected to rise 1% next year attributable to this policy change.

The administration notes that ‘these products are not for everyone,’ so buyers should review their options carefully.

Beginning this fall, consumers will be allowed to buy short-term limited-duration health plans renewable for up to three years, the Trump administration announced Wednesday morning with a newly finalized rule.

The policy change expands access to lower-grade coverage options the Obama administration had restricted to three months, without a renewal option, in light of the Affordable Care Act. The looser rules finalized Wednesday allow terms up to 12 months, renewable up to 36 months.

While critics contend the short-term options will pull younger healthier beneficiaries out of ACA-compliant exchange plans, driving up premiums for sicker populations left behind, the administration says any negative effects will be minimal and outweighed by the market benefits of having more options.

James Parker, MBA, a former Anthem executive who serves as director of the Health and Human Services Office of Health Reform and as one of four key senior advisors to HHS Secretary Alex Azar, said the administration doesn’t expect a mass exodus from the ACA exchanges to these short-term options.

“What we do believe, however, is that there will be significant interest in these policies from individuals who today are not in the exchange and, in many cases, have been priced out of coverage as insurance premiums have significantly increased over the past four to five years,” Parker said during a call with reporters Tuesday evening.

Randy Pate, a deputy administrator of the Centers for Medicare & Medicaid Services who oversees individual and small-group markets as director of the Center for Consumer Information and Insurance Oversight, said the administration expects about 600,000 people to enroll in the short-term plans next year as a result of the expanded access. Only an estimated 200,000 will leave the exchange market as a result of the final rule, he said.

This shift is expected to increase gross premiums for marketplace plans by 1% next year, with net premiums decreasing by 6%, Pate said during the call.

  • The wrong direction? When the administration announced its plans earlier this year to expand access to short-term coverage options, American Hospital Association President and CEO Rick Pollack called it “a step in the wrong direction for patients and health care providers.” If consumers are unaware of the limits on their skimpy coverage, it could ultimately drive bad debt for hospitals, he said.
  • Disclosure requirements beefed up: The final rule includes additional language to make sure consumers know what they are buying, Pate said. “We fully recognize these products are not necessarily for everyone, but we do think they will provide an affordable option to many, many people who have been priced out of the current market under the Obamacare regulation,” he said.
  • There’s an opportunity for insurers. As consumers gain interest in their short-term options, insurers will have an opportunity to meet the rising demand. “The impact is going to vary depending on the insurer, whether this is a business they have been in in the past and whether they have been longing to get back into it when consumer interest reached an acceptable level,” Christopher Holt, director of healthcare policy with D.C.-based think tank American Action Forum, told HealthLeaders Media. “There also could be some who see it as a new opportunity to claim a share of the marketplace they’re not reaching.”
  • But insurers have some skepticism. Matt Eyles, president and CEO of America’s Health Insurance Plans, wrote a letter to HHS in April. “We are concerned that substantially expanding access to short-term, limited duration insurance will negatively impact conditions in the individual health insurance market, exacerbating problems with access to affordable comprehensive coverage for all individual market consumers,” Eyles wrote.
  • Trump administration boosters: Beyond simply opening a door to longer short-term plans, the Trump administration has touted these and other non-ACA-compliant options as viable rescue mechanisms for individuals squeezed by rising premiums. Navigators, who have been tasked in past years with helping people sign up for exchange coverage, will now be encouragedto provide information on short-term and association health plans as well.
  • States can block: The final rule released Wednesday addresses the federal government’s definition of short-term limited-duration health insurance, but states retain the authority to impose stricter regulations, Pate said. They can limit or even ban the plans altogether.

While lawmakers seem to have backburnered their aspirations for broad healthcare reform in the near-term, Parker said the administration will continue taking incremental steps to improve affordability of coverage.

 

 

Reinsurance in Wisconsin expected to stabilize individual market

https://www.healthcarefinancenews.com/news/reinsurance-wisconsin-expected-stabilize-individual-market?mkt_tok=eyJpIjoiTVdJMVlUVmtNMlppTUdZNSIsInQiOiJublwvXC83VVdcL2dcL1U3a3FHNGNMRHppSldoOThiRGtNQXk4UFJyZE5FUkRQeWZWZEQ1NDMxT3FZeGRhZjdGOUlnQUtaQTUyeEMrcnBSaDNKQjZLWEIzRkVCaFlNelNXSmI1R1ZrZFdOcXlzTWVUcGk3OXl5WnNRZDlaTjhjN09WM3MifQ%3D%3D

Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

Wisconsin has received a federal waiver to leverage $200 million to implement a state-based reinsurance program to cover high-cost claims in the individual health insurance market.

Reinsurance covers a portion of the most expensive claims. The move helps to stabilize the individual market by reducing insurer claim costs and decreasing premiums.

Insurers don’t have the uncertainty that a small number of high-risk individuals could dramatically increase their expenses because there aren’t enough healthy consumers to balance out the risk pool.

Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

The Department of Health and Human Services and the Department of the Treasury on Sunday approved the 1332 state innovation waiver under the Affordable Care Act. The five-year program starts Jan. 1, 2019 and ends Dec. 21, 2023.

The approved waiver allows the state to have access to $200 million in reinsurance funding. The federal government will pay an estimated $166 million and the state, $34 million.

The program is budget neutral to the federal government. The money comes from savings from premium tax credits. The federal waiver allows the premium tax credits to be passed through to the state, rather than going directly to the consumer.

Consumers will see the savings in an expected 3.5 percent drop in their premiums in the individual market, starting in 2019, according to a released statement from the Centers for Medicare and Medicaid Services and Wisconsin Governor Scott Walker. This compares to a 44 percent rate hike on premiums in 2018.

Walker submitted the waiver request for the state’s Health Care Stability Plan in April.

In an unrelated waiver request, Wisconsin has asked to impose work requirements as a condition of Medicaid beneficiaries receiving coverage.

While CMS Administrator Seema Verma and HHS Secretary Alex Azar have reportedly said that a judge’s decision in Kentucky barring work requirements will not stop the Trump administration from considering similar waivers, Wisconsin’s request awaits federal approval.

Last month, a federal judge blocked Kentucky’s plan to implement a work requirement waiver. In light of the action, CMS decided to reopen Kentucky’s 30-day federal public comment through August 18.