Tag Archives: Health Insurance Market Uncertainty

How Have Health Insurers Performed Financially Under the ACA’s Market Rules?

Posted on by • Posted in Uncategorized • Tagged , , , , • Leave a comment

http://www.commonwealthfund.org/publications/issue-briefs/2017/oct/health-insurers-perform-financially-aca-market

Image result for How Have Health Insurers Performed Financially Under the ACA's Market Rules?

Abstract

  • Issue: The Affordable Care Act (ACA) transformed the market for individual health insurance, so it is not surprising that insurers’ transition was not entirely smooth. Insurers, with no previous experience under these market conditions, were uncertain how to price their products. As a result, they incurred significant losses. Based on this experience, some insurers have decided to leave the ACA’s subsidized market, although others appear to be thriving.
  • Goals: Examine the financial performance of health insurers selling through the ACA’s marketplace exchanges in 2015 — the market’s most difficult year to date.
  • Method: Analysis of financial data for 2015 reported by insurers from 48 states and D.C. to the Centers for Medicare and Medicaid Services.
  • Findings and Conclusions: Although health insurers were profitable across all lines of business, they suffered a 10 percent loss in 2015 on their health plans sold through the ACA’s exchanges. The top quarter of the ACA exchange market was comfortably profitable, while the bottom quarter did much worse than the ACA market average. This indicates that some insurers were able to adapt to the ACA’s new market rules much better than others, suggesting the ACA’s new market structure is sustainable, if supported properly by administrative policy.

Background

Glossary

Premium is adjusted premium earned, net of licensing and regulatory fees.

Gross medical costs are incurred medical claims adjusted for cost-sharing payments and quality-improvement expenses but prior to reinsurance and risk-adjustment payments.

Net medical costs are incurred medical claims adjusted for cost-sharing payments, quality-improvement expenses, reinsurance, and risk-adjustment payments.

Cost-sharing reduction (CSR) payments are funds the government pays to insurers to lower patient cost-sharing for lower-income members.

Reinsurance reimbursed insurers for part of costs for patients with especially high claims, but only during the first three years of the ACA (2014–2016).

Risk adjustment transfers money from insurers with lower-risk members to those with higher-risk members so that insurers with different risk pools price their products closer to the market average.

Quality-improvement expenses include activities in the following categories: improving health outcomes, preventing hospital readmissions, improving patient safety and reducing medical errors, increasing wellness and promotion, and implementing health information technology. Quality-improvement expenses are included along with medical expenses in the numerator of the medical loss ratio for purposes of calculating rebates owed under the ACA.

Administrative costs includes sales expenses, claims adjustment costs, and salary and benefit expenses, as well as all other general corporate overhead costs.

Profit or loss is calculated by subtracting net medical costs and administrative costs from net premium earned. It does not include profit or loss from investments or taxes on investments.

The Affordable Care Act (ACA) created an entirely new marketplace for individual health insurance through three key reforms: a prohibition against charging more for premiums based on subscribers’ health status or risk, providing substantial subsidies for millions of people to purchase individual coverage, and an “exchange” structure that facilitates comparison shopping among insurance plans. In addition, the ACA limits the percentage of premiums insurers can devote to profit and administrative expenses and requires state or federal regulators to evaluate any rate increases requested by insurers.

Because the ACA transformed the market so fundamentally, it is no surprise that the transition was not entirely smooth.1 Because insurers lacked experience with these market conditions, they were uncertain about how to price their products2 and some had significant losses.3 A number of newly established insurers that focused on the individual market went out of business entirely4 and a substantial number of others decided to leave the individual market.5Others, however, appear to be thriving.6

Overall, insurers lost money in the ACA’s individual market in each of the first three years. To date, 2015 has been the worst year, but some insurers did better than others.7 To better understand this varied financial performance, this issue brief analyzes financial data for 2015 reported by insurers from 48 states and D.C. to the Centers for Medicare and Medicaid Services (CMS).8 It is important to analyze marketwide financial performance because the experience in particular states or among specific insurers may not represent conditions generally. Lessons from better-performing parts of the market in the ACA’s most difficult year could help improve areas with worse performance and encourage the adoption of policies that avoid future market turmoil.

We focus on data for “qualified health plans” (QHPs) — that is, products that insurers are certified to sell through the ACA’s “marketplace” exchange. Although insurers also sell QHPs outside the exchanges, premium subsidies are available only for plans sold on the exchanges. Thus, the exchanges account for over three-fourths of QHP sales.9 For insurers to be willing to participate in the exchanges, they must be able to achieve adequate financial results. In turn, their participation is critical to providing coverage and choice to the millions of Americans who are eligible for subsidized insurance.

Based on our analysis of “credible” insurers (i.e., those with more than 1,000 members), we find that QHPs suffered losses of 10 percent overall in 2015. The top quarter of insurers had profits of 7 percent while the bottom quarter had losses of 37 percent. This indicates that some insurers were able to adjust to the ACA’s new market rules much better than others. Because financial performance has improved substantially since then,10 the ability of some insurers to achieve acceptable results even in the ACA’s worst year confirms analyses by the Congressional Budget Office and the former White House Council of Economic Advisors that the ACA’s market structure is sustainable, if properly supported by administrative policy.11

Study Findings

Variation in Profitability

We identified 214 insurers across different states in 2015 with more than 1,000 members in QHPs. Overall, these insurers’ marketplace plans did not fare well in 2015. As shown in Exhibit 1, across the ACA market as a whole, insurers lost almost 10 percent of premiums from their QHP products, amounting to a loss of $33 per member per month (pmpm). This compares with a 6 percent loss overall in 2014 (or $19 pmpm; data not shown). Losses were large in 2015, even after accounting for substantial reinsurance payments of $45 pmpm (or 13% of premium) that insurers received to help offset higher-cost patients. Without these reinsurance payments, losses would have totaled $78 pmpm.

Although insurers’ losses were substantial, they were not as dismal as some pessimistic analysts had projected.12Moreover, some insurers did substantially better than the market overall. Dividing insurers into quartiles based on profitability,13 the top quarter generated rather handsome profits overall of 7 percent, amounting to $25 pmpm — $58 pmpm better than the market average. These profits resulted from two key factors: somewhat higher QHP premiums of $20 pmpm over the market average, coupled with somewhat lower net medical costs of $39 pmpm less than the market average. Better-performing insurers received the same amount of help from reinsurance and risk adjustment as the average insurers. This illustrates that although their medical claims were somewhat lower than the market average, the better-performing insurers did not have substantially healthier enrollees.14 Instead, they appear to have done a better job of either anticipating QHP subscribers’ true medical costs or of controlling those costs (or both).

In contrast, QHP insurers in the bottom quartile did substantially worse on both premiums charged and medical costs incurred. Their net medical costs were $66 pmpm greater than the market average (or $105 more than the best-performing quartile) and their premiums were $14 pmpm lower than the market average. It appears that the premiums of worse-performing insurers failed to anticipate the extent of medical claims their QHP subscribers would generate. These higher claims were partially offset by reinsurance and risk-adjustment payments totaling $68 pmpm — an amount that is 51 percent higher than the market average — but this was not sufficient to offset premiums that were substantially underpriced. Thus, the bottom quartile had an overall loss of 37 percent of premiums — or $120 pmpm, which was three-and-a-half times more than the average loss.

Change in Profitability

To further understand how insurers’ experiences differed in 2015, we analyzed how QHP financial performance changed from 2014 to 2015 (Exhibit 2). Focusing on the 175 insurers who had at least 1,000 members in each year, we divided insurers according to whether they were profitable or unprofitable in 2015.

Among the more than two-thirds of insurers that were unprofitable in 2015, losses increased substantially from 2014: from 10 percent to 17 percent of premium. More than two-thirds of these insurers were also unprofitable in 2014 and their loss levels were similar each year (20% of premium, data not shown). Thus, the increased losses overall were driven by the 38 insurers that went from an 11 percent profit in 2014 to a 9 percent loss in 2015 (data not shown).

Profitable insurers in 2015 were also profitable in 2014, on the whole, but their operating margins dropped, from 8 percent to 5 percent. Three-quarters of these insurers were also profitable in 2014. The group that became profitable in 2015 did so mainly because — in contrast with other insurers — their medical claims declined slightly (data not shown).

Overall, insurers with financial losses did worse in 2015 because net medical costs increased (by 13%, or $40 pmpm) and because their premium increase was only modest (4%, or $13 pmpm). Insurers that had a loss in 2014 increased their premiums 6 percent while those that went from being profitable in 2014 to having a loss in 2015 kept their premiums the same, despite increasing medical costs (data not shown).

Net medical costs for insurers with losses increased primarily because of a 32 percent reduction (or $23 pmpm) in offsetting reinsurance and risk-adjustment payments, and, to some degree, because of a 5 percent increase ($17 pmpm) in gross medical costs. The same pattern was also true for profitable insurers in 2015: their 10 percent increase ($27 pmpm) in net medical costs was due more to the 23 percent decrease ($15 pmpm) in offsetting reinsurance and risk-adjustment payments than to the 4 percent ($12 pmpm) increase in gross medical costs.

In sum, it does not appear that losing insurers suffered substantially from a simple increase in medical claims. Instead, their modest premium increases failed to correct for the previous year’s losses or to anticipate reductions in cost-reducing reinsurance and risk-adjustment payments. Competitive pressures on the exchanges may have caused these insurers to keep their premium increases in check. As for anticipating net medical costs, when insurers set their premiums for 2015, actuaries had only a few months of experience from 2014 on which to base their projections and they did not have the results from the ACA’s reinsurance and risk-adjustment programs. Thus, actuaries lacked the information they needed to make more precise estimates.

It also appears that unprofitable insurers simply were not able to offer prices that could compete well with profitable insurers. On average, the premiums for unprofitable insurers were $20 pmpm less than profitable ones — both in 2014 and 2015 — despite having net medical expenses that were from $41 to $55 greater on a pmpm basis. From these data, we cannot determine to what extent these greater medical expenses are the result of differences in subscribers’ underlying health risks or to differences in insurers’ ability to manage and control health care spending.

Discussion

The fundamental reforms of the Affordable Care Act — subsidizing coverage, establishing insurance exchanges, and making insurance available to people with preexisting conditions — changed market conditions in ways that insurers initially had difficulty predicting.15 Our analysis shows that these difficulties worsened in the second year of full ACA market reforms: insurers suffered a 10 percent loss overall in 2015 compared to a 6 percent loss in 2014 for their qualified health plans.

Our findings, along with other analyses,16 show that this decline was not because of substantially greater medical costs per person. Instead, because insurers had not yet had enough experience under the new market conditions when they filed their rates for 2015, many underpriced their products relative to their members’ health risks. It appears now that this underpricing was a short-term issue. As insurers gained more experience in the reformed market, their financial performance in the ACA’s individual market improved substantially in 2016 and many or most appear to be on their way to profitability in 2017.17

Moreover, insurers in the top quarter of the market in 2015 fared much better than the market average and those in the bottom quarter did much worse. This is a sign of inevitable market “shake out,” as some insurers learn that they are not as well positioned to compete in the new market as are others.18 As worse-performing insurers either leave the market or change their strategies, overall financial performance is improving substantially. Even if some insurers continue to struggle financially, the ability of many to achieve acceptable results in the ACA’s worst year to date suggests — along with other recent evidence19 — that the ACA’s market structure is inherently sustainable in the long run.

Long-run sustainability depends, however, on insurers being able to maintain profitability. As the new administration shifts its regulatory policies and Congress contemplates ACA replacements, new threats to market stability have emerged.20 It was difficult for insurers to achieve profitability when they were unable to predict and accurately price for the impact of changing market rules and implementation policies. As insurers regain their footing after a rocky transition, it would be unfortunate to reintroduce or aggravate elements of uncertainty and instability that they have only recently overcome.

How Trump is planning to gut Obamacare by executive order

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , • Leave a comment

https://www.vox.com/policy-and-politics/2017/10/8/16439492/trump-obamacare-association-health-plans

Image result for aca repeal

 

With a repeal bill off the table, the Trump administration has drafted an executive order that could blow a huge hole in the Affordable Care Act, according to a source with direct knowledge of the plan.

The order would, in effect, exempt many association health plans, groups of small businesses that pool together to buy health insurance, from core Obamacare requirements like the coverage of certain essential health benefits. It would potentially allow individuals to join these plans too, which would put individual insurance marketplaces in serious peril by drawing younger and healthier people away from them.

The draft order is also said to broaden the definition of short-term insurance, which is also exempt from the law’s regulations. Together, these changes represent a serious threat to Obamacare: President Trump seems ready to open more loopholes for more people to buy insurance outside the health care law’s markets, which experts anticipate would destabilize the market for customers who are left behind with higher premiums and fewer insurers.

“This appears to be a backdoor way of undermining the Affordable Care Act,” Kevin Lucia, who studies the markets at Georgetown University, said of the alleged changes.

It’s possible that the order could change before Trump signs it, or never be signed at all, as has happened with other executive orders in the past. The details of the order as described, though, generally match up with what had been expected after Trump said he would soon issue an executive order on health care. Association health plans have been a priority for Sen. Rand Paul (R-KY), who has urged Trump to expand them.

The White House declined to comment when Vox inquired about the pending order. A senior administration official detailed the outline of the executive order to the Wall Street Journalon Saturday evening, which aligns with the description provided to Vox.

On Tuesday morning, Trump promised that his forthcoming actions would provide “great HealthCare to many people.”

But experts have warned they could significantly destabilize the Obamacare markets.

Association health plans, explained

An association health plan, as Vox’s Sarah Kliff has previously explained, is a way for a group of small businesses pool together to buy insurance, giving them more purchasing power and access to cheaper premiums. A group of bakeries, for example, might form a bakers association and purchase health coverage together. The most famous examples have been farm bureaus, which allowed independent farming businesses to band together and get insurance.

Before Obamacare, national associations could pick and choose which states’ insurance rules they wanted to follow and use those rules to guide the plans they offered nationwide. The bakers association could choose to follow the rules for, say, the Alabama insurance market, which mandates coverage of relatively few benefits, for all its bakeries in New York, a state with many mandates.

The result was often health insurance that skirted state rules and was a better deal for businesses with young and healthy employees, who are likely to prefer skimpier health plans. The former insurance regulator described the situation prior to the ACA to Kliff as being “a race to the bottom, with some associations offering lower-cost plans that covered virtually nothing.”

Obamacare changed these rules. Association health plans were treated as small businesses and were therefore required to cover all of the law’s mandated benefits.

Essential health benefits, mandating that insurers cover everything from hospital care to prescription drugs to maternity care, are central to the ACA’s insurance protections: They prevent plans from crafting their coverage to attract mostly young and healthy customers at the expense of older and sicker people, which had been one of the primary problems with the association health plan model before the law.

How Trump’s executive order could damage Obamacare

Requiring association health plans to follow the same rules as small businesses was one of the many ways the Affordable Care Act cracked down on skimpy health plans. Trump is now looking to roll back those changes.

Under the draft executive order as described, new regulations would allow association health plans to be considered large employers when it comes to health insurance. Large employers are not subjected to the same rules as individual or small-group plans under Obamacare. Most notably, they do not have to cover all of the law’s essential health benefits or meet the requirement that insurance cover a minimal percentage of a person’s medical bills.

If that change were made, association health plans would be freed to craft skimpier (and cheaper) health plans that appeal only to businesses with younger and healthier employees. Small businesses left in Obamacare’s marketplace would likely face higher costs and fewer options as the market became less attractive to insurers.

“It will destroy the small-group market,” Tim Jost, a law professor at Washington and Lee University who generally supports Obamacare, told me. “We’ll be back to where we were before the Affordable Care Act.”

The draft order did not specify whether individuals would also be allowed to buy into these associations health plans, as some Republicans like Paul want. But, according to the source, the regulations resulting from the order could potentially be written to allow self-employed people to buy into the now-deregulated association market, which would be an even bigger blow to Obamacare.

The self-employed individuals likely to flee the law’s markets for association plans would probably be younger and healthier, leaving behind an older, sicker pool for the remaining Obamacare plans. That has the makings of a death spiral, with ever-increasing premiums and insurers deciding to leave the market altogether.

“The ability for individuals to purchase health insurance through an association really puts the individual market at risk and destabilizes it over the long term,” Lucia said. “When you have market segmentation, it over time leads to higher premiums and it becomes less attractive to carriers.”

Trump is also eyeing short-term coverage to undercut the health law

Trump’s executive order would also expand what’s called short-term limited duration insurance. These short-term policies typically have higher out-of-pocket costs and cover fewer services than traditional insurance. They were designed for people who, for example, expect to be out of work and therefore without insurance for a limited period of time.

That kind of coverage is totally free from the health care law’s insurance regulations: the mandate to cover essential health benefits, the prohibition on charging sick people more than healthy people or denying people coverage based on their medical history, and so on.

Short-term insurance had previously been allowed to last as long as 364 days. The Obama administration, in an effort to curtail the use of such coverage to circumvent the health care law, shortened it to three months. Trump’s draft order would reverse that rule, once again allowing people to buy this non-Obamacare coverage for almost an entire year, my source said.

The effect would be much the same as the changes to association health plans: Healthier people would be the consumers most likely to use this escape hatch to find cheaper, if far less comprehensive, coverage outside of Obamacare — though they would still be subject to the law’s individual mandate, as short-term insurance is not considered sufficient.

“If you allow them to sell 364-day policies, or policies that are renewable, that’s just going to suck a lot of the healthy people out of the individual market,” Jost said.

And here, again, fewer healthy people in the Obamacare market means higher costs to insurers, which leads to higher premiums and possibly more insurers dropping out.

“Consumers are going to face a less stable, less competitive individual market,” Lucia said.

The ultimate impact on Obamacare will depend on the final language of the executive order Trump signs. But based on the draft described to me, Trump is readying the devastating blow to the health care law that congressional Republicans have so far failed to deliver.

Trump could make waves with health-care order

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , • Leave a comment

Trump could make waves with health-care order

Image result for essential health benefits

President Trump’s planned executive order on ObamaCare is worrying supporters of the law and insurers, who fear it could undermine the stability of ObamaCare.

Trump’s order, expected as soon as this week, would allow small businesses or other groups of people to band together to buy health insurance. Some fear that these association health plans would not be subject to the same rules as ObamaCare plans, including those that protect people with pre-existing conditions.

That would make these plans cheaper for healthy people, potentially luring them away from the ObamaCare market. The result could be that only sicker, costlier people remain in ObamaCare plans, leading to a spike in premiums.

“If this executive order is anything like the rumors then it could have a huge impact on stability of the individual insurance market,” said Larry Levitt, a health policy expert at the Kaiser Family Foundation.

Andy Slavitt, a former top health-care official in the Obama administration, warned that insurers could drop out of the Affordable Care Act markets because of the order.

“I am now hearing that the Executive Order may cause insurers to leave ACA markets right away,” Slavitt tweeted on Sunday.

Slavitt argues the order is part of Trump’s broader effort to undermine ObamaCare. He said the order could accomplish through executive action what Congress failed to do through legislation.

But supporters say Trump’s move could unleash the free market and lower prices for consumers.

Sen. Rand Paul (R-Ky.) has been pushing for the order, arguing it is something Trump can do without Congress to give people an alternative to ObamaCare.

“This is something I’ve been advocating for six months,” Paul said on MSNBC in late September.

“I think it’s bigger than Graham-Cassidy, it’s bigger than any reform we’ve even talked about to date, but hasn’t gotten enough attention,” Paul added, referring to the failed Republican repeal-and-replace bill co-sponsored by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.).

Paul said allowing more people to band together to purchase health insurance gives them more leverage to lower premiums than when people are buying coverage on their own.

The National Federation of Independent Businesses (NFIB), which has long opposed ObamaCare, supports expanding association health plans and has been advocating for action.

“Allowing people more affordable arrangements is not a bad thing,” said Kevin Kuhlman, director of government relations at the NFIB. He said fears about undermining ObamaCare markets are “overblown.” His group is waiting to review the details of the order, which he said he expects to be issued on Thursday.

Association health plans already exist, but Trump’s order could allow them to expand and get around ObamaCare rules, creating plans that are only for healthy people.

Experts pointed to the Tennessee Farm Bureau, which currently offers an association health plan in the state that, through a loophole, does not have to follow ObamaCare rules.

The plan has about 73,000 enrollees and may be one of the reasons that Tennessee’s ObamaCare market has struggled, according to researchers at Georgetown University.

There is still much uncertainty about the order. Many observers doubt that Trump has the power to change much on his own.

Tim Jost, a health law expert at Washington and Lee University, said it is hard to imagine how the White House could find the legal authority to expand association health plans to individuals. The move would likely draw legal challenges.

A more likely action, Jost said, would be to expand association health plans so that it is easier for small groups to form them. That could destabilize the small group insurance market but would be a less sweeping step than expanding association health plans to individuals.

Given the limits on his authority, Trump is likely to direct agencies, including the Department of Health and Human Services and the Department of Labor, to issue guidance or regulations. Those additional steps will prolong the process.

Insurers are worried about the potentially destabilizing effects of the order. Lobbyists said insurers had begun quietly working on the issue and talking to the administration but do not yet know how far-reaching the effects would be.

It is possible there could be legal challenges to the regulations. The order would change the interpretation of a 1974 law called the Employee Retirement Income Security Act. That interpretation could be challenged in court, for example if the order sought to allow individuals, not just small groups, to join association health plans.

“There will likely be challenges,” said Kevin Lucia, a professor at Georgetown University’s Center for Health Insurance Reforms.

Lucia said the planned order, in combination with other steps the Trump administration is taking, like cutting back on outreach efforts, “really undermines the future of the individual market.”

A sicker group of enrollees remaining in the ObamaCare plans poses problems.

The changes “will lead to less [insurers] playing in this market and potentially a sicker risk pool which translates to higher premiums,” Lucia said.

Cori Uccello, senior health fellow at the American Academy of Actuaries, said that one aspect to watch in the order is when the changes will take effect. Insurers have already set their prices and made plans for 2018.

“Anything that applied to 2018 would be incredibly destabilizing,” she said. “It would still be destabilizing in 2019 but people would know ahead of time.”

Steep Premiums Challenge People Who Buy Health Insurance Without Subsidies

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , • Leave a comment

http://www.npr.org/sections/health-shots/2017/10/07/555957419/steep-premiums-challenge-people-who-buy-health-insurance-without-subsidies

Image result for Uninsured

Paul Melquist of St. Paul, Minn., has a message for the people who wrote the Affordable Care Act: “Quit wrecking my health care.”

Teri Goodrich of Raleigh, N.C., agrees. “We’re getting slammed. We didn’t budget for this,” she says.

Millions of people have gained health insurance because of the federal health law. Millions more have seen their existing coverage improved.

But one slice of the population, which includes Melquist and Goodrich, is unquestionably worse off. They are healthy people who buy their own coverage but earn too much to qualify for help paying their premiums. And the premium hikes that are being announced as enrollment looms for next year — in some states, increases topping 50 percent — will make their situations more miserable.

Exactly how big is this group? According to Mark Farrah Associates, a health care analysis firm, as of 2017, there were 17.6 million people in the individual market, 5.4 million of whom bought policies outside the health exchanges, where premium help is not available. Combine that with the percentage of people who bought insurance on the exchanges but earned too much (more than four times the federal poverty level, or about $48,000 for an individual) to get premium subsidies, and the estimate is 7.5 million, or 43 percent of the total individual market purchasers, according to insurance industry consultant Robert Laszewski.

Who are these people?

“They’re early retirees,” says Laszewski. “They’re people working part time who have substantial outside income. They’re people who are self-employed of any age, people who are small employers.”

Melquist is one of those early retirees. He and his wife are both 59. He worked in the defense industry and retired at the end of 2016.

He always planned to retire at age 55 but ended up working longer, in part because he knew health insurance costs were rising. When he did retire and sought to purchase coverage for himself and his wife, he says, “I was shocked to find out how bad it actually was.”

For a bronze-level plan with a health savings account, Melquist says, “we pay $15,000 a year [in premiums] and the first $6,550 [for health care expenses] for each of us comes out of our pocket. So basically you could be looking at $30,000 out of pocket before anything gets covered.”

Insurance is important, Melquist says, particularly if a catastrophic health issue were to hit either of him or his wife. In the meantime, he can still pay the bills. But he’s frustrated. “I’m not eating dog food, but I’m also not able to do stuff for my grandchildren,” he says, like help with college costs. “It’s not that my life is falling apart, but the [Affordable Care Act] has ruined a lot of things I’d like to have done.”

The good news, if there is any, for Melquist is that premiums in Minnesota are going up by only small amounts for 2018, and in some cases going down, because of a reinsurance program passed by the state legislature that will help cover the costs for some of the state’s sickest patients in the individual market. That move will help keep premiums from spiking even more.

But that won’t be the case in Raleigh, where Goodrich and her husband, John Kistle, work as private consultants in the energy industry.

Goodrich, 59, and Kistle, 57, bought insurance through the ACA exchange in their state for three years. When premiums reached $1,600 per month with deductibles of $7,500 each, however, “it was just unbelievable. We decided just not to get insurance,” Goodrich says.

Eventually, they bought short-term plans that cover only catastrophic illness or injury. That insurance is not considered adequate under the ACA, so the couple could be liable for a tax penalty as well.

Goodrich, who volunteers to help people with their taxes in her spare time, says she has run the numbers and thinks that insurance is so expensive where she lives that the couple will be exempt from the penalty. That is because the cheapest insurance would cost the couple more than 8.16 percent of their income. Under the health law’s provisions, the penalty doesn’t apply above that level because insurance is considered unaffordable.

“We try to be good citizens and do the right thing,” she says. “Next year, we’re trying to figure out how to make less than $64,000 so we can get subsidies.” That amount is equal to 400 percent of the federal poverty line for two people, the cutoff for premium assistance because Congress assumed those who earned more could afford to buy affordable coverage.

Sabrina Corlette, a research professor at Georgetown University who specializes in health insurance, agreed that this is a population “that faced big hikes” in premiums when the health law took effect.

But, she says, in many cases, people in the individual market were previously paying artificially low premiums. Some of those old policies had substandard coverage. For others, however, the higher prices are the result of one of the fundamental changes enacted by the health law. “These are folks who were benefiting from a system that was affordable solely because insurers were able to keep sick people out,” Corlette says, adding that they are now being asked “to pay more of the true cost of health care.”

This is a population that is also more likely to vote Republican, says Laszewski, “which is one of the grand ironies now.”

Republicans in Congress and President Trump haven’t been able to “repeal and replace” the health law. But some of their efforts are undermining it — primarily the administration’s threat to stop paying billions of dollars to insurers in subsidies to help some lower-income people pay their out-of-pocket costs. The uncertainty surrounding those subsidies has led insurers to boost premiums next year by an estimated 20 percent. Those who get premium help from the government won’t have to pay more. But those who are paying the full freight will.

Also driving up premiums for next year, says Corlette, are the administration’s threats not to enforce the individual requirement for insurance and its decision to cancel most advertising and outreach for the year’s open-enrollment period that begins Nov. 1. Both of those provisions bring more healthy people into the insurance pool to help spread costs.

“One could argue that the 2014 premium increases were painful, but it was about getting us to a system that was more fundamentally fair and just,” Corlette says. “Now, it’s completely unnecessary price increases for unsubsidized folks that could so easily be avoided by a rational political system.”

Senate leaves town with no Obamacare fix

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , • Leave a comment

State Department: China, Russia want to ‘break the West’

Image result for leaving on a jet plane

The Senate left town on Thursday for more than a week without reaching a deal to stabilize Obamacare’s marketplaces.

Talks between Democrats and Republicans started up again in earnest late last month after the GOP’s latest attempt at Obamacare repeal collapsed. However, the Senate left town Thursday without finalizing any deal, although negotiators pledged to continue talks.

Meanwhile, the Senate is in recess all of next week and won’t return until Oct. 16, just a few weeks before 2018 open enrollment starts on Nov. 1. A Senate aide said there is “no question a sense of urgency if you want to have impact on 2018.”

Sen. Lamar Alexander, R-Tenn., leading the Republican side of the talks, said Thursday that Democrats and Republicans remain in good faith negotiations.

When asked if it was too late to reach an agreement to affect the 2018 coverage year, Alexander quickly responded “no.”

Sen. Patty Murray, D-Wash., did not give a timeline for when to finish a deal.

“We are absolutely working on this. No one should think this is easy,” she said.

Some senators were perturbed they are leaving for a week without any bipartisan plan.

“I had hoped that we would pass before leaving town a bill that would help stabilize the insurance markets and lower premiums,” said Sen. Susan Collins, R-Maine, a major proponent of an agreement.

The basic framework of the agreement is funding insurer subsidies in exchange for giving more flexibility to states for waivers.

The subsidies reimburse insurers for lowering copays and deductibles for low-income Obamacare customers. The Trump administration has been making the payments month to month but has not made a commitment to the payments for 2018, which insurers have been pleading with them to do.

Republicans want in exchange for the subsidies greater flexibility and a quicker approval process for states to waive Obamacare regulations for insurers. States have complained the current process for approving waivers by the federal government is slow and burdensome and they want fewer constraints on what regulations they can waive.

Alexander said earlier this week the two sides have “differences in opinion on what amounts to giving states meaningful flexibility in exchange for two years of cost-reduction payments.”

Insurers are already finalizing rates for next year and some could charge higher rates without the subsidies.

For instance, Highmark Blue Cross Blue Shield in Delaware announced Thursday it will raise Obamacare rates by 25 percent next year, according to Delaware Online. The insurer said the rate request was based on the uncertainty surrounding the payments and questions around whether the federal government will enforce the individual mandate that forces people to have insurance.

The nonpartisan Kaiser Family Foundation has estimated that rates for silver plans, the most popular of Obamacare’s three metal tier plans, will go up 19 percent without the payments.

Critics see Trump sabotage on ObamaCare

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , • Leave a comment

http://thehill.com/policy/healthcare/354308-trump-sabotage-seen-on-obamacare

Image result for aca sabotage

The Trump administration is taking a hatchet to ObamaCare after failing to pass legislation through Congress repealing President Obama’s signature law.

The administration has cut funding for advertising and outreach by 90 percent, raising the odds that fewer people will join the health-care exchanges during the fall enrollment period.

It has slashed funds by 41 percent for outside groups that help reach and enroll likely ObamaCare consumers.

The enrollment period has also been chopped in half, and the administration announced plans to take down the Healthcare.gov website for maintenance for hours at a time on several days during the sign-up period, two other steps likely to cut into enrollment.

All of these steps could lead fewer people to sign up for the law, which in turn might lead to higher premiums that could force others off the exchanges.

Healthy people are the most likely to drop coverage because of a lack of outreach, leaving a sicker group of enrollees that drives up costs for everyone else.

“One has to assume at this point that enrollment will be lower as a result of the administration’s actions and that will lead to fewer healthier people signing up,” said Larry Levitt, a health policy expert at the Kaiser Family Foundation.

The Trump attacks go beyond enrollment, too.

President Trump has threatened to cut off key ObamaCare payments to insurers in a bid to make the law “implode.”

And on Friday, his administration took a new step to roll back the law, limiting the requirement for employers and insurance plans to cover birth control.

Andy Slavitt, a former top health-care official in the Obama administration, warned on Twitter Thursday that the administration’s “sabotage” of the law added up to what he called “synthetic repeal,” meaning a range of small steps that add up to repealing ObamaCare even if Congress doesn’t act.

The administration counters that ObamaCare is a failing law that should not be propped up.

“Obamacare has never lived up to enrollment expectations despite the previous administration’s best efforts,” a Department of Health and Human Services spokesperson wrote in an emailed statement. “The American people know a bad deal when they see one and many won’t be convinced to sign up for ‘Washington-knows-best’ health coverage that they can’t afford.”

The cuts are having real world consequences already.

Reducing the outreach budget has forced local organizations known as navigators to dramatically scale back their operations.

Shelli Quenga, director of programs at the Palmetto Project, a navigator group in South Carolina, said her organization has had to cut staff from 62 people to 30 after its funding was reduced by around 50 percent.

“You want to talk about designed to fail?” she said. “This is the playbook for how to build something to make sure it fails.”

Quenga said that she only found out about the cut to her organization’s funding after the administration publicly made an announcement about the navigator cuts and she was called by a reporter for reaction.

She said the career officials she works with at the Centers for Medicare and Medicaid Services (CMS) were not aware of or involved in the decision to cut the funding, saying the decision was made at higher levels of the administration.

Navigators across the country had to scramble to craft new plans ahead of the open enrollment period beginning on Nov. 1.

“I’m just feeling very anxious about the fact that we have a whole lot less time to gear up then we should have had,” said Jodi Ray, director of Florida Covering Kids and Families, which is affiliated with the University of South Florida.

“We had a very well thought out plan, and we definitely had to go back and revise that plan, except we didn’t plan on having 3.5 weeks to put it together,” said Ray, whose group will receive $900,000 less, a 15 percent reduction.

A group of former Obama administration officials this week announced plans to launch their own enrollment effort, called Get America Covered, to try to fill the gap left by the cuts.

Insurers and ObamaCare supporters are also on edge about an executive order from Trump that could come as soon as next week loosening rules to allow businesses and other groups to band together to purchase health insurance. The problem is that these special insurance plans are not subject to the same ObamaCare rules and pre-existing condition protections, which could suck the healthy enrollees out of ObamaCare plans and damage the market.

The administration has also resisted efforts by some states, even conservative ones, to make changes aimed at stabilizing ObamaCare.

Iowa submitted an innovation waiver, which lets states alter ObamaCare as long as the law’s basic protections are retained. Part of the proposal included conservative reforms to the Affordable Care Act, yet President Trump reportedly wasn’t on board.

Trump saw a story about the waiver in The Wall Street Journal, and asked CMS to deny it, according to The Washington Post.

The application has not been formally rejected, at least not yet. It is in the midst of a 30-day public comment period, and is still pending, an Iowa Insurance Division spokesman confirmed to The Hill.

But without it, Iowa’s Insurance Commissioner Doug Ommen has warned the impact “on many Iowa families would be catastrophic.”

The deep-red state of Oklahoma had sought a waiver to help stabilize its markets, but withdrew it at the end of September because it hadn’t received approval from the administration in time.

The withdrawal came even after “months of development, negotiation and near daily communication over the past six weeks” between the state and the administration, Oklahoma wrote in a letter complaining to the administration about the lack of action.

“While we appreciate the work of your staff, the lack of timely waiver approval will prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance premiums in 2018,” wrote Terry Cline, Oklahoma’s Commissioner of Health.

 

As ACA enrollment nears, administration keeps cutting federal support of the law

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , , , , , , • Leave a comment

https://www.washingtonpost.com/politics/as-aca-enrollment-nears-administration-keeps-cutting-federal-support-of-the-law/2017/10/05/cc5995a2-a50e-11e7-b14f-f41773cd5a14_story.html?utm_term=.b9039864660d

Image result for sabotaging ACA

 

For months, officials in Republican-controlled Iowa had sought federal permission to revitalize their ailing health-insurance marketplace. Then President Trump read about the request in a newspaper story and called the federal director weighing the application.

Trump’s message in late August was clear, according to individuals who spoke on the condition of anonymity to discuss private conversations: Tell Iowa no.

Supporters of the Affordable Care Act see the president’s opposition even to changes sought by conservative states as part of a broader campaign by his administration to undermine the 2010 health-care law. In addition to trying to cut funding for the ACA, the Trump administration also is hampering state efforts to control premiums. In the case of Iowa, that involved a highly unusual intervention by the president himself.

And with the fifth enrollment season set to begin Nov. 1, advocates say the Health and Human Services Department has done more to suppress the number of people signing up than to boost it. HHS has slashed grants to groups that help consumers get insurance coverage, for example. It also has cut the enrollment period in half, reduced the advertising budget by 90 percent and announced an outage schedule that would make the HealthCare.gov website less available than last year.

The White House also has yet to commit to funding the cost-sharing reductions that help about 7 million lower-income Americans afford out-of-pocket expenses on their ACA health plans. Trump has regularly threatened to block them and, according to an administration official who was not authorized to speak publicly, officials are considering action to end the payments in November.

The uncertainty has driven premium prices much higher for 2018. A possible move by the Treasury Department to ease the requirement that most Americans obtain coverage could further erode a core element of the law.

On Friday, Sen. Margaret Wood Hassan (D-N.H.) called on the administration to abandon its “attempts to sabotage health care markets and raise health care costs for millions.” Such efforts, warn health advocates as well as state and local officials, will translate into more uninsured Americans.

“In Ohio, the Trump administration has already inflicted the damage,” said Lisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks. After its nearly $1.7 million enrollment-assistance grant was cut 72 percent last month, the group decided it no longer could effectively participate. “We are past the point of no return on this,” Hamler-Fugitt said.

HHS has told its regional administrators not to even meet with on-the-ground organizations about enrollment. The late decision, which department spokesman Matt Lloyd said was made because such groups organize and implement events “with their own agenda,” left leaders of grass-roots organizations feeling stranded.

“I don’t think it’s too much to ask the agency tasked with outreach and enrollment to be involved with that,” said Roy Mitchell, executive director for the Mississippi Health Advocacy Program, which receives no federal funding for its ACA efforts. “There’s money for HHS to fly around on private jets, but there’s not money and resources to do outreach in Mississippi.”

Administration officials make no apologies for actions scaling back federal support for the ACA, also known as Obamacare. Trump, Vice President Pence and those carrying out the law at different agencies take most every opportunity to claim that it is failing. HHS Secretary Tom Price’s abrupt resignation Friday, prompted by the furor over his use of expensive chartered planes for work trips, is not expected to shift this overall approach.

After failing to repeal and replace the Affordable Care Act, Republican leaders said it will “implode.” Health-care experts disagree, saying the ACA is stable under current law — but President Trump and congressional Republicans could change that. (Daron Taylor/The Washington Post)

“Obamacare has never lived up to enrollment expectations despite the previous administration’s best efforts,” Lloyd said in an email last week. “The American people know a bad deal when they see one, and many won’t be convinced to sign up for ‘Washington-knows-best’ health coverage that they can’t afford.”

Trump and his aides also are looking for ways to loosen the existing law’s requirements, now that the latest congressional attempt to repeal it outright has failed. The Treasury Department may broaden the ACA’s “hardship exemption” so that taxpayers don’t face costly penalties for failing to obtain coverage, a Republican briefed on the plan said. That is sure to depress enrollment among the younger, healthier consumers whom insurers count on to help buffer the health-care costs of sicker customers.

“We should fully expect the Trump administration to take a more activist route to deal with Obamacare, given the inability of Congress to move through with a repeal-and-replace bill,” said Lanhee Chen, a research fellow at Stanford University’s Hoover Institution.

While the law’s open enrollment period has attracted the most public attention, a more obscure battle within the administration over several states’ proposed changes for their marketplaces speaks volumes about the president’s approach to the law.

It was a Wall Street Journal article about Iowa’s request that provoked Trump’s ire, according to an individual briefed on the exchange. The story detailed how officials had just submitted the application for a Section 1332 waiver — a provision that allows states to adjust how they are implementing the ACA as long as they can prove it would not translate into lost or less-affordable coverage.

Iowa’s aim was to foster more competition and better prices. The story said other states hoping to stabilize their situations were watching closely.

Trump first tried to reach Price, the individual recounted, but the secretary was traveling in Asia and unavailable. The president then called Seema Verma, administrator of the Centers for Medicare and Medicaid Services, the agency charged with authorizing or rejecting Section 1332 applications. CMS had been working closely with Iowa as it fine-tuned its submission.

State Insurance Commissioner Doug Ommen has repeatedly described the “Iowa Stopgap Measure” as critical to expanding marketplace options there. The plan would abolish the ACA exchange there and convert consumer subsidies into a type of GOP-styled tax credit. New financial buffers would help insurers handle customers with particularly high medical expenses.

Without the measure, “over 20,000 middle class farmers, early retirees and self-employed Iowans will likely either go uninsured or leave Iowa,” Ommen warned in a Sept. 19 statement. Those who sign up for 2018 exchange coverage face premium rate increases of 57 percent on average from the single insurer participating.

Some administration officials are still pressing for the waiver to be granted, according to interviews with several Republicans. The HHS spokesman confirmed last week that Iowa’s application “has been deemed complete and is currently under review” but did not address the president’s directive on the matter.

Eliot Fishman oversaw such waivers at CMS during the previous administration and said in an interview that President Barack Obama weighed in on those decisions only in “unusual” cases” toward the end of the process.

“Things that are tough calls typically go to the president, but they go with a [staff] recommendation that often carries a great deal of weight,” said Fishman, now senior director of health policy for the liberal health-care advocacy group Families USA.

Iowa is not the only red state to chafe at the administration’s unwillingness to allow more flexibility.

On Friday, Oklahoma sent a letter to Price and Treasury Secretary Steven Mnuchin saying it was withdrawing its federal waiver request because administration officials had not provided an answer “after months of development, negotiation, and near daily communication over the past six weeks.”

“While we appreciate the work of your staff, the lack of timely waiver approval will prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance premiums in 2018,” wrote Terry Cline, the state’s health secretary.

In at least one case, CMS has approved a waiver in a way that upended a state’s plan to maximize health coverage for its residents. Minnesota applied to CMS for permission to establish a reinsurance program, which can lower premiums by giving insurers a guarantee that they will have limited financial exposure for customers with particularly high medical expenses. The agency informed Gov. Mark Dayton (D) on Sept. 22 that it would provide $323 million for the program since the lower premiums would mean savings to the federal government on subsidies to Minnesotans with ACA health plans.

But, Verma added, the federal government also would cut $369 million in funding for a separate program aimed at residents who earn between 138 percent and 200 percent of the federal poverty level and don’t qualify for the same subsidies.

Minnesota’s entire congressional delegation, Democrats and Republicans alike, issued a joint statement saying they were “disappointed that our state is facing a last-minute penalty” and “exploring possible paths forward.”

Sen. Patty Murray (Wash.), the top Democrat on the Health, Education, Labor and Pensions Committee, said Trump should devote time to forging a bipartisan agreement to stabilize the ACA marketplaces.

“If he is only interested in sabotaging the market, that is a dangerous road for him to ride, because he will own it,” she said.

With Affordable Care Act’s Future Cloudy, Costs for Many Seem Sure to Soar

Posted on by • Posted in Uncategorized • Tagged , , , , , • Leave a comment

Image result for cost sharing reduction payments

Health insurers are aggressively increasing prices next year for individual policies sold under the federal health care law, with some raising premiums by more than 50 percent.

By approving such steep increases for 2018 in recent weeks, regulators in many states appeared to be coaxing companies to hang in there, despite turmoil in the market and continuing uncertainty in Congress about the future of the law, the Affordable Care Act.

In Georgia, the state insurance commissioner, Ralph T. Hudgens, an outspoken critic of the law, often referred to as Obamacare, said the rates he approved would be up to 57.5 percent higher next year. The state had already lost Anthem, the large insurer that offers for-profit Blue Cross plans in several states, which left many markets in Georgia.

“Obamacare has become even more unaffordable for Georgia’s middle class,” Mr. Hudgens said in a statement. “I am disappointed by reports that the latest Obamacare repeal has stalled once again and urge Congress to take action to end this failed health insurance experiment.”

In Florida, the average rate increase will be about 45 percent, according to state regulators. And in New York, where officials said prices would still be below where they were before the law took effect, premiums were expected to increase by an average of about 14 percent. Many states have not made insurers’ rate increases public, and experts said the rise in costs for consumers could run from 10 percent to nearly 60 percent.

There are exceptions. Minnesota, which sought a federal waiver to address the high cost of premiums, said this week that prices for plans sold on the state exchange there would remain stable or drop significantly in 2018.

Those who qualify for federal subsidies, a group that accounts for about 85 percent of the roughly 10 million people who buy insurance through the marketplaces created under the health law, will largely be shielded from the higher prices.

Regulators in Florida and New York said that residents of those states who qualified for the most generous subsidies could see lower prices next year, depending on which plan they buy. In some places, the least expensive plans could become free after customers apply their subsidies. (Deficit hawks will probably complain about the higher federal outlays for subsidies.)

People who earn too much to qualify for financial assistance will feel the brunt of any increases. Because many insurers raised prices most sharply on plans that are attractive to people who receive the most generous subsidies, those unable to get subsidies may have to shop for plans that are not affected or look beyond their state marketplaces for lower-priced options.

The final prices and policies available for all plans may not be public until Nov. 1, leaving many consumers confused about coverage costs as a shortened period of open enrollment for health care insurance under the Affordable Care Act begins.

The insurance companies have defended the rate increases, saying they were unavoidable under the current circumstances. After the latest Senate effort to repeal the health law collapsed, insurers still have no commitment about whether the government will continue to allocate millions of dollars in critical financing. Some lawmakers have renewed talk of a bipartisan solution to guarantee that the money keeps flowing, but there is no resolution — forcing insurers to set rates without an agreement.

The Trump administration has sent mixed signals about whether it will enforce key elements of the law like the individual mandate, which encourages healthy people to sign up for insurance or be charged a tax penalty. If insurers cannot spread out the cost of coverage for people with high medical bills over a large enough group, they may be inclined to raise premiums even higher.

“We’re all pricing up for it,” said Dr. Martin Hickey, the chief executive of New Mexico Health Connections, one of the few remaining insurance start-ups created by the federal law. New Mexico Health Connections recently expanded an existing partnership with Evolent Health, a public company, which will provide additional capital.

In New Mexico, the average rate increase for plans sold on the state marketplace is about 30 percent. “Half of that increase is due to the uncertainty in Washington and the inability to lead,” said John G. Franchini, the state insurance regulator. The four insurers selling policies in the state marketplace are offering more types of plans.

After a slow start, many insurers have been making money in the individual market for the past year or so. Premiums have generally risen faster than underlying medical expenses, according to a recent analysis by the research firm Mark Farrah Associates. With rates set to climb much higher next year, insurers could see profits rise significantly too.

But questions about the insurance market’s future make it nearly impossible to come up with accurate projections. Regulators and actuaries said that the higher rates reflected a conservative approach as a cushion against potentially sizable losses.

“It’s very hard for a regulator to deny those rate increases when we can take a look at their bottom line and can tell they can’t continue if they can’t keep their head above water,” said Mike Kreidler, Washington State’s insurance commissioner and a supporter of the health law.

Actuaries said that the higher rates were justified. The insurers “are really struggling,” said Kurt Giesa, a partner with Oliver Wyman, a consultant that has worked with regulators to review rates. “They have been working hard to adapt to what they are faced with right now,” he said.

And although they have been raising prices aggressively, “it doesn’t mean that insurers couldn’t lose money,” said Deep Banerjee, an industry analyst for Standard & Poor’s who has been following the improved profitability of Blue Cross plans. “The trend has been improving but the market is still fragile,” he said.

The uncertainty over paying insurers for the so-called cost-sharing reductions, which limit out-of-pocket medical costs for people with low incomes, remains problematic. Most state regulators let insurers set prices to cover the cost of the required reductions, but several did not.

The Trump administration has been paying insurers on a month-to-month basis; a legal challenge over the payments by House Republicans has left the issue in limbo.

In the states that did not allow insurers to account for a loss of federal funding, the rates would be “inadequate” if that funding went away, said David M. Dillon, a fellow with the Society of Actuaries who has also worked with several state regulators. They “are just hopeful that something can be fixed later on,” he said.

Two insurers pulled out of the markets at the last minute because of the confusion. Medica stopped offering coverage in North Dakota next year because regulators said insurers had to assume the financing would continue; Anthem abandoned the Maine marketplace because the money had not been guaranteed.

Mr. Kreidler of Washington approved two sets of rates but is only allowing insurers to charge the lower set. If the government stops paying for the subsidies, he said, “It’s going to be a real challenge.”

If Congress or the administration decide to keep providing the subsidies, prices will be higher than necessary if insurers raised their rates to make up for a loss of the funding. “We’ll see if we can lower those rates with the permission” of the federal agency responsible for overseeing the marketplace, Mr. Franchini of New Mexico said.

Some insurers think a decision on the cost-sharing money could come too late.

CareFirst, a Blue Cross insurer, offers plans in Virginia and Maryland. Virginia allowed CareFirst to assume a lack of financing; Maryland regulators prohibited insurers from setting higher rates based on a loss of subsidies.

“You have this unbelievable contradiction,” said Chet Burrell, CareFirst’s chief executive. In Maryland, where the company is losing money on individual policies, it could sustain much deeper losses if the federal money stopped coming in.

“I don’t think you can work it out,” he said. “The workout is you will have to eat it this year.”

Like other insurance executives, Mr. Burrell worries that the higher prices will eventually discourage too many healthy people from enrolling. In Maryland, he said, only one-third of those buying coverage are eligible for subsidies. Everyone else pays full price. The most popular type of plan could come with premiums of $373 a month to $686 a month for a 40-year-old.

“Given the size of the rate increases, we think healthier people will continue to opt out of the risk pool,” he said, suggesting that would lead to rates being even higher in 2019. “If that occurs, then you’re in a death spiral,” he said, because as rates climb, more healthy people drop out, sending prices even higher. Mr. Burrell said he was working with regulators in Maryland to potentially create a fund that would help care for patients with the very high medical bills while possibly lowering overall premiums.

But even insurers in states that have allowed for the loss of funding are not sanguine.

“I think it’s going to be a stumbling in the dark next year because of all the uncertainties,” Dr. Hickey of New Mexico Health Connections said. The changing circumstances and inaction by Congress have forced insurers to raise rates and experiment with different plans for those who are not eligible for federal assistance.

“It’s almost like the beginning, again,” he said.

GOP gives ground in ObamaCare stabilization talks

Posted on by • Posted in Uncategorized • Tagged , , , , • Leave a comment

http://thehill.com/policy/healthcare/353671-gop-willing-to-give-ground-on-obamacare-subsidies

Image result for cost sharing reduction payments

Republicans are willing to provide insurers with two years of ObamaCare subsidies under a bipartisan market stabilization bill, according to the Senate Health Committee chairman.

Sen. Lamar Alexander (R-Tenn.) said continuing cost-sharing reduction subsidies for two years is a key part of the stabilization package he is trying to negotiate with Sen. Patty Murray (D-Wash.).

Alexander and Murray are continuing to try to rally Republicans and Democrats around a short-term plan to lower ObamaCare premiums in 2018 and 2019.

“The elements of that are continuing cost-sharing payments for two years and to give states meaningful flexibility in the types of policies they can write,” Alexander said Tuesday.

Alexander initially only wanted to fund the payments for one year, while Democrats were pressing for two years.

Republicans pulled the plug on the bipartisan talks when it appeared their last-ditch ObamaCare repeal bill was gaining momentum, but the change in Alexander’s position could be a sign that he and Murray are closing in on an agreement.

The White House has been making the cost-sharing payments on a monthly basis, all while President Trump has continued to threaten to cancel them in a bid to make ObamaCare “implode.”

While Alexander and Murray may be close, the future of the bipartisan fix is unclear.

Many other Senate Republicans, including Senate Finance Committee Chairman Orrin Hatch (R-Utah), are more skeptical of a deal to stabilize ObamaCare than Alexander is.

And the House and White House are also uncertainties.

Alexander said the talks are continuing, and he and Murray plan to meet later on Tuesday.

Asked whether GOP leadership is urging him to continue the talks, Alexander said he thinks they have more important things to worry about.

“Well, I’m telling them that I am continuing the talks. They have lots of other things to worry about today,” he said.

 

ACA “Bare Counties”: Policy Options to Ensure Access Must Address Longer-Term Stability and Competition

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , • Leave a comment

http://www.commonwealthfund.org/publications/blog/2017/sep/aca-bare-counties

Image result for Bare Counties

 

Continued uncertainty about federal funding for health plans is contributing to higher individual market premiums and insurer withdrawals in 2018. The danger that consumers in some regions wouldn’t have any coverage option next year seemed to subside when insurers in the affected states eventually agreed to broaden their participation. But with the September 27 deadline for deciding to participate in the Affordable Care Act (ACA) marketplaces fast approaching, Virginia officials announced an insurer withdrawal that may leave as many as 63 counties without coverage. At the same time, many more counties appear likely to have just one insurer offering marketplace coverage. The risk that any consumer might be without options for health coverage deserves the right response from policymakers.

Relief for Bare Counties?

The threat of counties without individual market insurers, known as “bare counties,” should be a real concern of policymakers. Even if consumers in all counties have a marketplace plan that gives them access to ACA subsidies, a single plan choice locks consumers into the plan that is available to them, not necessarily the one that best meets their needs. It also fails to foster competition on price and quality, and leaves state officials tasked with approving plans in a difficult position. Two proposals in the Senate would address bare counties, and although both might provide access to federal subsidies, each has significant side effects that are likely to negatively impact market stability and future plan choices.

The Health Care Options Act (S. 761), introduced earlier this year by Senator Lamar Alexander (R–Tenn.), would allow individuals who live in an area without a marketplace plan to qualify for premium tax credits — paid at year-end — to purchase coverage off of the marketplace, including coverage that doesn’t comply with ACA consumer protections. A second bill introduced by Senator Claire McCaskill (D–Mo.), the Health Care Options for All Act (S. 1201), would allow individuals living in a bare county to purchase coverage through the District of Columbia marketplace, where members of Congress and their staff obtain coverage.

By allowing tax credits to be used for coverage that does not meet ACA requirements, the Alexander bill will likely encourage insurers to sell skimpy policies and healthy individuals to enroll in them. Noncompliant policies would have far lower premiums than compliant ones, which, because of the ACA, cannot discriminate based on an individual’s health status. Consequently, insurers that choose to sell in the off-marketplace market likely will hike their premiums for comprehensive coverage to account for the likelihood of enrolling fewer and less healthy individuals. Indeed, they may find that offering such coverage is unsustainable, particularly given that they would still be able to capture healthy, subsidized enrollees through the sale of noncompliant plans.

In contrast, the McCaskill bill would allow consumers to continue to have access to the ACA’s upfront premium and out-of-pocket help and would limit federal financial help to marketplace plans that meet critical consumer protections. However, by requiring insurers selling in the District of Columbia’s small business marketplace to offer individual market coverage to out-of-state consumers, many of whom live in rural areas and are likely to be higher-cost individuals, the proposal may undermine premiums and plan choice for D.C.’s residents and small businesses.

Other potential solutions would offer help to residents of bare counties without the potential harm of the Senate proposals. For example, Congress could allow individuals living in bare counties to use ACA subsidies to buy into other comprehensive coverage — for example, the Federal Employees Health Benefits Program or Medicaid — to ensure access to ACA financial help without undermining market stability.

Policymakers also might consider requiring a fallback plan modeled on the approach taken in the Medicare prescription drug benefit. When that program was enacted, policymakers ensured adequate plan participation in the new market by designating a fallback plan that would provide coverage in any county with two or fewer plans. Such an approach would solve not only the bare counties problem but also would foster competition and ensure adequate plan participation.

Looking Forward

Policymakers looking to stabilize the market and avoid bare counties are right to start by ensuring that payments for cost-sharing reductions continue. Insurers have made clear that guaranteeing federal funding for cost-sharing reductions is a defining factor in their decision to participate in marketplaces next year. In the event there are counties without insurers, it is important that policymakers consider not just the immediate effects of potential policy fixes, but also their longer-term consequences for access to affordable, comprehensive coverage. Solutions for bare counties that allow individuals to use upfront assistance to buy a fallback plan that offers comprehensive coverage would help those individuals who are affected buy and maintain comprehensive coverage while insuring healthy and competitive markets for all.