Health Plan Weekly

ACA Plans and Medicaid May See Enrollment Growth Amid COVID-19 Pandemic

March 25, 2020

The COVID-19 pandemic is shaping up to be a stress-test for the post-Affordable Care Act insurance market. The crisis has already caused mass layoffs, and experts say the individual health insurance exchanges and Medicaid could see record enrollment in the coming months as a result.

“This would be the first recession since the Affordable Care Act went into effect, so we are in somewhat uncharted territory in terms of what might happen in a recession under both the ACA marketplace and the Medicaid expansion,” Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, said during a March 18 conference call with reporters.

by Peter Johnson

The COVID-19 pandemic is shaping up to be a stress-test for the post-Affordable Care Act insurance market. The crisis has already caused mass layoffs, and experts say the individual health insurance exchanges and Medicaid could see record enrollment in the coming months as a result.

“This would be the first recession since the Affordable Care Act went into effect, so we are in somewhat uncharted territory in terms of what might happen in a recession under both the ACA marketplace and the Medicaid expansion,” Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, said during a March 18 conference call with reporters.

Levitt said the ACA marketplace is likely to see rapid growth in enrollment as workers lose jobs or hours, making them eligible for special enrollment periods in some cases.

“Household income is going to tend to fall, and that will put more people into that lowest income category with the broadest enrollment in the ACA marketplace,” Levitt said. That influx of enrollees, he added, “has the potential to improve the risk pool in the ACA marketplace and shouldn’t, by itself, have a big effect on premiums.”

Meanwhile, “as people lose their jobs and their incomes fall below 138% of poverty in those states that have expanded Medicaid, we’re likely to see growth in Medicaid enrollment — as we typically do during recessions,” Levitt said.

“Medicaid traditionally has been countercyclical….It’s an economic balancer,” says David Anderson, a health policy researcher at Duke University’s Margolis Center for Health Policy. “In 2009 [during the last economic recession], the federal government raised the federal payment rate — the federal share of Medicaid — by 6.2 points. What that did is it gave states breathing room in their budget…That extra federal share takes a little bit of pressure off the rest of the state budget.”

To that end, President Donald Trump on March 18 signed the Families First Coronavirus Response Act, which, among a host of other provisions, temporarily increased the Medicaid federal medical assistance percentage by 6.2 points.

Questions Remain About Cost Impact of Coronavirus Treatment

March 24, 2020

Though many health insurers have removed cost barriers related to testing patients for the new coronavirus that’s sweeping the globe, they largely haven’t pledged to waive out-of-pocket costs for severely sickened members who require hospitalization. A new analysis suggests that the cost of caring for those patients could be steep for members and health plans alike, but experts tell AIS Health it may be too early to say what that will actually mean for commercial insurance markets.

By Leslie Small

Though many health insurers have removed cost barriers related to testing patients for the new coronavirus that’s sweeping the globe, they largely haven’t pledged to waive out-of-pocket costs for severely sickened members who require hospitalization. A new analysis suggests that the cost of caring for those patients could be steep for members and health plans alike, but experts tell AIS Health it may be too early to say what that will actually mean for commercial insurance markets.

According to the analysis, from the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF), the average total cost — combining employer-plan spending and patient out-of-pocket costs — for a pneumonia-related hospital stay “with major complications and comorbidities” was $20,292 in 2018. For a stay “with complications or comorbidities,” the average cost was $13,767, and for patients without complications, the price tag was $9,763. Looking at out-of-pocket costs alone, the average cost for patients with major complications or comorbidities was $1,300.

But those estimates can only tell us so much about the financial impact of the pandemic, KFF Executive Vice President for Health Policy Larry Levitt said during a March 18 web briefing with reporters.

“We have some information about what the cost for each patient will be, but we have very little information yet about how many patients there may be,” Levitt said in response to a question from AIS Health. “And that’s the big area of uncertainty — how widespread the infection will be and how many people will become severely ill and require hospitalization. So insurers at this point are running blind on how much the total cost may be.”

Generally, regulators do not permit health insurers to recoup prior-year losses through premium increases, “so insurers are going to be focusing a lot on what the ongoing cost” of the coronavirus outbreak could be when pricing their products, Levitt said.

Increased Carrier Participation Helps Drive ACA Exchange Stability

March 19, 2020

Individual marketplaces under the Affordable Care Act (ACA) have seen premiums stabilize, according to an analysis of 2020 open enrollment data performed by McKinsey & Co Inc., and experts sayincreased payer participation and market maturity are related to the increased consistency in prices.

According to the report, the number of counties with a single on-exchange carrier dropped 11% year over year to 25% in 2020. And approximately 9% of consumers could choose only one carrier in 2020, down from 16% in 2019.

By Peter Johnson

Individual marketplaces under the Affordable Care Act (ACA) have seen premiums stabilize, according to an analysis of 2020 open enrollment data performed by McKinsey & Co Inc., and experts sayincreased payer participation and market maturity are related to the increased consistency in prices.

According to the report, the number of counties with a single on-exchange carrier dropped 11% year over year to 25% in 2020. And approximately 9% of consumers could choose only one carrier in 2020, down from 16% in 2019.

The report attributes premium stability to increased carrier participation in ACA exchanges. According to the report, 27 carriers entered the individual marketplaces in 2020 and 25 entered in 2019, while only one carrier left the exchanges during both years.

The report says that increased participation in the exchanges by regional and local payers is one of the largest factors in both price stability nationally and improved competition in rural markets.

“This is really important, and I think it speaks to the health of these markets,” says Dan Mendelson, the founder of health care consultancy Avalere. “The reality is that a regional and local carrier often knows the population the best, and some of them were reluctant to go into the exchange markets because they just feared uncertainty, and they feared adverse selection.”

However, Mendelson says that efforts to repeal and undermine the ACA are the primary culprit for market instability. “The market did not mature as rapidly as it could have, because it became a political football,” he says.

Kathy Hempstead, a senior health care policy adviser at the Robert Wood Johnson Foundation, says natural market corrections are also a factor in improved premium stability.

“We’re not back to where we were in 2016, and I’m not sure we ever will be — or even if we should be,” Hempstead tells AIS Health. “But we are seeing a steady return to the market as carriers are seeing there’s an opportunity.”

Insurers, States Move to Lower COVID-19 Costs

March 17, 2020

As the new coronavirus continues to spread throughout the world, the U.S. federal government, states and private health insurers have responded with a flurry of actions aimed at lowering cost barriers that could discourage people from getting tested or treated.

More than 40 different health insurers so far have stepped forward to unveil new coronavirus-related policies, according to a running list compiled by America’s Health Insurance Plans. Many are waiving cost-sharing and prior-authorization requirements for members who need to get tested for the virus, and some of them are also waiving deductibles. Other measures include relaxing restrictions on telehealth and prescription refills, and opening emotional-support help lines.

By Leslie Small

As the new coronavirus continues to spread throughout the world, the U.S. federal government, states and private health insurers have responded with a flurry of actions aimed at lowering cost barriers that could discourage people from getting tested or treated.

More than 40 different health insurers so far have stepped forward to unveil new coronavirus-related policies, according to a running list compiled by America’s Health Insurance Plans. Many are waiving cost-sharing and prior-authorization requirements for members who need to get tested for the virus, and some of them are also waiving deductibles. Other measures include relaxing restrictions on telehealth and prescription refills, and opening emotional-support help lines.

At the state level, some governors are tapping their emergency-rulemaking powers to compel the commercial health plans they regulate — those that are fully insured — to eliminate cost sharing for coronavirus-related testing and services.

Both states and insurers, though, have limited ability to compel employers’ self-funded health plans to alter their benefits. Such plans are primarily regulated at the federal level under the Employee Retirement Income Security Act.

“The evidence is very clear that deductibles and exposure to other forms of cost sharing do mean people will delay or forgo care out of fear that they’re going to face high cost sharing,” says Sabrina Corlette, a research professor at the Georgetown University Health Policy Institute’s Center on Health Insurance Reforms. “So to the extent that insurers can reduce that fear or eliminate that fear, I think they should do that.”

Still, Kathy Hempstead, a senior health care policy adviser at the Robert Wood Johnson Foundation, says the need for so many players to revise their policies “reflects how unfortunately complex and fragmented the whole health insurance system is.”

“I would imagine…that people are trying to do the right thing in all the different markets, but does that mean that cost isn’t a deterrent for some people? I mean, it still probably is,” she says. “It just goes to show how much cost exposure there is for, obviously, uninsured people, but [also] for the majority of insured people.”

Supreme Court to Hear ACA Appeal in 2020

March 12, 2020

On March 2, the Supreme Court agreed to hear Texas v. United States, the latest lawsuit intended to overturn the Affordable Care Act (ACA). Though health insurance trade groups indicated they are anxious for a resolution in the case, health care law experts tell AIS Health that the survival of the ACA is far from certain.

By Peter Johnson

On March 2, the Supreme Court agreed to hear Texas v. United States, the latest lawsuit intended to overturn the Affordable Care Act (ACA). Though health insurance trade groups indicated they are anxious for a resolution in the case, health care law experts tell AIS Health that the survival of the ACA is far from certain.

The case has a circular premise at its core, drawn around the ACA’s individual mandate, which levies a tax penalty on non-exempt people who don’t sign up for health insurance. In 2017, Republican congressional majorities lowered the penalty for uninsured adults to $0 starting in 2019, effectively ending the mandate. The Republican state attorneys general who filed Texas v. United States in February 2018 argue that zeroing out the mandate makes the entire law unconstitutional.

This argument depends on a precedent set by another Supreme Court case that challenged the ACA, National Federation of Independent Business (NFIB) v. Sebelius, which determined that the individual mandate is constitutional — but only through Congress’ taxing authority. According to the Texas argument, because the individual mandate is a central component of the ACA, the rest of the law became unconstitutional when Congress zeroed out the tax.

Katie Keith, a lawyer and research professor at Georgetown University’s Center on Health Insurance Reforms, says there’s a decent possibility that a majority of justices could find that argument persuasive, even though the same justices who preserved the individual mandate are all still on the court. Chief Justice John Roberts, who authored the NFIB v. Sebelius decision, can’t be expected to do so again now that the penalty has been zeroed out.

Should Roberts or another justice agree with the zeroing-out argument, the fate of the larger ACA would depend on whether justices think the constitutionality of the individual mandate can be separated from the constitutionality of the rest of the law.

The plaintiffs in Texas v. United States argue that the rest of the law is not severable, but that idea has raised eyebrows across the legal community. In an amicus brief regarding Texas, four prominent health care law professors argue that “under established doctrine[,] the mandate is severable from the rest of the ACA.”

However, if the court does follow established severability precedent, other important ACA policies could once again become an open question.