Health Insurance Exchanges
In more stunning proof that America’s 18th century style governing process just doesn’t work, a subset of a regional Federal court ruled against part of Obamacare. The Halbig ruling is certain to be overturned by the full DC court and then probably will stay that way after it makes it’s way through the Supremes–at least Jonathan Cohn thinks so.
But think about what the Halbig ruling is about. Its proponents say that when Congress (well, just the Senate actually as it was their version of the bill that passed) designed the ACA, they wanted states only to run exchanges and only people buying via states to get subsidies. But that they also wanted a Federal exchange for those states that couldn’t or (as it turned out) wouldn’t create their own. But apparently they meant that subsidies wouldn’t be available on the Federal exchange. That would just sail through Logic 101 at any high school. Well only if the teacher was asleep, as apparently most Senators were.
Now two judges interpret what was written down to imply that subsidies should only be available on state exchanges–even though logic, basic common sense and fairness would dictate that if we’re going to subsidize health insurance we should do it for everyone regardless of geography.
Don’t forget that in the House version of the bill there was only a Federal exchange. Continue reading “Halbig corpus interruptus”
Filed Under: THCB
Tagged: ACA Database, Health Care Reform, Health Insurance Exchanges, Matthew Holt, Obamacare, The Supreme Court Challenge
Jul 23, 2014
Last Thursday, HHS released the final enrollment stats for health exchange enrollment for 2014. Here’s what we learned:
- 8.1 million enrolled in a plan in the Health Insurance Marketplace. 3.8 million (47% of total) since the end of February including 1.2 million in the much-watched 18-34 age cohort.
- 54% are female; 28% are between the ages of 18-34; 63% are White, 17% Black, 11% Hispanic, 8% Asian/other.
- 20% chose a bronze plan, 65% chose silver, 9% gold, 5% platinum and 2% catastrophic. Note: At the silver level, individuals who earn less than 250% of the federal poverty level — ($29,175 for an individual, or $59,625 for a family of four) — are eligible for assistance for out-of-pocket costs. 85% who picked an exchange plan qualified for a subsidy: 82% in the 14 state-run exchanges and 86% in the federally-run exchange.
- Young adults 18-34 were 83% of those applying for the catastrophic coverage.
Continue reading “So What Do the Expanded Enrollment Numbers Mean?”
Filed Under: THCB
Tagged: enrollment numbers, Health Insurance Exchanges, Healthcare.gov, Paul Keckley, The ACA, The States
May 5, 2014
A few observations from my travels and conversations in the marketplace:
About half of the enrollments are coming from people who were previously insured and half are not. When I try to gauge this, I go to carriers who had high market share before Obamacare and have maintained that through the first open enrollment. Some carriers have said only a small percentage of their enrollments had coverage before but health plans only would know who they insured before.
By sticking to the high market share carriers who have maintained a stable market share and knowing how many of their customers are repeat buyers, it’s possible to get a better sense for the overall market. Other conventional polls have suggested the repeat buyers are closer to two-thirds of the exchange enrollees.
The number of those in the key 18-34 demographic group improved only slightly during the last month of open enrollment so the average age is still high. The actuaries I talk to think this issue of average age is made to be far more important than it should be. It is better to have a young group than an old group. But remember, the youngest people pay one-third of the premium that older people pay.
The real issue is are we getting a large enough group to get the proper cross section of healthy and sick?
The bigger concern continues to be the relatively small number of previously uninsured people who have signed up compared to the size of the eligible group. The recent report released by Express Scripts reporting on very costly pharmacy claim experience from January and February enrollees is far more concerning than the average age.
Continue reading “Obamacare Observations from the Marketplace”
Filed Under: THCB
Tagged: 2015 Open Enrollment, Health Insurance Exchanges, Health Plans, Healthcare.gov, Insurance claims, Robert Laszewski, The ACA
Apr 23, 2014
This morning, the tally of enrollees in health exchanges is between 6 and 7 million.
Many of these will not finalize their paperwork until April 15, and many more might not pay their premiums.
Nonetheless, given the underwhelming rollout of Healthcare.gov, and well-funded campaigns in some states to discourage enrollment, the number is impressive. But the rest of the story is more important.
In coming weeks, these questions will be answered:
How many of these new enrollees will actually pay their premiums next month and be insured?
Are the new enrollees healthy or sick and in need of medical attention? How will the delivery system respond to these needs?
Did the penalty induce enrollment, or were other factors more important to individuals? Was it the attractiveness of subsidies or something else?
How will employers that provide health coverage assess the viability of health exchanges in their benefits strategies? Can these exchanges serve as a viable marketplace for employee insurance purchases (and allow employers to shift purchasing responsibility to their employees)?
Continue reading “The Rest of the Story on Health Exchange Enrollment”
Filed Under: Uncategorized
Tagged: Health Insurance Exchanges, Open Enrollment, Paul Keckley, The ACA
Apr 1, 2014
Rumors have been circulating in the marketplace all week that the administration was thinking of extending the individual health insurance policies that Obamacare was supposed to have cancelled for as much as three more years.
Those rumors have now come out into the open with Tom Murphy’s AP story on Friday.
That the administration might extend these polices shouldn’t come as a shock. My sense has always been that at least 80% of the pre-Obamacare policies would ultimately have to be canceled because of the administration’s stringent grandfathering rules that forced almost all of the old individual market into the new Obamacare risk pool.
But with the literal drop dead date for these old policies hitting by December 31, 2014, that would have meant those final cancellation letters would have had to go out about election day 2014. That would have meant that the administration was going to have to live through the cancelled policy nightmare all over again––but this time on election day.
The health insurance plans hate the idea of another three-year reprieve. They have been counting on the relatively healthy block of prior business pouring into the new Obamacare exchanges to help stabilize the rates as lots of previously uninsured and sicker people come flooding in.
With enrollment of the previously uninsured running so badly thus far, getting this relatively healthier block in the new risk pool is all the more important. The administration’s now doing this wouldn’t just be changing the rules; it would be changing the whole game.
Republicans, and a few vulnerable Democrats, had essentially called for this last fall when legislation was floated in both the House and Senate with the “If You Like Your Policy You Can Keep It,” proposals. At the time, the administration and Democratic leaders rightly said if this sort of thing would have been made permanent it would have a very negative impact on what people in the new pool would pay––and on their already high deductibles and narrow networks.
At the beginning of this post I asked, Is Obamacare unraveling?
First, as I have said before on this blog, the law’s reinsurance provisions will mean Obamacare can keep limping along for at least three years. And, even making this change won’t alter my opinion on this. It will just cost the government more reinsurance money to keep the carriers whole.
By asking if it is unraveling, what I really wonder about is the whole sense of fairness in the law and the expectation that everybody needs to get the Democrat’s definition of “minimum benefits” whether they want them or not.
Continue reading “Is Obamacare Unraveling?”
Filed Under: The Business of Health Care
Tagged: Enrollment, Health Insurance Exchanges, Health Plans, Individual mandate, Obamacare, Open Enrollment, Robert Laszewski, The ACA
Feb 9, 2014
Risk adjustment is a key mechanism to ensuring appropriate payments for Medicare Advantage plans, Medicare Part D drug plans, and Medicaid health plans. Since health plans vary in their mix of healthy and sick enrollees, risk adjustment modifies premium payments to better reflect the projected costs of members served and compensate plans that enroll high-cost patients.
Historically, risk adjustment was only used in Medicaid and Medicare – in effect, redistributing some revenue from health or drug plans with a relatively healthier mix of members to those plans with a more costly enrollment profile. However, the Affordable Care Act (ACA) extends risk adjustment to the individual and small group health insurance markets starting in 2014.
A new brief from The Synthesis Project tackles the issue and makes several interesting recommendations for how to improve risk adjustment methods for the post-ACA market. Without accurate risk adjustment, health plans have a strong financial incentive to seek out only the healthiest enrollees, especially under ACA-mandated adjusted community rating. Under adjusted community rating, health plans may not vary premiums based on health status or sex and are limited in how much they may vary premiums based on age. Under ACA, the healthy, the young, and men subsidize the health costs of the unhealthy, the older, and women.
Risk adjustment is therefore a necessary factor in stabilizing the dramatically new post-ACA health insurance marketplace, particularly the new Health Insurance Exchanges. Even then, the ACA is a giant game of musical chairs. The market under ACA will be chaotic and challenging, with a mix of winners and losers once the music stops and the dust settles, which will take at least three to five years.
Continue reading “How Health Plan Risk Adjustment Models May Change Under the ACA”
Filed Under: Economics, THCB
Tagged: Economics, Health Insurance Exchanges, Kip Piper, Risk adjustment, Synthesis Project, The ACA, Upcoding
Jan 3, 2014
Confusion about Affordable Care Act (ACA) deadlines is rampant. That’s because there are lots of them and they keep changing. The fact is that some of them matter a lot more than others.
In my view, the BIG deadline is:
MARCH 31, 2014: Under the ACA, all Americans must have health insurance, and this is the latest date you can acquire it if you wish to avoid paying a penalty on your 2014 income tax. Some individuals will be exempt from penalties, including, as of last week, people whose policies were canceled because their plans’ benefits did not meet new ACA standards of adequacy.
Another date that has drawn attention but, in my view, doesn’t matter as much:
JANUARY 1, 2014: This is not a deadline so much as an opportunity. It is the first day, when, if you signed up in time (now December 24 for the federal website, but a few states have later deadlines)—and paid your premium in time (at the administration’s urging, many insurers are allowing a grace period through January 10 for the federally run marketplaces and some states have also moved this date)—you could enjoy the subsidized coverage available under the ACA. But if you miss these so-called deadlines, you still have until March 31 to sign up for coverage to avoid a penalty.
For the millions of Americans who are uninsured, or who could have enrolled in improved insurance through a state or federal exchange, missing these deadlines merely means you failed to make yourself better off as soon as you possibly could. BUT YOU WILL BE NO WORSE OFF THAN YOU WERE BEFORE.
There are also some dates that are consequential, but have received less attention, or have receded from the headlines:
NOVEMBER 2014: This is when the Obama administration promises online enrollment for the Small Business Health Options Program (SHOP) in the 34 states where the federal government is operating the small-business marketplaces for companies with fewer than 50 workers. For now, small businesses in these states can apply via paper application or an insurance broker or navigator.
Online access is available already in most of the 17 states and the District of Columbia that are operating their own SHOP exchanges.
JANUARY 1, 2015: The date by which employers with 50 or more employees will become liable for a tax penalty if they are not offering health insurance that meets minimum standards, and an employee becomes eligible for subsidized private coverage through the marketplaces.
The changing dates associated with the ACA are troubling to some, since they suggest confusion and even mismanagement by the Obama administration. It would obviously be reassuring if every declared date were honored and announced rules and intentions never changed.
On the other hand, I’m doing some long-delayed repairs in my home. The contractor said the work would be done by Thanksgiving, but there were unanticipated problems. We’re hoping now for Christmas. I’ll be happy if it’s done by mid-January, but the key thing is whether, a year from now, I’m satisfied with the result.
Health insurance is obviously way more important to millions of Americans than any home repair project could ever be. But few things in life go exactly as planned, and it would be totally astonishing if the implementation of massive reforms to a sector accounting for 20 percent of our economy rolled out without a bump or a detour. We should keep that in mind as we think about those changing ACA deadlines.
David Blumenthal, M.D., M.P.P., is president of The Commonwealth Fund, where this post originally appeared.
Filed Under: THCB
Tagged: David Blumenthal, Deadlines, Health Insurance Exchanges, The ACA
Dec 26, 2013
When envisioning what public insurance exchanges of the future can and should look like when it comes to technology and structure, one only needs to look at the successful private exchanges that have paved the way over the past several years.
This experience has taught those who administer private exchanges that open enrollment—the phase that the federal government’s Health Insurance Marketplace is struggling through currently—is only the beginning. Public exchanges could benefit from lessons already mastered by private exchanges—starting with open enrollment but extending to even more complex technology-based transactions.
There are 10 scenarios that vendors must be able to handle.
1. Life Events. In today’s individual Health Insurance marketplace, consumers can generally add or drop coverage for themselves or their dependents anytime they want. In other words, it’s a relatively “rule-free world.” In January 2014, that world changes to look more like the current group health marketplace in which many rules are defined by the federal government’s existing tax code (e.g., Section 125) and HIPAA requirements, and consumers must select and “lock in” their coverage once a year for the following 12 months, unless they experience a qualified life event.
As a result, each qualified life event – e.g., marriage, divorce, birth of a child, loss of spouse’s coverage and many more – must be configurable within the Exchange technology to enforce the appropriate rules. For example, if a person gets married, is that person allowed to drop coverage or change plans and carriers? How about with the birth of a child? Or with a loss of spouse’s coverage? For a truly scalable Exchange technology, thousands of scenarios must be configured in advance to enable consumers to make enrollment choices online without administrator involvement.
Continue reading “What Public Insurance Exchanges Will Look Like 5 Years From Now”
Filed Under: Uncategorized
Tagged: Health Insurance Exchanges, Health Plans, Open Enrollment, Robert Gallun, the business of healthcare
Dec 4, 2013
Obamacare is impacting the small group insurance market in many of the same ways as the individual health insurance market. While employers with less than 50 workers don’t have to provide coverage, if they do they are required to comply with the same essential benefit mandates, age rating changes, and pre-existing condition reforms the individual market faces.
That means essentially all small group policies cannot continue as they are––they have to be discontinued.
What makes things a bit easier, if not any less expensive, is that small employers typically have health insurance brokers to run interference for them and help them through this change where individual consumers often get that dreaded cancellation letter telling them they will not have health insurance after a certain date if they do not act quickly in what is a confusing marketplace in the best of times.
The first small group renewals are now occurring––the January 1 renewals that typically have to be delivered during the month of November under state law.
Many employers are facing significant changes in order to comply with Obamacare and therefore price increases. One Maryland broker I spoke to this week has 90 small group accounts and he reports his smallest increase was 15%, his largest was 69%, and most are in the 30% – 40% range.
(By comparison, Mercer just announced the average large employer health care cost increase for 2014 will be 5.2%, meaning small groups could have reasonably expected an increase under 10% without Obamacare.) The biggest rate increases are generally going to those employers with the youngest groups the most impacted by the new “age compression” rules.
Does this mean these small employers’ coverage has been outright cancelled and they will now send their workers to the exchanges, as I have heard some commentators argue?
No, at least not anytime soon.
But that does not mean that lots of these small employers aren’t angry and confused.
What are these small employers doing?
Continue reading “The Next Shoe to Drop: Small Group Health Insurance Cancellations”
Filed Under: THCB
Tagged: Employers, Health Insurance Exchanges, Health Plans, Robert Laszewski, Small Business, The ACA
Nov 21, 2013
Last week President Obama announced that he will try to keep his oft repeated promise to Americans in the individual market that they can keep their plans if they like them … for a year. The media have done an excellent job explaining why President Obama’s temporary patch to the ACA may endanger its existence; in the process the American public has learned more than it ever wanted to about adverse selection, cream skimming, and most importantly crass politics.
Though the full costs of adverse selection will be muted in the first year by risk corridors and reinsurance, it is clear that the failing website, the bad press, and the recently announced delay are placing maximal stress on even those backup provisions of the bill.
Even if the ACA survives this additional insult against the economics that support its very existence, we have witnessed yet another missed opportunity for positive reform to President Obama’s signature legislative achievement. And this time we can’t just blame intransigent tea-party Republicans and their quixotic efforts at repeal; here the buck stops at 1600 Pennsylvania Ave, NW.
While many of the plans that are affected by the President’s temporary patch might actually be plans that don’t qualify as “insurance” (i.e. they have low lifetime caps on expenditures or don’t cover hospital services), numerous others actually offer quite good coverage that just don’t meet the exceptionally high standards of the newly developed minimum essential health benefit (EHB).
In many ways, the first dollar coverage for preventive care and the wide ranging number of services covered by the ACA aren’t truly insurance either. Instead, these features amount to a very generous pre-payment plan for medical services supported by the United States treasury.
These elements of the EHB are too costly and unnecessary. Perhaps even more concerning, they are just the ante. As time goes on, vested interests for everything not included in the EHB will work tirelessly to insure that their favorite benefits are included. If you want evidence of this eventuality, you need look no further than the remarkably long and growing list of benefits mandated by most states.
Keep in mind that as the EHB grows more generous the premiums and subsidies on the exchanges will also grow. And we know who will pay their “fair share” of those increases.
Continue reading “The Real Fix? The Exchanges Aren’t Working. Here’s Why …”
Filed Under: Economics, THCB
Tagged: Craig Garthwaite, David Dranove, Essential health benefits, Health Insurance Exchanges, Health Plans, Obama administration, Obamacare Fix, The ACA
Nov 18, 2013