Medicaid outperforms marketplace in Kaiser probe of low income ACA beneficiaries

The Kaiser Family Foundation conducted focus groups of low income people newly insured by the ACA. Participants qualified either for Medicaid or for subsidized marketplace plans with Cost Sharing Reduction subsidies -- if they chose silver level plans, which some didn't. There were nine focus groups in six cities, convened early this year. Conclusions, in brief:

1. Medicaid enrollees were pleased, grateful and relieved to have the coverage -- though some were disappointed that the coverage did not relieve them of existing medical debt. They found the cost structure (no premium, modest copays) appropriate.

2. Marketplace coverage is better than nothing. Many used it to access medical care that they had long denied themselves; many found it more affordable than their past options. For some it was a Godsend. But...many were confused by the array of choices and complexity of terms; sorely stretched by either the out-of-pocket costs or the premiums or both; and tortured and terrified by balance billing or otherwise uncovered costs.

3. Many are sorely in need of dental and visual coverage that the plans (including Medicaid in many places) don't provide.

The results and testimonials clarified and reinforced several impressions and emerging (if still malleable) convictions of mine about our healthcare system generally and the ACA specifically. Here they are, illustrated by select comments from the Kaiser focus group participants.

1. Medicaid works.  While network quality may vary widely state-to-state and region to region, the dominant fact about it is that it makes needed care available at affordable cost.

It was a relief to not have to always worry about what the co-pay was going to be this time. When I had private insurance I was always worried about whether or not I was going to be able to afford the visit. 

2. Marketplace coverage is better than nothing -- but it's needlessly complex, too skimpy and vitiated by balance billing.

I thank God for the marketplace because if I had to pay that [for surgery] out of pocket, I just would have had to live through the pain and I wouldn’t be able to have kids anymore…if I’d had insurance before, we would’ve caught it much, much sooner. It wouldn’t have been the issue that it is today.

But...

No one ever explained to you what deductibles were or what the difference between a premium and a deductible was, or why they were different. 

3. Bronze plans are a travesty -- at least, if you don't have a fairly robust income and at least a few thousand dollars in assets.  Like hedge funds, bronze plans should only be available to those who meet an income or asset test -- if at all. And for many of those who don't meet that test, the ACA should offer more comprehensive coverage at lower cost than at present.

It’s just more simplification of the whole thing would be nice. There’s too many options, and in essence you don’t know the results of what you choose, until you actually have an operation, and then you get that $6,600 [bill from the deductible]. 

4. Balance billing -- at least by out-of-network providers at in-network facilities -- is a disgrace, really a form of fraud perpetrated on people who think they have insurance. Every state should have protections as strong as New York's, taking the patient out of any tug-of-war between the provider and the insurer (perhaps the NAIC Model Act will spur more states to take action; Florida recently passed balance billing protection). And in a flaw specific to ACA benefit design, colonoscopies are covered, but resulting polyp removal is not.

You get a procedure done that you’re supposed to get done, a colonoscopy. You read the information in your health plan that says, “We cover screenings, screenings are free,” but if you find something it’s not covered. I went in and got it done thinking, I’m perfectly healthy, there’s nothing wrong with me. “Oh no, we had to take something out.” Well I’m glad they found it… Now it’s like I get this series of bills.  Now the premium is higher than it was and you have medical bills. What I’ve done is I’ve not gone in to get blood screens anymore because I don’t know what they’re going to pay for. 

5. Every state should form a Basic Health Plan (BHP), an option the ACA provides to states. A BHP is a Medicaid-like plan with low cost sharing, open to residents with incomes up to 200% of the Federal Poverty Level who would otherwise be eligible for private plan subsidies. So far, only Minnesota and New York have formed them. The simplicity and cost structure, with a required actuarial value of at least 94%, is more appropriate to low income enrollees than the plethora of marketplace choices.

Under the ACA, the federal government will fund the BHP to the tune of 95% of what premium tax credits for private plans would have cost for residents up to 200% FPL had the state not formed the BHP. That funding formula should be reformed, as it makes BHPs more feasible for states with high private plan premiums than for states with low premiums.

6. States should consider seeking ACA "innovation waivers" to extend BHP eligibility beyond 200% FPL. Doing so might weaken the state's ACA marketplace, and its broader individual market. Which raises the question: why have a private individual market for health insurance at all? In New York and Minnesota, the BHPs are actually mini-marketplaces of plans administered by managed care organizations. Why not have the whole market for adults under age 65 who lack access to employer-sponsored insurance be a market with a public (state) payer and competing plans administered by private companies?