Monday, October 31, 2016

Fly-specking a myth-busting from HHS on the ACA marketplace

As the ACA's fourth open enrollment kicks off in the face of steep rate hikes and reduced competition, HHS Secretary Burwell feels compelled to engage in some "myth busting."

Fair enough, but I in turn feel compelled to, shall we say, qualify the clarifications. My two cents are in italics, below each myth-bust.

Myth #1: Health coverage on the Marketplace is unaffordable.

On the surface, headline rate changes can look spooky – but they don’t actually reflect what the vast majority of people will pay.

If you dig deeper, most consumers shopping on the Marketplace will be able to find a plan between $50 and $100 per month, thanks to financial assistance.

Well...it depends what your definition of "vast majority" is. At present there are 10.5 million marketplace enrollees, and about 1.5 million of them are unsubsidized. There are also 6.9 million enrollees in the off-marketplace individual market, however, by HHS's tallying. Off-marketplace enrollment estimates vary; Mark Farrah Associates pegged the total individual market at 20.2 million in August, which would suggest about 9 million off-marketplace.  

HHS estimates that 2.5 million current off-marketplace enrollees are "potentially" eligible for subsidies, but "potential" does not mean "actual," and the actual number is probably considerably smaller, as I explained here

If 2.5 million off-marketplace enrollees were indeed subsidy-eligible, and if the 6.9 million off-marketplace count is accurate, then about 2/3 of current individual marketplace enrollees would be eligible for subsidies. The actual percentage is probably somewhat smaller. At present, by HHS's count, barely more than half of individual market enrollees are subsidized. 

It may be literally true that "the vast majority" of people shopping on the Marketplace will be subsidy eligible, but that's because most individual market customers who are subsidy ineligible are aware of that fact and don't bother with the marketplace.

The unsubsidized individual market is where the wild things are -- and will indeed be spooky for many who are not eligible for subsidies but not truly wealthy.

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Myth #2: Consumers don’t have choices on the Marketplace.

In fact, people shopping for coverage on the Marketplace will have more choices than many people who get coverage through their employers. The average Marketplace consumer will be able to choose from 30 different plans.

It’s important to distinguish between issuers and the plans they offer. On average, each issuer this year will offer around 10 plans. These are plans with different options for premiums, out-of-pocket costs, networks of hospitals and physicians, and prescription drugs.

It is indeed important to distinguish between the number of issuers and the number of plans -- but the number of issuers is the more important measure. For one thing, it's the indicator of the degree to which competition is likely to restrain future price increases. It's also true that all too many insurers in the individual market provide multiple offerings with little to no meaningful difference between plans, slightly shifting the mix of deductibles and copays within a given metal level -- rather like the way toilet paper vendors will spin your head with "12 triple sized rolls" versus "18 double rolls" or even six rolls that equal 15 -- any of which may be one- or two-ply.  Rarely does a single insurer offer different-sized networks at different price points.  And usually, only a handful of choices will be within a given shopper's price range -- usually captured by the cheapest silver or the cheapest bronze plans.

The hard truth is that 21% of marketplace will have choices from just one insurer, another 23% will have a choice of two, and 56% will have a choice of three or more.

Myth #3: It’s hard to shop for health coverage on the Marketplace. There are problems with the website and there’s no help available.

We’ve come a long, long way since we launched HealthCare.gov. This year, we’ve made it even easier for you to find and enroll in a plan that works for you and your family.

HealthCare.gov has tools to help people easily compare plans based on their doctor, the medications they need covered, and the out-of-pocket costs they’d pay.

This year, we’ll also be phasing in changes that make it smoother and more intuitive to shop on a phone or tablet. That means no more clicking on tiny boxes or hard-to-read screens.

And people can get help on the phone or in person. The Marketplace Call Center (1-800-318-2596) is open 24 hours a day, 7 days a week, in more than 150 languages. You can also find in-person assistance right in your community by visiting: LocalHelp.HealthCare.gov.

This is mostly true. HealthCare.gov works well for consumers, and the decision support tools have improved every year. Many will still find the choice inherently confusing, Many if not all states could desperately use more enrollment assistance, but the technology itself works well (notwithstanding my beefs).Some state-run websites are considerably clunkier than the federal HealthCare.gov (which will serve 39 states this year). 

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Myth #4: I bought coverage on the Marketplace last year, so I don’t need to do anything during Open Enrollment.

Let’s face it – a lot can change year to year. A year ago, for example, I definitely didn’t have this mustache.

Every new Open Enrollment gives you a chance to see if you can find a better plan – or a lower monthly premium. Many people will qualify for tax credits this year, sometimes even if they didn’t during the last Open Enrollment, especially if they live in places where headline premiums are going up.

This year, returning customers to HealthCare.gov can save an average of $682 in annual premiums by shopping on the Marketplace.

It's very true -- arguably all too true -- that it's important for continuing enrollees to shop anew every year. HHS naturally emphasizes the positive and doesn't go all Halloween with the horrendous costs an unwary "auto-enrollee" who renews last year's plan without scrutiny can be saddled with. A renewer who doesn't comparison-shop may be forced to pay the whole difference between last year's premium and this year's, and many plan premiums are going up a lot. In past years, many could be hit by a double whammy if their plan's premium went up while the price of the second-cheapest "benchmark" silver plan  in their area, which determines the subsidy size,  went down. But that's not likely to happen much this year -- new competition driving down the benchmark premium is rare dodo in 2017.

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Myth #5: It’s fine to be uninsured.

When you’re young, you may think you’re invincible. But we busted that myth a long time ago. Life isn’t always predictable, accidents happen and we all get sick.

Health coverage keeps you protected – both in your health and your wallet. Many young people may not realize that more than 9 in 10 Marketplace-eligible young adults without health insurance have incomes that could qualify you for tax credits that make coverage more affordable than you think. You can even get preventive services at no out-of-pocket cost so you can stay healthy – services like diet counseling to wean you off that addiction to Halloween candy.

There’s one thing that’s predictable, though. If you stay uninsured, you could face a tax penalty come April. Avoid the sticker shock today and get covered.

This is true -- though if your income is low and you have barely any financial assets or family backup, a bronze plan with a deductible north of $6,000 is not likely to do you much good. If your income is over 200% FPL -- $23,760 for a single person -- you may find the marketplace pickings a bit lean.

No quarrel with Myths 6 and 7 below:

Myth #6: The Affordable Care Act is killing jobs and driving up costs for everybody.

You don’t need to be a rocket scientist to know this just isn’t true. Since the law passed, U.S. businesses have added 15.3 million jobs, and we’ve experienced 79 straight months of private sector job growth – the longest streak on record.

For the 157 million Americans who have health insurance through their employer, premiums have grown more slowly since the Affordable Care Act passed. And overall health care prices have been rising at the slowest rate in 50 years.

Myth Busted!

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Myth #7: Open Enrollment runs from November 1 through January 31.

Myth Confirmed!


Open Enrollment is the best opportunity for Americans to shop for health coverage on the Marketplace, and it starts tomorrow. So visit HealthCare.gov to learn about your coverage options today!

Good luck, HHS. Outreach your children well.

1 comment:

  1. Gov Dayton has proposed that the state government give each person over 400% of poverty at 25% 'rebste' on their premiums. So a 62 year old making $50,000 who faces a grotesque premium of $1,000 a month (about 25% of his income) would get a rebate of $250 a month.

    Not a bad idea. It is not possible to lower the premiums charged by the carriers, and not possible to change the subsidy formulas in one state, so what else is there?

    ReplyDelete

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