Saturday, March 31, 2018

Open thread: How Trump's cutoff of CSR funding affected Maryland enrollment

My last post looked at the drop-off in silver plan selection among Marylanders eligible for strong Cost Sharing Reduction subsidies in 2018. CSR is available only with silver plans. When Trump cut off federal funding for CSR, insurers in Maryland priced it into on-exchange silver plans only,which generated large discounts in bronze and gold plans for subsidized buyers . For an explanation of how that worked, see the first note at bottom. For a summary of the discounts to the subsidized on offer in Maryland in 2018, see the second note.

Today, let's kick back and squint at the changes in metal level choices in Maryland at each income level (including the upper brackets this time) from 2017 to 2018. I'll offer a couple of observations below the charts now, and maybe more through the weekend. I invite you to offer your own.

Here are the percentages who chose each of the three main metal levels in each income band in both years. In both years, a bit under half of all enrollees had incomes under 200% of the Federal Poverty Level, and so were eligible for strong CSR (about 98% of them, anyway).  At bottom, the raw numbers at each metal level are charted, courtesy of the Maryland Health Connection. (Platinum and catastrophic plans accounted for 3% of enrollment between them in both years.)

2017

Income (% FPL)
% bronze
% silver (CSR)
% gold
< 100 
 3
96
  0.7
100-138
 4
95
  0.5
138-150
 7
92
  0.5
150-200
10
88
  1.0
0-200 (strong CSR)
 7
92
  0.8
200-250 (weak CSR)
21
74
  3.2
250-300
30
60
  6.0
300-400
31
57
  7.4
>; 400
33
48
11.6
Unknown
26
54
11.0
Total
18
74
 0.5

2018


Income (% FPL)
% bronze
% silver (CSR)
% gold
< 100
<100 p="">
10
80
  7
100-138
  8
84
  7
138-150
  9
83
  8
150-200
13
76
10
0-200 (strong CSR)
11
79
  9
200-250 (weak CSR)
24
46
28
250-300
32
32
33
300-400
37
25
34
> 400
42
24
27
Unknown
35
34
22
Total
23
55
19

Wednesday, March 28, 2018

A downside to silver loading: CSR takeup drops in Maryland

note 3/30 updated at bottom.

Maryland is one state that experienced beneficial effects from Trump's cutoff of federal funding for Cost Sharing Reduction (CSR) subsidies. In Maryland, insurers concentrated the cost of CSR into silver plans offered on-exchange only, creating dramatic discounts in gold and bronze plans for many subsidized buyers, as well as cheaper off-exchange silver plans for the unsubsidized (who nonetheless were stung by super-high premium increases). In January, I reviewed the bounty available to subsidized buyers:
Throughout the state, all subsidy-eligible* enrollees with incomes below 200% of the Federal Poverty Level (FPL) could obtain an bronze plan for under $20 per month. Most at this income level -- e.g., everyone over 30 -- could get a bronze plan for under $4 per month. In the state's most populous counties, subsidy-eligible buyers could get a gold plan for just a few dollars more than a silver one.  And in several rural counties, an enormously expensive benchmark (second cheapest) silver plan, which determines subsidy size, rendered silver and gold plans as well as bronze plans free for many enrollees.
Probably as a result of those discounts, subsidized enrollment in the state increased slightly over 2017, despite the shortened enrollment period and sharply reduced advertising and enrollment assistance funding from the Trump administration (overall enrollment was down slightly). Gold plan selection almost quadrupled.

Those were the benefits. But there was a downside as well. CSR,  available only with silver plans, makes silver plans roughly equivalent to platinum for enrollees with incomes up to 200% of the Federal Poverty Level (FPL). Among enrollees with incomes below that threshold, as with higher income enrollees, silver selection dropped significantly.

Today the Maryland Health Connection sent me a breakout of metal level selection by income for 2017, to go with the 2018 numbers they supplied in January.  Below, I've extracted the percentage changes in selection of each metal level among those eligible for CSR. Note aggregate numbers for all groups up to 200% FPL. At 200-250% FPL, CSR is available but negligible.  Switching to discounted gold and bronze makes sense for many in that income range.

Thursday, March 22, 2018

Elizabeth Warren roars at health insurers, but her ACA 2.0 offers them a pretty sweet deal

Elizabeth Warren loves to bash insurers. Yesterday, she introduced a bill* that would radically improve the health insurance offered in the ACA marketplace. Reading the preamble to the bill's one-page summary, you'd think that problems of access and affordability in U.S. healthcare are solely a product of insurance company greed.

Leaving aside various hat-tips to the ACA, here's the indictment:
...today, too many patients still have to battle with their insurance companies just to see a doctor or get a prescription filled. Insurance companies draw networks so narrow that patients struggle to find a doctor or get an appointment.1 Patients find out when they get a bill in the mail that they unwittingly relied on an outdated provider directory and now owe hundreds of dollars in unexpected costs for out-of-network care. Insurance companies can drop doctors from their network in the middle of the plan year with no notice, suddenly jack up out-of-pocket costs for a cancer or MS drug, or rip up a plan at the end of the year and leave new mothers or patients dealing with a serious health condition scrambling to maintain access to their doctor.

Tuesday, March 20, 2018

Health Insurers' risk corridor suits could seek a lot more than $12.3 billion


Stephanie Armour reports in the Wall Street Journal that a decision should come down soon from the U.S. Court of Appeals for the Federal Circuit in two of the risk corridor lawsuits against the federal government filed by health insurers seeking reimbursement for losses in the ACA marketplace. Those suits seek a total of about $12.3 billion in risk corridor payments the government failed to make in 2014, 2015 and 2016.  In fact, the bill could be considerably higher if insurers prevail. That's what I'd like to spotlight, below.

The risk corridors, to review briefly, were one of three risk management programs the ACA established to cushion health insurers' plunge into an unprecedented market structure. Insurers with losses above a fixed threshold would get a large chunk of them reimbursed by the federal government, while those with profits above a mirror-image threshold would pay a chunk of those gains in. The ACA statute states that insurer losses will be paid according to this formula, and HHS guidance through 2013 affirmed this. In early 2014, though, with the program under attack from Marco Rubio and other Republicans, HHS and CMS indicated that reimbursements would be revenue neutral, and reduced if the contributions from profitable insurers did not cover unprofitable insurers' losses. Republicans then, in omnibus funding bills for FY 2015 and 2016, banned the agency from using its funding streams to pay any shortfall beyond insurers' contributions. In October 2015, CMS announced that it would pay just 12.6% of $2.87 billion in insurers' compensable 2014 losses. A cascade of failures among the nonprofit insurance co-ops established (and underfunded) by the ACA followed. How many of those co-ops would have survived had the risk corridor promises been kept is debatable.  By 2016, the last year of the program, unpaid risk corridor losses totaled $12.3 billion.

The insurers have a clear case on the merits, regardless of what the courts decide about the paradox of funds promised by statute by unappropriated by Congress (one of several such paradoxes generated by serial Republican sabotage of the ACA, all of them eroding the full faith and credit of the U.S. government). One aspect of the complaint highlighting the extent of the moral debt, and possibly the financial one, caught my eye in the class action complaint joined by some 150 insurers, Health Republic Insurance Company v. The United States of America.

Saturday, March 17, 2018

Who'd be hurt by restored federal CSR funding? A snapshot from Maryland

Update: snapshot from Rhode Island added at bottom, 3/19.

Based on 2017 ACA marketplace enrollment data, Aviva Aron-Dine of the Center on Budget and Policy Priorities estimates that as many as 36% of marketplace enrollees might be harmed if federal funding for Cost Sharing Reduction (CSR) payments is restored by Congress. That's an upper bound, if all who could potentially benefit in 2018 by switching from silver plans to other metal levels did so. It comes to about 22% of all individual market enrollees, since about 40% of those in ACA-compliant plans bought their plans off-exchange -- and so are ineligible for subsidies.

One sample of data already available for 2018 -- Maryland's -- indicates that Aron-Dine's estimates are on target. I have something of a quibble with how the potentially harmed population is defined, however.

Wednesday, March 14, 2018

Inflation that tracks your march to death

As the ACA-compliant individual market shuddered under a second consecutive round of premium hikes averaging well north of 20% in 2018, I took in an earful of stories from people in their fifties and sixties who were paying full freight, partly recounted here.

One thing that struck me somewhere along the way is the impact of the personal inflation hit induced simply by aging. In the best of markets, late-middle-agers will pay 4-5% more in many years simply for getting a year older. that's  a turbo-charge to double-digit hikes for everyone (particularly for couples).

David Anderson, who may do a more analytical post about this, was kind enough to pull an ACA age rating chart for me. I begin at age 45,  just before price increases accelerate. This is for one bronze plan in Arizona:

Monday, March 12, 2018

We're not in ACA Repeal-and-Replaceville. We're in Cassidy-Collinstown

Peter Suderman argues that The GOP Accidentally Replaced Obamacare:
Republicans, having failed to repeal Obamacare, have stumbled, almost accidentally, into replacing it. For better and for worse, and with little coherent vision at work, they are making Obamacare their own. And over time, they are likely to embrace it.
There's a good degree of truth in this. Suderman runs through the panoply of Republican legislative and administrative whacks at the ACA's structure and benefits on the federal and state level: individual mandate repeal; creation of a parallel market of non-ACA-compliant plans; regulatory hurdles to Medicaid enrollment aimed particularly at the ACA Medicaid expansion population; repeal of the Independent Payment Advisory Board for Medicare. And Suderman adds a creative future-cast twist: If Democrats take power and pursue a fully or quasi-single payer system, Republicans may end up defending the relatively moderate -- and Republican-moderated (or adulterated) -- status quo, i.e. the ACA.

Suderman's neat conceit leaves a core factor out of the equation, though: funding.

Thursday, March 08, 2018

Can Medicare Advantage plans lower enrollees' out-of-pocket costs? A talk with Kaiser's Juliette Cubanski

A month ago, I took a look at the resources available -- or unavailable -- to Medicaid enrollees who face a "Medicare cliff" when they turn 65 -- that is, a transition from having basically all their medical expenses covered to a program that carries a monthly premium for most of $134, requires 20% copays for most medical services and potentially huge outlays for inpatient hospital care, and has no cap on out-of-pocket costs.

Some 10.7 million Medicare enrollees are "dual eligibles" of one kind or another -- enrolled either in ABD (Aged/Blind/Disabled) Medicaid, which provides comprehensive coverage,  or in Medicare Savings Programs (MSPs), which offer more partial coverage, or in some cases both.  But the income thresholds for all of these programs are lower than for Medicaid in states that accepted the ACA expansion, and the asset tests for the MSPs are quite low -- $7560 for an individual, excluding home and car.  The application process is complex, and help and outreach are underfunded.  (For a useful overview, see Josh Schultz.)

For the many seniors of quite limited means who don't qualify for MSPs, I wondered to what extent Medicare Advantage (MA) plans might function as a de facto discount plan. About one third of current Medicare enrollees are in MA plans. MA plans usually incorporate a Part D drug plan, and often the premium is lower than the combined premium for Medicare Parts B and D (e.g., in zero-premium plans, in which enrollees pay only their Medicare Part B premium).  MA plans may offer extra benefits, such as dental, vision or hearing coverage (often quite limited). Perhaps most importantly, they cap out-of-pocket costs at a maximum of $6,700 per year. The main tradeoff is acceptance of a limited provider network -- often quite limited.

I spoke to Juliette Cubanski, Associate Director of the Program on Medicare Policy at the Kaiser Family Foundation and lead author of a recent Kaiser report on healthcare spending in Medicare households, about the appeal, real or perceived, of Medicare Advantage plans for lower income Medicare enrollees.  An edited q-and-a is below.

xpostfactoid: Does Medicare Advantage often offer effective de facto discounts over traditional Medicare?

Tuesday, March 06, 2018

Getting creamed in New Jersey: Testimony of the unsubsidized

As noted in my last post  (and called for in my January op-ed), a bill introduced in the New Jersey Senate  (S-1877) last month would implement a state individual mandate and earmark the penalty revenue for a state reinsurance program. A companion bill (S-1878) would authorize pursuit of an ACA innovation waiver to seek federal funding for the reinsurance, as Alaska, Oregon and Minnesota* have successfully done.

BlueWaveNJ, a grassroots group for which I volunteer, supports these paired bills. We have lots of members who insure themselves through the individual market -- many subsidized, and many unsubsidized. In support of the bills, we collected testimony from the latter group -- who were slammed by this year's premium increases. Yesterday, I submitted their testimony at a hearing of the state Senate's Budget and Appropriations Committee, which approved amended versions of both bills.

The testimony is posted here, on the BlueWaveNJ website. As the personal narratives indicate:
These are individuals in their fifties and sixties now facing premiums in the $600-1000/month range and family premiums north of $2000.  They describe tough choices between narrow network coverage and still-higher premiums, or between narrow networks and down-sizing to bronze plans that offer basically catastrophic coverage. Subsidized members are faced with a similar choice between ultra-narrow networks and steep premium increases or reduced coverage.

Saturday, March 03, 2018

New Jersey bill aims to block Trump admin's proposed rule for Association Health Plans

New Jersey is relatively well defended against the Trump administration efforts to fragment the individual and small group health insurance markets by allowing short-term plans to be sold for year-long terms and easing the path for association health plans (AHPs) to be deemed employers in their own right and so gain large group status.

New Jersey bans short-term plans outright, and tightly regulates association plans (the main species of  multiple employer welfare arrangements, or MEWAs, that is, plans that cover the employees of two or more unrelated employers). In Jersey, MEWAs are regulated as small group plans,even if they're self-funded. (While self-funded plans generally are subject to federal oversight under ERISA, which preempts state law, there has long been an exception enabling states to exert all but full  regulatory control over MEWAs.)

As small group plans, MEWAs in New Jersey are subject to the full suite of ACA coverage rules, including Essential Health Benefits. Small group plans are not available to self-employed individuals, or to small businesses that have no employees other than owner and spouse.. Under the Department of Labor's proposed rule for AHPs, these self-employed individuals and small business owners would be eligible to enroll in AHPs that gain large group status.

Does the proposed rule threaten New Jersey's current regulation of AHPs? That's not clear. On the one hand, "The proposed rules also would not modify the States’ authority to regulate health insurance issuers or the insurance policies they sell to AHPs" (p. 42). At the same time, Kevin Lucia, a professor in Georgetown University's Health Policy Institute, cites concern among experts "that this is potentially going to have to be litigated. If you're an association and you set up in Oklahoma, if you read these regulations, you think, well I can sell everywhere -- and yet, California tells me I can't come in?"

Bottom line for Lucia: "It's a big question whether states will be able to maintain their authority to regulate MEWAs."

That uncertainty likely drives a provision addressing MEWAs in a bill introduced in the New Jersey legislature, S-1877, that would establish a state individual mandate to replace the federal mandate effectively repealed by the Republican Congress.

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