Two reasons the proportion of young adults in ACA marketplace may be rising

Sarah Kliff has marshaled good evidence that the individual mandate is working over time to pull more young adults into the ACA marketplace. As the penalty ratchets up each year, the proportion of young enrollees increases. The evidence in brief: 1) that's how it worked in Massachusetts; 2) young adults identify the mandate as a chief motivator in polling data; 3) HHS and Enroll America have brought the mandate to the fore in marketing messages; and 4) the proportion of enrollees under 35 (including children) has risen modestly this open season, from 35% in OEII to 38% so far this time around.

All of this is convincing. But the perspective of Anne Filipic, of Enroll America, also indirectly highlighted something I've put forward as a secondary cause of this year's modest spike in young enrollment: Because prices are higher this year, more young adults qualify for subsidies. Here's Filipic:

Filipic and her team already think the mandate could play a bigger role in their messaging going forward. Right now, Enroll America has a calculator that lets potential enrollees see how much financial help they'd be eligible to receive if they signed up for coverage.

Marketplace watch: ACA year in review

As an amateur student of U.S. healthcare, I'm always conscious that I'm talking to (and reading) people who know far, far more than I do.  And I wish I knew how to locate and talk to more marketplace and Medicaid enrollees about their experiences. Perhaps that can be my resolution for 2016.

That said, by carefully reading sources I've come to trust (and studies they recommend), and burrowing into a few preoccupations (CSR, anyone?), I do think I've managed to bring a few important points to light or into focus in the past year. Chief among them may be the extent to which enrollees who should have been Medicaid-eligible propped up the private plan marketplace in states that refused the Medicaid expansion; the extent to which the uninsured were concentrated in low income bands where ACA offerings have been most effective; the various ways in which subsidy-eligible uninsured people may have got the impression they were ineligbile for aid; the extent to which news coverage and even sophisticated research misses the effects of Cost Sharing Reduction; and the extent to which exchange design affects CSR takeup.

A lot of my 'discoveries' are surely obvious to those who closely study healthcare or work at implementing the ACA. But it may not be obvious to them that the points need highlighting. Below are a few of those highlights from 2015. Thanks for reading!

Dollars to donut holes, Ambetter undercuts the competition (11/20)
     Cut-rate insurers with roots in Medicaid managed care are driving down benchmark premiums in some major markets

The counter-Upshot: Obamacare is quite as egalitarian as it seems (11/20)
     Most of America's uninsured have incomes below 250% of the Federal Poverty Level

Supporting the biggest decision for ACA marketplace shoppers (11/3)
     That would be whether to access or forgo Cost Sharing Reduction subsidies

What about a state-level public option (with a remixed subsidy schedule?)

ACA marketplace plans work reasonably well for a majority of subsidy-eligible buyers -- but leave far too many underinsured, or paying premiums they can't readily afford. There's virtually a progressive consensus on that point by now.

The latest crystallization of this consensus is in an analysis of ACA plan holders' costs by the Urban Institute's* Linda Blumberg, John Holahan and Matthew Buettgens, which spotlights high combined premium and out-of-pocket costs for the sickest, oldest and wealthiest of subsidized plan holders in the ACA marketplace (as well as for those a notch above subsidy eligibility).

Among the subsidy-eligible, median costs are most acute for buyers with incomes over 200% of the Federal Poverty Level (FPL), the threshold at which strong Cost Sharing Reduction (CSR) subsidies phase out while subsidized premiums as a percentage of income rise. Median combined premium and out-of-pocket costs for marketplace customers with incomes ranging from 200-500% FPL range from 10,8% to 13.4%, according to the study authors. The spike in costs at the 200% FPL threshold is reflected in ACA takeup rates, which  according to a cited study,** fall off a cliff at 200% FPL, from 62% of eligible individuals to 29%.

The authors recommend, as Blumberg and Holahan have previously, that ACA subsidies be enriched across the board, and that tax credits be added above the current 400% FPL cap. While the cost would be relatively modest -- covered, in fact, by reduced spending projections for the ACA and Medicare-- the political lift is plainly impossible for the foreseeable future.

There may, however, be revenue-neutral steps that would boost affordability and so, takeup. If so, they will have to be taken at the state level. That's not only because Congress is incapable of constructive action where the ACA is concerned. It's also because the ACA benefit structure militates against any realized cost savings being passed directly to the consumer.

"Coordination without consolidation!"

This month, the findings of a rigorous study of new data on healthcare spending in the U.S. private market hit healthcare policymakers and scholars with gale force. The main findings:

1. While U.S. cost control efforts, through the ACA and more generally, are focused mainly on reducing wasteful care, in the private market the price of care is the primary driver of spending differences within and between regions, and so of high overall costs (or, as Sarah Kliff put it three years ago, it's  the prices, stupid).

2. Region by region, there's very little relationship between Medicare spending and private market spending. Many regions with low Medicare spending have high private market spending.

3. "Hospital prices are positively associated with indicators of hospital market power." The more concentrated the market, the higher the spending.

Points one and three have bene recognized to some extent for years -- though the new data is very valuable for boosting the growing attention to antitrust enforcement, which Hillary Clinton has promised to ramp up. Point two -- the lack of correlation between Medicare spending and private spending, -- is the surprise, and would seem to suggest a need to recenter cost control efforts to some degree, especially since out-of-pocket costs for the privately insured seem to keep rising relentlessly.

I'd like to highlight one point in the study's framing that may be obvious to healthcare professionals, but seems worth thinking about:

Higher health plan prices may bring *more* young buyers into the exchanges

In its latest ACA enrollment snapshot, CMS is touting an increased percentage of younger enrollees compared to last year.

As of the Dec. 17 deadline to obtain coverage beginning Jan. 1, enrollees under age 35 comprised 35% of all HealthCare.gov customers, compared to 33% in the year prior (that includes children, who last year accounted for about 7% of enrollees on the federal exchange). Among new enrollees only, 41% are under 35 this year, compared to 38% last year.

The modest de-aging of the risk pool is good news, and, according to Sarah Kliff, relieves a worry:

Obamacare premiums went up a lot faster for 2016 coverage (the year this current open enrollment covers) than they did for 2015. That created some worry that young people might not sign up in high numbers. Because younger people tend to have fewer medical needs, they tend to be more price sensitive and willing to forgo coverage in the face of a premium spike.

It's possible, though, that the price spike actually brought more young customers into the marketplace.

Obama to Inskeep: I'm not Eisenhower, ISIL is not the Soviet Union, the media is not the culprit, the country is not in crisis

NPR's Steve Inskeep began an interview with Obama by setting on a tee what might have looked to some like a giant softball:

STEVE INSKEEP: I have been reading a history of part of the Cold War. Dwight Eisenhower was president, he's meeting his cabinet sometimes in this room where we're sitting. The Soviet Union has emerged as a major nuclear threat. The country is very worried at this point in the 1950s. But Eisenhower is convinced that they are not that strong, that the United States is stronger, that the U.S. will win if we just avoid a huge war.

And he decides to try to reassure the public, gives a series of speeches, saying, keep your chin up, everything's fine, our strategy is working. It's a total failure. The public doesn't believe him. He is accused of a failure of leadership, and his approval rating goes down.

Are you going through the same experience now with regard to ISIS?

Obama took it for a ball:

What if all private health insurers paid 120% Medicare rates?

In my last post, I noted that some insurers fielding narrow networks plans in the ACA marketplace appear to be paying providers at rates as low or even lower than a strong public option would have. That left me wondering why those lower payment rates don't translate into much lower costs for plan holders willing to put up with the limited choice of providers. (One part of the answer may be that the ACA subsidy and benefit structure partly insulates subsidized buyers from the actual cost of care, potentially for worse as well as for better.)

The broader question is, what would be the effect on US healthcare if insurers generally paid a reasonable multiple of Medicare rates -- say, Medicare plus ten or twenty percent? And I just came across a short answer of sorts in a study that's having a swift impact on healthcare scholars' understanding of what drives healthcare prices. That's The Price Ain't Right? Hospital Prices and Health Spending on the Privately Insured, by Zach Cooper, Stuart Craig, Martin Gaynor and John Van Reenen,  which analyzes a huge new database of payments to hospitals for privately insured patients. Here is one conclusion that bears on the broad question:

Narrow networks: a crooked path to affordable healthcare?

Richard Mayhew has a post suggesting that even a strong public option in the ACA exchanges would generate only "marginal pressure to reduce prices." In a competitive market, it might not undersell all commercial plans, and in a non-competitive market it might be able to field only a very narrow network -- most providers wouldn't opt in. Be that as it may, one claim brought me up short:

Mayhew Insurance is in a competitive market region for the Exchanges.  The lowest priced Silver plans offered by all of the insurers in this region are narrow network HMOs where the providers get paid Medicare rates plus 5% to Medicare plus 10%.  The public option would be just another plan that is in the cluster for the 2nd Silver subsidy point.

In other words, there are insurers on the exchanges who are paying providers no more than a strong public option would pay. In fact it's been suggested to me that the lowest-priced insurers in the marketplace probably pay something closer to Medicaid rates than to Medicare.

This is one of those scratchpad posts, put up as I explore further. If you see any faulty assumptions, please let me know.

About that deadline, HealthCare.gov..

HealthCare.gov really, really wants the uninsured to get covered by Jan. 1. Hence these daily emails:

The moment when the rise of the oceans began to slow

Not to minimize the dangers posed either by ISIS or Trumpism, but the odds are pretty good that both will fairly swiftly end up in the ashcan of history. Meanwhile, as we in the US obsess about both, a 195-nation climae accord has been negotiated in Paris that may lay the foundation for  continued human progress without catastrophic interruption.

While the US is maintaining a relatively low profile at the conclusion, the accord would not have been possible without forceful and effective climate action on the part of the Obama administration and the long, intensive efforts of John Kerry. Thank God we have a president who knows what's most important, knows how to prioritize and persist.

Obama was mocked for grandiosity when he laid out this hope on the night he secured the Democratic nomination in 2008 (my emphasis):

Once more, slowly: Obama sends a signal through the noise

There was conceptually nothing new in the interpretation of American history that Obama voiced in his speech yesterday commemorating the passage of the 13th Amendment. Yet what an intense, somber, formal, meditative distillation it was.

As in his speech in the eye of the Reverend Wright storm in March 2008, and his speech celebrating the Selma march early this year, this speech reiterated the core Obama narrative:

• American history is a long quest to live up the principles articulated in the country's founding documents -- and to shake off the "original sin" of slavery.


• Heroes of American history have at critical junctures advanced that quest, widening the circle of those encompassed by the promise of equal rights and opportunity.


• It's incumbent on us today to write the next chapter in that history of bumpy, incremental progress.

What was different yesterday: There was more emphasis on the original sin, and less on the moments of glory. Three of the four "warriors of justice Obama cited were black, (Harriet Tubman, Frederick Douglass and Martin Luther King as well as Lincoln), keeping the focus on the "original sin" with less zooming out to other causes (women's rights, gay rights) than in other recent speeches.* Most of all, Obama was pushing back, obliquely but unmistakably, against the rising tide of nascent fascism in the current campaign:

Ripples in the ACA risk pool

When a state that initially refused to implement the ACA Medicaid expansion embraces it, that's great news for state residents who were in the so-called "coverage gap" -- earning too little to qualify for subsidized private plans in the ACA marketplace, but denied the Medicaid coverage which the ACA had originally mandated for them, before the Supreme Court rendered the expansion optional for the states.

For another income group, those with household incomes between 100% and 138% of the Federal Poverty Level (FPL), the expansion may be a blessing for some but not all. People in this income range are eligible for subsidized private plans in states that have refused the Medicaid expansion -- but for Medicaid only in states that implement it.

As of the end of the ACA's last "open season" enrollment period in February 2015, 22 states had not yet adopted the law's Medicaid expansion, and one state, Indiana, had just adopted it, effective February 1.  In those states, about one third of enrollees in private health plans purchased in the ACA marketplace had incomes in the 100-138% FPL range and so would have been eligible for Medicaid if their states had embraced the expansion.  They constitute perhaps 15-20% of all enrollees in the ACA private plan plan marketplace.

Trump, the musical

(Updated*) As I caught myself humming the Nazi crowd-raiser Tomorrow Belongs to Me from Cabaret a bit back, it occurred to me that Trump needs an anthem. Since he's promising restoration, what better template than Happy Days are Here Again?  So here goes:

Barbarians at the gate again!
To make America great again
we've got to learn how to hate again --
make America great again.

Attention, Secretary Burwell: If you really want ACA shoppers to consider more than price....

This is all very well, Secretary Burwell...

Burwell acknowledged that people have had some trouble picking the right policies, with some deciding based mainly on how expensive policies were, rather than on what’s covered.

But why then did I get a voicemail on Thursday from healthcare.gov telling me that "most people" can get plans for under $75? Here's the email version of that mantra (also sent Thursday):

The message here is that monthly premium price is all that matters. Based on current enrollment, a large subset of those who can find a plan for $75 per month can find only a bronze plan below that ceiling.  Most bronze plans have deductibles north of $6,000. Meanwhile, anyone who can get a bronze plan for under $75 is eligible for Cost Sharing Reduction (CSR) subsidies, which are available only with silver plans, which have higher premiums.

Partial protection against balance billing? More on the NAIC model law

I have an article up at healthinsurance.org that assesses (in more detail than the previous post here) the consumer protections against balance billing in the model law recently adopted by the National Association of Insurance Commissioners. 

A key question is what happens after a patient forwards a balance bill to her insurer for negotiation or mediation. Can it come back to bite her?  There's some precedent in Texas law. Here's the gist:

If adopted as is,  how fully will the model act protect a balanced-billed patient who exercises her option to send the bill to her insurer? "If it goes to mediation, the intention is that the patient will be held harmless," say Stephanie Mohl of the American Heart Association, who served as a consumer liaison to the NAIC and advocated for balance billing protections.

The model act does not explicitly guarantee, however,  that once the insurer settles the bill with the provider, it won't hold the patient responsible for a portion larger than he would pay for in-network care.  The Texas law, upon which this provision is most closely modeled, does not provide such a guarantee, according to Stacey Pogue of the Texas-based Center for Public Policy Priorities.

In practice, however, Pogue says that when patients do initiate mediation, the system seems to be "working really well." Anecdotally, she has heard (mainly from insurers)  that the bill is usually resolved with a brief phone call, and insurers usually cover the whole.