For UHC, what's the matter with Iowa?

This week, health insurance Centene announced that it is meeting its profit targets in the ACA marketplace. That's in marked contrast to United Healthcare, which expects to have lost a billion dollars in the marketplace by year's end -- and is withdrawing most of its offerings there in 2017.

I've previously noted that Centene is primarily a managed Medicaid company and has acted like one in the marketplace, fielding plans with low premiums, high deductibles and narrow networks. UHC, the nation's largest provider of employer-sponsored plans, put up more robust networks at higher prices in large markets.

While the contrast seems clean, there's more to the story. UHC is also a major managed Medicaid provider, and in many smaller markets its plans are price competitive.  That's the case in most of Iowa, from whence it is nonetheless withdrawing. In a post on healthinsurance.org, I examine why that might be -- and wonder why, more broadly, UHC is withdrawing most of its marketplace offerings, instead of replicating the low-cost narrow network model.

Can Hillary Clinton strengthen the ACA without legislation?

Jonathan Cohn has a post urging Bernie Sanders to use his enhanced visibility in the Senate to push for incremental moves toward his long-term goal of a single-payer healthcare system. Shorter term goals within the realm of imagination include letting CMS negotiate drug prices (and, I would add, leave some drugs off the formulary); gradually opening Medicare to people under 65 (perhaps starting with a buy-in option at age 60); and pushing for the widely popular "public option" that didn't make it into the ACA.

So much for Bernie in the Senate. What about Hillary in the White House? Let's be optimistic for a few minutes and assume she gets there. What can she really do to improve healthcare access and affordability?

We don't have to speculate wildly. In typical Hillary Clinton fashion, she has posted a raft of proposals to supplement and strengthen the Affordable Care Act and rein healthcare cost growth. They're lightly sketched in, though, and it's hard to know where Clinton would place her emphasis

One obvious starting point is with those that can be effected by executive action and administrative focus rather than by legislation. Steps requiring legislation are for the most part unlikely to happen, except in the unlikely event that a Democratic blowout takes back the House as well as the Senate -- and legislative possibilities would probably be quite limited even with a narrow Democratic majority.

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.

Proposed in Minnesota, an industrial-strength public option

Minnesota progressives and elected officials in the state's Democratic Farmer-Labor party (DFL) are yearning to get back to the future with MinnesotaCare, the state's excellent public insurance program for residents of low-to-moderate income who earn too much to qualify for Medicaid.

Prior to ACA implementation, MinnesotaCare was available to Minnesotans with incomes up to 275% of the Federal Poverty Level. In 2015, the plan was converted under the ACA into a Basic Health Plan, which qualified it for federal funding but cut off eligibility at 200% FPL. Former enrollees above that income level were sent to the ACA marketplace, where both premiums  and out-of-pocket costs are considerably higher.

A task force appointed by the governor recommended in mid-January that the state seek an ACA innovation waiver to restore MinnesotaCare eligibility to 275% FPL, with funding equivalent to the cost of federal marketplace subsidies for enrollees up to that income threshold. I wrote about that plan and its implications on healthinsurance.org in January. Its impact on the private plan marketplace and larger individual market would be fairly modest -- just 37,000 enrollees in the 200-275% FPL range are forecast -- but it would provide high actuarial value coverage to the majority of those who would otherwise be eligible for subsidies in the ACA marketplace if MinnesotaCare did not exist.

Last month, a more radical proposal was introduced in legislation in the Minnesota State Senate. I have a piece up about this proposal today on healthinsurance.org. It would offer MinnesotaCare at only modestly reduced actuarial value (if reduced at all) to anyone who wanted to buy in. While costs have not yet been closely calculated, the hope is that the premium would be in silver plan range:

What kinds of health plans are unsubsidized buyers choosing? A hint from HealthSherpa

Recently, I posted a series of comparisons of the health insurance obtained in the ACA marketplace by enrollees who were a) unsubsidized, b) subsidized, and c) heavily subsidized (i.e. with access to strong Cost Sharing Reduction (CSR) subsidies). In brief, the weighted average actuarial value of plans obtained by subsidized buyers was 81.4%, compared to 68.9% for the unsubsidized.  The perhaps more significant contrast was between those with incomes under 200% of the Federal Poverty Level, where CSR is strong, and everyone else. Average AV for buyers below 200% FPL was 86.3%. Subsidized buyers over 200% FPL obtained coverage only marginally richer than did unsubsidized buyers.

In that post I posited, tentatively, that the 1.4 million unsubsidized buyers who obtained plans on HealthCare.gov might stand in as a proxy for the estimated 9.6 million out-of-marketplace buyers of ACA-compliant plans.  While every buyer on HealthCare.gov and in the 12 state-run marketplaces is tabulated, the out-of-marketplace market is something of a black box.

Now I have a sliver of corroboration from HealthSherpa, a commercial online broker with a sleek interface and easy enrollment process. HealthSherpa is one of dozens of e-brokers authorized to process subsidized marketplace applications, which it does via a dedicated interface on HealthCare.gov (as do other brokers). According to co-founder Ning Liang, HealthSherpa has enrolled some 500,000 people in marketplace plans to date (since 2014). HealthSherpa sells in the 38 states using HealthCare.gov,and recently added  Liang sent me metal level selection data from the most recent 100,000 enrollees, all for 2016.

One surprise is that the vast majority of the 100,000, 88%, are subsidized enrollees. Finding one's way to HealthSherpa implies a certain degree of web savvy, and probably also relative youth, and most young enrollees are subsidy-eligible. So we are dealing with an unsubsidized sample of just 11,812, and all are buying plans available in the ACA marketplace, as opposed to ACA-compliant plans offered exclusively outside the marketplace.

All that said, the metal level selections of the HealthSherpa sample are pretty close to those of the unsubsidized HealthCare.gov enrollees. Here are the numbers for unsubsidized buyers from HealthSherpa:

NEJM Study: Vertical consolidation may negate benefits of health care coordination

A study* of the early performance of Accountable Care Organizations (ACOs) formed under the ACA suggests that, in funding such programs, the ACA creators may have sawed at the branch they were sitting on.

The analysis of of ACOs in the Medicare Shared Savings Program (MSSP), by a team led by Harvard's J. Michael McWilliams*, looked at total Medicare Parts A and B spending and spending on patients with select specific conditions in participating ACOs that entered the program in 2012 and 2013. In the MSSP, the largestof the ACO programs, organizations take on no downside risk -- they stand only to gain if they keep spending below targets.

The study found modest reductions in spending compared to control groups by the 2012 cohort, and negligible reductions in the 2013 cohort. Most of the improvement was in two subgroups: those whose spending was higher than the regional average prior to the program launch, and those that were composed of independent physician groups rather than those owned by hospitals. The second finding throws up a red flag with respect to current trends:

we estimated substantially greater savings for independent primary care groups than for groups integrated with hospitals when comparing spending changes in ACOs with local concurrent changes. There are both theoretical considerations and previous observational studies that would support the pattern of savings that we observed. In particular, independent physician groups have stronger incentives to lower inpatient and hospital outpatient spending than groups integrated with hospitals because their shared-savings bonuses are not offset by forgone profits from reductions in hospital care. Our findings suggest that financial integration between physicians and hospitals, which may increase commercial health care prices,is not necessary for ACO success. Early signals from the MSSP, however, may not predict the long-term efficiencies from various organizational structures under new payment models

Black, me?

Nicholas Kristof has done yeoman's work patiently documenting the persistence of pervasive racial prejudice in American life. In a series of columns, he has presented the evidence that African Americans face discrimination in hriring, housing, education, policing and sentencing. He's also invited readers to take a self-administered test charting our own unconscious biases -- which, he suggests, are basically hard-wired into human tribal psychology (not specific prejudices, but mistrust of out-groups).

Political scientists (e.g., Brendan Nyhan) tell us, however, that beliefs in which people are emotionally invested are rarely susceptible to facts. In fact, people tend to double down on their beliefs when confronted with facts that contradict them. That tendency often hovers in the back of my mind when I read Kristof's columns in this series -- or recall them, as I did today while reading this corrective history-via-op-ed of African American response to the 1994 crime bill.

My healthcare credo to date

As an amateur healthcare student, every now and then I like to pause and take stock of the convictions I've picked up by osmosis -- by deciding, consciously and unconsciously, what (and whom) to credit in what I read and hear. Here's a short set of hypotheses (and suspicions).

1. The single most important means of healthcare cost control is uniform or at least coordinated pricing: single payer, all-payer, or, maybe in the U.S., private as a fixed percentage of public. The U.S.'s  unique every-payer-for-itself system is the main reason Americans pay far more per procedure than citizens of any other developed country.

2. The evils of market consolidation are likely to outstrip the virtues of coordinated care.

3. Which treatments and drugs are covered by insurance, and to what level (ideally by all payers in concert, and. by Medicare and Medicaid in our current system) should be informed by outcomes research and price/benefit calculations.

4. The wisest words ever spoken by a public health official: "We cover everybody, but not everything."*

Is the ACA's drag on employer-sponsored insurance less than expected?

There seems to be an impression stalking the land that once upon a time (and for many years thereafter), the Congressional Budget Office forecast that the Affordable Care Act would strongly inhibit Americans' access to employer-sponsored insurance -- and that the forecast has not panned out. That's a misimpression.

In fact, since 2010 CBO has consistently forecast that the ACA would mildly inhibit the growth in access to ESI that would have taken place had the law never been passed. In all its annual ten-year forecasts, single years in which it forecast an actual drop in ESI enrollment form the year are rare -- and in fact, almost all such forecast one-year drops are for 2016..* From 2010 to 2016, moreover the only year in which CBO forecast that total ESI enrollment would be lower ten years ahead than in the present year was...this year. The current forecast has ESI at 155 million for 2016, dropping to 152 million by 2019 and staying at that level through 2026. In 2010, CBO forecast that ESI enrollment would be 159 million in 2019.

Why, then, the impression that CBO has reduced its estimates of ESI inhibition?  In one important, and relatively recent sense, it has. In 2013, CBO  ratcheted up its forecast of a drop in ESI this year, then pushed it up another notch in 2015. That cut was to be in tandem with a jump in enrollment in the ACA marketplace, always forecast for 2016. This was to be the year that the marketplace came of age and several million would presumably be sucked out of the employer-sponsored market -- presumably as employers of lower income workers came to recognize that their employees could do better in the ACA marketplace (which is broadly true for employees with household incomes below 200% of the federal poverty level). Again, every year since 2010, CBO has forecast an absolute drop in ESI this year. That apparently hasn't happened.

Notes on Gallup's latest health insurance status polling

Gallup announced today that the U.S  uninsurance rate, as reflected in its daily surveying, fell to its lowest rate yet recorded in the first quarter of 2016, 11.0% for all adults. Gallup has been conducting this survey in partnership with Healthways since 2008.

Just for the hell of it, I'm going to try a few I'm notes from my phone [updated 4/8/16]:

1. While Gallup headlines a drop from Q1 2015 (11.9%) to Q1 2016 (11.0%), a better contrast is probably with Q2 2015 (11.4%). In 2015, open enrollment did not end until the third week in February; this year it was over on Jan. 31. By Q4 of last year Gallup found that the uninsurance rate had ticked up to 11.9%. There will probably be some attrition this year as well -- though perhaps a bit less, as the ACA marketplace this year for the first time recorded no-pays and terminations more or less as they happened during open enrollment.

Is employer-sponsored insurance superior to ACA marketplace plans? For whom?

So far, the Affordable Care Act has not curtailed the availability of employer-sponsored insurance (though it may have curtailed its growth). On the front page of today's New York Times, Reed Abelson reports that "health care remains an important recruitment and retention tool as the labor market has tightened in recent years." One part of her explanation is "mostly true," as the fact-checkers say -- but hides an important fact about what kind of insurance is available to whom:

The law has resulted in more coverage for low-income people, as expected. But...the plans on the exchanges remain less generous than those offered by many employers, with significantly higher deductibles and a significantly narrower choice of hospitals and networks.

That's probably true for most workers whose employers offer them insurance. It's not true, however, with respect to out-of-pocket costs for workers whose household income is below 201% of the Federal Poverty Level (FPL). As I noted last Friday, for ACA enrollees with incomes below that threshold, the average weighted actuarial value (AV) of the plans they obtain -- that is, the percentage of the average user's costs that the plan will cover -- is 86%.  The average AV in employer-sponsored insurance was estimated by the Kaiser Family Foundation at 82% back in 2011 -- and it's probably dropped since then.  It's likely to be still lower for lower income workers.

What kinds of health plans are people buying outside the ACA marketplace? An eHealth snapshot

In estimating the weighted average actuarial value of health plans sold in the entire U.S. individual market last Friday (spoiler: AV 75%), my proxy for the off-exchange market was the 1.4 million HealthCare.gov enrollees who did not qualify for subsidies. Here's the score:

Actuarial value obtained by unsubsidized enrollees on HealthCare.gov

Actuarial Value	% of unsubsidized enrollees
90 (Platinum)	3.3
80 (Gold))	18.5
70 (Silver)	39.0
60 (Bronze)	33.0
57 (Catastrophic)	6.8
68.9% (weighted avg)

There are probably 7 to 8 million enrollees in ACA-compliant off-exchange plans, and assuming that the unsubsidized Hc.gov population reflects their choices is something of a leap, as I acknowledged. But here is a second data set: last December eHealth, the largest commercial online health insurance broker (pre-dating ACA implementation) broke out metal level selection among its unsubsidized enrollees in the first two weeks of open enrollment for 2016. The "last year" comparison in each line is to the first two weeks of open enrollment 2015. The results:

A major divide in the ACA individual market for health insurance

In my last post, I calculated that the average private health plan obtained by ACA marketplace enrollees for 2016 provides coverage equivalent to a gold-level plan, and also roughly comparable to the average employer-sponsored plan.  That is, the average actuarial value (AV) of plans sold in the marketplace is just about 80%, thanks in large part to the Cost Sharing Reduction (CSR) subsidies available to buyers with incomes under 250% of the Federal Poverty Level (FPL) who buy silver plans.

While an 80% average actuarial value sounds pretty good -- better, I think, than most people would guess, based on media coverage -- it covers a lot of unevenness. There are two great divides in the post-ACA individual market. The first is between the subsidized and the unsubsidized. The second is between enrollees with incomes up to 200% FPL -- the phase-out point for strong CSR subsidies -- and everyone else. Let's look at average AVs for the different groups.

First up is a breakdown of the subsidized buyers on the federal marketplace, HealthCare.gov. CSR raises the AV of silver plans to 94% for enrollees with incomes up to 150% FPL, to 87% for those with incomes in the 150-200% FPL range, and to 73% for those from 200-250% FPL.*  More than two thirds of subsidized buyers on the federal exchange get CSR of some kind.