[UPDATED, 5:15 p.m.: part of the drop in enrollees' ratings of their plans in 2016 may be due to who's buying the plans rather than what's on offer. See note at bottom.]
The Kaiser Family Foundation released its latest survey of enrollees in the individual market for health insurance today, which also includes some data on enrollees in employer-sponsored insurance (ESI). While majorities still report themselves satisfied with their health plans, the results suggest that health insurance is deteriorating, in ESI as well as in the individual market.
The comparisons provided with results from 2015 and 2014 tell a simple story. Deductibles and cost-sharing are on the rise, so people have more trouble paying their bills, are more often surprised by what their plans don't cover, more often go without needed care, and are therefore less satisfied with their plans. This is all true in employer-sponsored insurance as well as in the individual market, though satisfaction in ESI starts from a higher baseline.*
Data on deductibles brings the overall picture into focus. In the individual market as a whole, more enrollees in low deductible plans report themselves satisfied than those with high deductibles (74% vs. 59% ). The percentage of enrollees in high deductible plans is rising (49%, compared to 36% in 2015 ), and the percentage of those dissatisfied with their plans is also rising (31%, up from 20% in 2015 and 2016). The rise in high deductible plans is proportionate to the drop in reported satisfaction: 66% of all enrollees in ACA-compliant plans report themselves satisfied this year, compared to 74% in 2015.
Satisfaction is higher among those who bought their plans in the marketplace rather than outside it, among those who were subsidized, and (again) among those in low deductible plans, most of whom qualify for Cost Sharing Reduction (CSR) subsidies and so have incomes under 250% of the Federal Poverty Level. In fact, most of those with plans deemed low deductible by Kaiser (under $1,500 for a single-person plan) would have incomes below 200% FPL, where CSR is strong. (In 2015, Kaiser reported that 64% of those in lower-deductible plans had incomes under 250% FPL. Many of those with low deductibles outside the marketplace were probably in ACA-noncompliant plans, a shrinking pool)
Those in ACA-compliant plans who say they feel well-protected by their plans is down from 57% in 2015 to 51% this year. Those who say they had trouble paying medical bills is up from 16% in 2015 to 21% this year.
Am I overreacting? Kaiser's Larry suggests that I am, by email: "'Deteriorating' seems strong to me. There are some concerning signs that should be watched, but I wouldn’t draw too many inferences from perceptions which may or may not drive actual behavior." He also cautions that the 5% increase in those who say they have trouble paying medical bills isn't statistically significant. Caution taken -- but I would add that that rise is congruent with all the other recorded changes in perception.
It's going to get worse before it gets better, at least in the individual market. Many large insurers lost money in the ACA marketplace last year and have been preparing the ground for large rate increase, which they're now requesting.
While insurers' underestimation of enrollees medical care usage is the immediate drive of rate hikes for 2016 and 2017, I think it's fair to say that the broader underlying problem is simply the rates we pay to healthcare providers and pharmaceutical companies. While healthcare cost inflation has slowed in recent years (excepting recent drug price spikes), it still outstrips wage growth and overall inflation, and all payers (insurers, employers, individuals) are increasingly tapped out. My strong suspicion is that the only effective means of cost control is government-imposed rate discipline,whether single payer or some version (or innovative variant) on all-payer. I suspect that all our vaunted experiments in paying for performance are poor substitutes for uniform pricing, except perhaps insofar as they tend to align private payers with government payers, as in CMS's newly expanded pilot primary care initiative,which blends capitated payments and fee-for-service, with incentives for providing coordinated care, preventive care and chronic disease management -- and engages private insurers along with Medicare to pay on this basis.
The basic reality, I think, is that the U.S. political system is simply too captured by healthcare industry groups -- hospitals, doctors, pharma -- to impose rates that would be affordable to taxpayers, employers, and individuals. We also lack the political will to raise taxes enough to subsidize coverage adequately for those lacking access to ESI -- as proposed, for example, by the Urban Institute and somewhat vaguely adopted in campaign proposals by Hillary Clinton.
If subsidies in the individual market better covered enrollees' costs, and capped premiums for all buyers at 8.5% of income (as Urban and Clinton propose), enrollment would increase, the risk pools would be wealthier and healthier, and insurers would probably not be jacking up rates so dramatically. But we'll doubtless continue penny-wise and pound-foolish for the foreseeable future.
UPDATE: Liz Hamel, Kaiser's director of survey research, was kind enough to send me some additional cross tabs, including income data for respondents. One point: the percentage of enrollees in lower-deductible plans whose incomes were below 250% FPL dropped from 64% in 2015 to 59% this year. All of that drop was concentrated among those below 138% FPL: The percentage of enrollees in lower-deductible plans below that threshold fell from 40% to 33%. That drop may be related to the overall shrinkage in the percentage of enrollees in lower-deductible plans, from 46% in 2015 to 35% this year. [UPDATE II, 6/23: more detail in this post.
The percentage decrease of those under 138% FPL in lower-deductible plans is noteworthy, as those enrollees are almost entirely in states that refused the Medicaid expansion, where eligibility for subsidized marketplace plans begins at 100% FPL rather than 138% FPL. Generally speaking, the lower the enrollee's income, the higher the likelihood that the enrollee will buy a silver plan and access Cost Sharing Reduction, which in the 100-138% FPL range generally puts the deductible in the $0-500 range (with an actuarial value of 94% for the plan).
Belated Medicaid expansions may partly account for the change in the income mix in the individual market. In 2015, Pennsylvania and Indiana embraced the Medicaid expansion, eventually adding over 800,000 to the Medicaid rolls between them (625k in PA, 240k in IN). Many of those enrollees transitioned from marketplace plans -- most, presumably, from low-deductible plans. When Kaiser conducted its 2015 enrollee survey from Feb. 18 through April 5, that transition was far from complete. Pennsylvania's expansion was rocky and slow, as it transitioned from a hastily constructed "private option" plan put in place by an outgoing Republican governor to a conversion back to conventional Medicaid effected by incoming Democratic Governor Tom Wolf. Many private plan enrollees remained enrolled while they awaited confirmation of their Medicaid enrollment. Indiana's expansion, meanwhile, was not effective until Feb. 1, 2015 and doubtless the transition for newly Medicaid-eligible marketplace enrollees doubtless took some time there too. In 2016, Alaska and Montana expanded Medicaid, but those numbers are small. Louisiana will execute an expansion later this year.
As more states embrace the Medicaid expansion in coming years, the percentage of marketplace enrollees in lower-deductible plans will probably drop accordingly, and that will likely put downward pressure on enrollees ratings of their plans.
P.S. Offering some further evidence that the percentage of low-income low-deductible enrollees in the marketplace has been reduced are HHS enrollment stats. Among the three quarters of enrollees in states using HealthCare.gov, 38% had incomes in the 100-150% FPL range in 2015, compared to 35% this year (I've adjusted the numbers to account for the 6-7% in each year who did not report income). Also out of the low-deductible pool this year are about 100-150,000 low income New Yorkers transitioned into the state's low-cost Basic Health Plan, which opened to those in the 138-200% FPL range on Jan. 1, 2016. There, the transition was swift and sudden -- and about 86% of the transferees had been enrolled in silver plans with strong CSR, according to the state enrollment report. It should be acknowledged, though, that the percentage of marketplace enrollees in this income range did not drop in 2016, according to the Kaiser survey.
Related: Average income and reported satisfaction: The Kaiser survey revisited (6/23/16)
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* The satisfaction drop in ESI enrollees is almost entirely in those who rate their plans excellent, down from 37% in 2015 to 27% this year
The Kaiser Family Foundation released its latest survey of enrollees in the individual market for health insurance today, which also includes some data on enrollees in employer-sponsored insurance (ESI). While majorities still report themselves satisfied with their health plans, the results suggest that health insurance is deteriorating, in ESI as well as in the individual market.
The comparisons provided with results from 2015 and 2014 tell a simple story. Deductibles and cost-sharing are on the rise, so people have more trouble paying their bills, are more often surprised by what their plans don't cover, more often go without needed care, and are therefore less satisfied with their plans. This is all true in employer-sponsored insurance as well as in the individual market, though satisfaction in ESI starts from a higher baseline.*
Satisfaction is higher among those who bought their plans in the marketplace rather than outside it, among those who were subsidized, and (again) among those in low deductible plans, most of whom qualify for Cost Sharing Reduction (CSR) subsidies and so have incomes under 250% of the Federal Poverty Level. In fact, most of those with plans deemed low deductible by Kaiser (under $1,500 for a single-person plan) would have incomes below 200% FPL, where CSR is strong. (In 2015, Kaiser reported that 64% of those in lower-deductible plans had incomes under 250% FPL. Many of those with low deductibles outside the marketplace were probably in ACA-noncompliant plans, a shrinking pool)
Those in ACA-compliant plans who say they feel well-protected by their plans is down from 57% in 2015 to 51% this year. Those who say they had trouble paying medical bills is up from 16% in 2015 to 21% this year.
Am I overreacting? Kaiser's Larry suggests that I am, by email: "'Deteriorating' seems strong to me. There are some concerning signs that should be watched, but I wouldn’t draw too many inferences from perceptions which may or may not drive actual behavior." He also cautions that the 5% increase in those who say they have trouble paying medical bills isn't statistically significant. Caution taken -- but I would add that that rise is congruent with all the other recorded changes in perception.
It's going to get worse before it gets better, at least in the individual market. Many large insurers lost money in the ACA marketplace last year and have been preparing the ground for large rate increase, which they're now requesting.
While insurers' underestimation of enrollees medical care usage is the immediate drive of rate hikes for 2016 and 2017, I think it's fair to say that the broader underlying problem is simply the rates we pay to healthcare providers and pharmaceutical companies. While healthcare cost inflation has slowed in recent years (excepting recent drug price spikes), it still outstrips wage growth and overall inflation, and all payers (insurers, employers, individuals) are increasingly tapped out. My strong suspicion is that the only effective means of cost control is government-imposed rate discipline,whether single payer or some version (or innovative variant) on all-payer. I suspect that all our vaunted experiments in paying for performance are poor substitutes for uniform pricing, except perhaps insofar as they tend to align private payers with government payers, as in CMS's newly expanded pilot primary care initiative,which blends capitated payments and fee-for-service, with incentives for providing coordinated care, preventive care and chronic disease management -- and engages private insurers along with Medicare to pay on this basis.
The basic reality, I think, is that the U.S. political system is simply too captured by healthcare industry groups -- hospitals, doctors, pharma -- to impose rates that would be affordable to taxpayers, employers, and individuals. We also lack the political will to raise taxes enough to subsidize coverage adequately for those lacking access to ESI -- as proposed, for example, by the Urban Institute and somewhat vaguely adopted in campaign proposals by Hillary Clinton.
If subsidies in the individual market better covered enrollees' costs, and capped premiums for all buyers at 8.5% of income (as Urban and Clinton propose), enrollment would increase, the risk pools would be wealthier and healthier, and insurers would probably not be jacking up rates so dramatically. But we'll doubtless continue penny-wise and pound-foolish for the foreseeable future.
UPDATE: Liz Hamel, Kaiser's director of survey research, was kind enough to send me some additional cross tabs, including income data for respondents. One point: the percentage of enrollees in lower-deductible plans whose incomes were below 250% FPL dropped from 64% in 2015 to 59% this year. All of that drop was concentrated among those below 138% FPL: The percentage of enrollees in lower-deductible plans below that threshold fell from 40% to 33%. That drop may be related to the overall shrinkage in the percentage of enrollees in lower-deductible plans, from 46% in 2015 to 35% this year. [UPDATE II, 6/23: more detail in this post.
The percentage decrease of those under 138% FPL in lower-deductible plans is noteworthy, as those enrollees are almost entirely in states that refused the Medicaid expansion, where eligibility for subsidized marketplace plans begins at 100% FPL rather than 138% FPL. Generally speaking, the lower the enrollee's income, the higher the likelihood that the enrollee will buy a silver plan and access Cost Sharing Reduction, which in the 100-138% FPL range generally puts the deductible in the $0-500 range (with an actuarial value of 94% for the plan).
Belated Medicaid expansions may partly account for the change in the income mix in the individual market. In 2015, Pennsylvania and Indiana embraced the Medicaid expansion, eventually adding over 800,000 to the Medicaid rolls between them (625k in PA, 240k in IN). Many of those enrollees transitioned from marketplace plans -- most, presumably, from low-deductible plans. When Kaiser conducted its 2015 enrollee survey from Feb. 18 through April 5, that transition was far from complete. Pennsylvania's expansion was rocky and slow, as it transitioned from a hastily constructed "private option" plan put in place by an outgoing Republican governor to a conversion back to conventional Medicaid effected by incoming Democratic Governor Tom Wolf. Many private plan enrollees remained enrolled while they awaited confirmation of their Medicaid enrollment. Indiana's expansion, meanwhile, was not effective until Feb. 1, 2015 and doubtless the transition for newly Medicaid-eligible marketplace enrollees doubtless took some time there too. In 2016, Alaska and Montana expanded Medicaid, but those numbers are small. Louisiana will execute an expansion later this year.
As more states embrace the Medicaid expansion in coming years, the percentage of marketplace enrollees in lower-deductible plans will probably drop accordingly, and that will likely put downward pressure on enrollees ratings of their plans.
P.S. Offering some further evidence that the percentage of low-income low-deductible enrollees in the marketplace has been reduced are HHS enrollment stats. Among the three quarters of enrollees in states using HealthCare.gov, 38% had incomes in the 100-150% FPL range in 2015, compared to 35% this year (I've adjusted the numbers to account for the 6-7% in each year who did not report income). Also out of the low-deductible pool this year are about 100-150,000 low income New Yorkers transitioned into the state's low-cost Basic Health Plan, which opened to those in the 138-200% FPL range on Jan. 1, 2016. There, the transition was swift and sudden -- and about 86% of the transferees had been enrolled in silver plans with strong CSR, according to the state enrollment report. It should be acknowledged, though, that the percentage of marketplace enrollees in this income range did not drop in 2016, according to the Kaiser survey.
Related: Average income and reported satisfaction: The Kaiser survey revisited (6/23/16)
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* The satisfaction drop in ESI enrollees is almost entirely in those who rate their plans excellent, down from 37% in 2015 to 27% this year
I wonder whether this means that consumers are more sensitive to deductibles (and other OOP costs) than provider-side utilization management strategies ( e.g. narrow networks, HMOs and coordinated care).
ReplyDeleteIf this is the case ,then maybe more satisfaction can be achieved by mandating lower deductibles ( and other OOP costs) and letting insurance companies/ providers develop new utilization management strategies that allow premium revenue to match the cost of care provided.
Good start, but I am not sure that these utilization management strategies really exist.
ReplyDeleteA few persons in any group of insureds are going to have cancer, heart disease, etc. We need a national fee schedule to police these large claims, in my opinion.
And we need mandatory assignment, i.e. no balance billing. If insurer pays $15,000 for a heart surgery, then the provider must accept that as payment in full.