Saturday, February 29, 2020

Will Americans' fear of high medical bills hinder Coronavirus containment?

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On Wednesday, I noted that the high out-out of pocket costs that most insured Americans under age 65 are exposed to might deter people who contract the Coronavirus (or suspect they may have contracted it) from seeking treatment.
In employer-sponsored insurance, the average single-person deductible in 2019 was $1,655, according to the Kaiser Family Foundation. 28% of covered workers had a single -person deductible over $2,000.  The median annual maximum out-of-pocket (MOOP) limit (after which the plan pays 100% of covered expenses) was $4,000 (the maximum allowable is $8,100). About two thirds of employer plans require coinsurance for inpatient hospital stays, averaging 20%.
Today, Sarah Kliff reports that an American father and daughter who were subject to mandatory quarantine when they returned from Wuhan province in China were also subject to two mandatory stays in an isolation unit at a nearby children's hospital after the child was heard coughing. After release, "they found a pile of medical bills waiting: $3,918 in charges from hospital doctors, radiologists and an ambulance company."  The father's employer provided health coverage in China, where he had been working, but does not provide it in the U.S.

Wednesday, February 26, 2020

The card spells MOOP: Will Covid-19 expose Americans to financial risk?

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The Miami Herald reports that a man who developed flu-like symptoms after a business trip to China did what he felt was the right thing and went to the hospital to get tested for the Coronavirus. Hospital officials wanted to give him a CT-scan, but since he knew his insurance was limited, he asked for a flu test first.  Smart move. He tested positive for flu, and that was that -- except for the $3,270 bill that came later, with more to come.

The hospital told him that his share of the bill was $1,400. The story then focused on the fact that this man was in a short-term, limited duration plan that demanded he supply three years of medical records to prove that he didn't have a "pre-existing condition," i.e., a recent prior bout of flu.

That's outrageous, but it misses a broader point about Americans' financial exposure when the Coronavirus spreads. If this individual's medically underwritten policy does pay out, he's not necessarily in a worse financial position than the average insured American who walks into a hospital with suspected Covid-19.

Thursday, February 20, 2020

The one executable healthcare reform plan put forward by a presidential candidate

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If I may cannibalize my Twitter thread, a reaction to last night's debate in four tweets:
Healthcare in last night's debate: More blah blah blah about public option vs. M4A and nary a word about Republican intentions to void the ACA, gut Medicaid, bring back medical underwriting, uninsure tens of millions and cut at least $1 trillion in HC spending in first decade.

You have to have goals, yes. But they remind me of old-time communists arguing about who'll clean the toilets when the state withers away.

"Everyone must have access to Medicare-plus, but you can keep your wonderful employer plan if you prefer!" "No, everyone must have free access to everything!" Meanwhile...

It'll be a minor miracle if we're not living in authoritarian austerity state and if a Dem president can wring Medicare drug negotiation, balance billing ban and improvements to ACA subsidies/access through a 51-49 senate.

Wednesday, February 19, 2020

Six years later: Some stuff we've learned (or think we've learned) about the ACA marketplace

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The ACA marketplace is in its seventh year -- not a baby any more. I was just musing about some things we've learned, or think we've learned. Some are well understood, some are little recognized, some are tentative hypotheses. In no particular order:
  • The marketplace came of age during a period of steadily rising employment. That's good news for the country, but has constituted a steady headwind for enrollment. ACA subsidies are on standby as a shock absorber for the next recession (if the courts don't kill the law).

  • Since 2018, silver loading* has partly offset factors depressing enrollment, including massive cuts to outreach and advertising, rising incomes and employment, and rising premiums (in 2017-18) and out-of-pocket costs. As of 2019 silver loading had probably boosted enrollment by about 500,000.

  • Those out-of-pocket costs have risen relentlessly. That's inevitable in a system where a fixed percentage of income buys a fixed actuarial value, since healthcare costs continue to rise far faster than inflation.  In 2014, the top allowable out-of-pocket maximum for a single enrollee was $6,350.  In 2021, it will be $8,550. The average silver plan deductible (for those who don't qualify for CSR) was $2,425 in 2014 and $4,544 in 2020.

Monday, February 17, 2020

Bronze plans are terrible. Bronze plans are often the best choice.

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In discussion of the ACA marketplace (and health insurance generally), deductibles are often used as a stand-in for out-of-pocket costs. Now here cometh David Anderson to remind us that a plan's maximum out-of-pocket cost (MOOP) can be just as important -- and that the MOOP often does not particularly correspond to metal level.

The highest allowable MOOP at all metal levels is $8,150 (a travesty by international rich country standards).  Here is David's mapping of the range of MOOP for gold plans in HealthCare.gov states.  Dark green is $2,500 MOOP; dark red is $8,150.



As David points out, bronze plans will be a better deal for anyone who knows they'll hit the out-of-pocket max. As he's pointed out elsewhere (and in passing here), it takes a lot more spending to hit the high max in a gold plan -- say, $30,000 -- than in a bronze plan. That's because once you meet your deductible (likely to be relatively low in a gold plan with high MOOP), a high percentage of ensuing costs will be covered in a gold plan until the MOOP is reached, at which point coverage goes to 100% for ensuing costs (if you stay in network).

Wednesday, February 12, 2020

But love grows old and waxes cold: #HealthPolicyValentines 2020

A healthy Valentine's Day to all! As the rule of law in the U.S. erodes, and the Trump administration comes up with ever new ways to reduce enrollment, services, and affordability in public insurance programs, I can't forbear but to add some, shall we say, antivalentines to this year's mix. They follow the sweeter kind.

Cold wax, not to be confused with waxing cold



Health wonks are sweet,
their rhyming is cute.
Poetic meter
is not their strong suit.

          *     *     *

On hold with the hospital
in some endless billing tiff?
Put down the receiver
and dial @sarahkliff.


States seeking to reduce their uninsured populations must beware a Catch-22

By David M. Anderson, Charles Gaba, Louise Norris and Andrew Sprung
Note: this post is the third joint effort by David, Charles, Louise and me. Others here and here.
State policymakers have been prolific and creative in putting forward measures to strengthen their ACA marketplaces. Measures enacted since 2017 or in progress now include reinsurance programs, which reduced base premiums by an average of 20% in their first year in the first seven states to implement such programs; new or renewed state-based exchanges, which capture insurance user fees that can be used for advertising and outreach; state premium subsidies to supplement federal subsidies; and state-based individual mandates, which can provide funding for all of the above.
Policymakers must recognize, however, that these choices entail tradeoffs — and not just in budgetary constraints. Specifically, built into ACA marketplace architecture is a pricing dynamic that bedevils state attempts to improve ACA marketplace performance: reductions in premiums for unsubsidized enrollees tend to raise premiums for subsidized enrollees. Because premium subsidies are designed so that enrollees pay a fixed percentage of income for the benchmark (second cheapest silver) plan, premium increases also increase subsidies — and tend to increase the difference, or "spread," between the benchmark plan and cheaper plans.

Friday, February 07, 2020

The year after: Does reinsurance boost marketplace enrollment?

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I have written on various occasions about a Catch-22 that bedevils state governments trying to improve affordability and boost enrollment in their ACA marketplaces: reductions in premiums for unsubsidized enrollees tend to raise premiums for subsidized enrollees. Because premium subsidies are designed so that enrollees pay a fixed percentage of income for the benchmark  plan, premium increases also increase subsidies — and tend to increase the  "spread" between the benchmark plan and cheaper plans, creating discounts. Premium reductions reduce those spreads and discounts.

States face this Catch-22 when considering reinsurance programs, for which federal funding is available. By reimbursing insurers for costs incurred by their most expensive enrollees, reinsurance reduces premiums by predictable amounts, averaging 20% in the first year of implementation as of 2019, according to Avalere Health. That helps unsubsidized enrollees but sometimes hurts the subsidized.

By 2018, states faced intense pressure to help the unsubsidized. A federal reinsurance program helped control premiums nationally in the marketplace's first three years of operation, 2014-2016. When the program sunset in 2017, premiums skyrocketed, as they did in 2018 (other factors included insurers' initial underpricing in a new market, which was manifest by 2017, and political turmoil in advance of the 2018 enrollment season). From 2016 to 2018, average benchmark premiums increased by an average of 61%.  By 2019, unsubsidized enrollment in ACA-compliant plans was down about 50% from 2016.

Let's take a look at how enrollment fared in ten of the twelve states that have stood up reinsurance programs (as CMS has encouraged states to do) since 2018 (Rhode Island has not yet reported 2020 totals, and Maine's 2019 enrollment was affected by late implementation of the ACA Medicaid expansion).

Monday, February 03, 2020

Everything changes: Demographics inside and outside the ACA marketplace

Every year at this time I bind sheaves of four blog posts for two submissions to the National Institute of Health Care Management's Digital Health Care Media Awards. Here I'd like to post an outtake: a series of posts probing some under-the-radar facts about the the ACA marketplace and its prospective enrollees.  That is:

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