Insuring the newly uninsured: COBRA or ACA?

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So what about fully funding COBRA for the millions or tens of millions of Americans who lose job-based coverage? That is, bail out everyone -- insurers, employers large and small, employees, and hospitals and doctors, who depend on the commercial insurance gravy train?

It's the most expensive way to keep the ranks of the uninsured from ballooning. It's also the least disruptive way.  Families USA, hardly a corporate water-carrying outfit, supports it.

Thought bubbles:

Boosting ACA coverage in a time of mass unemployment: State options

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In the past five weeks 26 million Americans have lost their jobs. Could national impoverishment prepare a path to universal health coverage?

When tens of millions of household incomes shrink toward the poverty level, tens of millions will become eligible for Medicaid. If double-digit unemployment persists for many years, the program may be upgraded by popular demand and its eligibility threshold may creep up by degrees.

All bets are off if Trump is reelected, as Republicans are sworn enemies of Medicaid. Their 10 years' war against the ACA has at bottom been a drive to defund Medicaid -- roll back the ACA eligibility expansion, impose block granting or per capita caps on remaining Medicaid programs, and throw up barriers to enrollment like work requirements and frequent "redeterminations" of eligibility.  If Republicans regain control of Congress as well as the presidency any time soon -- or neutralize Congress under authoritarian rule -- they'll doubtless succeed in shrinking and hollowing out the program.

If they don't, Medicaid will remain funded, and it stands ready to catch a hefty proportion of the newly unemployed in the 36 states that have enacted the ACA Medicaid expansion. Total enrollment is likely to increase by 16.5 million to about 87 million according to the mid-range estimate in an analysis by Health Management Associates. With no end to our coronavirus exposure in sight, we are probably looking at double-digit unemployment for the foreseeable future. Elevated Medicaid enrollment may persist.

If Democrats win the presidency in 2020, but lack power or will to enact sweeping new coverage expansions, Medicaid coverage, perhaps under different names, will likely expand further.

Blue states looking to avoid (or roll back) massive increases in their uninsured population should look closely at existing state programs that extend Medicaid-like coverage up the income ladder.  There are two existing models that states might follow.

CMS answers a $600 question

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While CMS has declined to open an emergency Special Enrollment Period for all comers on HealthCare.gov, the agency is taking steps to smooth the enrollment path for the newly uninsured. Here's a roundup of some constructive moves, some of which I've noted in recent posts:

• The $600/week extra unemployment benefit provided in the CARES Act is income that counts toward the level of subsidy eligibility in the ACA marketplace but does not count toward Medicaid and CHIP eligibility. That seems a recipe for potential enrollment confusion on a platform that enrolls people in both programs. In response to a query, however, CMS tells me, "HealthCare.gov will be updated to apply logic to ensure federal pandemic UC is counted correctly and unemployed consumers receive the accurate eligibility determination." That is, applicants should report their full UI income in the application, and HealthCare.gov will be able to discount it for the purposes of determining Medicaid eligibility. That's good news, if the "logic" holds up as intended. [Update, 4/24: just to highlight the verb tense above, CMS says that they will add this capability, which means that it's not yet operative.]


• CMS also says that if an applicant's year-to-date income or projected full-year income exceeds the Medicaid eligibility threshold, but current monthly income is below the monthly threshold ($1468 for an individual, $3013 for a family of four), HealthCare.gov will recognize Medicaid eligibility and "transfer the consumer’s information to the state Medicaid or CHIP agency as appropriate." As I've noted in prior posts, in this situation navigators generally prefer to apply directly to state agencies for Medicaid. But whether or not it's difficult in practice to report both annual (or projected annual) and current monthly income on hc.gov and get the right result if one is over and the other is under the threshold, it's possible.


• As noted in my last post, those who apply for a Special Enrollment Period on grounds that they recently lost health coverage (usually after job loss) will not have to document the loss of coverage -- only attest to it. I am not sure whether that is true for other SEP causes, such as marriage.

HealthCare.gov will not require proof of loss of coverage from the newly uninsured

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CMS has refused to follow the lead of the thirteen state-based ACA marketplaces and open an emergency Special Enrollment Period (SEP) in the 38 states using HealthCare.gov, the federal ACA enrollment platform.  But the agency is taking smaller steps to smooth the enrollment path for the newly uninsured.

An emergency SEP would allow anyone who's uninsured to seek coverage in the marketplace as they can during the yearly Open Enrollment period, which on HealthCare.gov runs from Nov. 1 - December 15. Instead, only those who have have a qualifying "life change" -- e.g., loss of job-based coverage -- can enroll in marketplace plans. That requires applying for a SEP, which is a process in itself.  (Medicaid enrollment is open year-round, but many of the newly uninsured may not be aware if they're Medicaid-eligible -- all uninsured need a general message that coverage of one kind or another is available.)

Yesterday, Amy Lotven of Inside Health Policy reported (paywalled) that CMS has created a new Covid-19 page (parts of which I reviewed in my previous post) -- and, more significantly

CMS is providing flexibility around submission of certain documents, such as a document confirming loss of coverage from one’s employer, during the pandemic emergency, the agency says.

Smooth the path to Medicaid enrollment for the newly uninsured

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As tens of millions of Americans lose job-based health insurance, the heavyweight in reducing the ranks of the newly uninsured is going to be Medicaid -- at least, in the 36 states that have enacted the Medicaid expansion  (and if Democrats don't push through a 100% COBRA subsidy). Medicaid will far outweigh the ACA marketplace for several reasons:

• Medicaid eligibility is based on monthly income, whereas marketplace subsidy eligibility is based on annual income. Mid-year, marketplace subsidies are therefore weakened by income earned year-to-date.
• The average normal unemployment benefit nationally is $378 per week* -- close to the Medicaid eligibility threshold in expansion states for a single person ($1468/month) and well below the threshold for any larger family. 
• The extra $600/week UI benefit provided for up to 4 months by the CARES Act does not count as income for Medicaid eligibility purposes, but it does count toward subsidy eligibility in the ACA marketplace. 

ACA marketplace 2020: CSR takeup continues to erode

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In the current crisis, as millions lose employer-based insurance, the fine points of ACA marketplace enrollment back in Open Enrollment for 2020 are not going to get anyone's pulse racing.

That's especially true since the 2020 marketplace was quite stable. Enrollment nationwide was essentially flat; unsubsidized premiums were down slightly; and silver loading effects (discounts in bronze and gold plans, explained below) fluctuated within states and rating areas but did not change much on net.

Nonetheless, significant trends that surfaced in 2017 and were intensified by silver loading from 2018 forward continued. Silver plan selection continued to erode, though gold selection remained flat: the marketplace is "bronzing," which means more people are in plans with very high deductibles, averaging over $6,000 for a single person.

With Biden's public option, who needs Biden's Medicare buy-in?

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Joe Biden's healthcare reform plan, released last July, is a light sketch of a familiar reform model: "Medicare" for all who want it, centered on a public option that anyone can buy into on a subsidized basis.

Biden proposes a public option offered within the ACA marketplace, paying Medicare rates or something close them to providers (though the language is vague here) and available on a subsidized basis to people whose employers offer health coverage as well as those who lack access to employer-sponsored insurance (though the language on this front is also ambiguous*). The public option, and private plans within the ACA marketplace at the same benchmark metal level, would cover between 80% and 100% of the average enrollee's costs, diminishing with income, at premiums ranging from zero to 8.5% of income.**

A bill introduced in the House by Reps Jan Schakowsky and Rosa DeLauro, the Medicare for America bill, has this basic structure but integrates the new public option into a more comprehensive healthcare system overhaul, revamping and folding in both existing Medicare and Medicaid, and offering buy-ins to employers of all sizes.  Biden's bill leaves Medicaid and existing Medicare intact and does not offer buy-ins to employers, only employees.

That leaves an opening of sorts for Biden's latest initiative: opening existing Medicare to adults aged 60 and over. Such a step is imaginable as a stopgap that could be effected more quickly than Biden's more sweeping overhaul. But Biden is proposing that the opt-in to existing Medicare co-exist as an option beside "the Biden Medicare-like public option — as well as other subsidized private plans available to individuals through the Affordable Care Act."

Squinting at likely new Medicaid and marketplace enrollment as job losses accelerate

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Charles Gaba has used early enrollment data from state-based ACA marketplaces that have opened up emergency Special Enrollment Periods to hazard an estimate: If HealthCare.gov, the federal exchange that handles ACA marketplace enrollment for 38 states, were to open a no-strings attached emergency SEP for sixty days, about a million more people than usual would enroll in marketplace plans in those two months.

That's based on a rough quadrupling of normal off-season enrollment in 3 states (Maryland, Colorado, Minnesota) that have opened emergency SEPs that enable applicants to complete an application online, more or less as they would during the yearly Open Enrollment season. (In 3 states that require emergency SEP applicants to initiate the application with a phone call (Connecticut, Washington, Nevada), enrollment is up just 22-35%.) As of 2015, about 6,000 people per day were enrolling via HealthCare.gov in nine months outside of Open Enrollment season. An extra 18,000/day for 60 days (assuming an easy, wide open SEP) would come to 1,080,000 additional new enrollees.

A few further observations:

• Process matters: The difference in states that enable online applications vs. those that require a phone call to begin the process appears dramatic, though data is scarce at this point (12 SBEs, including California and New York, have opened emergency SEPs; just six have released any data).  That said, HealthCare.gov, for which CMS refused to open an emergency SEP, requires those who lose job-based coverage to verify the date they lost coverage in writing before they can enroll in a marketplace plan.  With 10 million newly unemployed in a two-week period, that could cause an administrative train wreck.


• More than two months? While an emergency Special Enrollment Period must maintain the perception that enrollment isn't open year-round, so that people don't wait until they get sick to enroll, a continuing crisis is likely to lead to continuing extensions, as has already happened in many states.


• Early days yet: Shelli Quenga, Director of Programs at the Palmetto Project in North Charleston, South Carolina, said last week that her agency was so far busiest helping people get food stamps: "people have to eat every day, so they think more about their food benefits than they do about their health benefits." That's a typical sequence of concerns, according to Quenga.


• Early days, Part B: While enrollment from the 10-odd million newly unemployed as of April 2 hasn't fully gotten going, the tidal wave of job losses probably hasn't peaked yet.


• Medicaid will matter more: Gaba reports that in Maryland, SEP enrollment from March 16 through April 6 totaled 8,454 in Medicaid (which is open year-round) and 5,735 in the marketplace. [Update, 4/23/20: MNSure, the Minnesota ACA exchange, announced SEP enrollment numbers yesterday that showed a similar percentage of users, 60%, applying for either Medicaid or MinnesotaCare, a Medicaid-like "basic health program' available to applicants in the 139-200% FPL income range.] The CARES Act, signed into law on March 27, will likely further skew enrollment toward Medicaid. As I've noted previously, the $600/week extra unemployment benefit the new law provides for up to four months counts as income for the purpose of calculating ACA marketplace subsidies, but not toward Medicaid eligibility. Up to $10,200 of extra income will disqualify many marketplace applicants for secondary Cost Sharing Reduction subsidies and render others ineligible for premium subsidies, or else will sharply reduce those subsidies. 

One widely circulated projection, from Health Management Associates, foresees up to 35 million Americans losing job-based coverage, with a mid-range estimate of 23 million, which comes to an unemployment rate of 17.5%.  Health Management foresees enrollment in ACA-compliant private plans remaining more or less flat, as some marketplace enrollees switch to Medicaid. In the mid-range estimate, Medicaid enrollment grows by some 17 million as the uninsured population rises from 29 million to 34-35 million.

I had missed the likelihood of people shifting from marketplace to Medicaid. The differing tax treatment should accelerate that too. At the same time, the unemployment income boost should newly qualify some people in states that have refused the ACA Medicaid expansion for marketplace coverage by raising their countable household income over 100 % FPL.

Related:
ACA enrollment train wreck coming
Our emerging public option: Medicaid
CARES Act may reduce coverage gap in states that refused to expand Medicaid
Enhanced unemployment benefit will skew marketplace enrollment
Emergency special enrollment periods in 12 states: How easy?
How about an emergency Special Enrollment Period for the ACA marketplace?

Reverse reinsurance for COVID-19 treatment

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The case for the federal government picking up the cost of all COVID-19 treatment for everyone, not just the uninsured, is compelling.* Benefits include:

• Eliminating inhibitions about seeking treatment, thereby helping to contain contagion as well as saving lives. 
• Avoiding a major channel of financial harm at a time when tens of millions are likely to suffer extensive financial harm.
• Establishing a unified database of treatment/results.
• Paying providers swiftly while eliminating price-gouging via balance billing (which enacted COVID-19 legislation has so far enabled at providers' behest).

At the same time, as we pile on trillions in federal debt with abandon, there's no reason that private insurers and self-funded health plans shouldn't pay their fair share.

A mechanism already exists to calibrate what constitutes such a "fair share." It's the statutory Medical Loss Ratio (MLR) that health plans are required to maintain. MLR is the percentage of premiums a plan spends on medical care for enrollees. The ACA-mandated minimum MLR is 80% for individual and small group plans and 85% for large group plans. If a plan spends below those thresholds on claims, it's required to rebate the employer (in group plans) or the enrollees (in individual market plans).

ACA enrollment train wreck coming

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Update, 4/21/20: On a CCIO webinar for enrollment assisters, a moderator said that HealthCare.gov as of now is accepting simple attestation from an applicant that she has lost health coverage -- the marketplace is not requiring documentation of loss of coverage. That's very good news.

On Tuesday, the Trump administration dashed widespread hopes that it would open an emergency Special Enrollment Period in the ACA marketplace for the 38 states using HealthCare.gov, the federal exchange, allowing anyone who was uninsured to apply for coverage. Twelve of the thirteen state-based exchanges have opened such emergency SEPs, and most are extending the deadline.

The White House told reporter Amy Lotven that an emergency SEP is not needed because "there's already special enrollment for job loss." That's wrong, as Charles Gaba and others pointed out: there's a SEP for loss of insurance that usually follows job loss.

Not only does that ordinary SEP exclude those who were uninsured before job loss -- it's also likely to make obtaining insurance a dauntingly difficult and dangerously slow process for the millions who do lose employer-based insurance and seek new coverage through HealthCare.gov.

The normal SEP crawl

Shelli Quenga, Director of Programs at the Palmetto Project in North Charleston, South Carolina, a nonprofit brokerage* serving primarily low income clients, explained to me that obtaining a SEP after loss of job-based (or other) insurance coverage is difficult in the best of times. "The process is deliberately cumbersome, and it's going to cause people to remain without coverage," she worries.

The newly unemployed also need an emergency Special Enrollment Period

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After a week or two of rumors that the Trump administration would open an emergency Special Enrollment Period (SEP) on HealthCare.gov, the federal ACA exchange used by 38 states, the administration announced on Tuesday that it would not do so. Twelve of the thirteen state-based exchanges have announced emergency SEPs since March 10, with only Republican-ruled Idaho demurring.

As Jeff Young put it, team Trump could not choke down "an admission that the law and its benefits help people." Their spite will likely cost some people their lives and others all their worldly wealth. As the Kaiser Family Foundation's Larry Levitt noted, some 9.2 million of the nation's uninsured were eligible for ACA marketplace subsidies at last count (i.e., as of 2018).

Normally, enrollment in ACA-compliant private plans is only possible during Open Enrollment, which runs Nov. 1 - Dec. 15 in HealthCare.gov states. A SEP is available at other times only to those who undergo a "life change," such as loss of employer coverage, marriage, divorce, death of a family member, etc.

Whether fear of COVID-19 and the huge costs of hospitalization (ranging from about $9,000-90,000 by Kaiser's estimate) would induce many of the uninsured to seek coverage is an open question.*  Poor takeup among the subsidy-eligible has persisted since the ACA marketplace launched. The 9 million subsidy-eligible uninsured estimated by Kaiser roughly match total on-exchange enrollment. Takeup is better among those rendered eligible for Medicaid by the ACA expansion, but Kaiser also estimates that about 7 million uninsured are eligible for Medicaid and CHIP. An emergency SEP, plus a concerted public information campaign, might shrink those ranks.

The main benefit of an emergency SEP opened unconditionally to all may lie elsewhere, however. ACA enrollment can be complicated at the best of times. An ordinary SEP, including one triggered by job loss and attendant insurance loss, adds friction.  An applicant has to attest to and verify the loss of insurance; the marketplace has to confirm it, grant the SEP, and then open the gate. In some states, accepting evidence of loss of coverage is up to the insurance company with which the applicant seeks to enroll.

Our emerging public option: Medicaid

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Axios's Bob Herman notes that "Medicaid will be a lifeline for droves of Americans affected by the coronavirus pandemic."

The program will pick up many people who lost their income and their health insurance together, as well as people who lost jobs that didn't provide health insurance, and potentially some people who are still working and need medical care but aren't insured.

Indeed it will. As of early this year, about 72 million Americans were enrolled in Medicaid's various programs. Based on an old rule of thumb from Georgetown's Edwin Park that I've cited before, enrollment (including CHIP)  could reach 85 million or more by the time the pandemic subsides: