Estimate: ACA Medicaid expansion enrollment may have grown 25% from February to December 2020

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As Covid-19 burned its swath through the U.S. in December, Medicaid enrollment in the ACA expansion category (adults with monthly incomes up to 138% of the Federal Poverty Level) continued the rapid growth that started with the pandemic.

Enrolment increased 2.7% from November in the 17 states for which I've been able to locate monthly expansion-category enrollment reported through December. In those 17 states, enrollment increased 27.6% from February 2020 -- the last month in which the economy was unaffected by the pandemic -- through December.

Medicaid enrollment likely near 80 million in December

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I am pretty confident that total Medicaid enrollment, which stood at 71.2 million in February 2020 according to CMS's adjusted total, is now in the neighborhood of 80 million.*

CMS's official tally through September shows a 9.4% increase from February. My tally below, based on monthly enrollment reports in 33 states, shows a 9.7% increase from February through September, 11.8% through November, and a likely further 1% increase in December (California will as usual drag the all-state percentage increase down a bit). A 12.4% increase from February through December would suggest 80 million total enrollees -- pretty close to a quarter of the U.S. population.

ACA marketplace coverage can be as generous as the Biden administration wants it to be

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A core Democratic party campaign promise was to "build on" the Affordable Care Act -- which at a minimum means making coverage obtained in the ACA marketplace far more affordable.  The party now has the narrowest possible majority in the Senate, along with a narrowed majority in the House, and the presidency.  To what extent will they deliver, and by what means?

As noted in the last two posts, the current mainstream Democratic proposal, as expressed in the Affordable Care Enhancement Act that passed the House last June, includes generous boosts to ACA marketplace subsidies at every income level, capping premiums for a benchmark silver plan at a maximum of 8.5% of income, no matter how high the income. Those "enhancements" may well get watered down in legislation that must pass via reconciliation with zero defections from the most conservative party members. 

Whether in place of or to complement legislation, the Biden administration can take regulatory action on multiple fronts that would have a major impact on the coverage that marketplace enrollees get for their money. Stan Dorn and Frederick Isasi of Families USA recently proposed some half-dozen regulatory measures to improve affordability, along with other steps to streamline enrollment and expand eligibility. 

Here I want to focus on one arcane-sounding proposal, described briefly in the Families USA package, that could radically (or not so radically) increase the value of coverage at each of the ACA's metal levels.  Those levels are set by "actuarial value" (AV), the percentage of the average enrollee's yearly costs that a plan is designed to cover, as determined by a formula promulgated by a division of CMS.  By statute, plans in the ACA marketplace conform (with some wiggle room) to four AV levels: bronze (60% AV), silver (70% AV), gold (80% AV) and platinum (90% AV).

Revaluing AV

The regulatory action in question, conceived by health insurance professional Gabriel McGlamery and healthcare policy researcher David Anderson, is to change the basis by which the AV of plans at the ACA metal levels is calculated by excluding enrollees with predictably high costs from the calculation. Doing so would raise effective AV at each metal level.  

ACA Hunger Games, Part II

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I'd like to revisit the "hunger games" scenario for legislation to improve the ACA posited in the last post. In brief: assume that Democrats, forced to accommodate their most conservative members to get all 51 of their Senate votes on board for any legislation passed through reconciliation, pare back the broad expansion of premium subsidies for ACA marketplace coverage they've proposed elsewhere -- e.g., in candidate Biden's health care plan and in the House-passed Affordable Care Enhancement Act of 2020 (ACEA). If forced to scale back, should they:

a. Concentrate on the currently unsubsidized, for whom coverage is often truly unaffordable, capping premiums for a benchmark plan as a percentage of income (e.g., 8.5% as in the ACEA, but probably higher)?

b. Concentrate on lower incomes, where takeup among the subsidy-eligible has been poor? (See the last post for the ACEA subsidy scale and how it compares to current law.)

c. Spread whatever enhanced subsidy money they can muster across all income groups?

If Democrats get skimpy with ACA enhancement, who should get half a loaf?

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With a 50-50 Senate under Democratic control, how far will the Democrats go in rendering health insurance more affordable for those who currently find it unaffordable?

The Affordable Care Enhancement Act passed by the Democratic House last June would reduce the percentage of income paid for a benchmark silver plan in the ACA marketplace at every income level -- and remove the income cap on subsidy eligibility, currently 400% of the Federal Poverty Level ($51,040 for an individual, $104,800 for a family of four). Premiums for a benchmark silver plan would range from $0 (at incomes up to 150% FPL) to 8.5% of income. Here's the scale established by the bill:

The 117th Congress should end Medicaid Estate Recovery for the ACA Medicaid expansion population

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n.b. 4/7/21: see update from 2021 MACPAC report at bottom

Democrats have big plans on the healthcare front, only some of which they're likely to push through Congress with a threadbare Senate majority. Look for some sweetening of ACA marketplace subsidies and meaningful action to contain prescription drug prices. 

First, though, some housekeeping. The first healthcare bill advanced in the 117th Congress will likely render moot Texas v. California,  the suit now before the Supreme Court seeking to have the ACA declared unconstitutional. A single sentence, either restoring an individual mandate penalty of $1 or repealing the mandate and declaring in severable from the rest of the ACA, should suffice.

For their second act, Democrats should take up a bill introduced just last month by Rep. Steve King (R). Yes, that Steve King, ex of Iowa's 4th District, the notorious racist who was defeated in a primary last June and is no longer in the House.

Balance billing arbitration tilts toward providers in New Jersey -- less so in new federal law

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 A study published in Health Affairs by Benjamin Chartock, Loren Adler et al. finds that the arbitration of out-of-network bills established by New Jersey's balance billing protection law has yielded extraordinarily high payments to providers:

Arbitration awards were considerably higher than typical in-network payment amounts  Compared with the HCCI data, we found that the mean and median arbitration awards were 9.0 and 5.7 times higher, respectively, than the median in-network price for the same set of services, with 31 percent of cases decided for amounts more than ten times the median in network price (exhibit 1). Because commercial insurers tend to pay more than Medicare, the contrast is even starker with Medicare rates. The mean and median arbitration awards were 12.8 and 8.5 times Medicare prices, respectively, with 45 percent of cases awarded at amounts more than 10 times what Medicare would have paid (exhibit 2). In both comparisons, the large divergence between the relative mean and median awards primarily stemmed from the skewness of arbitrated payment amounts  

The New Jersey law mandates "baseball" arbitration, in which arbitrators must rule in favor of one of the two competing bids, rather than than splitting the difference. The study authors note that arbitration awards in New Jersey track pretty closely with the 80th percentile of billed charges -- which are many times higher than in-network rates: