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:

An exit ramp for Republican senators queasy about ACA repeal-and-delay

Yesterday, two Republican senators who have been most vocal about the dangers of repealing the ACA without replacement, Bill Cassidy of Louisiana and Susan Collins of Maine, introduced a "replacement" bill that looks something like the compromise envisioned by many healthcare wonks, giving states the freedom to accept or redesign the core ACA benefit structure. Senators Shelley Moore Capito, R-WV, and Johnny Isakson, R-GA, are co-sponsors. Vitally, it does not repeal the taxes that fund ACA benefits. Full text is here; a one page summary, here

The plan is offspring of a bill Cassidy introduced in 2015*, when the possibility loomed that the Supreme Court would rule for the plaintiffs in King v. Burwell and ban the federal exchange HealthCare.gov, from granting premium subsidies. It allows states to either keep their ACA marketplace as is, or opt for a conservative alternative based on subsidized Health Savings Accounts (HSAs) and catastrophic plans offered in a deregulated market. It also leaves intact the ACA's "innovation waivers" allowing states to cook up their own coverage schemes to deploy comparable dollars to cover comparable numbers of people. A Republican HHS would presumably be disposed to wave through such alternative schemes if they have a conservative cast.

Mean vs.Median in post-ACA health insurance

This from Princeton's Paul Starr, speaking about the rise in deductibles in employer-sponsored health plans, rang a bell:

Since the ACA, there has been no overall increase in cost sharing. There are higher deductibles, but the ACA has also eliminated most annual and lifetime limits. It has provided for more complete coverage of preventive care.
So, people actually have benefited from the ACA in some ways. But I do not think they understand that...

I think many policy analysts, looking at this objectively, would say this is actually a very good shift. That it makes sense to cover those preventive costs. It makes sense to protect against catastrophic risks. The offset to that is that people have more exposure to routine medical costs up to their deductible. 

Actually, it rang two bells. I noticed this apparent paradox myself in a 2015 Commonwealth Fund survey of underinsurance: deductibles had risen, but the percentages of enrollees going without needed care or having difficulty paying medical bills hadn't. 

More to the point, though, it reminded me of the core claim in a study by Brookings' Loren Adler and Paul Ginsburg of the post-ACA individual market: that premiums are lower than they would have been absent the ACA (and lower than forecast by CBO, even accounting for this year's spike).

In 2016, CBO started counting Medicaid enrollment differently

CORRECTION, 6/6/17: Somehow, I missed an email response to my query from CBO (and asked them again twice after receiving the email). In 2016, they did not count partial benefit enrollees in their Medicaid totals; rather, the difference was that they counted people with multiple sources of coverage, including Medicaid, as Medicaid enrolled, whereas in past years they counted only the coverage source deemed primary. I was correct that in 2016 they started counting dual eligibles in both Medicaid and Medicare.

In a US News article by Kimberly Leonard about why the ACA private plan marketplace is not meeting enrollment expectations, while the ACA as a whole is reducing the ranks of the uninsured more or less on schedule, this claim did not compute:

Under Obamacare, states were allowed to expand the program to many more people, but many states have opted not to. Despite that, 16 million people more than expected enrolled in Medicaid and the Children's Health Insurance Plan, including in states that did not expand the program. Many people, it turns out, realized that they could have qualified for Medicaid even before the passage of the health care law.

Similarly, last March, when the Congressional Budget Office published its latest forecast of the ACA's effects, The New York Times' Robert Pear reported:

Brookings bombshell: ACA lowered premiums, subsidies aside. Some caveats....

In a rigorous study of health insurance premiums in the individual market pre- and post-ACA, the Brookings Institution's Loren Adler and Paul Ginsburg come to a startling conclusion: in 2014, the year the ACA marketplace launched, average premiums were 10-21% lower than in 2013 -- leaving aside the subsidies accessed by over 80% of marketplace enrollees. Further: even accounting for the steep increases coming into effect in 2017, premiums will remain lower than they would have been if the ACA had not become law.

Based on CBO estimates and  projections of premiums from 2009 and later years, and data from the Medical Expenditure Panel Survey (MEPS), Adler and Ginsburg conclude:

According to our analysis, average premiums for the second-lowest cost silver-level (SLS) marketplace plan in 2014, which serves as a benchmark for ACA subsidies, were between 10 and 21 percent lower than average individual market premiums in 2013, before the ACA, even while providing enrollees with significantly richer coverage and a broader set of benefits. Silver-level ACA plans cover roughly 17 percent more of an enrollee’s health expenses than pre-ACA plans did, on average. In essence, then, consumers received more coverage at a lower price.