ACA on the rocks

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Today Politico sounded an alarm that's been rising in Democratic policy circles: Democrats are walking right into an Obamacare fiasco of their own making. That is, if their lawmaking capacity is so paralyzed that they fail to extend the major boosts to ACA marketplace subsidies provided by the American Rescue Plan Act through 2022.

Politico's Adam Cancryn and Megan Messerly warn concisely:

The scenario has alarmed vulnerable lawmakers and White House allies, who have privately warned senior Democrats in recent weeks that the issue could cost Democrats control of the Senate and decimate their hard-earned reputation as the party of health care.

Politico does report some talks between Manchin and Democratic leadership. At this point, whether ARPA subsidies get extended appears to boil down to whether Manchin and/or Sinema simply want to destroy Democrats' electoral prospects -- now, and given the Republican drive to suppress votes and doctor vote counts, maybe forever. At the Washington Post's Plum Line, Greg Sargent is doubtful that Manchin will let any meaningful legislation pass.

As the clock ticks, I feel compelled to add my popgun to the salvo of increasingly desperate progressive healthcare groups and individuals begging Democrats to find a way to break the Manchin-Sinema blockade and extend the marketplace subsidy boosts provided by the American Rescue Plan. 

Is the uninsured rate flat since 2019, or down a bit?

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See 8/31 update from NHIS survey at bottom

The Urban Institute, in an analysis of results from its own ongoing Heath Reform Monitoring Survey, found that the uninsured rate among adults aged 19-64 did not change significantly from March 2019 to April 2021. 

That's at least a backhanded tribute to the U.S.'s kludgy health insurance safety net as bolstered by the Affordable Care Act. Big picture: in Urban's estimate, as a result of the pandemic, employer-sponsored insurance  fell by 3 percentage points (from 65% to 62.3%) in the survey period, while insurance through public programs (mainly Medicaid) increased by 4 percentage points (from 13.6% to 17.5%). 

You could read these results as a paean to the ACA Medicaid expansion (which Republicans almost repealed in 2017). In states that have expanded Medicaid, Urban found that the uninsured rate actually dropped two percentage points for people with incomes below 138% FPL, the Medicaid eligibility threshold. According to CMS, total Medicaid enrollment (including children) increased by 11 million -- 15.6% -- from February 2020 to March 2021.  Enrollment among adults rendered eligible by the expansion increased by about double that rate.

Urban recorded a much more modest and ambiguous impact for the ACA marketplace -- though the huge enrollment surge during the emergency Special Enrollment Period open from February 15 through August 15 of this year, turbo-charged by subsidy increases enacted in the American Rescue Plan, which appeared on HealthCare.gov on April, was mainly missed by Urban's study period. I'll return to that in a bit.

I speculated in May that the U.S. uninsurance rate might be at an all-time low, powered by huge gains in Medicaid enrollment, significant gains in marketplace enrollment, and relatively modest losses in employer-sponsored insurance during the pandemic. My methods (and math) are far less sophisticated than Urban's, and this is not to question their results (no source ever has a really complete picture of insurance in the U.S.).  That said, a few comments and caveats below.

How much will free benchmark silver plans boost ACA marketplace enrollment in nonexpansion states?

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An Urban Institute brief estimates that if the premium subsidy increases for the ACA marketplace enacted through 2022 in the American Rescue Plan are made permanent, marketplace enrollment will increase by 5.1 million, and the uninsured population will decrease by 4.2 million.

That's somewhat higher than the increase of 3 million that KFF's Cynthia Cox floated to me as a soft estimate. A lot depends on the effectiveness of outreach and possible future improvements to the enrollment process, Cox stressed. Both estimates are pretty modest, given the magnitude of the subsidy boost, outlined below. By KFF's estimate, about 10.6 million uninsured are eligible for subsidies under the new schedule.

Here I want to focus on the category* in which Urban foresees minimal change: enrollment at 100-138% FPL in states that have refused the ACA Medicaid expansion. In those states, eligibility for marketplace subsidies begins at 100% FPL, whereas in expansion states, adults** with incomes up to 138% FPL are eligible for Medicaid. Under ARPA, benchmark silver coverage is free at this income level, and in fact up to 150% FPL. And up to that threshold, Cost Sharing Reduction boosts the actuarial value of the free silver plan to 94%, well above the average for employer-sponsored coverage. According to CMS, the average deductible for silver plans at this income level is just $69 in HealthCare.gov states (e.g., all nonexpansion states). While even modest out-of-pocket costs appear to be a barrier at near-poor incomes -- Medicaid logs higher satisfaction ratings than high-CSR marketplace coverage in surveys -- this is a very valuable free benefit.

The Urban Institute analysis estimates that ARPA will reduce the uninsured population at incomes below 138% FPL by only 312,000. The authors do not provide an estimate of the subsidy-eligible population at 100-138% FPL -- but as I noted in early April, the Kaiser Family Foundation does provide such estimates for 12 nonexpansion states.*** In those 12 states together, 1.8 million people with incomes in the 100-138% FPL range were uninsured in 2019, according to KFF's estimate.  

ACA Medicaid expansion enrollment continues to swell as pandemic surges

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 As our woes show no sign of abating -- 120,000-plus new Covid-19 cases per day, a million new jobless claims per week -- neither does Medicaid expansion enrollment. This part of the ACA is providing a vital safety net. The sampling below (states that have reported expansion category enrollment through October) indicates that enrollment growth did not slow in October.

How representative is the sample? Well, August growth is about 1 percentage point higher in this sample than in the larger (18-state) sample I posted for that month. California, where Medicaid enrollment has been almost flat in pandemic months, drags down the all-state rate of increase by probably another 2 percentage points. I am pretty confident that expansion-category enrollment growth since February tops 20% nationally. For more about my various assumptions, see this post (and this September update).

Pandemic Medicaid expansion enrollment in 12 states
February thru October 2020

 Idaho increase through August is estimated at a rate comparable to Sept-Oct increase.

Could Trump's ACA sabotage pave the way to a strong public option?

The Urban Institute's Linda Blumberg and John Holahan, authors of an "ACA 2.0" blueprint, mull healthcare reform after Trump

In August 2015, Urban Institute scholars Linda Blumberg and John Holahan warned that the ACA marketplace as then constituted would probably never perform to expectations. Subsidies were insufficient to draw the robust participation the law's creators had anticipated. They proposed a revamped subsidy schedule that reduced premiums and out-of-pocket costs at every income level. For those with incomes above the current subsidy threshold of 400% of the Federal Poverty Level, premiums for a benchmark plan covering 80% of the average enrollee's costs would be capped at 8.5%.

Hillary Clinton more or less incorporated the Blumberg-Holahan proposal into her healthcare platform. And now, two years later, bills to improve the ACA introduced by Democrats in the House and Senate do likewise. Both bills precisely reproduce the plan's enhanced premium subsidies and offer even more generous reductions in enrollees' cost sharing (see the Appendix below for a summary).

The Senate bill, introduced by Elizabeth Warren and four colleagues,* places several new constraints on insurers in the individual market. These include requiring insurers to provide a better selection of doctors and hospitals, raising the percentage of premium revenue insurers are required to spend on enrollees' medical costs, and standardizing plan design. The preamble to a one-page summary of the bill appears to blame insurers alone for Americans' high healthcare costs.  By generously subsidizing enrollees at all income levels, however, the bill creates conditions under which insurers in the individual market can thrive.

ACA 2.0 -- or a whole new system?

I spoke to Blumberg and Holahan last week to get their reaction to the "ACA 2.0" bills, the Warren bill in particular. Blumberg confirmed that they had been consulted by the bill's creators, though they did not participate in the drafting.

Compromise maybe a little? Urban Institute's Blumberg and Holahan on what's next for the ACA

In August 2015, Urban Institute healthcare scholars Linda Blumberg and John Holahan acknowledged that ACA marketplace subsidies were too skimpy to do all they were intended to and came up with a comprehensive proposal to enrich them.  In January 2016, staring down the barrel of Republican repeal vows, they remixed those improvements in a compromise package that included several concessions to conservative priorities. These included:

• Repeal the employer mandate (requiring employers with more than 50 employees to offer insurance or pay a penalty)
• Repeal and replace the individual mandate  (with a premium penalty for those who did not maintain continuous coverage)
• Examine the Essential Health Benefits and look for responsible ways to lighten them
• Allow states to drop the income threshold for Medicaid eligibility to 100% of the Federal Poverty Level (FPL). At present, the threshold is 138% FPL in states that have accepted the ACA Medicaid expansion. 

As I noted recently, these concessions were embedded with offsets: reinsurance to mitigate the premium hikes likely to be triggered by individual mandate replacement, and lower out-of-pocket costs to cushion the substitution for enrollees in the 100-138% FPL range of private insurance for Medicaid (richer subsidies across all income levels would also offset the ill effects of a weaker mandate substitute).

Chipping away at the uninsured: What about those who can't afford employer-sponsored insurance?

Last week, I explored  why HHS's estimate that 9 million of the uninsured may be eligible for ACA marketplace tax credits is so much larger than the Kaiser Family Foundation's estimate of 5.4 million. In brief, the chief differences seem to be a) Kaiser takes into account those among the uninsured who have an offer of insurance from an employer, most of whom are probably ineligible for tax credits, and b) Kaiser also estimates and excludes those with incomes in the 250-400% FPL range who are "potentially" tax credit eligible but in fact ineligible because the unsubsidized premium for the benchmark silver plan in their area is deemed affordable by ACA criteria (i.e., costs under 8-10% of income).

Today, Kaiser updated its 2015 estimates, published in January 2016, of various categories of uninsured. The first thing to note is that the pool has shrunk: Kaiser now estimates 27.2 million nonelderly uninsured in 2016, down from 32.3 million in 2015. Next, the estimated percentage of uninsured who are eligible for financial assistance -- either Medicaid or marketplace subsidies -- is down from 49% to 43%.

That's due in large part to Medicaid enrollment: The estimate of uninsured people eligible for Medicaid is down from 8.9 million in 2015 to 6.4 million at present. But the estimate of the uninsured who are eligible from marketplace tax credits is also down, from 7.0 million in 2015 to 5.3 million now (an estimate Kaiser had already published, with minimal difference, earlier this year, and which I cited in the prior post).

As the ACA marketplace and the larger individual market with which it shares a risk pool wobble this fall, a key question is how close to capacity those linked markets are. Kaiser's new estimates suggest that not only has the pool of uninsured and potentially subsidizable marketplace candidates shrunk, but so has the pool of those who earn too much to qualify for subsidies yet remain uninsured -- from 3.7 million in 2015 to 3.0 million this year. (One thing to watch this year is whether premium spikes reverse that progress among the unsubsidized.)

Put the two together, and the pool of uninsured who might buy health insurance in the individual market has shrunk from 10.7 million to 8.7 million.

Blumberg and Holahan on belling the healthcare cost cat

This week, Urban Institute healthcare scholars Linda Blumberg and John Holahan published a report, Designing a Medicare Buy-In and a Public Plan Marketplace Option: Policy Options and Considerations.

The report demonstrates that while designing a Medicare buy-in would be dazzlingly complex (cf. my modest proposal for simplifying it), designing a "strong" public option would be relatively simple. For both programs, the rationale is also simple: moving part (or potentially all) of the individual market population into plans that pay Medicare rates to healthcare providers.  That, the authors note in conclusion, is is basically a sine qua non of healthcare cost control:

Regardless of the approach taken, providers are likely to resist new insurance options that may move more patients into plans paying lower rates. While this is to be expected, it highlights the perpetual quandary of health care cost containment. Health care spending and its growth cannot be reduced without either paying less, on average, per unit of service rendered or reducing the quantity of services provided. No matter the strategy for containing costs, achieving that goal will take money out of the pockets of providers. To protect providers financially means abdicating cost-containment efforts of any type.

Healthcare scholars who propose means of cutting payments to providers know that they're in the position of mice who propose putting a bell on the cat that stalks them. No one in elected office is willing to bell the cat.

United Healthcare is a major MCO, but its large-market ACA plans don't reflect that

In the ACA marketplace, insurers whose core business has been Medicaid managed care, most notably Centene and Molina, have increasingly underpriced the competition in markets where they compete. These insurers field narrow networks and probably pay little more than Medicaid rates to providers.

United Healthcare, the nation's largest health insurer, has made waves by reporting large losses in the ACA marketplace and threatening to withdraw from it.  Yesterday Richard Mayhew posited that UHC's complaints mainly reflect the extent to which the giant has gotten its clock cleaned in the marketplace -- offering more extensive networks than competitors, charging much higher rates in many key markets, and thereby likely attracting sicker enrollees who place a premium on provider choices.

Mayhew's main source is an Urban Institute analysis of 2016 rates, mainly focused on 81 ACA rating regions that account for 47% of the country's population. Urban's John Holahan and Linda Blumberg found that in 2015, UHC sold plans in 36 of those 81 regions, but offered the cheapest or second-cheapest silver plan in only eight of them. In 2016, UHC is in 48 regions, and offers cheapest or second-cheapest (benchmark) silver in just 15 of them.

In marked contrast, Medicaid managed care providers, led by Centene (fielding the Ambetter brand) and Molina, are playing in 48 of the 81 regions this year and offering cheapest or second-cheapest silver in 44 of them. That up up from 36 out of 44 in 2015.

Ignorance vs. unaffordability among the uninsured

As the ACA's third Open Season for private health plan enrollment draws to a close, enrollments are flatlining, and at a low level. Barring an enormous last-minute surge, it looks like HHS's preseason lowball estimate, with a midpoint of about 12.6 million total enrollments by Jan 31, will be on target.

At the same time, the Kaiser Family Foundation's latest health tracking poll indicates that most of the uninsured who are eligible for aid  have not been contacted and/or don't know what aid is available:

In terms of enrollment engagement and efforts to get coverage, most of the uninsured say they have not been contacted about signing up for coverage (67 percent) or that they have not tried to get more information on their own (57 percent). More specifically, most uninsured say they have not taken steps to figure out if they are eligible for the two main coverage expansions under the ACA — Medicaid and financial assistance to purchase health insurance through the healthcare marketplaces. Over 7 in 10 saying they have not tried to figure out if they qualify for Medicaid (72 percent) or for financial assistance to purchase health insurance (79 percent) in the past 6 months.

Those numbers give a somewhat exaggerated impression, as only 49% of the uninsured are eligible for Medicaid or private plan tax credits, and 10% of those are children eligible for CHIP. Still, many prior surveys -- e.g., by the Urban Institute and McKinsey & Co. -- have focused on the aid-eligible uninsured and found that majorities don't know what's on offer. Further, a previous Kaiser survey found that large numbers of the aid-eligible uninsured who did explore obtaining insurance received the false impression that no aid was available (I explored several ways that may happen here).

In ACA marketplace, low-hanging fruit is more than half picked

My long two-pointed ladder's sticking through a tree

Toward heaven still,

And there's a barrel that I didn't fill

Beside it, and there may be two or three*

Apples I didn't pick upon some bough.

Goddamn it, don't stop apple-picking now!

(Apologies, Robert Frost)

* or 7 or 8 million

Gearing up for the ACA's third enrollment season, HHS has released an analysis estimating 10.5 million uninsured individuals are eligible to buy private plans in the ACA marketplace. In a separate brief, HHS forecasts that between 2.8 and 3.9 million from this pool  will select marketplace plans in 2016 -- which sounds low until you pick through the numbers a bit.

HHS estimates that 48% of the 10.5 million live in households with incomes under 250% of the Federal Poverty Level (FPL) -- qualifying them for both premium subsidies and Cost Sharing Reduction (CSR) subsidies. Another 30% have incomes between 250% and 400% FPL and so "may qualify" for premium subsidies. But not all of them do.*  And buyers in that range, who are expected to pay at least 8% of income for the benchmark second-cheapest silver plan in their region, have proved a tough sell to date.

About three quarters of all current marketplace enrollees and 88% of subsidized enrollees -- about 7.4 million -- (as of June 30) have incomes under 250% FPL*  If half of the estimated 5 million marketplace-eligible uninsured people with incomes under 250% FPL enroll in plans, and if they constitute about 75% of new enrollees (as they do of current ones), that suggests 3.3 million new enrollees -- almost exactly the midpoint in HHS's forecast range.

Hey, Jeb! Who's getting those "huge new subsidies" under the ACA?

Touting his new ACA replacement plan, which would wipe out ACA coverage rules for insurers and replace means-tested ACA private plan subsidies with tax credits for catastrophic coverage available at any income level, Bush asserted:

Obamacare created huge new subsidies for low-income Americans, but it left middle-income Americans facing higher premiums and higher out-of-pocket costs.

There are some grains of truth to that.  People who 1) get their insurance in the individual market,  2) earn too much to qualify for subsidies (that is, over 300-400% of the Federal Poverty Level (FPL)), and 3) don't have pre-existing conditions pay more  than they would have pre-ACA.* You could argue, too, that the ACA has driven up out-of-pocket medical costs, if not premiums, for people with employer-sponsored insurance (ESI) -- or at least that it will do so once the Cadillac Tax kicks in, if it ever does. The claim is highly contestable, though, as neither premiums nor out-of-pocket costs have risen faster in ESI than in pre-ACA years and myriad factors are at work. Really, it's simply too early to tell.

But Bush's statement, like most Republican claims to speak in defense of "the middle class," reveals a top-heavy view of what "middle class" means. His sneer at "huge subsidies" is also a sneer at huge swaths of the U.S. population -- where the uninsured are concentrated.

A recent Census report** indicates that in 2014 the ACA caused large drops in the uninsured rate among Americans with incomes under 100% FPL ( a 4.2 point drop, from 23.5% to 19.3%), 100-199% FPL (a 5.3 point drop) and 200-299% FPL (4.2 points.).

ACA exchanges in 2016: targeting just 6.4 million subsidy-eligible uninsureds?

In a speech at Howard University College of Medicine today, HHS Secretary Sylvia Burwell laid out a few facts about the target market for the ACA exchanges -- those still uninsured and eligible for private plan coverage. A couple of key points:

• About 10.5 million uninsured Americans are eligible for Marketplace coverage in the upcoming open enrollment.


• Almost 40 percent of the uninsured who qualify for Marketplace plans are living between 139 and 250 percent of the federal poverty level (about $34,000 to $61,000 for a family of four).

HHS has confirmed for me that the 10.5 million estimate is not limited to the subsidy-eligible. At present, according to Kaiser estimates, about half of those who have bought plans in the nongroup market are ineligible for subsidies, and most of the subsidy-ineligible have bought their plans off-exchange. 

Does that, then, suggest a target market of just 5 million subsidy-eligible uninsureds? Not quite.* HHS's estimate of the target market between 139% and 250% FPL (4.2 million or a bit less) provides a basis for estimating the size of the subsidizable target market.  In 2015, about 76% of private plan buyers on the exchanges had incomes under 251% FPL.*  According to HHS's most recent enrollment snapshot, 83.7% of all exchange enrollees qualified for premium subsidies. Thus 91% of subsidy-eligible buyers were under 251% FPL. Not all of them, however, fit HHS's "40 percent" category of 139-250% FPL - because in states that refused the Medicaid expansion, eligibility for subsidized marketplace coverage begins at 100% FPL.*** In 2015, about 15% of all enrollees**** (and 20% of those under 250% FPL) were under 139% FPL and so outside HHS's category. Those between 139% and 250% FPL thus constituted about 60% of total enrollment. If that percentage holds in 2016, that would suggest that about 7 million of the 10.5 million in the target market are subsidy eligible.

But the percentage of potential buyers under 139% FPL will probably be considerably lower this year. Takeup among that group was disproportionately high: Avalere Health estimated that 76% of eligible buyers from 100-150% FPL did in fact enroll, and the percentage was probably still higher under 139% FPL (and dramatically lower for all higher income bands). Moreover, two (small states) have accepted the Medicaid expansion for 2016. If, in 2016, 10% rather than 20% of those under 250% FPL are also under 139% FPL, then that suggests about 580,000 fewer subsidizable targets. Since we're now in the realm of educated guesswork, let's say that HHS's estimate of the 139-250% market suggests that about 6.4 million of their 10.5 million overall target market is subsidizable.

At present, 83.7% of 9.9 million exchange enrollees are subsidized. If there indeed are only about 6.4 million subsidy-eligible uninsured still out there, then about 57% of the subsidy-eligible target market has been enrolled. That doesn't sound right. Kaiser has pegged the percentage of potential exchange population enrolled through June 20 at 35%.Though that estimate is not limited to the subsidy-eligible, uninsured rates are much higher in lower income brackets.

The 10.5 million estimate excludes the Medicaid-eligible and -- I assume but have not confirmed -- those in the Medicaid gap, who theoretically could buy unsubsidized plans on the exchanges. Those who earn too little to qualify for premium subsidies are unlikely to pay full price for plans on the marketplace -- although, confusingly (to me), the just-released census report on health insurance showed greater gains in private coverage than in government insurance for those whose incomes should qualify them for Medicaid under the ACA expansion.

The still uninsured: can't afford coverage or don't know what's on offer? (Or both?)

With respect to reaching the still-uninsured, Burwell cited findings from a PerryUndem study that reflect a tension between two key factors:

• About half of the uninsured have less than $100 in savings.

• Nearly three in five of the uninsured are either confused about how the tax credits work or don’t know that they are available.

The first point is a proxy for several points highlighting the financial precariousness of the uninsured. Another: 58% of respondents report having less than $100 left over each month after paying bills. In other words, many would have a very tough time with the average premium paid for marketplace plans, net of subsidies: $101 per month. At the same time, most who consider coverage unaffordable do not know what's on offer.

I have noted the same tension in data from the Urban Institute, and in other surveys of the uninsured. If the still-uninsured who qualify for premium and cost-sharing subsidies knew what was on offer, would they still consider it unaffordable? Doubtless some would and some would not. The proportion in each camp will go a long way toward determining how viable the ACA private plan marketplace will prove over the long haul.

Researchers at the Urban Institute and healthcare reporter Jed Graham have argued that the ACA subsidy structure is too skimpy to meet the needs of large percentages of the uninsured.  To whatever extent that's true overall, it's increasingly true as you move up the income scale -- as Avalere Health's analysis of takeup rates at different income levels indicates. Avalere estimated that about 76% of the subsidy-eligible uninsured with incomes under 150% FPL bought subsidized private plans, compared to 41% for those from 151-200% FPL, 30% for those from 201-250% FPL, 20% of those from 251-300% FPL, and so on down.  The threshold for really strong Cost Sharing Reduction, 200% FPL, is one dividing line between strong and weak aid.  The ACA works best for those up to that income level. At the same time, that's where most of the uninsured are concentrated.

P.S. The PerryUndem study, conducted in May 2015 and surveying some 1,270 adults, is full of interesting info about the finances and priorities of the uninsured.

UPDATE, 10/14/2015: Kaiser yesterday estimated that 7.1 million uninsured people are eligible for subsidized private plans in the ACA marketplace.

----
* I originally oversimplified this calculation, simply taking the percentage of exchange buyers under 250% FPL. Correction is in this paragraph.

** I calculated the percentage of exchange enrollees with incomes under 251% FPL in this post.

*** Thanks to Jed Graham for pointing out that HHS's estimate began at 139% FPL (rather strangely, when you consider the doubtless still-sizable number of uninsureds between under 139% FPL in states that refused the Medicaid expansion. Also among subsidized buyers under 139% FPL: legally present immigrants who are time-barred from Medicaid; they are eligible for premium subsidies even if their income is under 100% FPL (in nonexpansion states) or 139% FPL (in expansion states).

**** See this post for a calculation of 2015 exchange customer with incomes under 139% FPL. In this post, I've slightly dropped the estimate, from 16% of all buyers to 15%, in light of the recent purge of those who failed to verify their state income when asked.

How many of the uninsured know what's on offer? Not many, Urban finds

With ACA private plan market enrollment lagging initial CBO projections, one key question is whether those who qualify for aid but remain uninsured are doing so because they can't afford what's on offer or because they still don't know what's on offer.

The Urban Institute's latest Health Reform Monitoring Survey (HRMS), conducted in March 2015, indicates that both factors are at work, but comes down more on the side of ignorance of what's on offer. That's "good news" in the sense that ignorance can be rectified for less money than too-skimpy offerings -- though an Urban analysis released earlier this week warns that outreach and marketplace operations are underfunded, as are the subsidies intended to make coverage affordable.

The HRMS found that 43.1% of still-uninsured have household incomes that may be* in the range that qualify them for subsidized private plans on ACA exchanges. Another 27.7% have incomes that would qualify them for Medicaid under the ACA expansion and live in states that have accepted the expansion (including an unmeasured percentage of both undocumented and legally present immigrants** who do not qualify). 22.6% are in the "coverage gap," earning under 100% of the Federal Poverty Level in states that have refused to expand Medicaid. Just 6.6% of the uninsured earn too much to qualify for any aid.

Fully 60% of those likely to qualify for aid say they remain uninsured because costs are too high or they can't afford coverage. But... here is the key point, in my view:

The Urban Institute's Medicaid expansion proposal could help the ACA private plan market

The Urban Institute has released a report* proposing that the federal government spend an extra half-trillion dollars over ten years to boost the affordability and uptake of the Affordable Care Act's health insurance offerings. The core premise is that for far too many uninsured Americans, private plans offered on ACA exchanges are either unaffordable or offer too-skimpy coverage.

The headline proposal is to boost premium and cost-sharing subsidies for the private plans offered on ACA exchanges.  I'd like to spotlight a side effect of a secondary proposal, designed to entice some of the 21 states that have thus far refused the ACA Medicaid expansion to embrace it. It's this:

Although some of the currently nonexpanding states may choose to participate in the future, many others may continue to refuse to do so, maintaining the tremendous inequity that provides federal financial assistance to some people with incomes at or above the federal poverty level but denies assistance to many adults who are actually poor. One option to address this hole in the ACA’s reach is to give states the option of expanding Medicaid coverage up to 100 percent of FPL rather than requiring them to expand to 138 percent of FPL if they expand at all.

What's the web got to do with it? -- the uninsured need human help

I have an article forthcoming elsewhere (I hope) that examines why many people who visited healthcare.gov remained unaware that they were eligible for subsidies to defray the cost of health insurance. That article is mainly focused on website design, e.g., getting a quick subsidy calculation in front of site visitors.

A new Urban Institute report* drawing on information from Health Reform Monitoring Survey data collected this June spotlights a different aspect of reaching the uninsured: For many, access to expert human assistance is vital.

The report compares the experience of those who were insured in June 2014 but had been uninsured for all or part of the twelve months prior with those who remained uninsured at the time of the survey. While a higher percentage of the still-uninsured used a website as a source of information than of the newly insured (60.3%** vs. 51.1%), "the insured were more likely to use direct assistance assistance than the uninsured" (45.9% vs. 32.1%).  The newly insured were likelier than the still-uninsured to use navigators and application assisters (11.2% vs. 6.4%) or agents and brokers (12.4% vs. 5.1%).***

Those who gained coverage were less likely to use websites exclusively than those who remained uninsured. While that's unsurprising, it is perhaps surprising that 35.5% of those who gained coverage looked for information without using a website at all, compared with only 22.2% of the still-uninsured.

Stat shots of the unsubsidized uninsured

Barring any slip between cup and lip, I should have an article coming out soon that recounts the experiences of several people who do not qualify for ACA subsidies but who have bought insurance plans for 2014 in the new ACA-enacted universe.  A preview is here. In the process, I've tried to get a grip on just how many such people there may be and how they're likely to fare under the ACA.

A Health Affairs post by Urban Institute researchers Lisa Clemans-Cope and Nathaniel Anderson has helped me bring the statistical picture into focus. I should say into relative focus, because there's a good deal of uncertainty in every stat shot. With that caveat, here goes:

• Estimates based on 2009 surveys conducted by different federal agencies as to how many Americans were buying insurance in the individual market vary widely, from 9.1 million in the Medical Expenditure Panels Survey to 25.3 million in the American Community Survey. A mid-range estimate from the National Health Interview Survey (NHIS) conducted by the CDC is 14.0 million.


• In December 2013, the Health Reform Monitoring Survey found that 18.6% of those insured in the individual market received cancellation notices attributing cancellation to the ACA, and  another 6% had their policies cancelled for other stated reasons.  Using that data, and the NHIS estimate of 14 million in in the individual market, Clemans-Cope and Anderson  estimate that 2.6 million people received policy cancellations that their insurers blamed on the ACA (and one might infer another 840,000 cancelled for other stated reasons).


• According to a March 2013 Urban Institute study, 48.6% of those currently in the individual market are ineligible for subsidies. If that ratio is right, and the estimate of 2.6 million cancellations attributed to the ACA is on target, about 1.2 million people who received cancellation notices blamed on the ACA would be ineligible for subsidies.  Of those, some probably had pre-existing conditions and will do better under the ACA.
  


• The Urban Institute study estimates the current individual market at 12.8 million, 6.2 million of whom would be subsidy-ineligible.

The rougher road to health care cost control

There may be an ironic turn of the screw in the argument of an Urban Institute health policy paper by Robert Berenson, John Holahan and Stephen Zuckerman that a "hard trigger" for a strong public option may have a better chance of controlling health care inflation than the weak public options currently included in the House and Senate bills (an argument that Ezra Klein calls "as clear-headed on the public option as anything I've read').

The core argument is this: health care costs are out of control mainly because hospitals and doctors have undue pricing power in many markets. The main potential of a public option for controlling costs lies in exploiting Medicare's pricing power by tying public option payment rates to Medicare's - which neither the House nor Senate public option does. The current weak public option provisions could be negotiated away in favor of a well designed "hard trigger" -- one that goes into effect automatically if either plan pricing or overall health care cost control targets aren't met. Such a trigger would presumably mandate a strong public option with the right kind of pricing power.  Moreover, that trigger should go into effect by 2014, when the exchanges have barely got started -- so little or no time would be lost.