Massachusetts poised to extend ConnectorCare's low out-of-pocket costs to 500% FPL

Mr. and Mrs. Mallard hunt for coverage

Predating and existing alongside the ACA marketplace, Massachusetts implemented and has maintained a better system.

At incomes up to the 300% of the Federal Poverty Level, Massachusetts applicants who earn too much to qualify for Medicaid are offered a standard, easily comprehensible benefit package with low premiums and out-of-pocket costs. That contrasts with the ACA's bewildering array of sometimes more than 100 plans in four metal levels, each offering a smorgasbord of copays and coinsurance, often with high but Swiss-cheese deductibles to which many services are not subject.

As measured by actuarial value -- the percentage of the average enrollee's annual costs* the plan is designed to pay -- ConnectorCare offers more generous coverage than the ACA's benchmark silver plans  (which are enhanced by Cost Sharing Reduction subsidies at incomes up to 250% FPL) at every income at which it's available. The AV difference is nominal at the 100-150% FPL income level, pronounced at 150-200% FPL, and enormous at 200-300% FPL, as illustrated below (via a 2021 program overview). Equally important, enrollees are not lured by bronze or gold plans with radically higher out-of-pocket exposure.

Coming soon... some housekeeping notes

Dear xpostfactoid subscribers: as I haven't posted here in a couple of weeks, a brief update:

1. I've started posting on Substack and have ported the subscriber list to that site. I don't want to burden people with two emails per post, but I'm not quite ready to cut bait here at xpostfactoid's home of 13 (!) years.  I have no intention of charging at Substack-- I'm just hoping that its social media features may bring in some fresh traffic. If you find two emails per post annoying, perhaps unsubscribe here.  This site may remain a bit more of a scratch pad, as in this post. I put my last post, a strategic guide to shopping in the ACA marketplace, up at Substack but not here. That was an experiment, to see whether putting first publication up there affected traffic. 

2. I'm working on a couple of reported pieces:

• A look at the consumer impact of the No Surprises Act, which should have (and hopefully has) removed perhaps the most egregious travesty in U.S. healthcare - -the surprise bill for emergency care, or for scheduled care at an in-network hospital with an in-network provider assisted by out-of-network providers. National data isn't in yet, but the effect was presumably immediate -- though also probably invisible to the millions who didn't get balance-billed. 
  
  
• A look at an expansion of affordable, low-OOP coverage that's likely in the offing in Massachusetts, home to the country's lowest uninsured rate.

Please stay tuned!

Three cheer(ing) facts about the ACA marketplace for 2023

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HealthCare.gov posted available health plans and premiums in the ACA marketplace for 2023 this week. Many state-based exchanges also have their menus up. (So does commercial broker and Direct Enrollment platform HealthSherpa, the easiest place to check out plans and prices throughout HealthCare.gov states.)

On the whole, the markets are in good shape, albeit with some lead linings to bright puffy clouds. The ARPA-enhanced subsidies that boosted enrollment by 21% last year are still in place, thrown a three-year lifeline by the Inflation Reduction Act (though with Republican control of at least one house of Congress likely, their ultimate future is uncertain). Not only was enrollment up in 2022; retention was also good, at least through first payments, probably boosted by radically lower subsidized premiums (95% of those who selected plans in Open Enrollment had effectuated enrollment in February). 

Gold plans will be more affordable to more enrollees than ever this year, a boon to higher-income enrollees who don't qualify for the strong Cost Sharing Reduction that attaches to silver plans at incomes up to 200% of the Federal Poverty Level (FPL).  Insurers have newly entered several markets, though new offerings are more or less offset by the exit of Bright Health from 17 states (Louise Norris runs through market entries and exits nationwide here).

Three salient features of the national marketplace are outlined below. A caveat is that the first two deal in broad averages: prices and offerings vary widely by state, and often by county or even zip code.

On adding an out-of-pocket cost cap to traditional Medicare

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Medicare's annual Open Enrollment Period is in progress, and enrollment in Medicare Advantage (MA) is poised to exceed enrollment in traditional, fee-for-service (FFS) Medicare for the first time in 2023. Stat's Bob Herman spotlights advocates' case for erasing MA's most consequential competitive advantage by adding an annual out-of-pocket cost cap (OOP cap) to traditional, fee-for-service Medicare:

At least 1 in 5 people* who choose Medicare Advantage — the alternative to traditional Medicare that is operated by health insurance companies — say they choose it because of the out-of-pocket limits that insurers offer, according to a new survey from the Commonwealth Fund.

According to a Kaiser Family Foundation estimate, as of 2018, about one in six FFS Medicare enrollees (counting only those enrolled in both Part A and Part B**) lacked an OOP cap and were thus exposed to potentially catastrophic out-of-pocket costs. That comes to about 5 million enrollees in 2022. The other 25 million FFS enrollees in Parts A  and B have access to OOP caps -- usually quite low --  via either Medigap, an employer-sponsored supplemental plan, or dual eligibility in Medicare and Medicaid.

In a study commissioned by America's Health Insurance Plans (AHIP), Wakely actuaries calculated that adding a $6,700 OOP cap to FFS Medicare Parts A and B would increase per-person spending by 3.5%. Wakely cast that estimate as conservative, as it does not include an estimate of "induced demand"-- i.e., enrollees using more care because it's more affordable. A June 2022 Urban Institute analysis bears that out. Urban estimated the cost of a $7,550 cap -- the highest currently allowable by MA plans for in-network care -- at $25 billion per year, a 5% increase. But that cap is inclusive of Part D, which according to Urban's estimate accounts for about 18% of cost increases. A $7,550 cap for Parts A and B alone would presumably increase FFS costs by about 4%. Urban estimates that induced demand triggered by a $7,550 cap will increase total spending by all payers by $8 billion, or 1.6% (perhaps 1.3% with Part D omitted).  That added cost (not accounted for by Wakely) does seem to bring the Urban and Wakely estimates more or less in line. 

Total individual market enrollment in health insurance may (finally) be at an all-time ACA-era high

Please see a 2023 update at https://xpostfactoid.substack.com/p/aca-effectuated-enrollment-in-2023 

----

In June 2021, I wondered, will attrition in the ACA marketplace go negative?

Until the pandemic struck, enrollment attrition throughout the coverage year in the ACA marketplace was an established norm. Every year, effectuated enrollment (i.e. paid-up enrollment) as of the first month after the end of Open Enrollment (OE) was between 6% and 15% lower than the "plan selection" total as of the end of OE. From February through December, enrollment would downtick by 600-800,000....

This year, we're in a different world. The Biden administration opened an emergency SEP in HealthCare.gov on February 15, extending August 15, and the state exchanges followed suit, with some variations. Then the American Rescue Plan, signed into law on March 11, provided a massive subsidy boost through 2022, with the new subsidies appearing live on HealthCare.gov on April 1, and in state exchanges pretty shortly thereafter.

Well, the results are in, courtesy of CMS's early effectuated enrollment snapshot for 2022, which includes average monthly enrollment and month-by-month enrollment totals for the year prior.* And the answer is: almost! Or, in a sense, yes!  

Average monthly enrollment in 2021 came to 97.8% of  total plan selections as of the end of the year's Open Enrollment Period -- and to 106.3% of the early effectuated enrollment total reported as of February 2021.** 

ACA marketplace enrollment retention, 2016-2022 

Year	End of OE	Post-OE effectuated	Early effectuated/OE	Average monthly	Avg. monthly/OE
2016	12,681,874	10,828,894	85.4%	10,007,113	78.9%
2017	12,216,003	10,526,942	86.2%	9,763,076	79.9%
2018	11,750,175	10,515,192	89.5%	9,895,197	84.2%
2019	11,444,141	10,433,850	91.2%	9,810,613	85.7%
2020	11,409,447	10,592,901	92.8%	10,408,892	91.2%
2021	12,004,365	11,034,220	91.9%	11,734,931	97.8%
2022	14,511,077	13,807,669	95.2%

Sources: CMS state-level public use files and effectuated enrollment snapshots

AHIP's hooray for Medicare Advantage: Apples-to-candied-apples, and an open question

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Bob Herman of Stat casts a cold eye on a new claim from AHIP that Medicare Advantage provides superior value to the federal government:

America’s Health Insurance Plans, the industry’s primary lobbying group, funded a new report that was conducted by actuaries at Wakely Consulting Group. AHIP claims the report proves Medicare Advantage...is “saving Americans billions of dollars every year.” The actuaries, however, never use that language in the report.

STAT spoke with several independent Medicare policy experts, all of whom said AHIP’s report was incomplete at best and refuted by other studies that analyzed the same data. 

AHIP's press release asserts that "in 2019, rather than being 2% more expensive than original Medicare, on an apples-to-apples basis, average MA spending was actually about 7% lower than original Medicare."

That conclusion is based on two claims grounded in the Wakely analysis: 

To Whose advantage is Medicare Advantage? Part 2

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"They have to authorize this"

To whose advantage is Medicare Advantage? Part 1 of this inquiry overviewed the tradeoffs for enrollees and the primary payer -- the federal government. In this post, we'll hear from professionals who deal with MA enrollees and plans.

First, a recap of the issues overviewed in Part 1, based mainly on analysis from MedPAC, the Kaiser Family Foundation, and comments on MA recently solicited by CMS.

A note to subscribers

Dear xpostfactoid subscribers: I would like to start publishing on Substack, which I gather has social media-ish characteristics that could be helpful. I've taken the liberty of porting the subscriber list to Substack (and accidentally sent one post already to the whole list -- apologies). If you will bear with me through a brief trial, a handful of posts will come through both subscription services, at which point I'll cut bait with one. I have no intention of charging a subscription fee, as Substack enables.  Thank you for your forbearance. 

Glory hallelujah, for a moment

 Last night I had what is for me a very rare thing -- a dream filled with joy. As always, it's hard to distinguish the dream itself from the interpretive memory of it immediately after -- and possibly later, too. But as best as I can manage...

I was lying flat on my back under the sky, possibly in a trench, as I had been reading a few pages about World War I in Brad DeLong's Slouching Toward Bethlehem before bed. I had a strong feeling of relief and release. We -- I and my family, or community, or possibly nation -- were safe and free. We had prevailed in some life-threatening struggle.

The sky was full of stars.  I thought of singing, but for some reason it seemed more appropriate, or feasible, to write across the sky, and I could do this with my finger, as you do on credit card touchpads. I was about to write, or maybe did write, Glory, or Gloria -- maybe Glory Hallelujah, or Gloria in excelsis deo (I seem to have been mulling this as I woke). I thought I would get something going among those around me, a kind of chorus of joy. Not sure whether I did get it started.

There may have been some undertone in this of the election -- fending off rising Republican fascism -- or of the Ukraine war. Maybe I injected those associations later. In any case, I relate it in case there was some intuitive hope that might be shared, as I imagined the "gloria' chorus might be.

Photo by Philippe Donn (minus text) Subscribe (free) to xpostfactoid

To whose advantage is Medicare Advantage? Part 1

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Note: Enrollment in Medicare Advantage plans is poised to surpass enrollment in traditional, fee-for-service (FFS) Medicare in 2023. MA's rapid growth raises major questions about the shape of Medicare coverage going forward. This is the first of two posts examining the pros and cons of Medicare Advantage. This post outlines the major issues as framed by MedPAC and select researchers, along with the basic economic tradeoffs for enrollees. Part 2 will report the experience of a hospitalist, brokers, and various stakeholders who responded to a CMS request for feedback about the MA program.

There is a slipknot quality to attempts to compare the value and utility of traditional, fee-for-service (FFS) Medicare and Medicare Advantage.

Medicare Advantage plans generally place bids to CMS far below CMS benchmarks, which are based on an adjusted estimate of what it costs to provide FFS Medicare to enrollees in the plan's geographic area. On average, according to the 2022 MedPAC report, MA plans spend 15% less to provide Part A and B benefits than FFS Medicare would spend.  But CMS pays Medicare Advantage plans an average of 104% of what it would pay for FFS Medicare coverage for the same enrollees. But MA plans use the excess payment to provide an estimated $2,000 per member in surplus benefits or out-of-pocket cost relief. But, according to MedPAC, the value of MA-furnished extra services as actually used by enrollees is elusive, because of inadequate reporting requirements, and the quality ratings that increase payments to MA plans do a poor job measuring quality.

With regard to outcomes, MA plans employ treatment protocols that do minimize some so-called low-value care and, in some cases at least, boost usage of preventive care that, according to some studies, can reduce cardiac events, foot amputations for diabetics, ER trips, hospital admittances, and other conditions and services. But there is also good evidence that MA plans inhibit or impede access to needed or high-value care, introduce expensive and sometimes dangerous bureaucratic hurdles to obtaining needed care, and drive enrollees with intense medical needs back to FFS. 

Most notoriously, by multiple accounts, MA plans often impede, block, limit options and reduce the duration of post-acute care. Comments about MA that CMS recently solicited from stakeholders detail these complaints (from physician and hospital associations, practitioners, acute care personnel, patients, brokers and others) again and again and again. A major strain in these complaints is from state employees forced into MA plans by retirement benefit packages.

This month, the Kaiser Family Foundation published a report, based on a literature review of 62 studies published since 2016, comparing "Beneficiary Experience, Affordability, Utilization, and Quality in Medicare Advantage and Traditional Medicare." The authors' conclusions are...inconclusive:

Will Medicaid's "great unwinding" when the PHE ends trigger a "great uninsuring"?

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During the pandemic, from February 2020 to May 2022, Medicaid enrollment increased by 18 million, or 29%, according to administrative data that CMS collects from states. That's mainly because of a moratorium on disenrollments that began in March 2020 and has yet to end. The moratorium will end when the federal government declares an end to the  Public Health Emergency, which will happen in mid-January 2023 at the earliest (the PHE has been extended repeatedly in 3-month increments). 

As noted in my last post, the disruption that may be triggered by the resumption of state "redeterminations" of Medicaid enrollees' eligibility, and subsequent disenrollment of some, is a focus of considerable angst -- and preparations, in states where Medicaid personnel are committed to keeping as many people insured as possible, to proceed with due deliberation and compassion. The Urban Institute has estimated that 15 million people may be disenrolled over the course of a year, the time period that CMS has asked states to devote to clearing the "redetermination" backlog. The Kaiser Family Foundation (KFF) estimates somewhat more modest losses, in a range from 5.3 million to 14.2 million.

This week the Census Bureau released its annual report on health insurance coverage in the United States. Based on the annual supplement to the Current Population Survey, the report shows a more modest increase in Medicaid enrollment from 2020 to 2021 -- 0.9% -- than CMS's administrative data would indicate.  According to CMS, Medicaid and CHIP enrollment increased by 6.6 million from December 2020 to December 2021. That's about 2% of the population.

The Census Bureau also released a second report, spotlighting health insurance changes over two years, and based on the American Community Survey. which interviews people throughout the year about their current insurance status (the CPS, conducted early in the year, asks respondents if they were insured at any point in the past year).  The ACS also shows a gap between Medicaid enrollment gains as reflected in administrative data compared to the survey data. According to the report, the percentage of the population insured by Medicaid increased by 1.3% over two years, from 2019 to 2021 (based, again, on surveys conducted throughout each year). The administrative data records an increase of 11.7 million enrollees from June 2019 to June 2021. That's about 3.5% of the population.

An analysis of the ACS data by KFF attempts to explain this gap. The explanation suggests to me that the disenrollments that will begin at the end of the PHE may not be as disruptive as "15 million disenrolled" might indicate -- at least in states that work in good faith and with due diligence to establish contact with all enrollees, accurately determine their status, and help them consider their options.  My emphasis via yellow highlight below (the bolded subhead is in the original):

Preparing for the great Medicaid unwinding: the case of New Jersey

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NJ FamilyCare end-of-PHE alert

The pending end of the Public Health Emergency declared by the federal government in March 2020 will trigger something of an earthquake among Medicaid enrollees.  

As of May of this year, enrollment in Medicaid and CHIP had increased by 18.3 million -- 26% -- since February 2020, the last month unaffected by the pandemic. Some 90 million Americans, well more than a quarter of the population, are now enrolled in Medicaid or CHIP.  That increase is mostly due to a moratorium on disenrollments enacted in March 2020 as part of the Families First Coronavirus Response act, which conditioned a 6.2% increase in the federal government's share of each state's Medicaid costs on implementing the moratorium (all states complied).  The Kaiser Family Foundation (KFF) estimates that 84% of the enrollment increase during the pandemic is attributable to the moratorium.

Democrats have twelve years of healthcare accomplishment to run on

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Chuck Schumer tours Adirondack Medical Center

HuffPost reports that Priorities USA is urging Democrats to tout recent healthcare achievements:

In a memo set to be published Wednesday, Priorities USA says the most popular achievements of President Joe Biden’s tenure are giving Medicare the power to negotiate prescription drug prices, capping the price of insulin and continuing expanded subsidies for the Affordable Care Act.

Priorities USA recommends focusing on these issues while also attacking Republicans for working to restrict abortion rights in the wake of the Supreme Court decision overturning Roe v. Wade.

Amen. And below those top lines -- the healthcare provisions in the Inflation Reduction Act passed this month -- Democrats should also tout a long tail of recent accomplishments that have improved healthcare affordability and access. Their claim to be the party of healthcare bears not only recent but cumulative weight.

Healthcare was a potent issue for Democrats in 2018, with Republicans fresh off their failed attempt to repeal the ACA's core programs in 2017.  Because they failed, the ACA Medicaid expansion and subsidized marketplace survived to catch the newly uninsured when more than 20 million Americans lost their jobs in the first onslaught of the COVID-19 pandemic. 

Dem chorus rising: Don't let them take your freedom

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For most of the post-January 6 era, the U.S. has seemed to be sleepwalking toward autocracy. 

Republicans swiftly fell in all but unanimously behind Trump's Big Lie that he won the 2020 election; red states passed a raft of voter suppression laws; Trump acolytes positioned themselves to seize control of election administration and machinery; pardoned Team Trump criminals and the RNC encouraged thousands to sign up as poll workers; and diehard election deniers won Republican primaries for secretary of state, attorney general and governor in key states.

Meanwhile, inflation dominated headlines, Biden's approval rating sank to record lows for a first- and second-year president, courts upheld Republican gerrymanders and struck down Democratic ones, off-year elections swung heavily toward Republicans, and Republicans led in generic Congressional polling.

Then came the riveting January 6 Commission hearings in June and July, with Republican officials laying bare Trump's criminality and pathology -- and smack in the middle of that timeline, the intense shock of the Supreme Court ruling in Dobbs, overturning Roe v. Wade. Democrats woke up -- some Democrats, anyway. Gavin Newsom laid down a keynote in a July 4 ad aimed at Floridians ("inviting "them to move to California): freedom is under attack in your state...don't let them take your freedom.

Loony interlude

 

I wish the photo were better...

No healthcare this week, as we are in the Adirondacks, at a collection of Finnish (?!) huts on a small crystalline lake, with no motorboats allowed. On sunny Tuesday morning, in kayaks, we watched a family of loons (father, mother, adolescent) pursue and eat their breakfast. They sail along intermittently in tandem, with adults constantly diving for a minute or so at a time and coming up a few hundred feet away. After some time the female came up with a small silver fish, which she worked around in her beak for a long time, both as she swam back to the other two and as they circled together. At one point the male appeared to make a grab at it. Eventually she put it down the young one's throat. Then it was rinse, repeat: one of the adults (not sure which) caught another fish, worked it for a while, then swallowed it.

Widespread misconception of Medicare Part D enrollees' out-of-pocket exposure

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I object

Late last year, I took some pains to tease out the out-of-pocket (OOP) exposure of Medicare Part D enrollees up to the point where they reach the so-called "catastrophic threshold" of coverage. Beyond that point, they're responsible for a comparatively low 5% of subsequent costs until the end of the coverage year. 

The answer is no real mystery: it's well understood by involved professionals and scholars. It's just awfully hard to derive from general news coverage and even trade press coverage or scholarly coverage.

The exposure up to the catastrophic threshold in 2022 is $2,937, despite an often-cited cap of $7,050, referred to in the trade as the trOOP cap, or true out of pocket cap. 

Attention, Bernie Sanders: Medicare benefits from Inflation Reduction Act begin in 2023

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Free in 2023

Senate Democrats' passage of the Inflation Reduction Act yesterday evening was an exercise in the art of the possible, the culmination of a year-long immersion in the reality principle. Senate Democrats as a body probed to the last minute what first Manchin and finally Sinema would allow them to pass, and ultimately maxed out on that allowance. 

The result is powerful legislation that gives us a fighting chance to mitigate the worst effects of climate change and sets up a starter home for Medicare to negotiate prescription drug prices. It also boosts the perhaps still-long odds that Democrats can hold the Senate and House and so stave off the Republican threat to democracy itself.

How much drug price control are we getting in the Inflation Reduction Act?

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When media addresses the prescription drug cost control measures in the Inflation Reduction Act, the provisions empowering Medicare to negotiate the price of select high-value drugs tends to suck up all the attention. 

Rightly, perhaps. While the negotiation regime is slow to start (beginning with 10 drugs to be negotiated in 2026), modest in number (rising to 20 drugs negotiated in 2029), and abjuring reference pricing from European countries (instead capping prices at a set discount of average U.S. prices), it establishes a vital principle, and the scope and terms of negotiation may be expanded and strengthened over time. 

That said,  a lower-profile provision that kicks in quickly (in 2023) is projected (by the Congressional Budget Office) to save/raise roughly as much money as drug negotiation: Inflation caps on the prices of drugs currently on the market. If a drug manufacturer raises the average price charged for a given drug by an amount that exceeds the consumer price index for urban consumers (CPI-U) it must rebate the difference to Medicare. That provision not only starts right away, it also applies to employer-sponsored and individual market health plans as well as Medicare (the rebates accrue from all drugs sold but are paid only to the federal government). CBO projects that the inflation caps will generate $62 billion in savings and $38 billion in revenue over ten years.

U.S. uninsured rate hits an all-time low; Biden's HHS takes a victory lap; xpostfactoid claims prepostfactoid credit

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Record broken!

Biden's HHS took something of a victory lap yesterday, announcing that the national uninsured rate -- 8.0% for all ages --  was at an all-time low in the first quarter of 2022. Since the fourth quarter of 2020, the uninsured rate has dropped by 2.7 percentage both for ages 18-64 and for children, according to the ASPE* brief.

The brief is based on quarterly updates from the National Health Interview Survey. Those updates are notoriously bouncy, but the change over the time frame selected is clearly statistically significant. 

The brief asserts: "These gains in health insurance coverage are concurrent with [mustn't claim causality, now...] the implementation of the American Rescue Plan’s enhanced Marketplace subsidies, the continuous enrollment provision in Medicaid, several recent state Medicaid expansions, and substantial enrollment outreach by the Biden-Harris Administration in 2021- 2022."

I must note that I've been something of a canary in the coal mine on this front, first speculating that we might be approaching an uninsured low in April 2021; wondering whether the 2021 Special Enrollment Period coupled with the ARPA subsidy boosts might have got us there by late August 2021; and parsing the NHIS quarterly data in light of the 2022 marketplace enrollment surge in January 2022.

Ultimately, I noted in the January post, the enrollment math, if not the survey data, told a fairly simple story:

All Dem (and doc) hands on deck to get Medicare drug negotiation/ACA subsidy boosts across the finish line

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It struck my eye last week  that Doctors for America, a physician advocacy group that supports single-payer healthcare, saw fit to call on member docs (via email) to lobby for what's left of the Democrats' reconciliation bill:

This is a decisive week in Congress with the Senate poised to vote on several crucial pieces of legislation, including allowing the HHS Secretary to negotiate for Medicare drug pricing, out-of-pocket caps in Part D, and rebates for price increases exceeding inflation. There are also new provisions to make vaccines free for Medicare beneficiaries, to stabilize premiums, and expand the Medicare low-income subsidy programs.

We hope the Senate will move forward with a meaningful reconciliation package that includes the drug price provisions before the August recess. But we need to apply pressure to do so.  Remind your senators to choose #PatientsOverPolitics and pass the reconciliation bill this week, including all of the health care provisions promised to the American people.