Upcoming Federal Court Decision Could Mean Premium Increases for Nearly 5 Million Americans
Source: Avalere Health
A new analysis from Avalere Health finds that without action from the federal government nearly 5 million Americans would receive an average premium increase of 76 percent if the courts ultimately rule that consumers in the federal exchange cannot receive premium subsidies.
Halbig v. Burwell asserts that the Internal Revenue Service exceeded its authority in issuing a May 2012 rule that provides premium subsidies to individuals purchasing coverage through the federally facilitated exchange. While the ACA specifies that subsidies should be administered “through an exchange established by the state,” the law also gives the federal government the authority to establish an exchange on the state’s behalf. Only 16 states and the District of Columbia opted to create their own exchanges in time for the 2014 plan year.
“The court case has major implications for future insurance coverage and access to care for millions of Americans,” said Caroline Pearson, vice president at Avalere Health. “Depending on the ultimate decision by the courts and absent some other remedy, individuals in at least 25 states who remain in their current plans could see an average premium increase of over 70 percent.”
New GAO Reports
Source: Government Accountability Office
1. Consumer Finance: Credit Cards Designed for Medical Services Not Covered by Insurance. GAO-14-570, June 19.
Highlights - http://www.gao.gov/assets/670/664256.pdf
Podcast - http://www.gao.gov/multimedia/podcasts/664738
3. African Growth and Opportunity Act: Observations on Competitiveness and Diversification of U.S. Imports from Beneficiary Countries. GAO-14-722R, July 21.
Halbig v Burwell: Potential Implications for ACA Coverage and Subsidies
Source: Robert Wood Johnson Foundation
A new report quantifies what’s at stake—in terms of health coverage and dollars—in the Halbig v. Burwell decision expected soon. Urban Institute researchers estimate that 7.3 million people, or about 62 percent of the 11.8 million people expected to enroll in federally facilitated marketplaces by 2016, could lose out on $36.1 billion in subsidies. Residents in Texas and Florida would lose the most, $5.6 billion and $4.8 billion respectively in subsidies at risk in this court decision.
Selection and Costs for Employer-Sponsored Health Insurance in the Private Sector, 2013 versus 2012
Source: Agency for Healthcare Research and Quality (Medical Expenditure Panel Survey)
- In 2013, 51.3 percent of private-sector employees enrolled in employer-sponsored health insurance chose single coverage, rather than employee-plus-one or family coverage. This percentage did not differ from that for 2012.
- Average annual total premiums across all three coverage types were up in 2013 compared to 2012. Single premiums rose 3.5 percent, employee-plus-one premiums rose 3.5 percent, and family premiums rose 3.6 percent.
- The average annual dollar amount that employees contributed toward the premium also rose for all three types of coverage in 2013 versus 2012.
New Report Shows High-Value Provider Networks Maximize Quality, Affordability for Consumers
Source: America’s Health Insurance Plans (AHIP)
High-value provider networks are part of a broad array of strategies health plans use to maximize health care affordability and quality, and a new analysis from actuarial firm Milliman for America’s Health Insurance Plans (AHIP) offers additional insight into how health plans develop these networks to improve care delivery and value. The report finds that high-value provider networks allow for more affordable coverage options with 5% to 20% lower premiums compared to broader network plans, while placing an emphasis on the quality and effectiveness of providers.
To achieve high quality and cost-effective care, health plans’ high-value network designs are focused on delivering care through more efficient treatment protocols, which resulting in the elimination of wasteful spending. In that regard, these initiatives address the cost and quality challenges in a comprehensive way—not simply though implementing smaller or narrower provider networks.
While health plans continue to offer broader coverage options, creating high-value networks—or contracting with a select number of providers who meet quality, cost, and effectiveness metrics—is one way health plans address the wide variation in the price of services and care delivery. In addition, the report highlights that high-value provider networks are “specifically geared toward providing personal and comprehensive care to patients in an environment where providers effectively communicate and coordinate with each other regarding the best treatment for the patient.”
The ACA and America’s Cities: Fewer Uninsured and More Federal Dollars
Source: Urban Institute
This report estimated the effect of the Affordable Care Act (ACA) on 14 large and diverse cities: Los Angeles, Chicago, Houston, Philadelphia, Phoenix, Indianapolis, Columbus, Charlotte, Detroit, Memphis, Seattle, Denver, Atlanta, and Miami. For each city we estimated changes in health coverage under the ACA, particularly the resulting decline in the uninsured. We also estimated the additional federal spending on health care that would flow into these cities. For cities in states that have not expanded Medicaid eligibility, we provide estimates both with and without expansion.
Gaining Ground: Americans’ Health Insurance Coverage and Access to Care After the Affordable Care Act’s First Open Enrollment Period
A new Commonwealth Fund survey finds that in the wake of the Affordable Care Act’s first open enrollment period, significantly fewer working-age adults are uninsured than just before the sign-up period began, and many have used their new coverage to obtain needed care.
The uninsured rate for people ages 19 to 64 declined from 20 percent in the July-to-September 2013 period to 15 percent in the April-to-June 2014 period. An estimated 9.5 million fewer adults were uninsured. Young men and women drove a large part of the decline: the uninsured rate for 19-to-34-year-olds declined from 28 percent to 18 percent, with an estimated 5.7 million fewer young adults uninsured. By June, 60 percent of adults with new coverage through the marketplaces or Medicaid reported they had visited a doctor or hospital or filled a prescription; of these, 62 percent said they could not have accessed or afforded this care previously.
New GAO Report
Source: Government Accountability Office
Private Health Insurance: Early Effects of Medical Loss Ratio Requirements and Rebates on Insurers and Enrollees. GAO-14-580, July 10.
Highlights - http://www.gao.gov/assets/670/664720.pdf
Marketplaces Faced Early Challenges Resolving Inconsistencies With Applicant Data
Source: U.S. Department of Health and Human Services, Office of Inspector General
WHY WE DID THIS STUDY
This evaluation examines how the Federal and State health insurance marketplaces ensured the accuracy of information submitted by applicants for enrollment in qualified health plans and for advance payment of premium tax credits and cost sharing reductions. This evaluation complements a separate Office of Inspector General report (A-09-14-01000) issued in response to the mandate in the Continuing Appropriations Act, 2014, by providing an analysis of how and the extent to which marketplaces resolved inconsistencies between applicants’ self-attested information and the data received through the Federal Data Hub or from other data sources.
HOW WE DID THIS STUDY
We requested data on inconsistencies for October through December 2013 from all marketplaces although four did not provide any. We conducted interviews or site visits with the staffs at the Federal marketplace and all 15 State marketplaces between January and March 2014. We reviewed each marketplace’s policies and procedures for resolving inconsistencies.
WHAT WE FOUND
During the period of our review, marketplaces were unable to resolve most inconsistencies, which they reported most commonly as citizenship and income. Each applicant can have multiple inconsistencies. Inconsistencies do not necessarily indicate that an applicant provided inaccurate information or is enrolled in a qualified health plan or is receiving financial assistance through insurance affordability programs inappropriately. Specifically, the Federal marketplace was unable to resolve 2.6 million of 2.9 million inconsistencies because the CMS eligibility system was not fully operational. The abilities of State marketplaces to resolve inconsistencies varied. Four State marketplaces reported that they were unable to resolve inconsistencies, seven reported that they resolved inconsistencies without delay, one reported that it resolved only some inconsistencies, and three reported that their State Medicaid offices resolved inconsistencies. We also found that data on inconsistencies are limited. For example, the Federal marketplace could not determine the number of applicants who had at least one inconsistency. Finally, marketplaces faced challenges resolving inconsistencies despite having policies and procedures in place.
WHAT WE RECOMMEND
CMS should develop and make public a plan on how and by what date the Federal marketplace will resolve inconsistencies. CMS should conduct additional oversight of State marketplaces to ensure that they are resolving inconsistencies according to Federal requirements. CMS concurred with both of our recommendations.
Individual market: Insights into consumer behavior at the end of open enrollment
Source: McKinsey & Company
This intelligence brief discusses the results of our April individual-market consumer survey, which confirm observations from the first open enrollment period and indicate possible future behavior.
As the Affordable Care Act’s (ACA’s) first individual market open enrollment period (OEP) came to a close in April, we conducted our fifth national online survey to discern insights into how the 2014 individual market has evolved. We conducted the first four surveys between November 2013 and February 2014 and the fifth survey between April 7 and April 16, 2014.
The surveys have focused on both the intentions consumers expressed and the actions they reported taking during the 2014 OEP (especially their reports about how they shopped for, and evaluated, various plans and whether they decided to enroll or go uninsured). The surveys also explored consumers’ awareness of the ACA’s requirements and provisions (including potential subsidies and penalties) and other factors influencing their actions. Each survey included consumers reporting that they enrolled in healthcare coverage for 2014 (either on or off an exchange or by renewing an existing plan), those reporting that they shopped but did not enroll, and those reporting that they did not shop for health insurance during OEP.
Burwell v. Hobby Lobby Stores, Inc. (PDF)
Source: Supreme Court of the United States
The Religious Freedom Restoration Act of 1993 (RFRA) prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability” unless the Government “demonstrates that application of the burden to the person—(1) is in furtherance of a compelling govern – mental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” 42 U. S. C. §§2000bb–1(a), (b). As amended by the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), RFRA covers “any exercise of religion, whether or not compelled by, or central to, a system of religious be – lief.” §2000cc–5(7)(A).
At issue here are regulations promulgated by the Department of Health and Human Services (HHS) und er the Patient Protection and Affordable Care Act of 2010 (ACA), which, as relevant here, requires specified employers’ group health plans to furnish “preventive care and screenings” for women without “a ny cost sharing requirements,” 42 U. S. C. §300gg–13(a)(4). Congress did not specify what types of preventive care must be covered; it authorized the Health Resources and Services Administration, a component of HHS, to decide. Ibid . Nonexempt employers are generally required to provide coverage for the 20 contraceptive methods approv ed by the Food and Drug Administration, including the 4 that may have the effect of preventing an already fertilized egg from developing any further by inhibiting its attachment to the uterus. Religious employers, such as churches, are exempt from this contraceptive ma ndate. HHS has also effectively exempted religious nonprofit organi zations with religious objections to providing coverage for contraceptive services. Under this accom – modation, the insurance issuer must exclude contraceptive coverage from the employer’s plan and provide plan partic ipants with separate payments for contraceptive services without imposing any cost – sharing requirements on the employer, its insurance plan, or its em – ployee beneficiaries.
In these cases, the owners of th ree closely held for-profit corporations have sincere Christian beliefs th at life begins at conception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after th at point. In separate actions, they sued HHS and other federal officials and agencies (collectively HHS) under RFRA and the Free Exerci se Clause, seeking to enjoin application of the contraceptive mandate insofar as it requires them to provide health coverage for the four objectionable contraceptives. In No. 13–356, the District Court denied the Hahns and their compa – ny—Conestoga Wood Specialties—a preliminary injunction. Affirm – ing, the Third Circuit held that a for-profit corporation could not “engage in religious exercise” under RFRA or the First Amendment, and that the mandate imposed no requ irements on the Hahns in their personal capacity. In No. 13–354, the Greens, their children, and their companies—Hobby Lobby Stores and Mardel—were also denied a preliminary injunction, but the Tent h Circuit reversed. It held that the Greens’ businesses are “persons ” under RFRA, and that the corporations had established a likelih ood of success on their RFRA claim because the contraceptive mandate substantially burd ened their exercise of religion and HHS had not demonstrated a compelling interest in enforcing the mandate against them; in the alternative, the court held that HHS had not proved that the mandate was the “least restrictive means” of furthering a compelling governmental interest.
Held : As applied to closely held corp orations, the HHS regulations im – posing the contraceptive mandate violate RFRA. Pp. 16–49.
New From the GAO
Source: Government Accountability Office
1. Maritime Security: Ongoing U.S. Counterpiracy Efforts Would Benefit From Agency Assessments. GAO-14-422, June 19.
Highlights - http://www.gao.gov/assets/670/664269.pdf
2. Combating Terrorism: U.S. Efforts in Northwest Africa Would Be Strengthened by Enhanced Program Management. GAO-14-518, June 24.
Highlights - http://www.gao.gov/assets/670/664335.pdf
Podcast - http://www.gao.gov/multimedia/podcasts/664322
3. Private Health Insurance: The Range of Average Annual Premiums in the Small Group Market by State in Early 2013. GAO-14-524R, May 28.
5. Prepositioned Stocks: DOD’s Strategic Policy and Implementation Plan. GAO-14-659R, June 24.
6. Transportation Security Information Sharing: Stakeholder Satisfaction Varies; TSA Could Take Additional Actions to Strengthen Efforts. GAO-14-506, June 24.
Highlights - http://www.gao.gov/assets/670/664349.pdf
Transportation Security Information Sharing: Results of GAO’s Survey of Stakeholder Satisfaction with TSA Products and Mechanisms (GAO-14-488SP, June 2014), an E-supplement to GAO-14-506. GAO-14-488SP, June 24.
1. Explosives Detection Canines: TSA Has Taken Steps to Analyze Canine Team Data and Assess the Effectiveness of Passenger Screening Canines, by Jennifer Grover, acting director, homeland security and justice, before the Subcommittee on Transportation Security, House Committee on Homeland Security. GAO-14-659T, June 24.
Highlights - http://www.gao.gov/assets/670/664330.pdf
Deciphering the Data: Health Insurance Rates and Rate Review (PDF)
Source: Robert Wood Johnson Foundation
Health insurers participating in the new Marketplaces are filing rates for 2015 during the next few months. A few states have already released data on proposed rates. There is substantial economic, policy, and political interest in the magnitude of proposed rate changes. This brief provides background for understanding the economic drivers of proposed rates, state and federal rate review authority, the effects of rate changes on Marketplace enrollees and federal spending on premium credits, and the economic and political dynamics of the rate review and approval process.
Federal Funding for Health Insurance Exchanges (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Pursuant to the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended), a health insurance exchange has been established in each state and the District of Columbia (DC). Exchanges are marketplaces where individuals and small businesses can “shop” for health insurance coverage. The ACA provides that states may establish their own state-based exchanges (SBE), and as of January 2014, 14 states and DC have done so. It also directs the Department of Health and Human Services (HHS) to establish exchanges in states that do not establish SBEs, and 36 states have federally-facilitated exchanges (FFE) in 2014. In some states that have FFEs, the states carry out certain functions of the exchange; in other states, the exchange is wholly operated and administered by HHS.
The ACA provided an indefinite appropriation for HHS grants to states to support the planning and establishment of exchanges. For each fiscal year, the HHS Secretary is to determine the total amount that will be made available to each state for exchange grants. No grant may be awarded after January 1, 2015.
Survey of Non-Group Health Insurance Enrollees
Source: Kaiser Family Foundation
January 1, 2014 marked the beginning of several provisions of the Affordable Care Act (ACA) making significant changes to the non-group insurance market, including new rules for insurers regarding who they must cover and what they can charge, along with the opening of new Health Insurance Marketplaces (also known as “Exchanges”) and the availability of premium and cost-sharing subsidies for individuals with low to moderate incomes. Data from the Department of Health and Human Services and others provide some insight into how many people purchased insurance using the new Marketplaces and the types of plans they picked, but much remains unknown about changes to the non-group market as a whole. The Kaiser Family Foundation Survey of Non-Group Health Insurance Enrollees is the first in a series of surveys taking a closer look at the entire non-group market. This first survey was conducted from early April to early May 2014, after the close of the first ACA open enrollment period. It reports the views and experience of all non-group enrollees, including those with coverage obtained both inside and outside the Exchanges, and those who were uninsured prior to the ACA as well as those who had a previous source of coverage (non-group or otherwise).
An estimated three million people currently receive employer health benefits through a private exchange, according to new report by Accenture released at the annual America’s Health Insurance Plans (AHIP) Institute in Seattle.
Accenture’s analysis shows three-times as many people enrolled in private exchanges for 2014 benefits as the company originally forecast last year. And Accenture expects this trend to continue, projecting total enrollment in private exchanges will ultimately surpass state and federally funded exchanges, reaching 40 million by 2018.
“Private exchanges are experiencing hyper growth and will significantly change the role consumers have in personalizing their own employer health benefits,” said Rich Birhanzel, managing director, Accenture Health Administration Services. “With the first material open enrollment period concluded last year, private exchanges have an unprecedented opportunity to differentiate and prove the value of this new model over traditional self-managed plans.”
Premium Affordability, Competition, and Choice in the Health Insurance Marketplace, 2014 (PDF)
Source: U.S. Department of Health and Human Services
Research Brief Highlights
Marketplace Plan Choices and the Impact of Advanced Premium Tax Credits on Premiums:
• Individuals who selected plans in the FFM with tax credits7 have a post-tax credit premium that is 76 percent less than the full premium, on average, as a result of the tax credit—reducing their premium from $346 to $82 per month.
• 69 percent of individuals selecting plans with tax credits in the FFM have premiums of $100 or less after tax credits—nearly half (46 percent) have premiums of $50 or less after tax credits.
• Individuals choosing silver plans in the FFM tended to select lower premium plans—65 percent chose the lowest or second-lowest cost silver plan.
Overview of the 2014 Health Insurance Marketplace and the Association Between Competition, Other Market Factors, and Variation in Premiums:
• Most individuals had a wide range of health plan choices. Eighty-two percent of people eligible to purchase a qualified health plan live in rating areas with 3 to 11 issuers in the Marketplace; 96 percent live in rating areas with 2 to 11 issuers in the Marketplace.
• Competition, as measured by the number of issuers in a rating area, is associated with more affordable benchmark plans (the second-lowest cost silver plan) for individuals and reduced costs for the federal government. An additional issuer in a rating area is associated with a 4 percent lower benchmark premium.
• Areas with a greater number of issuers also tend to offer a wider range of choices among plan types (e.g. PPOs, HMOs, CO-OP) to better meet consumers’ preferences and financial needs.