Tag: health insurance
- The percentage of people without health insurance remained relatively steady over the past year despite efforts to repeal the Affordable Care Act and attempts to curb coverage in Washington and at state levels.
- The latest statistics from the CDC show that from January to March of this year 28.3 million people (8.8%) were uninsured. That’s compared to 29.3 million people (9.1%) a year ago. There are 20 million fewer people without insurance compared to 2010, when the ACA was enacted.
- More consumers shifted to high-deductible health plans (HDHPs) in the first quarter. The report found that nearly half (47%) of Americans under age 65 with private health insurance had a high-deductible plan, an upward trend since 2010.
CDC said 12.5% of adults aged 18-64 didn’t have insurance in the first three months of 2018. Nearly 20% had public coverage and 70% were covered by private health insurance. Of the 138.6 million adults with private health insurance, 8.3 million of them (4.2%) received coverage through ACA exchanges.
Nearly 5% of children were uninsured, 42% had public insurance and almost 55% had private health insurance coverage.
A person’s race continues to play a factor in health insurance. Nearly one-quarter of Hispanics lacked coverage in the first quarter. The Hispanic population has seen significant decreases in the percentage of uninsured adults since 2013 when it stood at more than 40%, but the percentage is still higher than other groups. The percentage decreased another three percentage points over the past year from 27.2% to 24.2%. The uninsured rates for other groups remained consistent from last year.
CDC also found that people in Medicaid expansion states were less likely to be uninsured compared to non-expansion states. The percentage of uninsured adults in expansion states decreased from 18.4% in 2013 to 8.7% in 2018. Non-expansion states’ rates fell from 22.7% in 2013 to 17.5% in 2015 before increasing to 19% in 2017. There was a slight percentage drop in 2018 (18.4%), which is still more than double the percentage in expansion states.
Meanwhile, in private insurance, payers and employers increasingly turn to HDHPs, which have higher out-of-pocket costs and usually lower premiums. Payers and employers have moved more people into those plans as a way to contain costs and give consumers “more skin in the game.”
CDC found that of the 47% of people enrolled in an HDHP, only 21.3% were in a consumer-directed health plan with a health savings account. About one-quarter had a plan without an HSA, which lets people save tax-free funds for their healthcare. Employers often contribute to those accounts.
CDC said the number of people in a consumer-directed plan tripled from 7.7% in 2010 to 21.3% in 2018, including a jump from 18.2% in 2017 to 21.3% this year. The percentage of people without an HSA didn’t change significantly over the past year. This shows that employers and payers are increasingly providing tools like HSAs to help people afford care.
Out-of-pocket costs remain a concern for Americans and can result in delaying care.
A recent Commonwealth Fund report found that one-third of American adults aren’t very or somewhat confident they can afford to pay for a serious illness. Only about half of people who earn less than $30,150 are confident they can afford that care.
They have reason to worry. Peterson-Kaiser Health System Tracker recently reported that payments for deductibles and coinsurance increased faster than the total cost for covered costs between 2006 and 2016. The report showed that total out-of-pocket spending increased by 54% in that period from an average of $525 in 2006 to $806 in 2016.
- Health insurance companies continue inching away from employer-sponsored plans to government-sponsored business. Medicaid managed care and Medicare Advantage plans now make up more than half of health plans’ premiums combined, A.M. Best said in a new report.
- Employer plans once dominated the private market, but they dropped to just 38% of total net premiums written (NPW) in 2017.
- Medicaid’s NPW grew the most of any health insurance sector over the past 10 years. The Affordable Care Act’s Medicaid expansion pushed Medicaid managed care’s NPW from $43.1 billion in 2007 to $224 billion last year, A.M. Best said.
Despite payers’ finding success in government plans, the move generally means lower margins with private insurers relying more on state and federal funding. That’s a potential downside.
A.M. Best said greater reliance on government payments “could lead to short-term liquidity pressure because of the timing of the receipt of funds and possible delays related to budgetary issues.”
Regulations and legislation could lead to unpredictability, especially in the ACA exchanges. “With healthcare remaining a controversial political issue, the regulatory regime is likely to remain volatile over the near to medium term, especially as it relates to the individual exchange segment,” A.M. Best said.
Nevertheless, private payers are increasingly embracing offering public plans. Medicaid’s NPW share increased from 10.2% in 2007 to 27.1% in 2017. Most of that growth came in 2014 and 2015 after states could expand Medicaid to 138% of the federal poverty line. Medicaid expansion added more than 14 million Medicaid recipients.
Medicare Advantage has grown from $69.9 billion in 2007 to $202.7 billion in 2017. It represented 24.5% of overall industry premiums in 2017. Both Medicaid and Medicare Advantage have seen flat business over the past few years, A.M. Best said.
However, more payers are interested in testing the Medicare Advantage market. One reason is that aging Baby Boomers are a fresh market for MA payers.
UnitedHealthcare and Humana still make up the two largest Medicare Advantage payers, but Aetna, Anthem, WellCare and Centene have all grown MA membership this year. Oscar Health also announced this week that it’s expecting to expand to MA in 2020.
Commercial premiums still make up the largest percentage of single sector premiums. That’s dropped from 58% in 2007 to 38% in 2017.
Things aren’t all negative in the commercial market, though. In fact, insurance companies’ cost-containing policies and benefit design have brought stability. Payers have been able to maintain low single-digit annual premium increases in the employer market this decade. Mercer’s recent National Survey of Employer-sponsored Health Plans said those plans’ premiums have increased about 3% yearly since 2012.
The Department of Justice on Thursday night declined to defend the Affordable Care Act in the U.S. District Court for the Northern District of Texas, instead filing a brief arguing that broad swaths of the law, including the provision compelling payers to cover those with pre-existing conditions and the individual mandate, are unconstitutional.
The brief argues the Supreme Court upheld the constitutionality of the individual mandate on the basis of the penalty being considered a tax. With Congress zeroing out the penalty starting in 2019 in the Tax Cuts and Jobs Act, the individual mandate, community rating and guaranteed issue provisions of the Affordable Care Act cannot stand, DOJ said.
The case probably will not be resolved this year, with the District Court decision likely to be appealed first to the 5th Circuit Court of Appeals and then to the Supreme Court.
DOJ’s decision is the latest in a slate of moves by the Trump administration aimed at weakening the Affordable Care Act, after failing to repeal it in Congress. Payers now face even more uncertainty as they set premiums for 2019.
Other efforts by the administration, including rulemaking around short-term, limited duration health insurance and association health plans are likely to be finalized soon.
“Although Plaintiffs speculate as to a chain reaction of failed policymaking that could occur once the individual mandate is struck down, they cannot show that striking down the individual mandate, guaranteed-issue, and community-rating requirements means that the Affordable Care Act necessarily ‘ceases to implement any coherent federal policy,’” DOJ writes.
The insurance lobby, America’s Health Insurance Plans, said that it will file an amicus brief that opposes the GOP “state plaintiffs’ request for emergency relief, and provides more detail about the harm that would come to millions of Americans if the request to invalidate the Affordable Care Act is granted in whole or in part.” The group added that 2019 premium rates are already spiking higher due to the zeroing out of the individual mandate, and that further disruption would induce more uncertainty.
“Zeroing out the individual mandate penalty should not result in striking important consumer protections, such as guaranteed issue and community rating rules that help those with pre-existing conditions. Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019,” AHIP said in a statement.
California Attorney General Xavier Becerra and 15 other attorneys general filed a brief opposing the lawsuit Thursday.
“Especially if we want to move to a system where we put patients more in charge of their own healthcare dollars, providers and insurers have to become more transparent about their pricing,” he told the Federation of American Hospitals on March 5. “There is no more powerful force than an informed consumer.”
“And if that doesn’t happen, we have plenty of levers to pull that would help drive this change,” he warned.
Increasing price transparency was part of a “four shifts” agenda Azar laid out for transforming U.S. healthcare into a more competitive, value-based system that costs less. But he faces a hard slog to make prices and out-of-pocket costs public, particularly since many providers and pharmaceutical companies have resisted even while saying they support the concept. They argue it’s the job of health plans to tell their members how much they will owe.
In addition, experts say the cost-reduction potential of greater price transparency is limited because only a small percentage of total U.S. healthcare spending is on services for which patients truly can comparison shop.
The HHS secretary offered no details on how his agency will promote this goal. Healthcare industry leaders were left to guess how he would tackle this complex issue, which policymakers and stakeholders have been struggling with for years and on which progress has been slow.
“It was just an outline and clearly wasn’t even in a formative stage,” said Chip Kahn, CEO of the Federation of American Hospitals. “We’ll have to see what he decides to come up with.”
The CMS did not respond to questions about when and how it planned to move forward on Azar’s price transparency goal.
Still, transparency advocates were encouraged by Azar’s clear commitment to the issue, illustrated by his personal tale of how hard it was for him to find out the price of a stress echocardiogram.
“I certainly believe that the HHS secretary putting energy behind the movement toward greater transparency will make a difference,” said Suzanne Delbanco, executive director of Catalyst for Payment Reform, whose 2017 report card on price transparency initiatives gave 43 states a failing grade.
Some question, however, whether the federal government is the appropriate player to drive price transparency, rather than letting states and the private sector take the lead. “It’s hard to come up with a federal solution that applies to 50 states when healthcare looks so different everywhere,” said Joe Fifer, CEO of the Healthcare Financial Management Association.
Nevertheless, Delbanco and other experts said there are steps HHS could take to advance price transparency, such as making it easier for states and private organizations to incorporate Medicare payment information into transparency tools for consumers. That data could help consumers compare individual hospitals’ and physicians’ average total cost for treating patients with particular conditions such as diabetes.
Or, as a condition of Medicare participation, HHS could require hospitals to disclose costs upfront and take steps to protect patients from surprise bills from out-of-network providers. In addition, the CMS could publish cost and outcome results for individual providers’ bundles of care for services such as total joint replacements. It also could require health plans on the Affordable Care Act exchanges to give members pre-service estimates of out-of-pocket costs.
But the experts questioned Azar’s heavy emphasis on price transparency as a way to bring down healthcare costs. For one thing, the Health Care Cost Institute found that less than 7% of total U.S. healthcare spending was for “shoppable” services, meaning those that can be scheduled in a market with some competition.
“It’s a necessary but not sufficient component,” said Niall Brennan, president of the Health Care Cost Institute, which offers a consumer-focused website with price information for nearly 300 healthcare services. “Consumers are the weakest actors in the healthcare ecosystem. Every actor needs to work together to reduce costs.”
In his speech, Azar described his frustrating experience in Indiana a few years ago trying to price-shop for an echocardiogram stress test when he had a high-deductible health plan. Initially he was told the list price at a hospital was $5,500, then he was told his insurer’s negotiated price was $3,500. Finally, after considerable difficulty, he found out it would cost him just $550 at a physician’s office.
“Now, there I was, the former deputy secretary of Health and Human Services, and that is the kind of effort it took to find out how much I would owe for a procedure … That is simply wrong.
“I believe you ought to have the right to know what a healthcare service will cost—and what it will really cost—before you get that service … We’ll work with you to make it happen—and lay out more powerful incentives if it doesn’t.”
But Azar will face opposition from providers and drugmakers, who have raised administrative concerns about transparency efforts.
For instance, the Ohio Hospital Association won a court injunction blocking implementation of a 2015 state law requiring providers to give patients a “good faith” estimate before treatment of how much non-emergency services would cost out of pocket. That law remains on hold while providers are supporting more limited transparency requirements.
The Affordable Care Act already requires hospitals to publish a list of their standard charges for items and services, including Medicare DRG charges. But neither the Obama administration nor the Trump administration has made any move to implement that provision. Critics of the provision say it wouldn’t be helpful to patients because charges represent inflated retail rates that almost no one actually pays.
The CMS did not respond to a question about whether it would propose a rule to implement the ACA charge-disclosure provision.
Price and quality transparency tools introduced by states and private insurers have faced lots of growing pains. Only a few of these tools provide comprehensive information on quality, price, patient experience, network providers and benefit design, according to Catalyst for Payment Reform. Maine, Maryland, New Hampshire and Oregon offer the best consumer websites, featuring all-payer claims data on individual hospitals and physicians, the group found.
Among the hurdles, third-party vendors typically lack access to real-time data, and insurers generally don’t want to share their proprietary data. Plus, the U.S. Supreme Court ruled in 2016 that self-insured employers can’t be required to turn over their claims data for state cost-transparency data bases.
As a result, most states currently do not publish the actual amounts providers receive from payers for individual services.
But some providers are working on offering patients pre-service estimates of their out-of-pocket costs, even though there’s evidence that only a small percentage of patients use price-shopping tools. Geisinger Health System has an online estimator that Geisinger Health Plan members can use to calculate their costs for 300 of the most common services. The calculator doesn’t work for patients in other health plans.
“The idea of sharing our pricing structure with patients makes perfect sense,” said Karen Murphy, Geisinger’s chief innovation officer. “But will price transparency in and of itself completely bend the cost curve? Probably not.”
Despite such industry caveats, Azar last week sounded determined to push ahead. “This administration and this president are not interested in incremental steps,” he said. “In fact, the only option is to charge forward—and for HHS to take bolder action, and for providers and payers to join with us.”
The Trump administration has proposed a new federal rule that would give states more leeway to define essential health benefits, along with a host of other changes to the regulations governing the individual and small-group markets.
The 2019 Notice of Benefit and Payment Parameters (PDF), released Friday by the Centers for Medicare & Medicaid Services, has the overarching goal of increasing states’ power to administer the Affordable Care Act. A focus on increased flexibility for states has been a hallmark of the Trump administration’s approach to healthcare policy.
Perhaps most notably, CMS’ proposed rule would allow states to alter their essential health benefits benchmark plan annually, beginning as early as 2019.
As mandated by the Affordable Care Act, insurers in the individual and small-group markets will still have to cover 10 basic benefits, such as preventive care and prescription drugs. But once CMS’ proposed rule takes effect, states could borrow another state’s EHB benchmark plan—in whole or part—or create a new one altogether, provided it follows certain criteria.
“In addition to granting states more flexibility regulating their markets, we believe this change would permit states to modify EHBs to increase affordability of health insurance in the individual and small group markets,” CMS says.
But CMS also acknowledges the proposed changes might result in those with specific health needs losing coverage for certain services, depending on what option their state chooses.
EHBs aren’t the only areas where the agency is proposing changes. CMS also aims to:
- Allow states to assume a larger role in the qualified health plan certification process for the federally facilitated exchanges.
- Explore ways to make statebased exchanges that use the Healthcare.gov platform a more appealing and sustainable option for states.
- Gives states “significantly more flexibility” in how they operate a Small Business Health Options Program, also known as SHOP.
- Recalibrate the parameters for risk adjustment methodology and give states more flexibility regarding risk adjustment transfers in their markets.
- Let states to apply for an adjustment to their individual market medical loss ratio standard.
- Raise the threshold for review of “unreasonable” premium increases from 10% to 15%.
- Allow states with effective rate review programs to set different rate filing deadlines for insurers, and lets them post rate-filing information on a rolling basis.
- Remove the requirement that each exchange have at least two navigator entities, and the rule that navigators provide inperson outreach/enrollment support.
The proposed rule would also roll back the standardized plan options—known as “Simple Choice” plans—that were introduced during the Obama administration. Some insurers opposed those standardized options, arguing they will stymie innovation and competition, so the Trump administration’s new regulations are likely to be welcome news.
“We seek to encourage free market principles in the individual market, and to maximize innovation by issuers in designing and offering a wide range of plans to consumers,” the proposed rule says.
CMS has announced special open enrollment periods for all Medicare enrollees and some federal health insurance exchange consumers in the wake of hurricanes Harvey, Irma and Maria, along with other disaster-related policies to help insurance companies in affected areas.
“The lives of millions of Americans have been disrupted and impacted in some way by recent hurricanes,” CMS Administrator Seema Verma said in an email statement.
“Setting up special enrollment periods gives Medicare beneficiaries and individuals seeking coverage on the Federal Exchange the opportunity to access health coverage during this difficult time and when they need it the most. We remain committed to doing all we can to help support the areas and individuals affected by these historic and catastrophic hurricanes.”
This enrollment is in addition to this fall’s open enrollment period and other enrollment periods beneficiaries may have missed. “We will examine the circumstances in the affected areas and may extend the SEP beyond Dec. 31, if needed,” the agency said.
A CMS guidance memo (PDF) also covers extensions to disenrollment rules about extended absences from a service area and failure to pay premiums.
Payers may also get relief if an emergency or major disaster impacts operations and clinical care in a way that would skew Medicare Star Ratings data. Strategies might include alternative sampling approaches or changing timeframes of measurement. The agency said it could even revert to last year’s score if a majority of enrollees are in the FEMA-designated areas and alternative strategies won’t work.
CMS has issued several blanket waivers in the impacted areas in the United States Virgin Islands and the Commonwealth of Puerto Rico, as well. “These waivers will prevent gaps in access to care for beneficiaries impacted by the emergency,” according to CMS.
For example, CMS waived the three-day prior hospitalization rule for skilled nursing facilities caring for patients who are evacuated, transferred or dislocated because of Hurricane Maria.