Open enrollment in the federal and state Health Insurance Marketplaces is over for the 2016 insurance year but we’re still learning from prior years’ experiences. The focus of the following issue brief written by RWJ and the Urban Institute http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2015/rwjf424382 presents March 2015 data (end of Open Enrollment 2) showing:
- how many estimated people who were eligible for Marketplace coverage actually signed up, and of those,
- how many were eligible and applied for assistance in paying for premiums, and
- how many of those in total “effectuated” coverage, that is paid premiums and filled out all necessary paperwork to start the policy coverage.
The data are presented by state, with some data on how people of different income levels behaved in these markets.
The general picture shows that there are many people in all states who are likely missing out on using the Marketplaces for affordable health insurance coverage. The selection rates…number of people eligible for financial assistance paying for Marketplace plan divided by the total number of people estimated eligible…are still lower than might be expected. There is also large variation between states as to how many are enrolled, and whether or not it was a state-based exchange, or a state with a Medicaid Expansion, were not necessarily the defining factors.
Some key findings:
- 24.1 million people were eligible for Marketplace tax credits
- 10 million, 41%, selected plans but only 8.6 million “effectuated” their coverage for a more accurate enrollment rate of estimated eligibles of 35%.
- the 13 state based marketplace states had more variation between each other in effectuated plan rates (5-50%) than those in the 37 states using healthcare.gov (18-57%).
- Florida’s high effectuation rate (57%), the highest of all states, skews the non Medicaid expansion states’ rates when combined.
- Rates in Minnesota and DC were impacted by special programs they have that cover individuals under 200%FPL. Over 200%FPL, Minnesota and DC look much as the other states.
- the higher the income, the less use of the Marketplace. This was true for all states. That is, even with tax credits, out of pocket premium costs for those with higher incomes get increasingly more expensive and appear to be discouraging Marketplace enrollment. (Some of the drop off may be due to under estimated alternative insurance options like employer based insurance.)
- The relatively low effectuation rate could be improved by additional outreach efforts, especially in states with very low rates.
- Premium tax credits, cost sharing reductions, and premium criteria are the same across all states so Marketplace enrollment data provide insights into people’s willingness to pay for insurance given some level of financial assistance.
- The limits of a willingness to pay more of the premium costs could hold back significant decreases in the number of people uninsured. While the fines for remaining uninsured may weigh into families’ decisions as those fines become increasingly expensive, it may be that without a policy change to improve affordability overall insurance costs may remain a barrier to fuller insurance levels.
By the end of June 2015 the Supreme Court of the United States will hand down their decision in King v Burwell that will impact around 8 million Americans who are currently receiving tax subsidies to help pay insurance premiums for policies they have bought in their state marketplaces. Either those 8 million will sleep easily knowing that all is as it was and they will continue to get help paying for their subsidies OR they may be quite a bit more agitated with lots of unknowns.
The issue is whether or not the language of the Affordable Care Act (aka Obamacare) that permits subsidies for residents only in those in states running their own Exchanges/marketplaces is the way the law must be interpreted and enacted OR if the intent was indeed broader.
In a large sense all of the Exchanges/marketplaces are “state” Exchanges since the insurance policies approved for sale in those are set up for each state specifically. The sticking point is that some states (34 of them) had the federal government facilitate the operation of their marketplaces. Those are called “federally-facilitated” exchanges/marketplaces and are considered, by the challengers, to be non-state marketplaces.
The challenge about the wording has been an attempt to gut one of the main provisions of the law that makes insurance policies offered in those Exchanges/marketplaces more affordable. In some cases, it is very much more affordable with individuals near 138% federal poverty line ($16,242 for one in 2015) paying ~$20/month for a policy.
Depending on whom you ask the law’s reference to state Exchanges 1) was sloppy wording, but seen in context of the whole law, could not have intended to cut off from subsidies residents of states not operating their own Exchanges OR 2) the intent was not to give subsidies to states not operating their own Exchanges, perhaps as an incentive to get the states to operate their own Exchanges. The SC Justices are either going to assume the language was sloppy within the full context of the law thereby allowing the subsidies to exist in all states OR they will be true to the language of the law and say: if Congress intended subsidies to be for residents of all states then Congress has to fix the wording. There exists concern that Congress is not in any position to agree upon new wording. Certainly, there are many legislators who would welcome the damage a ruling in favor of the plaintiffs would do to the ACA. However, since those directly impacted negatively would be residents of many states, and these are their legislators, some are looking to temporary fixes including:
- extending the tax subsidies through the end of the year so there would be less disruption (this would leave no good alternative for affordable policies going forward), and
- Governors are considering taking on the responsibility of running their own Exchanges (but this is a huge undertaking, as evidenced by the fact that some states tried and decided to let the federal government takeover: e.g. Maryland)
I spoke to this issue on Nov 19, 2014 and in depth in a July 22, 2014 post when the issue about ACA tax subsidies was just heating up with circuit and district court rulings. The specifics remain relevant.
How do American’s feel and what do they understand about this judicial case? “A brand spanking new Kaiser Family Foundation poll finds a broad majority of Americans wants Congress to pass a law to make subsidies available in all states if the Supreme Court guts them…about 6 in 10 (63 percent) say Congress should pass a law so that people in all states can be eligible for financial help from the government while about a quarter (26 percent) say Congress should not act on the issue.” (Washington Post, Sargent, June 16, 2015).
I spoke to this issue in depth in a July 22 post when the issue about ACA tax subsidies was just heating up with circuit and district court rulings. The Supreme Court has agreed to hear the case. That earlier posting is still accurate. https://blogs.ksre.ksu.edu/issuesinhealthreform/aca-tax-credits-may-be-taken-away-by-courts/
The fact that the SCOTUS has chosen to take this up, and some say a bit out of expected cycle, has raised concern among the supporters of ACA, and of the tax subsidies in particular. The ACA covers many things beyond assuring affordable health insurance for many (the otherwise eligible Medicaid population in many states including Kansas got left out by a June 2012 SCOTUS decision that said the feds could not coerce states into expanding Medicaid by threatening to pull all Medicaid funds if that state did not participate). It has funds for health care workforce development and community health projects, and ways to improve the efficiency of Medicare and delivery of care in general. However, expanding the number of insured is clearly a main centerpiece of the legislation and a contrary ruling many say would effectively dismantle that aspect of the ACA. The SCOTUS will decide if the consumers in the 27 states with federally facilitated exchanges (marketplaces) can still receive those tax subsidies. Without them we would assume that insurance policies would once again be unaffordable for most as 80% of those enrolled in health insurance plans through those marketplaces nationwide are now receiving subsidies.
In the past week a new distinction in implementation success between states that had chosen to facilitate their own new insurance marketplaces (also called Exchanges) and those that did not has become apparent. Previously much was written about how much it really did NOT matter if the Exchange was going to be run by a state or run by the feds. After all, there were going to be marketplaces with a collection of new insurance policies for consumers to choose regardless of who was doing the facilitating. Negotiating with the different insurance companies happened. States have lots of policies being offered in these Exchanges. But getting access to them online has been quite a different experience for those trying to access a state facilitated Exchange vs those accessing healthcare.gov to get to their states’ federally facilitated Exchanges.
Early on it was apparent that the burden of having the feds do it for over half of the states was going to take its toll on the administrators. But beside that, things were going to be fairly equal.
Well, not so. The federal website is experiencing all sorts of glitches and delays. It is unfortunate since those who have been able to create and account and see what their states’ insurance offerings are have been satisfied. We now see evidence that running such a massive online site, with apparently outdated government type computer services, is more problematic than having states put together smaller Exchanges. Check out this article explaining the differences: http://www.nytimes.com/2013/10/09/us/politics/uninsured-find-more-success-via-health-exchanges-run-by-states.html?_r=0
Kansas families who have not been able to register or submit an application to consider a policy being offered in the Kansas Exchange can at least get a glimpse of what the premiums and tax credits might be for them in Kansas by going to insureks.org
There one enters county, household size, income, and ages of family members to be covered and a cost estimator gives expected monthly costs based on premiums and tax credits that are true to the cost of premiums in their region of Kansas.
This report from the Urban Institute looks at the roles 3 states, Alabama, Michigan, and Virginia are playing in the implementation process in their states of federally-facilitated marketplaces/Exchanges. The other states, including Kansas, are not detailed but one can assume similar types of variations in style of collaboration.
The paper’s findings include:
- Two of the three states are actively engaged in their exchange’s development, although some stakeholders noted they need more information from the government to complete the exchange and prepare themselves in a timely manner.
- State Departments of Insurance view the regulations and their role in the exchanges as a continuation of their work pre-reform.
- States are at different stages of readiness, Alabama for instance is lagging as a result of political/administrative hurdles the state faced and they have no plans to assist in the exchange’s development.
- Consumer assistance programs will need to be created to help people navigate the exchange, although clearing political hurdles will be a challenge in the acquisition of federal funds to pay for such programs.