The Patient Protection and Affordable Care Act (ACA) introduced many changes to the individual health insurance market beginning in calendar year (CY) 2014, including new rating rules and federal financial assistance to purchase health insurance through the insurance marketplaces. It is important to understand the condition and stability of the individual health insurance market and how the ACA has affected its health insurance consumers.
To support this understanding, actuaries Paul Houchens, Jason Clarkson, and Zachary Fohl prepared Milliman’s second annual profile of the individual health insurance market for each state along with the District of Columbia (DC). The profile summarizes insurer financials, marketplace enrollment, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces, incorporating recently released data from the 2018 open enrollment period and early 2018 effectuated enrollment snapshot.
This information is vital for stakeholders for a number of reasons, including:
1. Future legislation or administrative actions. While the pace of new healthcare reform legislation will likely slow in 2018 with the upcoming mid-term elections, data from the individual marketplace can be useful in informing future policy decisions both at the federal and state level.
2. 1332 State Innovation Waiver (1332 Waiver). The information in our state profile reports can enable a state to better understand the funding and coverage requirements that must be adhered to under Section 1332 of the ACA.
3. Marketplace enrollment trends. One important measure of risk pool stability is enrollment.
4. Cost-sharing reduction (CSR) termination. From CY 2014 through the first nine months of CY 2017, insurers received direct federal payments for the cost of providing CSR variants. However, effective October 2017, CSR payments were terminated by the federal government.
To read the full article which summarizes 2018 individual market enrollment and ACA subsidies, click here.
The requirement that every American have healthcare coverage or pay a financial penalty was one of the key provisions of the Patient Protection and Affordable Care Act (ACA). Known as the individual mandate, it was one of the most controversial provisions of the ACA. Some questioned its legality and others questioned its effectiveness at driving insureds into the insurance pool.
The U.S. Supreme Court settled the issue of the mandate’s legality in 2012, ruling that attaching a financial penalty to a failure to purchase health insurance did not run afoul of the U.S. Constitution. This decision, though, did not settle the issue of its effectiveness. And in late 2017, Congress enacted the Tax Cuts and Jobs Act, which reduced the financial penalty to $0 beginning with the 2019 mandate year, effectively eliminating the individual mandate.
Understanding the impact of this change on the health insurance risk pool is important to both insurers offering ACA-compliant products and state policy makers evaluating alternatives to the individual mandate. Health insurers—now in the process of setting rates for 2019—need to understand how elimination of the individual mandate penalty will affect future enrollment rates, which have a significant impact on rate projections. Some states are considering implementing state-based individual mandates, in some cases in conjunction with a Section 1332 State Innovation waiver.
In this paper, Milliman’s Andrew Bourg, Fritz Busch, and Stacey Muller discuss the significance of the individual mandate and model the impact of eliminating it.
In this report, Milliman’s Paul Houchens, Jason Clarkson, and Jason Melek provide a detailed review of the commercial health insurance industry’s financial results in 2016 and evaluate changes in the market’s expense structure and enrollment prior to relative years. They also provide enrollment and Advanced Premium Tax Credits estimates for 2017.
Some states are looking for ways to offer more comprehensive or lower-cost health insurance on the individual market and to entice more of those currently uninsured to purchase coverage. One option currently getting the attention of states is Medicaid buy-in.
A Medicaid buy-in option is different from Medicaid expansion efforts under the Patient Protection and Affordable Care Act (ACA). A Medicaid buy-in approach can build on a state’s existing Medicaid program infrastructure and offer a Medicaid-like plan to specified residents.
Under a Medicaid buy-in proposal, the core target population would typically be those who are purchasing insurance using advanced premium tax credits (APTCs) or who are eligible for APTCs but uninsured. A Medicaid-buy in may allow individuals not eligible for commercial group coverage to purchase a Medicaid-like plan. This type of proposal may allow a state to replace or augment the current insurance marketplace and ACA premium assistance structure under federal waiver authorities.
States could use their own funds and/or leverage federal funding to develop a buy-in program authorized by a Section 1332 State Innovation Waiver. A state’s goals for a Medicaid buy-in through a 1332 Waiver could be further supported by a Section 1115 Demonstration Waiver or other Medicaid coverage changes.
In this paper, Milliman’s Paul Houchens, Christine Mytelka, and Susan Philip discuss buy-in proposals, exploring the opportunities at a high level and laying out key considerations for states as they weigh their options.
In February 2018, the Departments of Health and Human Services (HHS), Labor, and the Treasury released a proposed rule that would change the maximum duration of short-term, limited-duration insurance (STLDI) policies. Under the proposed rule, STLDI plans, or “short-term medical” plans, may emerge as an alternative form of individual health insurance. In this article, Milliman actuaries Jason Karcher and Nick Ortner discuss the proposed changes and the potential effect they might have on the individual health insurance market.
Milliman’s Paul Houchens and Fritz Busch will speak at this year’s National Conference on the Individual and Small-Group Markets hosted by America’s Health Insurance Plans (AHIP) on March 8 in Washington D.C. The consultants will talk about the role that reinsurance and high-risk pool programs may play in the individual market. The talk is based on their published paper “Reinsurance and high-risk pools: Past, present, and future role in the individual health insurance market.”
For more information about the conference, click here.