The individual mandate is one leg of the “three-legged stool” of the Patient Protection and Affordable Care Act (ACA). During the crafting of healthcare reform, insurers and other market experts contended that the mandate was absolutely necessary for a functional individual guaranteed issue market. With the passage of the Tax Cuts and Jobs Act of 2017, there are renewed concerns related to the stability of the individual market.
Milliman consultants Fritz Busch and Paul Houchens believe that the individual mandate’s financial penalties at face value are high enough to induce high insurance participation rates, but that the enforcement of these penalties has not been strict enough to fully achieve the mandate’s policy aims. They say that available premium assistance in the insurance marketplaces may provide sufficient financial incentives to prevent a collapse of marketplace enrollment rates resulting from the mandate’s repeal. In their paper, Busch and Houchens examine available empirical data to arrive at this conclusion.
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.
The fate of the CSR subsidies in the Patient Protection and Affordable Care Act (ACA)—or rather, whether they’ll continue to be federally funded—is a highly anticipated decision for healthcare stakeholders nationwide. Cost-sharing reduction subsidies are payments made to insurers that reduce copays and deductibles for qualifying individuals and families earning up to 250% of the federal poverty level (FPL) who purchase health insurance through the insurance marketplaces. Their government funding is currently under legal challenge, awaiting the White House’s decision whether or not to drop the House v. Price lawsuit.
Recently, Politico.com reported that Republicans are inching closer to a decision regarding the fate of CSR funding. As this decision will affect healthcare stakeholders in every state, it is important for policymakers to understand the health and stability of the individual market and how subsidies have affected health insurance consumers. Recently, my colleagues and I at Milliman prepared a profile of the individual health insurance market for each state along with the District of Columbia. The profile summarizes insurer financials, marketplace enrollment, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces.
We’ve compiled some of our 2017 data into an infographic that takes a closer look at ACA cost-sharing subsidies to enable stakeholders to better understand the population currently receiving assistance and the amount of assistance being provided. The graphic looks at two metrics: the estimated average annual CSR subsidy per qualifying individual and the number of individuals receiving CSRs by state in 2017. Results below provide a clearer picture of which states’ populations more heavily rely on CSR subsidies and by how much. Florida has the largest number of CSR recipients of any state, with approximately 1 million recipients in 2017. On a national level, we estimate that there are 5.7 million individuals covered by CSR subsidies nationally, and the sum of federal CSR expenditures will exceed $5.8 billion in CY 2017.
More data and analysis can be found at Milliman.com/hcr.
This blog post first appeared on LinkedIn.
While there is significant uncertainty regarding current healthcare reform legislation, reinsurance and high-risk pool (HRP) programs are likely to play a role in attempting to stabilize individual market enrollment and premiums. In this paper, Milliman consultants Fritz Busch and Paul Houchens examine the following issues related to reinsurance and HRPs.
• The historical uses of HRPs prior to the implementation of the Patient Protection and Affordable Care Act (ACA)
• The role of reinsurance under the ACA, including emerging state-based programs developed using Section 1332 State Innovation Waivers
• The proposed usage of reinsurance and HRP under the American Health Care Act (AHCA), as passed by the House on May 4, 2017
• Considerations for states that are examining the creation and deployment of these types of mechanisms
How much does your state benefit from Patient Protection and Affordable Care Act (ACA) subsidies?
Milliman’s recently published 50-state profile of the individual health insurance market presents nationwide enrollment and subsidy data that can help states better understand the funding and coverage requirements under the ACA. The infographic below sheds light on some of the 2017 results, including marketplace enrollment numbers by state, and a closer look at the ACA cost-sharing reduction (CSR) subsidies—for which government funding is currently under legal challenge.
As the healthcare reform debate continues in Washington, D.C., it is worth revisiting one of the key components of the proposed American Health Care Act (AHCA). The Patient and State Stability Fund (PSSF) is a grant program included in AHCA intended to stabilize individual and small group state insurance markets and lower patient costs. The PSSF would appropriate a total of $100 billion to states over the period 2018 through 2026. In this paper, Milliman’s Paul Houchens, Kathleen Ely, and Thomas Murawski discuss elements of the PSSF as proposed by the American Health Care Act (AHCA) on March 6, 2017. The authors also explore the following considerations for stakeholders.
• Value of reinsurance option
• Short application window
• State-specific impact of AHCA provisions
• High-risk pools
• State-run cost-sharing subsidies
• State-run premium subsidies
• Reduced Medicaid enrollment and benefits
• PSSF grant allocation methodology
• Promotion of and payment for preventive care
• Impact to healthcare providers