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.
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.
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.