Costs remain a central concern for many Americans, according to an in-depth presentation regarding the current state of health care reform and updates regarding the current political situation and its effects on health care reform presented by Melissa Andel, MPP, Vice President of Health Policy Applied Policy, at AMCP Nexus 2019.
Overview of Current State of Affairs
Beginning with the current state of health insurance coverage in the U.S., Andel noted that employer-sponsored coverage continues to be the main source of coverage for Americans and that roughly 3% of Americans are covered through marketplace plans. It is estimated that 209 million Americans have gained coverage through the Affordable Care Act (ACA). Andel added that after dropping in 2014-2016, the rate of uninsured Americans began to increase in 2017 and has continued to do so, despite still being below pre-ACA levels. According to the presentation, Americans aged 18-34, women and those living in households making less than $48,000 annually have seen the greatest increases in uninsurance rates since 2016, as per a January 2019 Gallup poll.
Andel also stated that premiums are above claims costs on average, but that experiences can be highly variable between states and between plans. The growth in claim costs seen early in 2019 indicated the repeal of individual mandate and the expansion of short-term insurance plans didn’t leave the individual market significantly less healthy. The participation of insurers in 2020 is expected to increase in comparison to current participation in 2019.
Andel listed some key takeaways for the current state of U.S. health insurance coverage:
- Know your market and don’t get distracted by headlines: the primary source of insurance coverage for Americans continues to be employer-sponsored, followed by Medicare and Medicaid.
- While there has been a recent increase in the uninsured rate, we are not near pre-ACA levels of uninsurance (at least nationally).
- Enrollment in the Exchange market appears to be stabilizing (though it is an inherently unstable market).
- Financial performance of plans indicates that individual Exchange market premiums are priced “right” and may be stabilizing.
- There are large variations in experience from state to state.
Current Administration Actions and Their Effects
Regarding the Trump Administration’s actions, Andel begins by addressing the underlying issue with cost-sharing reduction payments. She noted that exchange plans must provide cost-sharing reductions (CSRs) to enrollees with incomes between 100%-250% of FPL and that legislation did not appropriate funds for the government to refund plans for value of CSRs, adding that the Obama Administration had been using funds from another source to make payments to plans that the Trump Administration stopped payments for in October 2017.
Issuers in most states responded to this cessation in CSR payments by including costs of CSRs in premium calculation for Silver plans only. This “Silver Loading” is expected to result in higher federal costs, with additional subsidies and an increase in premium tax credit value expected to increase federal costs by approximately $10 billion between 2019 – 2021.
Here in 2019…
Speaking on 2019 being the first year without the mandate, Andel states that Americans will no longer face a tax penalty for failing to carry ACA-compliant health insurance, and brought up two concerns regarding this development: Americans not carrying insurance, and the resulting risk-pool of Americans carrying insurance, particularly through the exchanges.
Her key takeaways for the current administration’s impact on health insurance coverage were as follows:
- It is still too early to tell how regulatory changes implemented by the Trump Administration will ultimately impact enrollment.
- The CSR issue appears to have led to at least some enrollees purchasing more generous coverage, which could impact utilization.
- Early financial reports from plans in 2019 do not indicate a dramatic negative impact on the risk pool.
Popularity of the ACA
The ACA has become more popular over time, as per figures presented by Andel. The opinion on employer-sponsored insurance is more complicated, however, with affordability at the apex of citizens’ concerns. Americans, Andel’s presentation noted, are blaming pharmaceutical and health plans for current high costs, and although most are receptive to Medicare for all/single-payer, they don’t appear to believe there will be much of a change.
Andel’s key takeaways regarding how Americans view the ACA, and health care in general, were as follows:
- Public concern over health care as an issue has shifted from coverage to cost
- Drugs (and health plans) have become the target of anger over health care prices and therefore the driver of policy proposals
- Americans may like the idea of Medicare for All, but also seem to think they will keep their ESI under the plan
- The path that consistently garners public support is a Medicare/Medicaid buy-in option
Andel, M. Checking In on Health Care Reform Efforts: What Do They Mean for Payers, Manufacturers and Patients? Presented at: AMCP Nexus 2019; October 29 – Nov 1; National Harbor, MD.