Health Insurance

Several More Insurers Enter AZ Marketplace

Consumers who buy their health insurance from the federal marketplace at www.HealthCare.gov will have new options and new prices to consider before they make a decision for 2019 coverage. During the upcoming open enrollment period (November 1 through December 15)  there will be 4 companies to choose from with several different plans.  Pima County will go from 1 to 3 companies for 2019 and the remaining 13 counties will continue to have BlueCross BlueShield of Arizona as their HealthCare.gov insurance company.

Because financial assistance for Affordable Care Act plans is tied to the price of the price of a Silver plan in each county or zone, Arizonans will generally see more financial assistance and little, if any, change in their current monthly premium. 90% of Arizonans who get coverage from HealthCare.gov receive financial assistance in the form of refundable tax credits to help lower their monthly premium.

November 1 to December 15 is open enrollment this year at www.healthcare.gov.  Free local help from unbiased health insurance Assisters is available by calling 1-800-377-3536 or by visiting www.CoverAZ.org/Connector.

Health Insurance for People w Pre-existing Conditions in Jeopardy Again

A main driver for passing and implementing the Affordable Care Act was to ensure that people with pre-existing health conditions could buy health insurance.  Prior to the ACA- people with pre-existing medical conditions like diabetes faced real challenges getting health insurance.

Indeed, one of the most consistently popular parts of the ACA are the provisions that help people get  coverage regardless of health status.  The ACA prevents health insurance companies from denying someone a policy because they have a preexisting condition (called the “guaranteed issue” requirement), refusing to cover services that people need to treat a pre-existing condition (called “preexisting condition exclusions”), or charging a higher premium based on a person’s health status (called the “community rating” provision).   

You can think of pre-existing conditions exclusions, guarantee issue, and community rating as the three legs of the ACA stool.  Despite these largely popular provisions, there are people that want to knock over the stool.  Back in February, 20 states (including Arizona) filed a lawsuit in Texas federal court seeking to invalidate the 3 legs of the stool: preexisting condition exclusions, community rating, and guaranteed issue.

This most recent legal attack argues that the removal of the individual mandate penalty by the most recent federal tax cut legislation makes the ACA unconstitutional (the US Supreme Court upheld the ACA several years ago, in part, because the tax penalty provision provided a statutory hook for the ACA to rest on).  The lawsuit argues that because the mandate is an essential feature of the ACA, the rest of the law must be struck down too.  If the lawsuit eventually succeeds these central provisions of the ACA would go away and an estimated 17 million people could become uninsured again.

During the Obama Administration, the federal government defended the ACA from lawsuits like these.  Those days are over.  A couple of months ago, the U.S. Department of Justice announced that they agree with the plaintiff States that the ACA’s individual mandate is unconstitutional. The administration urged the court to strike down the law’s guaranteed issue, preexisting condition exclusion, and community rating provisions.

Prior to the ACA, standards to protect people with preexisting conditions were primarily determined at the state level.  Most states including AZ had very limited protections. Before the ACA, many insurers maintained lists of up to 400 different conditions that disqualified applicants from insurance or resulted in higher premiums.  35% of people who tried to buy insurance on their own were either turned down by an insurer, charged a higher premium, or had a benefit excluded from coverage because of their preexisting health problem.

If the Federal courts (ultimately the US Supreme Court probably) rule in favor of the plaintiffs, States could still play as a regulator of insurance, as they could enact and enforce their own laws to protect residents from discrimination due to preexisting conditions.  In fact, several states already have their own laws to incorporate some or all of the ACA’s protections (Arizona does not). 

Oral arguments have been scheduled for next week in the Texas lawsuit. Arguments are scheduled to take place next Monday before Judge Reed O’Connor.  Whatever the Federal TX Court rules, the result will likely be appealed to the UA Appellate Court and eventually probably the US Supreme Court.

Federal Policy Decisions Eroding Health Insurance Stability

It’s been a few weeks since I’ve written about what’s happening with the Affordable Care Act- and there’s been some recent action- so here goes.

First of all, there’s good evidence that stable health insurance coverage helps people get preventive and primary care services that improve outcomes and downstream healthcare spending.  The Affordable Care Act included several provisions that helps people get these kinds of preventive services.  One of the primary goals of the ACA was to create broad access to robust health insurance coverage through: 

  • Employer mandated coverage for large employers;
  • An mandate to be insured or face a tax penalty to encourage full participation;
  • Subsidies and out-of-pocket protections for purchasing in the individual federal marketplaces;
  • Guaranteed issue and community rating of premiums;
  • Expansion of Medicaid to low-income adults; and
  • Ten essential health benefits for all marketplace insurance sold on the individual federal marketplaces, which includes requirements to cover services for mental health, substance abuse, and reproductive health.

It’s been working.  In the last several years the percentage of uninsured working-age adults decreased from 20% in 2013 to 12% by 2016 (nationally).  It would have been an even bigger decrease if all states had expanded Medicaid.  This  coverage expansion has led to increased access to preventive services, higher rates of having a usual source of primary care and increased affordability of care. 

However, progress is now stalling because of policy changes that have been made by the President like:

Cost Sharing Reduction Payments Stopped

In October 2017, the President announced that he was ending cost-sharing reduction payments (a program that previously reimbursed health insurance companies for the out-of-pocket protections available to some individuals who purchased coverage on the individual marketplaces). This caused higher premium rates in the individual marketplaces this year. 

Short Term Health Plans

The President also issued Executive Order 13813, which expanded “association health plans” and short-term, limited duration insurance. These plans create parallel markets in which healthier individuals move to cheaper plans that offer barebones coverage, destabilizing the marketplace.

Last week HHS and the US Department of Treasury followed through on the EO and issued a final rule that will allow consumers to buy short-term health plans to provide coverage for up to 36 months. These plans don’t need to comply with ACA requirements like covering essential health benefits, pre-existing conditions or the requirement to sell to any consumer regardless of health status.

These plans will likely attract younger, healthier and drive them out of the risk pool, which will increase costs in the ACA compliant plans.  It’s estimated that about 600,000 Americans will enroll in these short-term health plans, increasing federal spending on marketplace subsidies by $200M in 2019 and $28B over ten years.

Individual Mandate Effectively Expiring

As part of the new federal tax law, the individual mandate tax penalties will be $0 starting on January 2019, which will further erode the goal of increasing coverage and stabilizing insurance markets. In July 2018, the Commonwealth Fund predicted that eliminating the tax penalty will result in at least 2.8 million fewer Americans with coverage.  The nonpartisan Congressional Budget Office estimates that the number of people with health insurance will decrease 4M by 2019 and 13M by 2027.   CMS also cut funding for the federally-facilitated Exchange Navigator Program which will also contribute to decreased enrollment rates.

Risk Adjustment Payments

CMS announced in July that it would freeze $10.4B in 2017 risk adjustment payments. Luckily CMS released a final rule a couple of weeks ago to reinstate payments, so that’s an additional destabilizing thing that thankfully won’t happen at least for now.

Everyone benefits from access to primary and preventive services (including behavioral and reproductive health services), specialty care, and culturally appropriate care. If the individual insurance market continues to destabilize or doesn’t include affordable plans that offer comprehensive services, consumers may face expensive and inaccessible healthcare options. 

Many of the decisions that the President has been making make that outcome more likely in my opinion.