Insurance companies in, insurance companies out. Premiums up, premiums down. Failing CO-OPs, successful Medicaid managed care plans. The narrative surrounding the Affordable Care Act (ACA) marketplaces sounds like wildly unpredictable blues number. As we approach open enrollment in November, ominous headlines paint a picture of doom and gloom about the health law, especially concerning coverage in the individual market.
While some call for a full repeal of the law, many are committed to staying the ACA course. This week, the Alliance for Health Reform hosted a panel of health care experts from a range of backgrounds to provide a status check on the ACA’s health insurance marketplaces. CHIR’s very own Sabrina Corlette joined Elizabeth Hall from Anthem Blue Cross Blue Shield, Christopher Holt provided a conservative perspective from the American Action Forum, and Peter V. Lee from Covered California shared his experience as the executive director of a successful state-based marketplace.
Sabrina Corlette kicked it off, offering an overview of at what she described as an “evolving” marketplace:
- Preliminary analyses of insurer announcements indicate that their participation will be lower in 2017 than in 2016. Approximately 19 percent of marketplace enrollees will have a choice of just one insurer, down from 2 percent in 2016.
- Commonly cited reasons for withdrawing include sicker-than-expected enrollees and inadequate compensation through the ACA’s risk mitigation mechanisms.
- Across all states, silver level plans are estimated to have an average premium increase of 11.2 percent, but this estimate is not final, nor does it account for the vast variability between states, markets, and carriers.
- Some carriers have found success in the marketplace, thanks to robust marketing strategies, narrow network design, and utilization management.
- Policy changes may be needed to bring stability to the marketplaces and boost competition. These include: investing in outreach and enrollment assistance, improving the affordability of coverage options, and reviving reinsurance.
The four health care experts engaged, echoed, and dissented on a number of topics:
Risk Mitigation Mechanisms
Risk management remains at the forefront of the health care debate, especially in the individual market. While the ACA’s guaranteed issue has increased coverage for individuals with pre-existing conditions, the influx of sick people creates greater liability for carriers, who often site a dearth of healthy enrollees as a reason for exiting marketplaces. The three risk mitigation mechanisms, commonly known as the “3Rs,” attempt to curb that liability, but with only one program left standing after this year, two legs of the risk management stool are kicked out from under consumers and carriers.
Both Ms. Corlette and Mr. Lee suggested extending the reinsurance program, which ends this year. Reinsurance is a permanent feature of the Medicare Part D program, and can help mitigate adverse selection in the individual health insurance market.
Mr. Holt, on the other hand, focused on deregulation as a way for carriers to manage risk. In addition to abolishing the ACA’s essential health benefits standard, he proposed eliminating the ACA’s restrictions on age rating, arguing that it would encourage young people to enroll.
Special Enrollment Periods
While the panel topic largely anticipated the fourth open enrollment in November, the issue of special enrollment periods (SEPs) took center stage. The mid-cycle enrollment ensures that major life transitions don’t affect coverage, but insurance companies claim that some SEP enrollees are gaming the system – using SEPs to enroll in coverage when they need health care and dropping it when they no longer need it.
Offering the carrier perspective, Ms. Hall stressed the need to tighten verification requirements for special enrollment, arguing that “buy to use” behavior makes it impossible for carriers to set premiums. Ms. Corlette pointed out that there is nothing inherent to Qualifying Life Events that results in sicker enrollees; indeed, the fact that 85 percent of those eligible aren’t even aware of their SEP options suggests that insurance companies are missing an opportunity to aggressively market to people going through qualifying life transitions, such as getting married, becoming a citizen, or turning 26.
One area of consensus among the panelists was the need to increase enrollment in marketplace plans. To be sure, the fierce political opposition to the law, constitutional challenges, and congressional refusals to adequately fund outreach and assistance have dampened enrollment.
Ms. Corlette has written about this topic in the past, and reiterated the need to invest in outreach and enrollment efforts as well as offering more generous consumer subsidies. Mr. Lee doubled down on these suggestions, highlighting Covered California’s robust enrollment thanks to the 600 storefronts they’ve set up throughout the state. Exchange plans, he claims, are “the cheapest date in town” for insurers because the Covered California marketplace invests heavily in doing their marketing for them.
After the presentations, the packed briefing room buzzed with advocates, medical professionals, and Hill staffers, all voicing concerns and asking tough questions about the future of health care in America. But amidst the disagreement over the means, there was a remarkable consensus among the panelists over the goal of building on and improving the ACA’s marketplaces – and not to let them flounder.