July Research Round Up: What We’re Reading

Health policy researchers are keeping busy, assessing the impact of recent and potential state and federal actions. This month’s round up focuses on how interruptions in insurance coverage impact chronic disease management, the debate over the Affordable Care Act’s (ACA) employer mandate, the innovative ways that California is keeping its risk pool healthy, characteristics of the uninsured in the U.S., and the coverage and premium effects of state-based individual mandates.

Rogers, M. et al. Interruptions in Private Health Insurance and Outcomes in Adults with Type 1 Diabetes: a Longitudinal Study. Health Affairs; July 1, 2018. This study analyzes how insurance interruptions between 2001 and 2015 affect health outcomes for working-age adults with type 1 diabetes.

What it Finds

  • Of the individuals studied, 24.3 percent experienced an interruption in health insurance coverage that lasted longer than 30 days.
  • For every interruption in insurance coverage, there was a 3.6 percent relative increase in glycated hemoglobin, an indicator of blood sugar levels.
  • Acute care, such as urgent care or emergency room visits, increased fivefold after an insurance coverage interruption.
  • People with no diabetic complications were more likely to have an interruption in coverage than those with complications, possibly due “job lock,” the phenomenon of people with health complications avoiding job changes to prevent the loss of their job-based coverage.

Why it Matters

Research often focuses on the effects of “churning” in and out of Medicaid coverage, but much less is known about the effects of churning in and out of private insurance. This study shows a strong relationship between insurance coverage and the ability to manage a chronic health condition. Studies like this one can help policymakers assess the consequences of losing insurance.

Sommers, B. et al. Why Did Employer Coverage Fall in Massachusetts After The ACA? Potential Consequences of a Changing Employer Mandate. Health Affairs; July 1, 2018. Massachusetts was the only state to have an employer mandate before the ACA was implemented. Massachusetts’ employer mandate applied to all employers with at least 11 full-time employees, while the ACA’s employer mandate only applies to employers with 50 or more full-time employees. When the ACA took effect, Massachusetts repealed their employer mandate, ultimately exempting employers with 11-49 employees from the requirement to provide insurance coverage. This study examines the coverage outcomes of changing Massachusetts’ employer mandate.

What it Finds

  • Enrollment in employer-sponsored insurance (ESI) in Massachusetts fell by 2.3 percentage points after the majority of the ACA’s reforms took effect in 2014.
  • ESI offer rates fell significantly compared to the rest of the country, and drops were more prevalent in small businesses than large firms.
  • The greatest drop in ESI coverage in Massachusetts occurred among near-poor and middle-income families that are above the Medicaid income threshold, suggesting the Medicaid expansion was not the cause of the reduction in ESI coverage.

Why it Matters

Congress has repeatedly considered repealing or modifying the ACA’s employer mandate. Although the CBO has predicted minimal changes to ESI offer rates if the employer mandate is repealed, based on this study’s findings, CBO may be underestimating the effect that the employer mandate has on insurance coverage.

Bingham, A et al. National vs. California Comparison: Detailed Data Help Explain the Risk Differences Which Drive Covered California’s Success. Health Affairs; July 11, 2018. California is one of the few states that has shown consistent individual market stability, with premium increases below the national average and a stable, relatively healthy risk mix. In this study, experts evaluate characteristics of the California’s health insurance exchange, Covered California, and find potential drivers of its success.

What it Finds

  • Covered California premium increases averaged 7.2 percent from 2015-2018 as compared to the national average of 25 percent for 2017 and 32 percent for 2018.
  • California’s state-wide average risk scores, an indicator of the amount of unhealthy risk in a market, have remained in the lowest 10 percent of states year over year, averaging a 20 percent lower risk mix than other states.
  • California’s off-exchange market has remained stable relative to the rest of the country, maintaining steady enrollment while other states experienced off-exchange enrollment decreases upwards of 30 percent.
  • Researchers conclude that policy decisions such as active purchasing (the practice of contracting with carriers and using stricter eligibility criteria), Medicaid expansion, and significant investments in outreach and enrollment efforts contributed to Covered California’s success. 

Why it Matters

California has enacted policies to bolster their individual market year after year. Covered California has typically outspent the federal government on outreach and enrollment efforts, contributing significantly to the enrollment of healthier individuals who might otherwise not sign up. The exchange’s uniform plan designs decrease consumer confusion and increase uptake of coverage. Additionally, the decision to expand Medicaid in California contributed to a healthier risk pool by decreasing the prevalence of sick enrollees both on and off the exchange. The outcome suggests that state policy decisions matter: California’s individual market has a healthier risk pool and lower premium increases than other states.

Blumberg, L. et al. Characteristics of the Remaining Uninsured: An Update. Urban Institute; July 11, 2018. Experts at the Urban Institute assess the levels of uninsurance across the country between 2015 to 2017 and record changes within different demographics and geographic areas.

What it Finds

  • Across the United States, the uninsured rate fell between 2015 and 2017 from 12.2 percent to 11.1 percent.
  • Young adults made the most significant coverage gains, making up 38.6 percent of the nonelderly uninsured population in 2015 and dropping to a share of 37.9 percent in 2017.
  • The uninsured rate did not decrease among non-Hispanic black individuals, resulting in an overall increase as a share of the uninsured population, from 13.7 percent in 2015 to 15 percent in 2017.
  • In 2017, 25 percent of the uninsured population was eligible for Medicaid and 10.4 percent fell under 200 percent of the federal poverty level, eligible for the most generous premium subsidies through the ACA’s exchanges.

Why it Matters

In order to have effective outreach and enrollment, states need to know the characteristics of the uninsured population in their state. States have implemented various strategies to reach target populations, such as pairing food assistance eligibility with eligibility for Medicaid and investing large amounts of state funds into outreach and enrollment budgets. With cuts to the federal navigator program, the repeal of the individual mandate penalty, and the expansion of non-ACA-compliant coverage, the uninsured rate is expected to rise in 2019. To counter that trend, states can more strategically deploy their limited outreach and enrollment assistance resources if they understand who the remaining uninsured are.

Blumberg, L. et al. How Would State-Based Individual Mandates Affect Health Insurance Coverage and Premium Costs? The Commonwealth Fund and Urban Institute; July 20, 2018. The Tax Cuts and Jobs Act of 2017 eliminated the ACA’s individual mandate penalty. Some states have passed legislation to establish their own individual mandate. Experts at the Urban Institute modeled the effect of implementing a state-based individual mandate similar to the ACA’s coverage requirement in every state.

What it Finds

  • If all state implemented their own ACA-style individual mandate, the uninsured population would decrease by 3.9 million in 2019, and 7.5 million in 2022.
  • States could bring in $7.4 billion in penalty revenues, and would lower spending on uncompensated care by $11.4 billion.
  • On average, premiums would decrease between 4 and 21 percent across states in 2019, with an average premium decrease of 11.8 percent.
  • Spending for the state-financed portion of Medicaid and CHIP would increase, but the vast majority of states would see increases of only one percent or less.

Why it Matters

Multiple states have taken action to replace the ACA’s individual mandate, including New Jersey, Massachusetts, Vermont and the District of Columbia. Modeling the effects of such state laws can aid state policymakers in making informed, evidence-based decisions on how to protect consumers and their markets in the wake of federal actions to undermine the ACA.

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