June Research Round Up: What We’re Reading

State officials, insurers, and consumer advocates and assisters are gearing up for a hectic 2019 enrollment season as federal uncertainty threatens the stability of the individual market. June’s Research Round Up is full of deep dives into how the Affordable Care Act (ACA) has affected consumers’ access to insurance coverage and care. We also look at research on reasons behind this year’s increased premium rates and last year’s surprisingly successful Open Enrollment season.

Fiedler, M. How Did the ACA’s Individual Mandate Affect Insurance Coverage? Evidence from Coverage Decisions by Higher-Income People. Brookings Institution; May 31, 2018. As we prepare for the first Open Enrollment for a plan year without an individual mandate penalty, researchers in this study isolate the effects of the individual mandate on coverage decisions. They do so in part by focusing on enrollment patterns among people whose income made them ineligible for the ACA’s premium subsidies.

What it Finds

  • The uninsured rate declined for young adults with incomes over 400 percent of the federal poverty level (FPL), even though many faced higher premiums after the ACA was implemented.
  • Although other provisions of the ACA such as guaranteed issue and community rating expanded access to insurance, this study finds that New York and Vermont – two states with similar requirements prior to the ACA – saw declines in their uninsured rate that paralleled the nation in whole after the law went into effect.
  • The author estimates that the population of those enrolled in insurance above 400 percent FPL would have been 27 percent lower without the individual mandate.
  • Results of this study are consistent with pre-ACA estimates of the impact of the individual mandate.

Why it Matters

With the elimination of the ACA’s individual mandate penalty effective January 1, 2019, insurers and researchers alike predict that fewer healthy individuals will sign up for insurance. Since many of the ACA’s provisions went into effect simultaneously, it has been difficult to isolate and quantify the insurance gains attributed to the individual mandate. This study is one of the first of its kind to highlight the impact of the individual mandate on the uninsured rate. As some states consider implementing their own individual mandate, studies like this will help policymakers make informed decisions.

Gollust, S. et al. TV Advertising Volumes Were Associated with Insurance Marketplace Shopping and Enrollment in 2014. Health Affairs; June 1, 2018. This study examines how the volume of TV advertisements for insurance during the 2013-14 ACA open enrollment period affected consumers’ shopping activity.

What it Finds

  • Individuals who lived in counties with more federally funded television advertisements during open enrollment were significantly more likely to shop for and enroll in marketplace coverage than those in counties will fewer federal ads.
  • Consumers in counties with more political ads that spoke negatively of the ACA were less likely to shop for and enroll in a marketplace plan.
  • Higher numbers of advertisements paid for by insurance companies and brokers were also associated with higher rates of consumers shopping for and enrolling in marketplace plans, albeit to a lesser extent than federally sponsored advertisements.

Why it Matters

Last year, the Trump Administration cut funding for open enrollment marketing by 90 percent, citing inefficiencies and lack of impact. The administration has yet to announce any additional funding for marketing or in-person enrollment programs for this fall’s enrollment season. Yet marketing is seen as vital to efforts to maintain and increase enrollment of the healthy uninsured in marketplace plans. Coupled with the repeal of the individual mandate penalty as well as continuing efforts to repeal the ACA in its entirety, enrollment efforts critical to market stabilization could be significantly hindered in the coming year. This study provides important new evidence that marketing is a critical part of ensuring the long term success and sustainability of the ACA’s insurance marketplaces.

Vistnes, J. and Cohen J. Duration of Uninsured Spells for Nonelderly Adults Declined After 2014. Health Affairs; June 1, 2018. This study used longitudinal data of initially uninsured individuals from before and after the ACA went into effect to measure whether more people had continuous coverage after gaining insurance following the law’s implementation. The research found that gaps in insurance coverage, which can be detrimental to one’s health, decreased after the ACA’s implementation.

What it Finds

  • After the ACA was implemented, individuals experienced shorter periods without insurance coverage than they did before the law’s reforms were in effect.
  • The shift to shorter uninsured spells between 2013-14 and 2014-15 was particularly pronounced for people with chronic or pre-existing conditions.
  • In states that expanded Medicaid, health coverage gaps were significantly smaller than in states that failed to expand Medicaid.

Why it Matters

Gaps in health coverage can lead to higher costs and poorer health outcomes for patients, especially those with lower incomes. Before the ACA, insurance companies were allowed to deny insurance to those with pre-existing conditions, leaving many consumers with chronic conditions uninsured for long periods of time. The ACA resulted in fewer people experiencing gaps in their health care coverage. However, recent threats to the stability of the insurance market and the foundations of the ACA could reverse that progress, especially for those with pre-existing conditions.

Hanna, C. and Uccello, C. Drivers of 2019 Health Insurance Premium Changes. American Academy of Actuaries; June 13, 2018. As insurers propose higher rates for 2019, actuarial experts examine the reasons behind the ever-rising cost of coverage in the individual market.

What it Finds

  • Federal policy changes, including expanding access to noncompliant plans, the repeal of the individual mandate penalty, and the defunding of cost-sharing reduction (CSR) payments to insurers will lead to increased premiums in 2019.
  • The cost of coverage in a particular market generally rises as enrollment falls, and insurers considered trends in enrollment and the health of those remaining in the market when they priced for 2019.
  • Proactive state policies such as reinsurance programs, a state-level individual mandate, and restrictions on non-ACA-compliant plans can help keep proposed rate increases low.

 Why it Matters

Last year, premium increases in the wake of federal uncertainty surrounding the ACA dominated the news cycle. Yet insurers offering products on the individual market have showed signs of improved financial stability, and enrollment stayed fairly level this year. As policymakers, regulators, insurers and other stakeholders continue to work towards greater market stability, it is critical to keep an eye on the drivers of premium increases and decreases, and respond accordingly to better insulate consumers buying in the individual market from the higher prices and reduced plan choices caused by federal policy changes.

Burton, R. et al. What Explains 2018’s Marketplace Enrollment Rates? Urban Institute; June 20, 2018. In this study, the Urban Institute interviewed key stakeholders in states that experienced either an increase or a decline in enrollment this year to determine what drove marketplace enrollment in 2018.

What it Finds

  • Fifteen states experienced an increase in marketplace enrollment in 2018. Stakeholders from some of these states pointed to factors such as more generous premium tax credits due to “silver loading,” an uptick in insurer-funded advertisements, and extended open enrollment periods as reasons for higher enrollment numbers.
  • States that had marketplace enrollment gains in 2018 were more likely to be state-based exchanges.
  • States that had decreased marketplace enrollment in 2018 indicated that a shortened open enrollment period, federal funding cuts that led to fewer advertisements, and the prevalence of non-ACA-compliant plans curbed enrollment numbers.

Why it Matters

Grassroots efforts paired with pushes from insurance companies to keep enrollment numbers from dropping played a big role in the success enrollment season last year. With funding for navigator groups in limbo, the upcoming repeal of the individual mandate penalty, and further expansion of non-ACA-compliant plans, even more effort will be necessary to maintain marketplace enrollment levels in 2019. Understanding the strategies of states that kept up or increased their marketplace enrollment this year – as well as what drove drops in enrollment in other states – will be helpful to state officials, insurance companies, and grassroots organizations to prepare for 2019 enrollment.

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