March Research Round Up: What We’re Reading

Spring has arrived, and the research is blooming! This March, we were buzzing around studies on direct enrollment, balance billing from air ambulance rides, affordability for middle-income consumers, and the roles of assisters and support tools.

Straw, T. “Direct Enrollment” in Marketplace Coverage Lacks Protections for Consumers, Exposes Them to Harm. Center on Budget and Policy Priorities; March 15, 2019. Since the ACA marketplaces first launched, the federal government allowed brokers and insurance companies to use their own websites as a pathway for consumers to enroll in Affordable Care Act (ACA)-compliant coverage on the marketplace, a practice called “direct enrollment.” In 2018, the federal government expanded this pathway to allow companies and brokers to participate in “enhanced” direct enrollment, in which insurers and web-brokers could handle the entire application process without having to re-direct enrollees to the marketplace website, HealthCare.gov. This study evaluates the direct enrollment shopping experience, and outlines some potential risks for consumers.

What It Finds

  • Many direct enrollment entities offer non-ACA-compliant plans, such as short-term limited duration insurance, and may have financial incentives to enroll people in these products.
  • Although federal regulation bars direct enrollment entities from displaying non-ACA-compliant plans alongside ACA-compliant plans, many sites use screening tools to collect information unrelated to enrollment (such as weight and gender) which may be used to steer certain consumers to more profitable, less comprehensive products.
  • Direct enrollment entities can bypass the marketplace’s “no wrong door” policy, which allows individuals to be screened for Medicaid and CHIP along with subsidy eligibility, instead directing consumers towards private insurance. This practice may cause low-income people and families to miss out on government programs they may qualify for.
  • Many direct enrollment platforms do not display unbiased comparisons of ACA-compliant plans, steering consumers to plans or companies that offer higher commissions.

Why It Matters

The ACA’s marketplaces were created to give consumers an unbiased one-stop shop for quality health coverage. When consumers go to HealthCare.gov, or an equivalent state-run enrollment platform, their personal information is kept private, they will be screened for multiple health insurance programs, and will have access to all available plans in their rating area. Although the idea behind direct enrollment pathways was to give consumers more access points to ACA-compliant plans, this goal has been blurred through significant loosening of requirements, and a lack of required consumer protections and education.

Fehr, R., et al. How Affordable are 2019 Premiums for Middle-Income People? Kaiser Family Foundation; March 5, 2019. In 2018, 87 percent of marketplace enrollees received premium tax credits to lower their premiums. Researchers at Kaiser Family Foundation took a closer look at individuals who do not qualify for the federal subsidies based on their income to assess how affordable marketplace plans are without financial assistance.

What it Finds

  • Marketplace affordability has a “subsidy cliff,” or a point along the income scale in which financial assistance is minimal to nonexistent, causing a sharp decrease in affordability. This begins at 371 percent of the Federal Poverty Level (FPL), or $45,000 in annual income for an individual.
  • A 40-year-old individual at 412 percent FPL, making $50,000 a year, would have to spend over 10 percent of their income on the lowest-cost marketplace plan in 21 percent of counties. However, because premiums are higher in rural areas than urban areas, only 8 percent of Marketplace enrollees reside in counties where this is the case.
  • Age plays a big role in affordability for unsubsidized consumers: a 27-year-old at 400 percent FPL would spend, on average, 7 percent of their income on premiums for the lowest-cost marketplace plan, while a 60-year old at the same income level would spend 17 percent of their income on premiums for the same plan.
  • In 2019, the average deductible for a bronze plan is $6,258, and $4,375 for a silver plan.

Why it Matters

The ACA helped millions of Americans obtain to health insurance for the first time, in part because of subsidies that make premiums more affordable. Despite this progress, consumers still face affordability challenges. The price tag of premiums coupled with high levels of cost sharing can make comprehensive health insurance out of reach.  Some ideas have been floated at the federal level to address the issue, such as limiting premiums to under 10 percent of income, or expanding premium subsidies to consumers with incomes above 400 percent FPL, but these policies have yet to pass muster with Congress.

Wong, C., et al. The Roles of Assisters and Automated Design Support Tools in Consumers’ Marketplace Choices: Room for Improvement. Health Affairs; March 1, 2019. Through focus groups and structured interviews with a national sample of 32 certified application counselors, in-person assisters, and navigators (collectively, “assisters”) in 10 states, researchers analyzed assister perspectives on the plan selection process and the effectiveness of consumer support tools available on the marketplace, such as cost estimators and provider network searches.

What it Finds

  • Assisters reported low levels of health insurance literacy, indicating that the resources available on HealthCare.gov and many state-based marketplaces that provide definitions are too complex for the average consumer’s level of understanding, particularly for those with limited English proficiency.
  • Commonly used decision support tools like provider look-ups, out-of-pocket cost estimators, and drug formulary look-ups were seen as deficient, nonspecific, inaccurate, or confusing.
  • Consumers face challenges in making informed health decisions without assisters, even with improved consumer tools. Assisters offer individualized assistance identifying lower-cost options; they also often help consumers with post-enrollment problems.

Why it Matters

Many consumers lack health insurance literacy, which has costly outcomes. Assisters act as a critical resource in the individual market, helping consumers qualify for subsidies and educating them on their coverage options. . If consumers cannot obtain personalized help, web-based consumer support tools may be the next best option, but only if they are easy to use and accurate.

Cosgrove, J, and Krause, H. Air Ambulance: Available Data Show Privately-Insured Patients Are At Financial Risk. U.S. Government Accountability Office; March 20, 2019. Air ambulances are sometimes used in cases of emergency and for critically ill patients, who often do not have a choice in who provides the transportation. As part of the Consolidated Appropriations Act of 2017, the US Government Accountability Office (GAO) was directed to conduct an analysis of air ambulance services, including the magnitude of out-of-network services, as well as the prevalence of balance billing and approaches taken by states to limit the practice.

What it Finds

  • In a dataset of roughly 20,700 air ambulance transports in 2017, 69 percent were out-of-network, compared to 51 percent of ground ambulance transports.
  • Median charge prices for air ambulances in 2017 were $36,400 for helicopters and $40,600 for fixed-wing air ambulances. The availability of specific balance bills, what patients ultimately have to pay providers, and whether the bill is actually paid, is extremely limited.
  • States have taken actions to mitigate surprise bills resulting from out-of-network air ambulance transports, but state regulation is limited due to a federal law that preempts states’ ability to regulate air carrier services. Within the study states:
    • Montana, New Mexico, North Dakota, and Texas attempt to limit balance billing through insurance regulations; three of the four states faced challenges in federal district court.
    • Florida, New Mexico, and North Dakota use education to alleviate balance billing from air ambulance transports, while Maryland has increased awareness of the practice, drumming up public pressure on air ambulance providers and insurers to spur contract negotiations.

Why it Matters

Balance billing is not limited to air ambulances, but transporting people in critical condition and the lack of competition among air ambulance providers is a recipe for a surprise out-of-network bill. Consumers who need emergency air transport are likely not in a position to select in-network air transport. Data on prices, the rate of network affiliation, and the cost to consumers will help researchers and policymakers identify the source of the problem and find effective policy solutions. This GAO report identifies gaps in coverage of air ambulance services for privately insured consumers, as well as limitations states face in their attempts to protect consumers.

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