The Sky is Not Falling: CHIR Expert Kevin Lucia Talks Trends in Coverage and Affordability on the ACA Marketplaces

With the fourth open enrollment period just around the corner, consumers, insurers, and policymakers have their eyes on the marketplaces and their fingers on the trigger; from recent CO-OP closures in Oregon and Illinois to the announcement that United Health Care (UHC) will exit most state exchanges in 2017, public discourse on this lynchpin of the ACA is ripe with cynicism and skepticism.

To bust myths, provide context, and answer questions, the Alliance for Health Reform put together a briefing on marketplace trends in coverage and affordability. CHIR senior faculty member Kevin Lucia joined a panel of health care experts including Sara Collins of The Commonwealth Fund, Cori Uccello of the American Academy of Actuaries, and Justine Handelman of the Blue Cross Blue Shield Association. Panelists looked back at the initial goals of the marketplaces, gave a snapshot of what private insurance coverage looks like today, and offered predictions for the fourth open enrollment period.

Responding to concerns over marketplace stability and addressing common fatalistic narratives, Mr. Lucia pointed out several areas of strength in marketplace coverage:

  • Insurer participation in state-based marketplaces (SBMs) has remained stable in 2016, with nine states reporting the same number of insurers, three states with a net gain in participating companies, and only five states that saw a decline in the last year; HHS reported a similar trend in the federally facilitated marketplace (FFM)
  • Many SBMs have curbed the effects of the insurer shuffle by setting participation rules, which encourage competition among insurance companies in an exchange, demonstrating that states have the ability to stabilize their marketplaces
  • Looking beyond the UHC announcement to other large, publicly traded insurers reveals a number of success stories: Aetna reported higher-than-expected enrollment, and expressed that they are “in a very good place” in regards to marketplace participation. Molina experienced the largest total membership increase in the company’s history and more than doubled their net income between 2014 and 2015. Other companies, like Anthem, have expressed that the marketplaces offer unique opportunities for growth, reporting that they are “well positioned” to continue and expand their participation
  • New federal regulations indicate a dedication to addressing ongoing issues in marketplaces, including changes to Special Enrollment Period (SEP) rules and restricting the sale of short-term durational policies

The Commonwealth Fund’s Sara Collins presented findings from a recent consumer tracking survey that addressed the topic of rising premiums. The study found a high rate of plan switching among consumers, many of whom cited a desire for lower premiums as their reason for jumping between different plans. Even so, low-income adults were less likely to report premium increases and high deductibles, meaning that the marketplaces are adequately and affordably covering one of the most vulnerable populations. Further, Dr. Collins asserted, most enrollees won’t spend any more on premiums in 2017.

Cori Uccello, Senior Health Fellow at the American Academy of Actuaries, spoke to the common concern of what drives premium increases. She cited rising medical spending, changes in risk pool composition, and the sunset of reinsurance in 2017 as major factors driving the predicted increases in premiums next year. Still, a closer look at premium predictions reveals that the rates vary greatly between and within states; echoing Dr. Collins, Ms. Uccello asserted that many consumers won’t be effected by premium increases that go into effect in 2017.

Finally, Justine Handelman of the Blue Cross Blue Shield Association gave the audience an insurer’s perspective on the state of ACA marketplaces. Noting that enrollees from the marketplace brought with them a slew of chronic conditions and high medical costs, Ms. Handelman made the case that the government needs to be a good “business partner,” mentioning that rules should not change mid-year when companies have already set premiums. She also called for changes to SEP regulations, such as proof of prior coverage; higher age band rating, mentioning a 5:1 ratio; and more investment in health care and “healthy living” programs for young adults. In what might have been the mic drop of the afternoon, Ms. Handelman noted that Nintendo has gotten more young adults moving in 48 hours than eight years of the “Let’s Go” program.

 

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