March Research Roundup: What We’re Reading

The CHIR team is excited to transition into spring, as with the warmer weather has come some great new health policy research! This month, Nia Gooding reviewed studies on best practices for implementing the No Surprises Act, the American Rescue Plan Act’s effect on insurance premiums, demographic variations in the U.S. uninsured population, and models for implementing a public option.

Fielder, M. et al. Recommendations for Implementing the No Surprises Act, Brookings Institute. March 16, 2021

In this report, Brookings Institute researchers offer recommendations for implementing the No Surprises Act.

What it Finds

  • Researchers argue that in their implementation of the No Surprises Act, federal agencies should aim to minimize the administrative costs of arbitration so as to keep consumer premiums low, and to ensure that the Act reduces the prices of health care services that were previously inflated by surprise billing.
    • Researchers note that meeting these goals according to their recommendations will make arbitration outcomes predictable, discouraging parties from going to arbitration often.
  • As they implement the Act, researchers recommend that federal agencies should issue guidance that specifies how arbitrators should make arbitration decisions. Specifically, they argue that arbitrators should:
    • Assume that qualifying payment amounts, defined as an insurer’s median contracted price, are accurate and make an effort to anchor arbitration outcomes to these amounts in most cases.
    • Challenge qualifying payment amounts only if there is sufficient evidence indicating that the services or circumstances at issue in a case differ from those reflected in the data used to calculate the amounts.
    • Document their reasoning for other arbitrators and regulatory agencies to refer to.
  • Researchers also recommend that federal agencies use a competitive process to select arbitrators in cases where parties fail to agree on an arbitrator. They argue that this process should favor arbitrators who commit to charging low fees, and resolve most disputes by agreeing on values that are close to qualifying payment amounts.
  • Researchers also recommend that federal agencies carefully consider the effect various approaches to batching claims, such as allowing broad versus narrow batching, may have on administrative costs and negotiated prices.

 Why it Matters

With the passage of the No Surprises Act, federal agencies need guidance on how best implement the legislation. This report offers insight for these groups, and for potential arbitrators, particularly those who wish to prioritize strategies that will ultimately improve the affordability of coverage.

McDermott, D. et al. Impact of Key Provisions of the American Rescue Plan Act of 2021 COVID-19 Relief on Marketplace Premiums, KFF, March 17, 2021

In this report, KFF researchers estimate the impact that the American Rescue Plan Act’s (ARPA) marketplace subsidy expansions would have on premiums.

What it Finds

  • As is the case under the ACA, ARPA subsidies vary for individuals and families based on age and income.
  • The ARPA subsidy schedule increases subsidies across all income levels, covers the entire premium for those receiving unemployment insurance, and, for the first time, extends to people with incomes over 400 percent of the federal poverty level (FPL).
    • Older adults with incomes above 400 percent of the FPL would generally see some of the most significant savings. For example, on average, a 60-year-old with a $55,000 annual income would pay 77 percent less for a bronze plan, 56 percent less for a benchmark silver plan, and 52 percent less for a gold plan than they did previously. Older adults in several states would even become eligible for free bronze plans.
    • For a person receiving unemployment compensation who is eligible for marketplace coverage, they and any eligible dependents can enroll in a silver plan with a $0 premium.
  • ARPA subsidies will yield lower health insurance premiums for a total of 29 million people, 15 million of whom are uninsured but are eligible for marketplace coverage, and 14 million who currently have coverage on the individual market.
  • At least 3.4 million of the lowest income marketplace enrollees would see a 100 percent decrease in their premium contribution.
  • Enrollees with incomes between 100 percent and 150 percent of the FPL would become eligible for a zero-premium silver plan with an average deductible of $177.
    • Most of these enrollees are already eligible for a zero-premium bronze plan under the ACA, which have an average deductible of about $6,900. For the same premium cost, these enrolled could now have a deductible that is 97 percent lower.

 Why it Matters

As this report indicates, millions more Americans will have increased access to affordable, comprehensive marketplace insurance coverage under the American Rescue Plan Act. It is important for consumers to know how much they stand to save, and for this information to be communicated to encourage greater enrollment.

Bosworth, A. et al. The Remaining Uninsured: Geographic and Demographic Variation, U.S. Department of Health & Human Services’ Office of the Assistant Secretary for Planning & Evaluation (ASPE), March 23, 2021

In this report, ASPE researchers report on the demographic makeup of uninsured populations that were eligible for marketplace coverage in 2019. Findings are presented by Public Use Microdata Areas (PUMAs), geographic areas within each state that contain at least 100,000 people.

What it Finds

  • Though the national uninsured rate has decreased substantially since the implementation of the ACA, high uninsured rates persist in some states that have yet to expand Medicaid, particularly those in the southern region of the country.
    • The average uninsured rate in the South was 12.5 percent, while the uninsured rate in the Northeast was 5.6 percent.
    • Texas has a disproportionate share of the uninsured, accounting for over 17 percent of the total U.S. uninsured population.
  • In some areas of the country, large portions of the uninsured population, up to 69 percent in Texas, live in households whose adults have limited English proficiency.
    • Among all those who were uninsured in 2019, 9 percent reported that they primarily spoke Spanish in their household.
  • Racial and ethnic minorities are disproportionately uninsured relative to population size. Hispanic individuals represent 19 percent of the total U.S. population but accounted for 29 percent of the uninsured, while Black individuals represent 13 percent of the U.S. population but accounted for 16 percent of the uninsured.

 Why it Matters

These findings indicate that there are deep racial, ethnic, and geographic inequities in the access to affordable, comprehensive coverage options. Twelve states have as yet failed to expand Medicaid, resulting in an estimated 2 million people without access to any affordable coverage option. The exclusion of undocumented immigrants from Medicaid and Marketplace coverage options is also a likely factor in the high uninsurance rate among Hispanic individuals. State and federal policymakers have an obligation to close these considerable gaps and open doors to health coverage for more people.

Holahan, J., Simpson, M., Introducing a Public Option or Capped Provider Payment Rates into Private Insurance Markets, Urban Institute, March 17, 2021

In this report, Urban Institute researchers model 2022 health care savings estimates for implementing a public option or caps on provider payment rates in the individual and employer markets.

What it Finds

  • When combined with a national public option, lowering provider payment rates to match Medicare rates while also reducing prescription drug prices below Medicare prices could significantly lower insurance premiums and government, employer, and household spending. In addition, the uninsured rate would decrease, while cash wages and federal income tax revenues increase.
  • The extent to which health care spending is reduced depends largely on provider payment rates; capping these rates at lower prices has a greater impact than simply implementing a public option. For example, the federal government would save $67 to $156 billion under a public option, and save $240 to $331 billion by extending both a public option and capped rates to employer and individual markets.
  • Depending on the fee schedule, extending a public option to the individual market alone could reduce premiums by 12 to 28 percent and result in federal savings of $6 to $15 billion. Household spending could fall by $3 to $8 billion, while national health spending would decrease slightly.
  • Depending on the fee schedule, extending a public option to the employer market alone could reduce employer premiums by 18 to 25 percent and result in savings of $32 to $86 billion. Household spending could fall by $27 to $58 billion.

Why it Matters

This report offers an extensive model for implementing various public option reforms. Policy makers can refer to these findings for guidance as they work to reduce health care spending.

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The opinions expressed here are solely those of the individual blog post authors and do not represent the views of Georgetown University, the Center on Health Insurance Reforms, any organization that the author is affiliated with, or the opinions of any other author who publishes on this blog.