Research sprouted like May flowers this past month, with new studies on the effects of silver loading in the Affordable Care Act (ACA)-compliant individual market, disparities in mental health access, hospital prices, and employees’ insurance cost burdens.

Branham, DK and DeLeire, T. Zero-Premium Health Insurance Plans Became More Prevalent in Federal Marketplaces In 2018. Health Affairs; May 1, 2019. The ACA established subsidies for premiums and cost sharing for low- and middle-income consumers. In 2017, the Trump administration cut off cost-sharing reduction (CSR) payments to insurers, leaving the industry with the cost of providing the subsidies. Because CSRs are only available through certain silver plans, some states allowed insurers to load the entire cost of providing CSR plans onto silver-level products. Since premium subsidies are tied to the second-lowest cost silver plan on the marketplace, when those premiums rose, so did premium tax credits. The result was that more subsidized consumers could sign up for plans with a net $0 premium. Researchers from the Department of Health and Human Services (HHS) and Georgetown University analyzed the effects of “silver loading,” and the prevalence of these “zero-premium” plans.

What It Finds

• Zero-premium plan availability grew by 18.3 percentage points between 2017 and 2018.
• Selection of zero-premium plans increased by 7.9 percentage points.
• More than half of all marketplace consumers had a $0 bronze plan available to them in 2017, compared to a little over one-third in 2017.
• Restoring CSR payments to insurers would likely have a negative effect on availability of zero-premium plans

Why It Matters

The decision to end federal CSR payments to insurers caused a great deal of turmoil in the individual market, threatening bare counties across the country and causing skyrocketing premiums. Two years later, the individual market has hung on to most of its enrollees and maintained insurer participation, in part due to the practice of silver loading. As policymakers think of ways to increase stability and improve affordability in the individual market, they should keep in mind the potential consequences of reversing the 2017 decision now that the dust has settled.

McKenna, R, et al. Insurance-Based Disparities in Access, Utilization, And Financial Strain for Adults with Psychological Distress. Health Affairs; May 1, 2019. Access to mental health services is a key concern for the U.S. health system. Although the ACA took major steps towards reducing disparities, gaps remain. To assess the extent of mental health coverage disparities, researchers from Drexel University and HHS looked at different coverage populations (Medicaid enrollees, people with employer-sponsored insurance (ESI), and ACA marketplace enrollees) to identify barriers to primary care and mental health services for people with psychological distress according to their access, utilization, and financial strain.

What it Finds

• Across all three insurance types, individuals with psychological distress reported greater difficulties accessing and using care, as well as greater financial strain than those without psychological distress.
• Of the individuals with psychological distress, over 11 percent of marketplace enrollees and over 9 percent of Medicaid beneficiaries surveyed reported challenges in finding a provider in the past year, whereas less than 5 percent of those with ESI reported difficulty, either because the provider would not accept their insurance or not accept them as a new patient.
• Almost 10 percent of marketplace enrollees with psychological distress reported forgoing mental health care due to cost, and over 30 percent of that population reported forgoing medical care for the same reason.
• Compared to ESI enrollees with psychological distress, Medicaid enrollees in the same condition were less likely to experience health-related financial strain.

Why it Matters

Mental health care is an essential part of health care and can exacerbate physical illnesses. Policymakers have acknowledged the necessity to increase access to such services through legislative action like the ACA, but disparities remain. Given the obvious barriers of provider access, and the financial strain of seeking out-of-network care, when thinking of ways to increase access and utilization of mental health services, policymakers should look to network adequacy as an area of mental health coverage reform.

Chapin, W and Whaley C. Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely. RAND Corporation; May 9, 2019. Following up on a 2017 study on Indiana hospital prices, researchers at the RAND Corporation looked at health plan claims across 25 states to assess hospital price variation from 2015 to 2017.

What it Finds

• Relative hospital prices rose from 236 percent of Medicare rates in 2015 to 241 percent of Medicare rates in 2017 across all states.
• In the majority of the 25 study states, the relative price of outpatient services exceeded the relative price of inpatient services.
• Relative prices varied among states; for example, relative prices increased by almost 3 percent annually from 2015 to 2017 in Colorado and Indiana, but Michigan saw an overall decrease in that period.

Why it Matters

Employers have been raising the out-of-pocket costs for employees (see Commonwealth study, below) to counter the ever-rising cost of health care. As health care systems continue to consolidate, their prices are edging ever higher, forcing employers and insurers to look for more ways to keep costs in check. This study sheds light on the trends and variations in relative prices paid to hospitals, numbers that have been proven difficult to find. However, in the face of monopolistic pricing, transparency alone is an inadequate solution, and public policy interventions may be needed to level the playing field between insurers and providers.

Hayes, S, et al. How Much U.S. Households with Employer Insurance Spend on Premiums and Out-of-Pocket Costs: A State-by-State Look, Commonwealth Fund; May 23, 2019. Following up on a previous study on the cost of employer insurance, researchers at the Commonwealth Fund evaluated the total cost of premiums and out-of-pocket (OOP) expenses for employees and their families using data from the 2016 to 2017 federal Current Population Survey.

What it Finds

• Employees saw significant variance across states in annual household spending on their ESI premium contributions, ranging from $500 in Hawaii to $3,400 in South Dakota, with a median cost of $2,200 across states.
• Employees’ OOP costs also varied depending on where they lived, ranging from $340 in Hawaii to $1,500 in Nebraska, with a median cost of $800 across states.
• An estimated 13.3 million people spent 10 percent or more of their household income on premiums, while an estimated 6.2 million spent 10 percent or more (or 5 percent or for lower-income people) on OOP costs

Why it Matters

The conversation surrounding insurance prices often focuses on the individual market, partly owing to the spotlight on the ACA’s marketplaces. While people with ESI are often shielded from the total cost of their insurance through employer subsidies, this study and previous work by the Commonwealth Fund show that employees are increasingly bearing the burden of rising health care costs, particularly because wages have grown more slowly than the cost of care. While the individual market continues to be in need of policy solutions, ESI is also ripe for reform, and policymakers, employers, and insurers alike need a renewed focus on ways to keep costs down for employees.