While health policy folks had fun with spooky costumes for Halloween this year, researchers were also handing out treats, including studies on the potential effects of health care reform options, sustaining a low uninsured rate in California, and the effects of state-run reinsurance programs on premiums.

Blumberg, L, et al. From Incremental to Comprehensive Health Reform: How Various Reform Options Compare on Coverage and Costs. Urban Institute; October 16, 2019. With health care a top policy issue being debated by the 2020 presidential candidates, researchers at the Urban Institute analyzed eight different combinations of proposed reforms to national health insurance coverage and spending, comparing outcomes of the policy packages with current law. These reform combinations include:

• Building on the ACA:
  • Reform 1: Reinsurance and enhanced premium and cost-sharing subsidies
  • Reform 2: Reform 1, restoration of the Affordable Care Act’s (ACA) individual mandate, and reversing the short-term limited duration (STLDI) expansion
  • Reform 3: Reform 2, as well as addressing the Medicaid eligibility gap
  • Reform 4: Reform 3, along with a public option and/or capping provider payment rates in the individual market
  • Reform 5: Reform 4, auto-enrollment into the public option with retroactive enforcement, and elimination of the employer insurance offer “firewall” to accessing marketplace financial assistance
  • Reform 6: Reform 5, with more enhanced premium and cost-sharing subsidies
• Replacing the current system:
  • Reform 7: A single-payer system that covers the ACA’s Essential Health Benefits (EHB) and cost-sharing requirements on a sliding scale
  • Reform 8: A single-payer system that covers benefits in addition to the EHB at no cost sharing

What It Finds

• More federal spending is needed for larger improvements in coverage affordability and the number of insured.
• Over half of the reform packages simulated involved provider payment regulation (Reforms 4-8); only these policy combinations reduced or maintained total health spending, and these packages resulted in the greatest reduction in the number of people without minimum essential coverage.
• Every reform package is estimated to reduce employer spending on health care, and research indicates that these savings will likely be “passed back” to workers in the form of higher wages.
• Tax increases needed to pay for reforms would likely offset the savings for higher-income people, while lower-income people would likely see net savings.

Why It Matters

As the 2020 presidential and Congressional elections approach, candidates will continue to discuss a wide range of health care reform ideas. While polling finds that the majority of Americans support the idea of the government doing more to help provide health insurance, there is no consensus on exactly what approach to take. This study provides estimates to inform the ongoing conversation, providing critical data for policymakers shaping plans to address the now rising uninsured rate, and for voters heading to the ballot box.

Becker, T and Ponce, N. Californians Maintain Health Insurance Coverage Despite National Trends. UCLA Center for Health Policy Research; October 1, 2019. Nationally, the substantial insurance coverage increases achieved after the full implementation of the ACA in 2014 began to reverse in 2018, after several federal policy changes rolled back the law’s reforms. In contrast to the national trend, California’s uninsured rate has remained at a record low. Researchers at UCLA’s Center for Health Policy Research analyzed economic and policy reasons why California bucked the national trend.

What it Finds

• In response to federal efforts to undermine the ACA, California implemented a number of policies to stabilize the state’s health care market, including increasing the length of the open enrollment period, increasing funding for in-person assistance, offsetting the loss of federal cost-sharing reduction payments to insurers, and expanding Medi-Cal coverage to undocumented children and young adults.
• Between 2016 and 2018, the proportion of nonelderly California residents reporting employer-sponsored coverage increased, while the proportion reporting Medi-Cal coverage decreased.
• Between 2017 and 2018, California’s uninsured rate went down across income groups, but those with incomes at or below 400 percent of the federal poverty level still have the highest rate of uninsurance.
• Despite major progress between 2014 and 2018, more work is needed to address disparities in the insurance rates that leave Californians who are of Latino, African American, and Asian descent with a higher uninsured rate than their white counterparts.

Why it Matters

As federal policies have led to increases in the uninsured rate, states can demonstrate ways to resist that trend. California and other states – notably those that run their own marketplace – have implemented health policies that have successfully expanded access to affordable coverage options.

Sloan, C and Rosacker, N. State-Run Reinsurance Programs Reduce ACA Premiums by 16.9% on Average; October 29, 2019. States can apply for 1332 waivers to create a reinsurance program, a source of funds to offset losses for insurers due to very high cost patients. Researchers from Avalere returned to previous work to analyze how twelve state-run reinsurance programs affect average individual market premiums.

What if Finds

• In the twelve states with state-run reinsurance programs, premiums were 6 to over 43 percent lower than they would have otherwise been without a reinsurance program, an average total decrease of 16 percent across all studied states.
• Reinsurance programs saved $1 billion in estimated federal spending on Advanced Premium Tax Credits (APTCs) in their first year, funds now passed through to each state’s program.

Why it Matters

Since the ending of the ACA’s risk corridors and reinsurance programs, states have searched for ways to keep insurance premiums down. One way they’ve done so is through state-run reinsurance programs. Though studies like this are hopeful in terms of average premium rates, some states have struggled with unintended consequences, such as net increases in premiums paid by some subsidized enrollees That being said, growing evidence that state-run reinsurance programs reduce average premiums in all states where it has been implemented can help  policymakers assess the benefits and risks of implementing similar programs.