Insurance enrollment numbers continue to climb
In 2014, a resident and business owner in El Paso, Texas, met with a marketplace assistor to find affordable health insurance for his children and employees. He was not planning to buy coverage for himself as well, but with a little encouragement and help, he did.
Newly covered, he went for a checkup and his provider found colon cancer. Fortunately, with insurance in hand, he received timely treatment and a promising prognosis. The outcome is good news for the man and his family, but also for the many people he employs through his construction company. Mimi Garcia, Texas state director for Enroll America, called this the “trickle-down effect” of the Affordable Care Act (ACA).
“And we have dozens more stories just like this,” Garcia said. “People who had never had health insurance before or had only been to the doctor when they were acutely ill, who get covered, go for a checkup and it turns out they have heart disease or breast cancer or are on the verge of developing diabetes .… In a place like Texas, where so many people had been priced out of insurance coverage, (the ACA) is definitely a life-changer.”
While Texas is still the nation’s uninsured capital, the state has clocked significant progress since ACA implementation. According to the latest census data, the state’s uninsured rate dropped from more than 22 percent in 2013 to about 19 percent in 2014, representing the largest gain in health coverage in Texas since 1999. And Texas is just one of the ACA’s evolving success stories. Six years after President Barack Obama signed the ACA into law and three open enrollment periods later, health reform is bringing similar progress to communities across the country: Insurance enrollment numbers continue to climb upward, growth in health-care spending has slowed and early research shows the ACA is tied to an increase in the uptake of preventive services.
According to February data from the U.S. Department of Health and Human Services, about 12.7 million people purchased or were re-enrolled in an insurance plan during the 2015 open enrollment period, either through a state-based marketplace or the federally run marketplace at Healthcare.gov. Of the 9.6 million who purchased coverage through the federal marketplace, about 42 percent were new consumers. And while there was some concern that young, typically healthier populations would not enroll, 2.7 million people ages 18 to 34 signed up for coverage via the federal marketplace during the last enrollment period—an increase from the previous period. Another promising data point: In 2014, the nation’s uninsurance rate among children dropped to a historic low of 6 percent.
“The ACA has clearly delivered in terms of coverage and access to coverage so far,” said Patrick Willard, health action director at Families USA. “It’s been great, especially in states that expanded Medicaid.”
Despite its successes, the ACA continues to face challenges, some political and some market-based. Arguably the biggest barrier to reaching the ACA’s full coverage potential is opposition to Medicaid eligibility expansion. In 2012, the Supreme Court ruled that states could opt out of Medicaid expansion without jeopardizing their federal Medicaid funds. As of mid-January, 32 states and Washington, D.C., had expanded Medicaid, three states were considering expansion, and 16 states had not adopted expansion.
In his fiscal year 2017 federal budget proposal, Obama proposed full federal funding for the first three years of Medicaid expansion for states that expand in the future. Under current health reform law, federal funding covers 100 percent of expansion costs between 2014 and 2016 and at least 90 percent thereafter. If Obama’s proposal becomes law, states that missed the 2016 cutoff would still receive three years of federal funds to cover the entire cost of expansion.
Willard said Medicaid expansion is critical to reaching much of the nation’s remaining uninsured, noting that the current patchwork of Medicaid eligibility standards means a person’s location determines their ability to afford insurance. The ACA was written with the assumption that all states would expand Medicaid eligibility up to 138 percent of the federal poverty line; however, the ability to opt out of expansion now means that about 3 million low-income adults fall into a coverage gap in which they do not qualify for Medicaid or for marketplace subsidies.
A February report from Families USA found that expansion states experienced an average 25 percent reduction in the rate of uninsured workers, versus a 13 percent drop in states without expansion. For example, in a state such as Texas, which has not expanded Medicaid, the difference of just $1 per hour in income can determine whether a person falls into the coverage gap or is eligible for insurance subsidies, said Garcia at Enroll America.
“We see this happening a lot and it just feels really unfair,” she said. “Without expansion, we’ll never be able to get the uninsured rate to the level we want—we’ll always be operating with one hand behind our backs.”
Sabrina Corlette, project director and research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute, said the coverage gap is the most “urgent priority” facing the ACA’s continued success. She tapped affordability within the marketplace as the second big priority. Late last year, the Centers for Medicare and Medicaid Services reported that across markets in 37 states, premiums for standard insurance plans went up an average 7.5 percent. For instance, in just one state—Minnesota—the state Department of Commerce reported that average increases in 2016 premium rates in the individual market ranged from 14 percent to 49 percent.
One way to avoid higher premiums is to choose a plan with higher out-of-pocket costs or deductibles, which can create a situation in which a person has insurance but cannot necessarily afford to see a doctor. Research has found that people with high-deductible plans are more likely to forgo needed care due to cost than those with lower-deductible plans. Another recent report, released from the Urban Institute in December 2015, found that even with financial assistance, 10 percent of 2016 individual marketplace enrollees with incomes below 200 percent of poverty will pay more than 18 percent of their incomes toward premiums and out-of-pocket costs.
“Even with subsidies, coverage isn’t always affordable in terms of premiums and cost-sharing,” Corlette said. “If a plan has a high deductible, I can frankly understand why people would say there’s no value there.”
Some states, such as California, are using their authority to standardize prices, benefits and provider networks within their insurance marketplaces. In comparison, other states accept any insurer or plan into their marketplace as long as they meet federal ACA requirements. However, federal officials may soon be following California’s lead.
In November 2015, CMS proposed a rule that would encourage insurers participating in Healthcare.gov to offer a set of standardized plans that fall within certain cost-sharing parameters. The proposed CMS rule also aims to strengthen standards regarding network adequacy, which refers to an insurance plan’s ability to provide timely access to a sufficient number of in-network providers. For example, the rule proposes continuity of care protections for patients facing life-threatening illnesses and whose treating providers are dropped from their networks.
According to Corlette, there is a trend within the insurance marketplace toward narrower networks and closed or HMO-style networks. However, she emphasized that narrower networks are not necessarily bad—“I wouldn’t equate narrow with lack of quality,” she said. She noted that the ACA eliminated many of the ways insurers had used to control costs, such as denying coverage to those with pre-existing conditions. Now, she said, network design is insurers’ No. 1 cost-cutting tool—a shift that she said could be advantageous for consumer wallets as well.
“Network adequacy is like a Rorschach test—one person’s adequate network is another person’s inadequate network,” Corlette said. “But the concern here is that without a standard, it could be a race to the bottom.”
Claire McAndrew, private insurance program director at Families USA, also said that “we can’t assume a narrow network is a bad network.” However, McAndrew said stronger federal rules around costs and networks would protect consumers, make it easier to comparison shop in the marketplace, and “perhaps most importantly” tease out best practices in designing health insurance plans.
“People are starting to see the marketplace as part of the fabric of our health-care system,” she said. “Before, (access to insurance) was holding us back from really being able to address broader issues. But now, I think we’ll see a greater focus on core issues of public health, a greater focus on health equity, a greater focus on quality and value. Now, we can really dissect what makes us healthy.”
Reprinted with permission from The Nation’s Health, APHA.