Health Insurance Reforms: News of State and Market Actions
Updated: February 2015
With numerous changes in health insurance regulation taking effect in 2014, there is a surge of state and private-sector activity as the traditional regulators create new structures and the commercial market adjusts or recalculates health insurance products and pricing.
The following are a selection of informative articles describing the developments, including examples of current discussions from media, state and nongovernmental sources. Some materials are grouped by topics, listed on the right.
NCSL also has prepared a growing number of reports, bill tracking features and newsletter-format descriptions of state and federal activities. Also visit online descriptions of NCSL sessions at the 2014 annual Legislative Summit.
Disclaimers: 1) NCSL takes no position for or against state laws and policies. 2) Reprinted material and links to third-party websites are for information only and do not reflect NCSL policy or editorial decisions.
Some Health Insurers Canceling Noncompliant Policies. - The Commonwealth Fund, Feb. 9, 2015.
In their latest blog post, Georgetown University Health Policy Institute researcher Kevin Lucia and colleagues clarify that health plans that don't meet the Affordable Care Act’s coverages standards must be discontinued in 2017. They also report that a number of insurers have decided to discontinue these policies earlier as part of routine evaluations of their product lines, but are now informing consumers about their health coverage options.
Containing Out-of-Pocket Healthcare Costs - HealthLeaders Media , Jan. 21, 2015 [Read full article]
In the effort to create a consumer-driven healthcare industry, innovations are needed to help individuals and families carry a hefty cost-sharing load. With deductibles and copayments spiking, health plans and employers are pushing the bounds of consumer tolerance for out-of-pocket healthcare spending. A pair of reports released this month by The Commonwealth Fund spotlight the delicate balancing act playing out in the elevation of consumers' economic role in the health insurance market.
On Jan. 8, 2015 The Commonwealth Fund released a report on employer-sponsored insurance (ESI) that showed a slowdown in health insurance premium hikes over the past decade has been accompanied by a sharp rise in consumer out-of-pocket spending for healthcare. The findings include data indicating consumer spending for premiums and deductibles nearly doubled from 5.3% of median household income in 2003 to 9.6% in 2013.
On Jan. 15, CF released a report that showed a significant drop in the uninsured population from 37 million people in 2010 to 29 million people in 2014 as well as improvement in affordability measures, but the report concluded that "excessive cost-sharing for Americans across all insurance types could jeopardize improvements in access to care and medical bill burdens."
Exchanges: Recent Articles
Insurers' Consumer Data Isn't Ready for Enrollees - published by NY Times, 10/26/2014 [Excerpts]
With health insurance marketplaces about to open for 2015 enrollment, the Obama administration has told insurance companies that it will delay requirements for them to disclose data on the number of people enrolled, the number of claims denied and the costs to consumers for specific services. .... In a bulletin sent to insurers last week, the administration said, “We do not intend to enforce the transparency requirements until we provide further guidance.” Administration officials said the government and insurers needed more time to collect and analyze the data.
The law states that each exchange shall require insurers to disclose their claims payment policies, “data on enrollment, data on disenrollment, data on the number of claims that are denied, data on rating practices” and information on the use of doctors and hospitals outside a health plan’s network. Moreover, the law says, insurers must allow consumers to “learn the amount of cost-sharing (including deductibles, co-payments and co-insurance) under the individual’s plan or coverage that the individual would be responsible for paying with respect to the furnishing of a specific item or service.” “At a minimum, such information shall be made available to such individuals through an Internet website” and by other means for people without access to the web. Read full article.
Bloomberg View: How states can save health-care act - published Nov. 12, 2014
It’s possible that the congressional Democrats who drafted the health-care act five years ago purposely sabotaged their signature accomplishment, failed to tell anyone and are now lying about it. More likely, they just made a mistake — and the states can easily address it.
Some background: The Affordable Care Act provides federal subsidies for eligible people who buy insurance on a government- run insurance exchange. Opponents of the law say those subsidies are available only to those who buy insurance from an exchange run by a state, and have sued to block people in the 36 states where exchanges are run by the federal government from receiving any subsidy. The case is both tendentious and frivolous, based on a single reference to subsidies for those enrolled in an “exchange established by the state.” It is also headed to the Supreme Court, which means that governments and businesses need to take it seriously.
This is especially true for states that decided to let the federal government run their exchanges. If they instead build their own exchanges, the case will be made moot. Any state that wants to set up its own exchange for the 2016 plan year only needs to submit an application to the federal government by June of next year. So what is stopping them from doing so? Part of the answer is political, part is practical. [Read full article: http://www.sltrib.com ... Federal-states-health-insurance-state-subsidies]
NCSL graphic shows increased choice or competition in most states for 2015
Is the Affordable Care Act Working? - N.Y. Times, Oct. 27, 2014
After a year fully in place, the Affordable Care Act has largely succeeded in delivering on President Obama’s main promises, an analysis by a team of reporters and data researchers shows. But it has also fallen short in some ways and given rise to a powerful conservative backlash.
Basic Health Plans. published at Health Affairs by Timothy Jost, 10/21/2014 [Excerpt]
"On October 21, 2014, HHS released its proposed methodology for determining federal funding amounts should a state establish a Basic Health Program for 2016. The Basic Health Program allows states the option of offering standard health plan coverage for individuals with incomes between 133 and 200 percent of poverty who are not eligible for Medicaid, CHIP, or other government programs, or employer sponsored insurance. Lawful immigrants who do not qualify for Medicaid and have incomes below 133 percent of poverty also quality. A state that operates a Basic Health Program will receive federal funding equal to 95 percent of the premium tax credits and cost-sharing reduction payments that enrollees would have received had they enrolled in qualified health plans through the marketplaces." [Read full post]
The Basic Health Program final rule was published in March of 2014 and was analyzed here. At this point, it is not clear that any state is interested in the Basic Health Program, but the ACA requires the establishment of an annual rate methodology.
Study questions Obamacare impact on canceled plans - Updated: 4/24/2014
Millions of the plans that were canceled because they did not meet Affordable Care Act requirements probably would have been canceled anyway — by the policyholders, a new Health Affairs study suggests. Last fall, as cancellation letters arrived in mailboxes around the country, opponents of the law cited them as evidence that President Barack Obama lied to Americans when he promised, “If you like your health care plan, you can keep it.” But most individuals who lost plans probably would not have continued them even without the law, according to the study, which was published online Wednesday in Health Affairs. Its author questions whether those cancellations contributed much to the nation’s ranks of short-term uninsured. The study looked at people who bought nongroup, or individual, insurance plans — a market that was relatively unstable even before Obamacare took effect. Between 2008 and 2011, fewer than half the people who started out with such coverage still had it after a year. And 80 percent of those who changed policies had a new plan within a year, usually through an employer, the study found.
Given this baseline, author Benjamin Sommers says, “the effects of the recent cancellations are not necessarily out of the norm.” An estimated 10.8 million people had nongroup coverage in 2012, according to the Congressional Research Service. Based on his own findings, Sommers estimated that 6.2 million Americans leave nongroup coverage each year under typical circumstances. News reports that as many as 4.7 million adults had their policies canceled in 2013 “are likely capturing a great deal of the normal turnover in this market,” he concludes. Read more at Health Affairs and: http://www.politico.com/story/2014/04/obamacare-affordable-care-act-canceled-plans-105964.html#ixzz2zwptv01K
To Promote Health Exchanges to the Public, States Get Creative - see: states-promoting-hix-to-public-creatively
CMS orders insurers to accept Ryan White HIV federal/state premium assistance Posted: March 14, 2014. On March 13, 2014 CMS ordered all insurance companies selling plans through insurance exchanges to accept premium payments and co-payment assistance from federal programs like the Ryan White HIV/AIDS program. But the government continued to urge insurers to reject premium assistance provided by hospitals, drug companies and devicemakers. Because of the time-sensitive effect of accepting or rejecting such payments, the agency opted to waive the normal public comment period and enforce the CMS rules (PDF) as soon as published.
California Employer Benefits Survey: Workers Feel the Pinch - Jan. 21, 2014
Employer-based coverage is the leading source of health insurance in California as well as nationally. This edition of the annual California Employer Health Benefits Survey [View the full REPORT] provides an overview of the landscape in the lead-up to implementation of the Affordable Care Act (ACA) in 2014.
Overall, the findings suggest that, compared with recent years, California workers are less likely to be offered employer-based coverage, and those who are covered pay more in premiums and cost sharing. Workers may continue to see costs rise next year: Over 40% of surveyed firms said they are likely to increase what workers pay for their premiums in the coming year, and 34% plan to increase employees' deductibles. Nevertheless, because this survey was conducted during the immediate lead-up to ACA implementation, the 2013 numbers may not signal important trends.
Key findings include:
- The proportion of California employers offering coverage has declined significantly over the last decade, from 69% in 2000 to 61% in 2013.
- Since 2002, premiums in California rose by 185%, more than five times the state's overall inflation rate.
- Average monthly premiums for single coverage in California were $572 in 2013, compared to $490 nationally. For family coverage, monthly premiums were $1,442 in California and $1,363 nationally.
- California workers paid an average of 22% of the total premium for single coverage and 33% for family coverage in 2013, significantly higher shares than the previous year.
One in four California firms reported that they reduced benefits or increased cost sharing in the last year.