Tag Archive: bronze plans

High premiums for catastrophic coverage violate consumer expectations

Levine has a Bronze plan, which has a $6,800 deductible, up from $6,500 last year. This year, Anthem has ended out-of-network coverage in its Bronze plans, turning them into EPOs, throughout much of the state.

That means Levine will be paying $517 month for a policy he says he may not even use.

“It has turned into a catastrophic policy,” he said, referring to plans intended to only cover large unexpected medical bills.

Source: As Obamacare enrollment nears, some Californians see big hikes in health premiums

This goes to the heart of the low value perception of bronze-rated individual health plans. When people are paying their own costs out of pocket for routine and minor medical care, they reasonably expect their premiums to be lower. Paying more than $500 a month for catastrophic coverage violently upends that expectation.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Underinsured ACA enrollees strain community health centers | Modern Healthcare

When the ACA was enacted, leaders of community health centers were excited about the prospect of their previously uninsured patients getting coverage and having their levels of uncompensated care drop. But they were surprised when many of their lower-income patients bought bronze plans with high cost-sharing and started coming in seeking treatment on a sliding-scale fee basis. Previously, sliding-scale fees were used mostly by uninsured people who had to pay their own bills.

The centers say this has had a negative impact of their finances. “The use of the sliding fee scale due to the inability to pay required co-pays impacts the community health centers’ uncompensated-care costs, which are not declining as rapidly as contemplated by some policymakers,” said Mary Leath, CEO of Community Health Centers of Arkansas.

The squeeze is being felt even in states that have expanded Medicaid to adults with incomes up to 138% of poverty, which has provided community health centers in those states with more paying patients. Deb Polun, director of government affairs at the Community Health Center Association of Connecticut, said the lowest deductibles for bronze plans in her state are about $4,000, which is not affordable for lower-income patients.

via Underinsured ACA enrollees strain community health centers | Modern Healthcare.

This is an interesting development that points to some potential implications:

1. Lower income households are mistakenly choosing high deductible bronze metal tier plans that are ill suited to their economic resources and health statuses — particularly among people who are frequent users of primary care services — because they don’t understand how out of pocket cost sharing works and believe health plans are all inclusive.

2. These households should be but are not being directed toward silver metal tier plans that feature cost sharing subsidies for households earning up to 250 percent of federal poverty. If so, this suggests state health benefit exchanges and those who help people choose individual plans such as insurance agents need to do a better job ensuring consumers are getting adequate information in order to choose the best metal tier plan for their circumstances.

3. Lower income households are deliberately selecting bronze plans in order to benefit from their lower premiums, knowing they can get low cost primary care on a sliding scale fee basis from community health centers.

4. Lower income households are overestimating their incomes and should be enrolled in Medicaid programs if eligible instead of exchange plans. California’s state-operated exchange, Covered California, has switched some plan year 2014 enrollees from exchange plans to Medicaid when income redeterminations for plan year 2015 found some households earning too little to qualify for an exchange plan.

The item reports bronze health plan issuers are denying claims submitted by CHCs, which are then written off as uncompensated care. This raises the question of the type of care for which reimbursement is requested since preventative services are not subject to cost sharing and are included in plans at all metal tiers of coverage.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

If Halbig becomes law of the land, flight to bronze and cat plans could result

One potential outcome should the federal courts ultimately determine that advance income tax credit premium subsidies are available only to eligible households purchasing individual coverage in state-based health benefit exchanges and not in states that have opted to have the federal government run their exchanges is a flight to bronze. Bronze as in the metallic value of qualified health plans that have around a 60 percent actuarial value (AV), meaning they cover on average 60 percent of expected costs in a plan year. (Click here for more background the Halbig ruling)

Individuals may find the only way to comply with the requirement they have some form of health coverage or pay a tax penalty is to buy a bronze-rated plan since these plans offer the lowest premiums compared to richer plans with silver (70 percent AV), gold (80 percent AV) and platinum plans (90 percent AV). For many individuals and families not covered by employer-sponsored or government health plans, bronze plans may be the only ones they can afford without the offsetting effect of the premium subsidies — particularly older people in the top one third of the age rating bands who pay the highest premiums.

In addition to bronze plans, there could also be a growth market in catastrophic plans that are rated below 60 percent AV. These plans are available to those aged 30 and under and households that would have to spend more than eight percent of their income to buy the lowest cost bronze plan offered. The Patient Protection and Affordable Care Act also provides an exemption from the tax penalty for these households, which could result in some requesting the exemption and going without coverage, undermining the law’s policy goal to reduce the number of medically uninsured Americans.

A flight to bronze plans could also give a boost to direct primary care (DPC) where patients pay advance monthly or annual fees for primary care since bronze and catastrophic plans aren’t designed for those who are frequent users of primary care services.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

AHIP’s catastrophic plan proposal needs rethinking

America’s Health Insurance Plans (AHIP) has proposed the creation of a new Patient Protection and Affordable Care Act-compliant catastrophic individual health plan. (Link here) According to AHIP:

The new catastrophic plan would offer an AV (actuarial value) just below the current minimum requirement (covering an average of 60 percent of medical utilization costs) allowing for lower premiums, but would still include coverage of the law’s mandated essential health benefits, have no annual or lifetime benefit limits, and cover all preventive health services with zero cost-sharing for consumers. This would allow individuals and families eligible for premium subsidies to use that financial assistance to purchase the new plan, an option currently unavailable to consumers purchasing the ACA catastrophic plan.

Since bronze plans and catastrophic plans are quite close in actuarial value, have the actuaries found any potential for meaningfully lower premiums for these proposed catastrophic plans? In other words, is the medical services utilization of a population covered at 57 percent AV, for example, significantly lower than one covered at 60 percent such that it can produce meaningfully lower premiums? Especially given that the Affordable Care Act limits annual maximum out of pocket costs for in-network providers?

Not likely. But the apparent goal isn’t so much to reduce premium rates but rather to make catastrophic plans eligible to become qualified health plans (QHPs) sold in the state health benefit exchange marketplace and thereby eligible for advance premium tax credit subsidies. That has raised criticisms from some quarters that proposed catastrophic plans would not be beneficial to lower income individuals and families since the plans’ high cost sharing (deductibles, co-insurance and co-pays) would discourage their getting necessary care. But lower income people and especially those who utilize a lot of catastrophic (i.e. hospital inpatient) care aren’t likely to choose catastrophic plans and instead opt for plans with at least 70 percent AV (this level includes additional cost sharing subsidies for lower income earners).

If the goal however is to bring more relatively healthy people into state risk pools who are comfortable covering their own out of pocket costs for non-catastrophic care and using tax deductible health savings accounts to cover them, a more appealing catastrophic plan would be one that provides lower cost sharing for hospitalizations and other unexpected high cost medical events. Even with annual out of pocket cost limits of $6,350 for an individual plan and $12,700 for a family plan, a hospitalization can result in large medical bills, particularly for out of network hospitals used in an emergency situation that can double those limits.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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