Tag Archive: state health benefit exchange

Final 2017 bid to temporarily stabilize non-group market includes reinsurance revival — and public option

In what is likely to be a final, last minute effort this year to temporarily bolster the challenging market that is non-group or individual medical coverage, two elements involved in the crafting of the Patient Protection and Affordable Care Act are being revived. One – reinsurance — was enacted as part of the law’s insurance market reforms but expired in 2017. Another – the so-called “public option” – wasn’t.

On August 30, a group of eight state governors called on Congress among other measures to restore reinsurance to protect health plan issuers wary of high cost claims and worse than expected statewide risk pools as part of a federal stability fund that would help states fund reinsurance programs in 2018 and 2019. Additionally, seven states have applied to the Trump administration for state innovation waivers under Section 1332 of the Affordable Care Act to establish reinsurance programs in 2018 to help stabilize their non-group markets. Two other states enacted authorizing legislation for such a waiver, according to a chart prepared by the law firm Faegre Baker Daniels LLP.

The proposal by the eight state governors – notably both Republicans and Democrats – would fortify the non-group coverage by allowing individuals to buy coverage via the Federal Employee Health Benefit Program in counties where only one commercial non-group plan is offered. This in effect would provide a “public option” in the form of a government-run plan that was considered but rejected in the development of the Affordable Care Act. It also is in line with a suggestion by former President Barack Obama during his final year in office to create a public plan to address constrained choice among plans in some parts of the nation. Using the FEHBP for the public option could raise objections that as a large employer group plan, it’s not actuarially and administratively suitable for covering non-employees.

Those objections as well as declining affordability for plans sold off the state exchanges jeopardizing the non-group risk pool could help fuel a proposal expected this month by Vermont Senator Bernie Sanders to extend Medicare to those under age 65. Look for this proposed Medicare expansion to serve as a starting point for debate on a possible successor to the Affordable Care Act’s individual and possibly small group market reforms going into 2018-20. In the meantime, both Congress and the Trump administration will likely go along with some of the proposals to help stabilize non-group including extending — at least for 2018 — out of pocket cost sharing subsidies for low income households purchasing silver level plans on state health benefit exchanges. Uncertainty surrounding that funding has drawn widespread concern from states, the exchanges and plan issuers, and consumer interests with no one standing to gain politically if they are not continued.

A key element of the Medicare expansion proposal will likely be some form of presumptive eligibility and/or automatic continuous enrollment, accompanied by payroll and self-employment taxes to help fund the expansion for those under 65 and ineligible for other private or public coverage – along with a possible opt in for those eligible for employer sponsored plans. Policymakers on both sides of the aisle with the support of states, plan issuers and consumer groups will likely conclude the Affordable Care Act’s annual enrollment period used for employer group plans does not translate well to the non-group market. Annual enrollment is a very well established and administratively supported process for employer group plans. But it has proven challenging to implement in non-group due to the market segment’s characteristic high churn and part year enrollment by consumers that makes it difficult to risk rate.

Conventional political wisdom would hold expanded Medicare might be a non-starter among majority Republicans in Congress. But it stands a chance of advancing since it would with automatic enrollment potentially reduce the need for the Affordable Care Act’s individual and employer shared responsibility mandates that have proven among the most unpopular provisions of the statute. A Medicare expansion might well include statutory authority allowing the federal government to negotiate prescription drug prices for the program, addressing concerns shared across the political spectrum over high medication costs.

 


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. 

Alaska poised to establish own reinsurance program for individual health insurance market, authorize 1332 waiver

Alaska’s relatively thin population makes it difficult to sustain a viable individual health insurance market. Too few “belly buttons” as plan members are termed within the industry doesn’t allow for adequate spread of risk so that premiums paid by members who use relatively little medical services offset those who use more. That also makes the state less attractive to health plan issuers since they could potentially suffer adverse selection.

The Patient Protection and Affordable Care Act’s individual market reforms included reinsurance to reduce that risk by compensating health plan issuers once medical utilization costs for a given member exceed a certain dollar amount over a plan year. That premium stabilization component that applies to plans sold in state health benefit exchanges goes away for plans effective in 2017.

Consequently, Alaska lawmakers approved legislation backed by Gov. Bill Walker to create its own reinsurance program for the individual market. HB 374 would also authorize the state to seek a state innovation waiver from the federal government under Section 1332 of the Affordable Care Act to establish its own state plan governing the individual market.

The legislation comes with a high level of urgency. State Insurance Division director Lori Wing-Haier told lawmakers that Alaska’s individual insurance market could collapse if it’s not enacted, according to this report. That’s not an overstatement given only one health plan issuer, Premera Alaska, remains in the individual market.

 


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. 

Assurant Health chooses costly exit of market over full sale – Modern Healthcare

Assurant Health offered health plans on 16 exchanges this year, the first and only ACA enrollment for the insurer. Similar to other insurers, Assurant Health looked to capitalize on the new, evolving individual marketplaces in which consumers are encouraged to shop for health plans as they would for other commodities.

. . .

The demise of Assurant Health signals hurdles for new entrants in the individual market, particularly when an insurer doesn’t have the same size or provider negotiation leverage as a larger carrier. “This is becoming more and more of a scale game,” Gunn said. “If you’re an undersized player like an Assurant, it’s going to be very difficult to make the math work.

Source: Assurant Health chooses costly exit of market over full sale – Modern Healthcare

 


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. 

ACA’s Multi-State Plan provision could aid government’s case in King v. Burwell

The issue before the U.S. Supreme Court in King v. Burwell is whether the U.S. Treasury Department properly interpreted the intent of the drafters of the Patient Protection and Affordable Care Act regarding the availability of tax credit subsidies for health plans sold on state health benefit exchanges. More specifically, whether Treasury is correct in determining the subsidies are available to qualified individuals regardless of whether an exchange is established by a state or if the federal government operates the exchange under a default provision of the Affordable Care Act if a state opts not to do so.

The high court could look to other parts of the statute for context as it discerns Congress’s intent regarding the availability of the subsidies. One element of the law that could support Treasury’s position is at Section 1334 of the Affordable Care Act. Section 1334 creates a federally-chartered Multi-State health plan (MSP) that must be offered in all state exchanges by 2017. The policy intent is to bolster competition and consumer choice, particularly in states with smaller populations and fewer plan issuers.

In the context of the question before the Supreme Court in King, the government might argue Congress could not have intended that the subsidies are available only for MSPs offered in states that chose to establish an exchange but not in those that did not. Especially given the objective of MSPs to make individual and small group health coverage more widely available. In a proposed rulemaking issued last week, the federal Office of Personnel Management (which charters MSPs) noted it “intends to ensure that MSP coverage is available as expansively and as soon as practicable.”

 


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. 

Concerns over large group plan exchange option overblown

Concern is being raised that a Patient Protection and Affordable Care Act provision allowing large group plans (defined as those offered to employers of 101 or more beginning in 2017) to offer plans on state health benefit exchanges could disrupt the large group market. The basis of the concern is an ACA requirement at Public Health Service Act Section 2701(a)(5). The section would apply the ACA’s mandate on individual and small group plans, requiring they use modified community-based rating (rather than risk rating) to large group plans in those states that elect to allow large group plans to be sold via their health benefit exchange marketplace:

(5) SPECIAL RULE FOR LARGE GROUP MARKET.—As revised by section 10103(a). If a State permits health insurance issuers that offer coverage in the large group market in the State to offer such coverage through the State Exchange (as provided for under section 1312(f)(2)(B) of the Patient Protection and Affordable Care Act), the provisions of this subsection shall apply to all coverage offered in such market (other than self-insured group health plans offered in such market) in the State.

My impression is this concern is overblown. It’s both unlikely that states will be interested in bringing large group plans into their exchange marketplace or that large group plans would want to participate. The Affordable Care Act’s enhanced risk spreading mechanisms contained in market rules and the exchange marketplace needed in the individual and small group markets are less necessary for large group plans that already benefit from greater scale and spread of risk. In addition, a robust private exchange marketplace is springing up to offer large employers more opportunity to create even larger pools and greater spread of risk.

 


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. 

Debt deal tightens oversight of state health benefit exchange marketplace subsidy eligibility

The continuing appropriation measure to reopen the partially shuttered U.S. federal government and extend the federal debt ceiling approved by Congress today and expected to be approved by President Barack Obama contains provisions aimed at better ensuring state health benefit exchange enrollee eligibility for premium and cost sharing subsidies.  They require the federal Department of Health and Human Services (HHS) to do the following:

  • Require state health benefit exchanges pre-verify the eligibility of individuals applying for premium tax credits and cost sharing reductions and certify it has done so to Congress
  • By January 1, 2014, detail the procedures used by the exchanges verify eligibility for premium tax credits and cost-sharing reductions in a report to Congress
  • Report to Congress by July 1, 2014 on the effectiveness of the procedures and safeguards provided for preventing the submission of inaccurate or fraudulent information by applicants for enrollment in a qualified health plans offered through the exchange marketplace.
 


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. 

%d bloggers like this: