12 Ways to Save on Health Care

Managing your money is tough, saving for your health care is pretty rough too. These tips and tricks will assist you in managing your medical finances for the future.


We all know paying for health care is a challenge, with or without insurance, amid rising copays, deductibles, and premiums. But there are ways to hold down the costs that can come in handy now, but also as the Affordable Care Act undergoes whatever transformation (or replacement) the Trump administration comes up with.

The Huffington Post reports that, despite the numerous obstacles to cutting costs on health care for individuals —insured or not — there are also numerous ways to do just that, whether it takes due diligence on the patient’s part or having conversations with doctors, hospitals and insurers — even drug companies — about price.

While such tactics may not exactly amount to haggling, negotiating skills can’t hurt, and determination and perseverance are definite assets when it comes to finding the best prices or convincing medical entities to give you a better deal.

Plenty of other sources have good suggestions for slicing medical expenses, whether for prescription drugs, doctor and dentist visits, or hospital care. In fact,

Here’s a look at 12 strategies and suggestions that can end up saving you beaucoup bucks for care and treatment.

12. Check the internet

You would be amazed at how many tips there are online to help you cut the cost of getting — or staying — healthy.

One of the first things you should do is to check out the internet, where you’ll find not just help from the Huffington Post but also from such prominent sources as Kiplinger, Investopedia, Money, CBS and other news stations — and checking them out can have the advantage of providing you with any new suggestions arising out of changes in the law or in the medical field itself. And definitely compare prices on the Internet for procedures and prescriptions before you do anything else.

11. Skip insurance on your prescriptions

Not all the time, and not everywhere, but you could end up getting your prescriptions filled for less money if you don’t go through your medical insurance.

Costco, Walmart, and other retailers with pharmacies often offer cut-to-the-bone prices on generics, some prescription drugs and large orders (say, a 90-day supply of something you take over an extended period). Costco will even provide home delivery, and fill your pets’ prescriptions, too.

Then there are coupons. GoodRx will compare prices for you, provide free coupons you can print out and take to the pharmacy and save, as the website says, up to 80 percent — without charging a membership fee or requiring a sign-up.

10. Talk to your doctor

And ask for samples and coupons. Especially if you’ve never taken a particular drug before, let your doctor know you want to try out a sample lest you have an adverse reaction to the medication and get stuck with 99 percent of your prescription unusable.

Pharmaceutical reps, of course, provide doctors with samples, but they often give them coupons, too, lest you suffer sticker shock in the pharmacy and walk away without filling the prescription. So ask for those too. Doctors can be more proactive about samples than coupons, but remember to ask for both. After all, it’s your money.

9. Talk directly to the drug companies

So you’ve tried to get a brand-name drug cheaper, but coupons don’t help enough and there’s no generic available (or you react badly to it). Don’t stop there; go directly to the source and ask about assistance programs the pharmaceutical company may offer.

Such programs can be need-based, but not always — sometimes it’s a matter of filling out a little paperwork to get a better deal. The Huffington Post points out dialysis drug Renvela can go for several hundred dollars, but drops to $5 a month if the patient completes a simple form.

8. Haggle

Before you go in for a procedure (assuming it’s voluntary), or when the bills start to come in, talk to both the doctors (is there ever only one?) and the hospital and ask for a discount — or a reduction in your bill for paying in cash or for paying the whole amount. Be polite, but stand your ground and negotiate for all you’re worth.

A CBS report cites Consumer Reports as having found that only 31 percent of Americans haggle with doctors over medical bills but that 93 percent of those who did were successful — with more than a third of those saving more than $100. Just make sure you’re talking with the right person in the office — the one who actually has the authority to issue those discounts. And get it in writing.

7. What about an HMO?

If you’re not devoted to your doctor, opting for an HMO can save you money — although it will limit your choices of doctors and hospitals. Still, coverage should be cheaper.

If you’re generally in good health, choosing a plan — HMO or not — that restricts your choices of doctors and hospitals can save you money. And having the flexibility to go see the top specialist in his field won’t necessarily be your top priority unless you have specific health conditions for which you really need specialized care. In that case, you might prefer to hang on to your right of choice, despite the expense.

6. Ask for estimates

Yes, just the way you would from your mechanic or plumber. Ask the doctor/hospital/etc. what the charge is for whatever it is you’re having done, whether it’s a hip replacement or a deviated septum. You will already have checked out the costs for these things on the Internet, of course, so that you have an idea of standard pricing — and if your doctor, etc. comes in substantially higher, look elsewhere.

And while you’re at it, ask whether the doctor uses balance billing. If so, run, do not walk, in the opposite direction and find a doctor who doesn’t. Otherwise, particularly if the doctor’s fees are high, you’ll find yourself paying the balance of his whole bill once the insurance company kicks in its share.

Normally the doctor and insurer reach an agreement that eliminates whatever is left over after you pay your share and the insurer pays its share. But with balance billing, whatever is left over becomes your responsibility — and you’ll be sorry, maybe even bankrupt. By the way, balance billing is actually illegal in some states under some circumstances, so check before you pay.

5. Network, network, network

Always, always ask if the doctor is in network, and if the lab where your blood work goes and the specialist he recommends and the emergency room doctor and surgeon are also in network. Of course you can’t do this if it’s a true emergency, but if you learn after the fact that you were treated by out-of-network doctors at an in-network hospital, see whether your state has any laws against, or limits on, how much those out-of-network practitioners can charge you.

According to a Kaiser Family Foundation study, close to 70 percent of with unaffordable out-of-network medical bills were not aware that the practitioner treating them was not in their plan’s network at the time they received care.

4. Check your bill with a fine-toothed comb

Not only should you check to see whether your bill is accurate, you should also read up on medical terminology so you know whether you’re being billed for medications and procedures you actually received.

Not only do billing offices often mess up — a NerdWallet study found that 49 percent of Medicare medical claims contain medical billing errors, which results in a 26.4 percent overpayment for the care provided, but they can also get a little creative, such as billing for individual parts of a course of treatment that ought to be billed as a single charge. It adds up. And then there are coding errors, which can misclassify one treatment as another and up the charge by thousands of dollars.

3. Get a health care advocate

If you just can’t face fighting insurers or doctors’ offices, or aren’t well enough to fight your own battles, consider calling in a local professional health care advocate. They’ll know what’s correct, be able to spot errors, and can negotiate on your behalf to contest charges or lower bills.

For that matter, if you call them in ahead of time for a planned procedure or course of treatment, they can advise you about care options in your area and maybe forestall a lot of problems.

2. Go for free, not broke

Lots of places offer free flu shots and screenings for things like blood pressure and cholesterol levels — everyplace from drugstores to shopping centers, and maybe even your place of work.

Senior centers do too, but if you can’t find anything locally check out places like Costco and Sam’s Club, which do screenings for $15; that might even be cheaper than your copay at the doctor’s office.

1. Deals can make you smile

Whether you have dental insurance or not, it doesn’t cover much. So go back to #8 (Haggle) to negotiate cash prices with your dentist for major procedures, and take advantage of Living Social or Groupon vouchers to get your routine cleanings and exams with X-rays. The prices, says HuffPost, “range from $19 to $50 and are generally offered by dentists hoping to grow their practices.”

SOURCE:
Satter, M (2 June 2018) "12 ways to save on health care" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2017/02/07/12-ways-to-save-on-health-care?t=Consumer-Driven&page=6


Pre-existing Conditions and Medical Underwriting in the Individual Insurance Market Prior to the ACA

Data provided through two, large government surveys, The National Health Interview Survey (NHIS) and the Behavioral Risk Factor Surveillance System (BRFSS), Kaiser Family Foundation addresses the risk factors involved in repealing and repealing ACA.


Before private insurance market rules in the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten.1  That means insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. To what extent people with pre-existing health conditions are protected is likely to be a central issue in the debate over repealing and replacing the ACA. This brief reviews medical underwriting practices by private insurers in the individual health insurance market prior to 2014, and estimates how many American adults could face difficulty obtaining private individual market insurance if the ACA were repealed or amended and such practices resumed.  We examine data from two large government surveys: The National Health Interview Survey (NHIS) and the Behavioral Risk Factor Surveillance System (BRFSS), both of which can be used to estimate rates of various health conditions (NHIS at the national level and BRFSS at the state level). We consulted field underwriting manuals used in the individual market prior to passage of the ACA as a reference for commonly declinable conditions.

Estimates of the Share of Adults with Pre-Existing Conditions

We estimate that 27% of adult Americans under the age of 65 have health conditions that would likely leave them uninsurable if they applied for individual market coverage under pre-ACA underwriting practices that existed in nearly all states. While a large share of this group has coverage through an employer or public coverage where they do not face medical underwriting, these estimates quantify how many people could be ineligible for individual market insurance under pre-ACA practices if they were to ever lose this coverage. This is a conservative estimate as these surveys do not include sufficient detail on several conditions that would have been declinable before the ACA (such as HIV/AIDS, or hepatitis C).  Additionally, millions more have other conditions that could be either declinable by some insurers based on their pre-ACA underwriting guidelines or grounds for higher premiums, exclusions, or limitations under pre-ACA underwriting practices. In a separate Kaiser Family Foundation poll, most people (53%) report that they or someone in their household has a pre-existing condition. A larger share of nonelderly women (30%) than men (24%) have declinable preexisting conditions. We estimate that 22.8 million nonelderly men have a preexisting condition that would have left them uninsurable in the individual market pre-ACA, compared to 29.4 million women. Pregnancy explains part, but not all of the difference. The rates of declinable pre-existing conditions vary from state to state. On the low end, in Colorado and Minnesota, at least 22% of non-elderly adults have conditions that would likely be declinable if they were to seek coverage in the individual market under pre-ACA underwriting practices.  Rates are higher in other states – particularly in the South – such as Tennessee (32%), Arkansas (32%), Alabama (33%), Kentucky (33%), Mississippi (34%), and West Virginia (36%), where at least a third of the non-elderly population would have declinable conditions.

Table 1: Estimated Number and Percent of Non-Elderly People with Declinable Pre-existing Conditions Under Pre-ACA Practices, 2015
State Percent of Non-Elderly Population  Number of Non-Elderly Adults
Alabama 33%                   942,000
Alaska 23%                   107,000
Arizona 26%                1,043,000
Arkansas 32%                   556,000
California 24%                5,865,000
Colorado 22%                   753,000
Connecticut 24%                   522,000
Delaware 29%                   163,000
District of Columbia 23%                   106,000
Florida 26%                3,116,000
Georgia 29%                1,791,000
Hawaii 24%                   209,000
Idaho 25%                   238,000
Illinois 26%                2,038,000
Indiana 30%                1,175,000
Iowa 24%                   448,000
Kansas 30%                   504,000
Kentucky 33%                   881,000
Louisiana 30%                   849,000
Maine 29%                   229,000
Maryland 26%                   975,000
Massachusetts 24%                   999,000
Michigan 28%                1,687,000
Minnesota 22%                   744,000
Mississippi 34%                   595,000
Missouri 30%                1,090,000
Montana 25%                   152,000
Nebraska 25%                   275,000
Nevada 25%                   439,000
New Hampshire 24%                   201,000
New Jersey 23%                1,234,000
New Mexico 27%                   332,000
New York 25%                3,031,000
North Carolina 27%                1,658,000
North Dakota 24%                   111,000
Ohio 28%                1,919,000
Oklahoma 31%                   706,000
Oregon 27%                   654,000
Pennsylvania 27%                2,045,000
Rhode Island 25%                   164,000
South Carolina 28%                   822,000
South Dakota 25%                   126,000
Tennessee 32%                1,265,000
Texas 27%                4,536,000
Utah 23%                   391,000
Vermont 25%                     96,000
Virginia 26%                1,344,000
Washington 25%                1,095,000
West Virginia 36%                   392,000
Wisconsin 25%                   852,000
Wyoming 27%                     94,000
US 27%              52,240,000
SOURCE: Kaiser Family Foundation analysis of data from National Health Interview Survey and the Behavioral Risk Factor Surveillance System. NOTE: Five states (MA, ME, NJ, NY, VT) had broadly applicable guaranteed access to insurance before the ACA. What protections might exist in these or other states under a repeal and replace scenario is unclear.

At any given time, the vast majority of these approximately 52 million people with declinable pre-existing conditions have coverage through an employer or through public programs like Medicaid. The individual market is where people seek health insurance during times in their lives when they lack eligibility for job-based coverage or for public programs such as Medicare and Medicaid.  In 2015, about 8% of the non-elderly population had individual market insurance.  Over a several-year period, however, a much larger share may seek individual market coverage.2  This market is characterized by churn, as new enrollees join and others leave (often for other forms of coverage). For many people, the need for individual market coverage is intermittent, for example, following a 26th birthday, job loss, or divorce that ends eligibility for group plan coverage, until they again become eligible for group or public coverage.  For others – the self-employed, early retirees, and lower-wage workers in jobs that typically don’t come with health benefits – the need for individual market coverage is ongoing.  (Figure 1 shows the distribution of employment status among current individual market enrollees.) Prior to the ACA’s coverage expansions, we estimated that 18% of individual market applications were denied. This is an underestimate of the impact of medical underwriting because many people with health conditions did not apply because they knew or were informed by an agent that they would not be accepted.  Denial rates ranged from 0% in a handful of states with guaranteed issue to 33% in Kentucky, North Carolina, and Ohio. According to 2008 data from America’s Health Insurance Plans, denial rates ranged from about 5% for children to 29% for adults age 60-64 (again, not accounting for those who did not apply).

Figure 1: Employment Status of Non-Group Enrollees, 2016

Figure 1: Employment Status of Non-Group Enrollees, 2016

Medical Underwriting in the Individual Market Pre-ACA

Prior to 2014 medical underwriting was permitted in the individual insurance market in 45 states and DC.  Applications for individual market policies typically included lengthy questionnaires about the health and risk status of the applicant and all family members to be covered.  Typically, applicants were asked to disclose whether they were pregnant or contemplating pregnancy or adoption, and information about all physician visits, prescription medications, lab results, and other medical care received in the past year.  In addition, applications asked about personal history of a series of health conditions, ranging from HIV, cancer, and heart disease to hemorrhoids, ear infections and tonsillitis.  Finally, all applications included authorization for the insurer to obtain and review all medical records, pharmacy database information, and related information. Once the completed application was submitted, the medical underwriting process varied somewhat across insurers, but usually involved identification of declinable medical conditions and evaluation of other conditions or risk factors that warranted other adverse underwriting actions. Once enrolled, a person’s health and risk status was sometimes reconsidered in a process called post-claims underwriting. Although our analysis focuses on declinable medication conditions, each of these other actions is described in more detail below.

Declinable Medical Conditions

Before the ACA, individual market insurers in all but five states maintained lists of so-called declinable medical conditions.  People with a current or past diagnosis of one or more listed conditions were automatically denied.  Insurer lists varied somewhat from company to company, though with substantial overlap.  Some of the commonly listed conditions are shown in Table 2.

Table 2: Examples of Declinable Conditions In the Medically Underwritten Individual Market, Before the Affordable Care Act
Condition Condition
AIDS/HIV Lupus
Alcohol abuse/ Drug abuse with recent treatment Mental disorders (severe, e.g. bipolar, eating disorder)
Alzheimer’s/dementia Multiple sclerosis
Arthritis (rheumatoid), fibromyalgia, other inflammatory joint disease Muscular dystrophy
Cancer within some period of time (e.g. 10 years, often other than basal skin cancer) Obesity, severe
Cerebral palsy Organ transplant
Congestive heart failure Paraplegia
Coronary artery/heart disease, bypass surgery Paralysis
Crohn’s disease/ ulcerative colitis Parkinson’s disease
Chronic obstructive pulmonary disease (COPD)/emphysema Pending surgery or hospitalization
Diabetes mellitus Pneumocystic pneumonia
Epilepsy Pregnancy or expectant parent
Hemophilia Sleep apnea
Hepatitis (Hep C) Stroke
Kidney disease, renal failure Transsexualism
SOURCE: Kaiser Family Foundation review of field underwriting guidelines from Aetna (GA, PA, and TX), Anthem BCBS (IN, KY, and OH), Assurant, CIGNA, Coventry, Dean Health, Golden Rule, Health Care Services Corporation (BCBS in IL, TX) HealthNet, Humana, United HealthCare, Wisconsin Physician Service.  Conditions in this table appeared on declinable conditions list in half or more of guides reviewed.  NOTE: Many additional, less-common disorders also appearing on most of the declinable conditions lists were omitted from this table.

Our analysis of rates of pre-existing conditions in this brief focuses on those conditions that would likely be declinable, based on our review of pre-ACA underwriting documents. Our analysis is limited – and our results are conservative – because NHIS and BRFSS questionnaires do not address some of the conditions that were declinable, and in some cases the questions that do relate to declinable conditions were too broad for inclusion. See the methodology section for a list of conditions included in the analysis. In addition to declinable conditions, many insurers also maintained a list of declinable medications.  Current use of any of these medications by an applicant would warrant denial of coverage.  Table 3 provides an example of medications that were declinable in one insurer prior to the ACA. Our analysis does not attempt to account for use of declinable medications.

Table 3: Declinable Medications
 Anti-Arthritic Medications

  • Adalimumab/Humira
  • Cyclosporine/Sandimmune
  •  Methotrexate/Trexall
  • Ustekinumab/Stelara
  • others
 Anti-Diabetic Medications

  • Avandia/Rosiglitazone
  • Glucagon
  • Humalog/Insulin products
  • Metformin HCL
  • others
Medications for HIV/AIDS or Hepatitis

  • Abacavir/Ziagen
  • Efavirenz/Atripla
  • Interferon
  • Lamivudine/Epivir
  • Ribavirin
  • Zidovudine/Retrovir
  • others

 

Anti-Cancer Medications

  • Anastrozole/Arimidex
  • Nolvadex/Tamoxifen
  • Femara
  • others
Anti-Psychotics, Autism, Other Central Nervous System Medications

  • Abilify/Ariprazole
  • Aricept/Donepezil
  • Clozapine/Clozaril
  • Haldol/Haldoperidol
  • Lithium
  • Requip/Ropinerole
  • Risperdal/Risperidone
  • Zyprexa
  •  others
Anti-Coagulant/Anti-Thrombotic Medications

  • Clopidogrel/Plavix
  • Coumadin/Warfarin
  • Heparin
  • others
Miscellaneous Medications

  • Anginine (angina)
  • Clomid (fertility)
  • Epoetin/Epogen (anemia)
  • Genotropin (growth hormone)
  • Remicade (arthritis, ulcerative colitis)
  • Xyrem (narcolepsy)
  • others
SOURCE:  Blue Cross Blue Shield of Illinois, Product Guide for Agents

Some individual market insurers also developed lists of ineligible occupations.  These were jobs considered sufficiently high risk that people so employed would be automatically denied.  In addition, some would automatically deny applicants who engaged in certain leisure activities and sports.  Table 4 provides an example of declinable occupations from one insurer prior to the ACA.  Our analysis does not attempt to account for declinable occupations.

Table 4: Ineligible Occupations, Activities
Active military personnel Iron workers Professional athletes
Air traffic controller Law enforcement/detectives Sawmill operators
Aviation and air transportation Loggers Scuba divers
Blasters or explosive handlers Meat packers/processors Security guards
Bodyguards Mining Steel metal workers
Crop dusters Nuclear industry workers Steeplejacks
Firefighters/EMTs Offshore drillers/workers Strong man competitors
Hang gliding Oil and gas exploration and drilling Taxi cab drivers
Hazardous material handlers Pilots Window washers
SOURCE: Preferred One Insurance Company Individual and Family Insurance Application Form

Other Adverse Underwriting Actions

Beyond the declinable conditions, medications and occupations, underwriters also examined individual applications and medical records for other conditions that could generate significant “losses” (claims expenses.)  Among such conditions were acne, allergies, anxiety, asthma, basal cell skin cancer, depression, ear infections, fractures, high cholesterol, hypertension, incontinence, joint injuries, kidney stones, menstrual irregularities, migraine headaches, overweight, restless leg syndrome, tonsillitis, urinary tract infections, varicose veins, and vertigo. One or more adverse medical underwriting actions could result for applicants with such conditions, including:

  • Rate-up – The applicant might be offered a policy with a surcharged premium (e.g. 150 percent of the standard rate premium that would be offered to someone in perfect health)
  • Exclusion rider – Coverage for treatment of the specified condition might be excluded under the policy; alternatively, the body part or system affected by the specified condition could be excluded under the policy. Exclusion riders might be temporary (for a period of years) or permanent
  • Increased deductible – The applicant might be offered a policy with a higher deductible than the one originally sought; the higher deductible might apply to all covered benefits or a condition-specific deductible might be applied
  • Modified benefits – The applicant might be offered a policy with certain benefits limited or excluded, for example, a policy that does not include prescription drug coverage.

In some cases, individuals with these conditions might also be declined depending on their health history and the insurer’s general underwriting approach.  For example, field underwriting guides indicated different underwriting approaches for an applicant whose child had chronic ear infections:

  • One large, national insurer would issue standard coverage if the child had fewer than five infections in the past year or ear tubes, but apply a 50% rate up if there had been more than 4 infections in the prior year;
  • Another insurer, which used a 12-tier rate system, would issue coverage at the second most favorable rate tier if the child had just one infection in the prior year or ear tubes, at the fifth rate tier if there had been 2-3 infections during the prior year, and at the seventh tier if there had been 4 or more infections; for some conditions, this company’s rating might depend on the plan deductible – applicants with history of ear infections would be offered the second rating tier for policies with a deductible of $5,000 or higher;
  • Another insurer would issue standard coverage if the child had just one infection in the prior year or if ear tubes had been inserted more than one-year prior, apply a rate up if there were two infections in the prior year, and decline the application if there were three or more infections;
  • Another insurer would issue standard coverage if the child had fewer than 3 infections in the past year, but issue coverage with a condition specific deductible of $5,000 if there had been 3 or more infections or if ear tubes had been inserted.

In a 2000 Kaiser Family Foundation study of medical underwriting practices, insurers were asked to underwrite hypothetical applicants with varying health conditions, from seasonal allergies to situational depression to HIV.  Results varied significantly for less serious conditions. For example, the applicant with seasonal allergies who made 60 applications for coverage was offered standard coverage 3 times, declined 5 times, offered policies with exclusion riders or other benefit limits 46 times (including 3 offers that excluded coverage for her upper respiratory system), and policies with premium rate ups (averaging 25%) 6 times.

Pre-existing Condition Exclusion Provisions

In addition to medical screening of applicants before coverage was issued, most individual market policies also included more general pre-existing condition exclusion provisions which limited the policy’s liability for claims (typically within the first year) related to medical conditions that could be determined to exist prior to the coverage taking effect.3

Example of pre-existing condition exclusion Jean, an Arizona teacher whose employer provided group health benefits but did not contribute to the cost for family members, gave birth to her daughter, Alex, in 2004 and soon after applied for an individual policy to cover the baby.  Due to time involved in the medical underwriting process, the baby was uninsured for about 2 weeks. A few months later, Jean noticed swelling around the baby’s face and eyes.  A specialist diagnosed Alex with a rare congenital disorder that prematurely fused the bones of her skull.  Surgery was needed immediately to avoid permanent brain damage.   When Jean sought prior-authorization for the $90,000 procedure, the insurer said it would not be covered.  Under Arizona law, any condition, including congenital conditions, that existed prior to the coverage effective date, could be considered a pre-existing condition under individual market policies.  Alex’s policy excluded coverage for pre-existing conditions for one year.  Jean appealed to the state insurance regulator who upheld the insurer’s exclusion as consistent with state law. Source:  Wall Street Journal, May 31, 2005

The nature of pre-existing condition exclusion clauses varied depending on state law.  In 19 states, a health condition could only be considered pre-existing if the individual had actually received treatment or medical advice for the condition during a “lookback” period prior to the coverage effective date (from 6 months to 5 years).  In most states, a pre-existing condition could also include one that had not been diagnosed but that produced signs or symptoms that would prompt an “ordinarily prudent person” to seek medical advice, diagnosis or treatment.  In 8 states and DC, conditions that existed prior to the coverage effective date – including those that were undiagnosed and asymptomatic – could be considered pre-existing and so excluded from coverage under an individual market policy.  For example, a congenital condition in a newborn could be considered pre-existing to the coverage effective date (the baby’s birth date) and excluded from coverage.  About half of the states required individual market insurers to reduce pre-existing condition exclusion periods by the number of months of an enrollee’s prior coverage.

Example of policy rescission Jennifer, a Colorado preschool teacher, was seriously injured in 2005 when her car was hit by a drug dealer fleeing the police. She required months of inpatient hospitalization and rehab, and her bills reached $185,000.   Jennifer was covered by a non-group policy which she had purchased five months prior to the accident.   Shortly after her claims were submitted, the insurer re-reviewed Jennifer’s application and medical history.  Following its investigation, the insurer notified Jennifer they found records of medical care she had not disclosed in her application, including medical advice sought for discomfort from a prolapsed uterus and an ER visit for shortness of breath.  The insurer rescinded the policy citing Jennifer’s failure to disclose this history. Jennifer sued the insurer for bad faith; four years later a jury ordered the insurer to reinstate the policy and pay $37 million in damages. Source:  Westword, February 11, 2010.

Unlike exclusion riders that limited coverage for a specified condition of a specific enrollee, pre-existing condition clauses were general in nature and could affect coverage for any applicable condition of any enrollee.  Pre-existing condition exclusions were typically invoked following a process called post-claims underwriting.  If a policyholder would submit a claim for an expensive service or condition during the first year of coverage, the individual market insurer would conduct an investigation to determine whether the condition could be classified as pre-existing. In some cases, post-claims underwriting might also result in coverage being cancelled.  The investigations would also examine patient records for evidence that a pre-existing condition was known to the patient and should have been disclosed on the application.  In such cases, instead of invoking the pre-existing condition clause, an issuer might act to rescind the policy, arguing it would have not issued coverage in the first place had the pre-existing condition been disclosed.

Discussion

The Affordable Care Act guarantees access to health insurance in the individual market and ends other underwriting practices that left many people with pre-existing conditions uninsured or with limited coverage before the law. As discussions get underway to repeal and replace the ACA, this analysis quantifies the number of adults who would be at risk of being denied if they were to seek coverage in the individual market under pre-ACA rules. What types of protections are preserved for people with pre-existing conditions will be a key element in the debate over repealing and replacing the ACA. We estimate that at least 52 million non-elderly adult Americans (27% of those under the age of 65) have a health condition that would leave them uninsurable under medical underwriting practices used in the vast majority of state individual markets prior to the ACA. Results vary from state-to-state, with rates ranging around 22 – 23% in some Northern and Western states to 33% or more in some southern states. Our estimates are conservative and do not account for a number of conditions that were often declinable (but for which data are not available), nor do our estimates account for declinable medications, declinable occupations, and conditions that could lead to other adverse underwriting practices (such as higher premiums or exclusions). While most people with pre-existing conditions have employer or public coverage at any given time, many people seek individual market coverage at some point in their lives, such as when they are between jobs, retired, or self-employed. There is bipartisan desire to protect people with pre-existing conditions, but the details of replacement plans have yet to be ironed out, and those details will shape how accessible insurance is for people when they have health conditions.

Gary Claxton, Cynthia Cox, Larry Levitt, and Karen Pollitz are with the Kaiser Family Foundation. Anthony Damico is an independent consultant to the Kaiser Family Foundation.

Methods

To calculate nationwide prevalence rates of declinable health conditions, we reviewed the survey responses of nonelderly adults for all question items shown in Methods Table 1 using the CDC’s 2015 National Health Interview Survey (NHIS).  Approximately 27% of 18-64 year olds, or 52 million nonelderly adults, reported having at least one of these declinable conditions in response to the 2015 survey.  The CDC’s National Center for Health Statistics (NCHS) relies on the medical condition modules of the annual NHIS for many of its core publications on the topic; therefore, we consider this survey to be the most accurate means to estimate both the nationwide rate and weighted population. Since the NHIS does not include state identifiers nor sufficient sample size for most state-based estimates, we constructed a regression model for the CDC’s 2015 Behavioral Risk Factor Surveillance System (BRFSS) to estimate the prevalence of any of the declinable conditions shown in Methods Table 1 at the state level.  This model relied on three highly significant predictors: (a) respondent age; (b) self-reported fair or poor health status; (c) self-report of any of the overlapping variables shown in the left-hand column of Methods Table 1.  Across the two data sets, the prevalence rate calculated using the analogous questions (i.e. the left-hand column of Methods Table 1) lined up closely, with 20% of 18-64 year old survey respondents reporting at least one of those declinable conditions in the 2015 NHIS and 21% of 18-64 year olds in the 2015 BRFSS.  Applying this prediction model directly to the 2015 BRFSS microdata yielded a nationwide prevalence of any declinable condition of 28%, a near match to the NHIS nationwide estimate of 27%.

 

Methods Table 1: Declinable Medical Conditions Available in Survey Microdata
Declinable Condition Questions Available in both the 2015 National Health Interview Survey and also the 2015 Behavioral Risk Factor Surveillance System Declinable Condition Questions Available in only the 2015 National Health Interview Survey
Ever had CHD Melanoma Skin Cancer
Ever had Angina Any Other Heart Condition
Ever had Heart Attack Crohn’s Disease or Ulcerative Colitis
Ever had Stroke Epilepsy
Ever had COPD Difficulty Due to Mental Retardation
Ever had Emphysema Difficulty Due to Cerebral Palsy
Chronic Bronchitis in past 12 months Difficulty Due to Senility
Ever had Non-Skin Cancer Difficulty Due to Depression
Ever had Diabetes Difficulty Due to Endocrine Problem
Weak or Failing Kidneys Difficulty Due to Blood Forming Organ Problem
BMI > 40 Difficulty Due to Drug / Alcohol / Substance Abuse
Pregnant Difficulty Due to Schizophrenia, ADD, or Bipolar Disorder

In order to align BRFSS to NHIS overall statistics, we then applied a Generalized Regression Estimator (GREG) to scale down the BRFSS microdata’s prevalence rate and population estimate to the equivalent estimates from NHIS, 27% and 52 million.  Since the regression described in the previous paragraph already predicted the prevalence rate of declinable conditions in BRFSS by using survey variables shared across the two datasets, this secondary calibration solely served to produce a more conservative estimate of declinable conditions by calibrating BRFSS estimates to the NHIS.  After applying this calibration, we calculated state-specific prevalence rates and population estimates off of this post-stratified BRFSS sample. The programming code, written using the statistical computing package R v.3.3.2, is available upon request for people interested in replicating this approach for their own analysis.

This article was written by Gary Claxton, Cynthia Cox, Anthony Damico, Larry Levitt and Karen Pollitz on Kaiser Family Foundation. Published: Dec 12, 2016

Taking Action to Prevent the Harmful Impact of Short-Term Plans

This article explores the recently established rule on short-term limited duration plans - as proposed by HHS - which would not comply with consumer protections afforded under ACA.

The U.S. Department of Health and Human Services (HHS) has proposed a new rule, open for comment until April 23, 2018, that is dangerous to consumers and to health care marketplaces. This rule would expand the sale of “short-term limited duration plans” that do not have to comply with the consumer protections afforded under the Affordable Care Act (ACA) and often leave consumers uncovered for major medical expenses.

The short-term plan rule will harm consumers and health care markets

The proposed rule would alter the definition of short-term plans as a backdoor way of creating a new class of plans that do not have to comply with the ACA, extending the duration of short-term plans from policies that last for 3 months to policies that can last just short of one year. Under this rule, insurers may also be allowed to renew a short-term plan for an enrollee after that period is up.

Companies selling these plans can make large profits at consumers’ expense, and the plans do not have to cover pre-existing conditions, provide essential health benefits, include adequate provider networks, or comply with a host of other key protections, as we describe in Seven Reasons the Trump Administration's Short-Term Health Plans Are Harmful to Families. Moreover, if many young and healthy people are drawn into these plans, the plans will undermine the market for real coverage, driving up prices in the ACA-compliant marketplace.

Now is the time to take action to prevent short-term plans from harming consumers and insurance markets throughout the country. Here we outline how advocates, consumers, and states can take action to address this harmful rule.

Stakeholders can urge HHS to stop the spread of harmful short-term plans

It’s important that HHS hears from stakeholders all over the country about how short-term plans will leave those who enroll in them without adequate protection from the costs of care, and how those who seek to stay in the market for comprehensive coverage will experience spikes in premiums and jeopardized access to coverage if short-term plans are allowed to expand.

The short-term plan rule will also burden states and insurance companies that are interested in making comprehensive coverage affordable. Particularly if the rule allows the proliferation of short-term plans that last for up to 12 months to take effect after insurers have already planned their premium pricing for 2019, these plans will cause chaos for comprehensive insurance providers and states alike in maintaining a stable insurance market. These expanded short-term plans should not be put on the market at all, but at the very least HHS should delay implementation of the final rule to give states and insurers more time to plan for it to take effect.

Advocates, consumers, state officials, health care providers, and other stakeholders can all make a difference by commenting to HHS about these problems. Stakeholders can also make a difference by urging state policymakers and officials to comment on the rule as well. Comments should urge HHS to stop or at the very least delay implementation of the rule on short-term plans. Comments should be submitted here by 5 PM on Monday, April 23rd.

States can take direct action to protect against short-term plans

States can take direct action to protect consumers and insurance markets from the harm of short-term limited duration plans. States have broad authority to regulate short-term plans and can adopt new laws or issue new regulations or guidance that exceeds the standards in the proposed rule. Given other upcoming changes in 2019 that will also pose risks for the market, including the repeal of the individual mandate penalty, taking swift action is particularly important.

These strategies can provide protections for consumers and help limit market instability caused by the expansion of short-term plans.

States can prohibit short-term plans altogether. Massachusetts, New Jersey, and New York currently prohibit short-term plans, and California is pursuing a prohibition via SB910 (Hernandez).

States can require that short-term plans comply with all protections that health plans sold on the comprehensive individual market meet. For example, a few states prohibit short-term plans from refusing to sell to a consumer based on their health status— those plans cannot “underwrite,” or take people’s health status into consideration when people seek to buy them. States could protect consumers from the harm of short-term plans by applying the same requirements to them as apply to comprehensive insurance. These include requirements for external review, essential health benefits and state benefit mandates, network adequacy, medical loss ratios, and pre-existing condition protections, including a requirement that plans do not charge people rates based on their health status. States can also ensure companies that offer short-term plans have to pay any existing state-based assessments, such as insurer taxes. States could also consider assessing short-term plan insurers and using those funds for a reinsurance program for plans that meet ACA standards.

  • States can restrict the duration of short-term plans. For example, states can pass laws prohibiting short-term plans from lasting for longer than 3 months. This will ensure that these plans are used as they were intended- to fill short gaps in coverage- and not as a long-term solution to substitute for real coverage. Some states already limit the period for which a short-term plan can be sold to less than the nearly 12 months allowed in the proposed federal rule. For a good index of such state laws, see State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting Risk to the Individual Market from the Georgetown Center on Health Insurance Reform.
  • States can prohibit short-term plans from renewing consumers’ policies beyond their allowed duration: To ensure that short-term plans are not treated as a replacement for comprehensive insurance, states can prohibit plans from renewing their contract with a consumer once the duration of the short-term plan is over. For example, a state could prohibit insurers from selling a short-term policy to anyone who has enrolled in one during the last 12 months.
  • States can require strong disclosure and marketing rules to ensure short-term plans are transparent about their shortfalls. States can require short-term plans to include prominent disclosures in marketing materials (including websites), application forms, and other forms to warn people about what the plans do not cover and how they may expose consumers to high out-of-pocket costs. For example, Colorado requires short-term plans to provide such a disclosure to warn people about the lack of coverage for pre-existing conditions in short-term plans. Additionally, states can require short-term plans to supply simple, clear, and comparable information about what benefits they do and do not cover, and corresponding cost-sharing requirements. Comprehensive plans must comply with requirements to produce a summary of benefits and coverage, and states could apply such requirements to short-term plans as well.

There are additional protections that states may want to consider to protect people from the harms of short-term plans. For additional discussion of how states can take action, see State Options to Protect Consumers and Stabilize the Market: Responding to President Trump’s Executive Order on Short-Term Health Plans by the Georgetown Center on Health Insurance reform.

State legislators and insurance departments can lead the efforts to enact these important protections. And, they along with any health care ombudsman programs or other organizations that assist health insurance consumers in the state may know of complaints and problems regarding short-term plans that can inform what protections the state should enact. State attorneys general, Better Business Bureaus, or other consumer protection agencies may also be aware of problems and can be helpful allies in efforts to prevent short-term plans from harming consumers and insurance markets alike.

Additionally, the National Association of Insurance Commissioners (NAIC) is currently updating its model law for states on Accident and Sickness Insurance Minimum Standards (Model #170) and its companion regulation, the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (Model #171). NAIC consumer representatives including Families USA are advocating to make these models as robust possible in their protection of consumers and the market from the damage of short-term plans. (See the March 2018 report by the NAIC consumer representatives and former Montana regulator Christina Goe, Non-ACA-Compliant Plans and the Risk of Market Segmentation.)

This article was brought to you by Families USA by Claire McAndrew on April 2018.


Half of Americans think the ACA marketplace is collapsing

Most Americans are happy with the insurance they buy on the individual market, yet those same people think the markets are collapsing before their eyes.

A poll by the Kaiser Family Foundation  (Kaiser Health News is an editorially independent program of the foundation), released Tuesday, found that 61 percent of people enrolled in marketplace plans are satisfied with their insurance choices and that a majority say they are not paying more this year compared with last year’s premium costs.

Yet, more than half of the overall public — 53 percent — also think the Affordable Care Act’s marketplaces are “collapsing.”

Experts have warned that some policy actions supported by the Trump administration would undermine the market, including repealing the penalty for going without insurance and giving people the option to buy short-term plans. Such plans are often less expensive but cover fewer benefits. They are not automatically renewable, and insurers are able to charge people with medical conditions more — or exclude them altogether.

But only about one-fifth of people who obtain coverage on the individual market were even aware that the mandate penalty had been repealed as of 2019, according to the poll. It is still in effect this year.

Nine in 10 enrollees said they would still buy insurance without the penalty, and 34 percent said the mandate was a “major reason” they chose to buy insurance at all.

“They may have been prompted to buy the coverage in the first place because of the mandate,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute. “But now that they’ve got it, they clearly value it.”

Most of the people who buy plans because they don’t get coverage through work or the government, 75 percent, said they bought insurance to protect against high medical bills, and 66 percent said peace of mind was a major reason.

In February, President Donald Trump eased some of the restrictions on short-term insurance plans, allowing them to cover people for 12 months instead of three.

Critics worried this alternative would draw people away from traditional insurance plans and weaken the individual market. According to the poll, though, only 12 percent of respondents buying on that market said they’d be interested in buying one of the short-term plans.

Georgetown’s Corlette cautioned that these numbers could change when people are faced with an actual choice next open enrollment season.

“If you look at how these things are marketed, your average consumer will not be able to tell that these products are any different from a traditional health plan,” she said.

Most people said they didn’t face a premium increase this year. Thirty-four percent said their premiums were “about the same” as last year and 23 percent said they actually went down.

That’s not surprising, said Joseph Antos, a resident scholar at the conservative American Enterprise Institute who follows the health industry. Many consumers saw their premium subsidies rise too.

Thirty-five percent of people said one of the major reasons they bought insurance was because government subsidies made it affordable.

The subsidies that people receive, Antos noted, went up to offset the premium increase in many cases, especially if consumers took the advice of experts and shopped around for coverage.

“They’re buying because they feel they need insurance and that their net premiums and deductibles add up to something they’re willing to buy,” Antos said.

The poll was conducted Feb. 15-20 and March 8-13 among 2,534 adults. The margin of sampling error is +/-2 percentage points for the full sample, +/-7 percentage points for all non-group enrollees and +/-9 percentage points for marketplace enrollees.

Source: Kaiser Health News senior correspondent Julie Appleby contributed to this report.
By Rachel Bluth, Kaiser Health News | April 03, 2018 at 10:06 AM | Originally published on BenefitsPro


Summarized Report of The Kaiser Health Tracking Poll March 2018 for Non-Group Enrollees

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Kaiser Health Tracking Poll – March 2018: Non-Group Enrollees

Key Findings: As part of the Republican tax reform plan signed into law at the end of 2017, lawmakers eliminated the ACA’s individual mandate penalty starting in 2019. About one-fifth of non-group enrollees (19 percent) are aware the mandate penalty has been repealed but is still in effect for this year. Regardless of the lack of awareness, nine in ten non-group enrollees say they intend to continue to buy their own insurance even with the repeal of the individual mandate. About one-third (34 percent) say the mandate was a “major reason” why they chose to buy insurance.

Survey: 9 in 10 people with non-group health insurance plan to continue buying insurance despite the repeal of the individual mandate penalty About half the public overall believes the ACA marketplaces are “collapsing,” including six in ten of those with coverage purchased through these marketplaces. In fact, across party identification and insurance type, more say the marketplaces are “collapsing” than say the marketplaces are not collapsing. Overall, the population who buy their insurance through the ACA marketplace report being satisfied with the insurance options available to them during the most recent open enrollment period and more than half give the value of their insurance a positive rating. Yet, some (32 percent) experienced problems while trying to renew or buy their coverage and six in ten marketplace enrollees say they are worried about the possible lack of health insurance coverage in their areas.

In 2017, President Trump issued an executive order directing his administration to expand the availability of non-renewable short-term insurance plans, and regulations have been proposed to implement the order. When asked whether non-group enrollees would prefer to purchase such a plan or prefer to keep the plan they have now, the vast majority (84 percent) say they would keep the plan they have now while 12 percent say they would want to purchase a short-term plan. The most common response offered by people who are uninsured when asked the reason why they don’t have health insurance is that it is too expensive and they can’t afford it (36 percent), followed by job-related issues such as unemployment or their employer doesn’t offer health insurance (20 percent).

Who Are Non-Group Enrollees?
This report examines people’s experiences with the current health insurance market focusing on individuals who currently have health insurance they purchased themselves (referred to as “non-group enrollees” throughout the report). This is comprised of individuals who purchase their own insurance through an Affordable Care Act (ACA) marketplace (“marketplace enrollees”) as well as those who purchase their insurance outside of the ACA markets. 1 In the first half of 2017, 10.1 million people had health insurance that they purchased through the ACA exchanges or marketplaces. 2 For comparison, the report also examines individuals ages 18-64 without health insurance (“uninsured”) as well as those who get their insurance through their employer (“employer-sponsored insurance”).

These extended interviews were conducted as part of the February and March Kaiser Health Tracking Polls and were completed after the close of the law’s fifth open enrollment period, which ended earlier this year. The Individual Mandate as part of the Republican tax reform plan signed into law at the end of 2017, lawmakers eliminated the ACA’s individual mandate penalty. The tax plan reduced the individual penalty for not having health insurance to zero beginning in 2019, effectively repealing the least favorable provision of the ACA (according to polling conducted by Kaiser Family Foundation). There is still uncertainty among the public as well as among the groups most directly affected by the individual mandate (non-group enrollees and the uninsured) on the status of the mandate.

—kff.org


Employer Responsibility Under the Affordable Care Act

Here's a helpful chart from the Kaiser Family Foundation to decipher the penalties employers may have for not offering ACA coverage in 2018.


The Affordable Care Act does not require businesses to provide health benefits to their workers, but applicable large employers may face penalties if they don’t make affordable coverage available. The employer shared responsibility provision of the Affordable Care Act penalizes employers who either do not offer coverage or do not offer coverage that meets minimum value and affordability standards. These penalties apply to firms with 50 or more full-time equivalent employees. This flowchart illustrates how those employer responsibilities work.

Read the article.

Source:
Kaiser Family Foundation (5 March 2018). "Employer Responsibility Under the Affordable Care Act" [Web Blog Post]. Retrieved from address https://www.kff.org/infographic/employer-responsibility-under-the-affordable-care-act/


Despite Compressed Sign-Up Period, ACA Enrollment Nearly Matches Last Year’s

President Trump decided to take away ACA, but that didn’t stop people from signing up. Read this article for the shocking numbers of enrollment.


A day after President Donald Trump said the Affordable Care Act “has been repealed,” officials reported that 8.8 million Americans have signed up for coverage on the federal insurance exchange in 2018 — nearly reaching 2017’s number in half the sign-up time.

That total is far from complete. Enrollment is still open in parts of seven states, including Florida and Texas, that use the federal healthcare.gov exchange but were affected by hurricanes earlier this year. The numbers released Thursday by the Department of Health and Human Services also did not include those who signed up between midnight Dec. 15 and 3 a.m. ET on Dec. 16, the final deadline for 2018 coverage, as well as those who could not finish enrolling before the deadline and left their phone number for a call back.

And enrollment has not yet closed in 11 states — including California and New York — plus Washington, D.C., that run their own insurance exchanges. Those states are expected to add several million more enrollees.

The robust numbers for sign-ups on the federal exchange — 96 percent of last year’s total — surprised both supporters and opponents of the health law, who almost universally thought the numbers would be lower. Not only was the sign-up period reduced by half, but the Trump administration dramatically cut funding for advertising and enrollment aid. Republicans in Congress spent much of the year trying to repeal and replace the law, while Trump repeatedly declared the health law dead, leading to widespread confusion.

On the other hand, a Trump decision aimed at hurting the exchanges may have backfired. When he canceled federal subsidies to help insurers offer discounts to their lowest-income customers, it produced some surprising bargains for those who qualify for federal premium help. That may have boosted enrollment.

“Enrollment defied expectations and the Trump administration’s efforts to undermine it,” said Lori Lodes, a former Obama administration health official who joined with other Obama alumni to try to promote enrollment in the absence of federal outreach efforts. “The demand for affordable coverage speaks volumes — proving, yet again, the staying power of the marketplaces.”

“The ACA is not repealed and not going away,” tweeted Andy Slavitt, who oversaw the ACA under President Barack Obama.

The tax bill passed by Congress this week repeals the fines for those who fail to obtain health coverage, but those fines do not go away until 2019. Still, that has added to the confusion for 2018 coverage.

And it remains unclear whether Congress will make another attempt to repeal the law in 2018.

“I think we’ll probably move on to other issues,” Senate Majority Leader Mitch McConnell (R-Ky.) said in an interview Friday with NPR.

Read further.

Source:
Rovner J. (21 December 2017). "Despite Compressed Sign-Up Period, ACA Enrollment Nearly Matches Last Year’s" [Web Blog Post]. Retrieved from address https://khn.org/news/despite-compressed-sign-up-period-aca-enrollment-nearly-matches-last-years/view/republish/

Individual Insurance Market Performance in Late 2017

In this article from the Kaiser Family Foundation, we will take a look at the individual insurance market performance as of late 2017. This is a great article for employers to get the low down on how to understand and read performance charts, as well as prepare for any instability in the next quarter.


Concerns about the stability of the individual insurance market under the Affordable Care Act (ACA) have been raised in the past year following exits of several insurers from the exchange markets, and again with renewed intensity in recent months during the debate over repeal of the health law. Our earlier analysis of first quarter financial data from 2011-2017 found that insurer financial performance indeed worsened in 2014 and 2015 with the opening of the exchange markets, but showed signs of improving in 2016 and stabilizing in 2017 as insurers began to regain profitability.

In this brief, we look at recently-released third quarter financial data from 2017 to examine whether recent premium increases were sufficient to bring insurer performance back to pre-ACA levels. These new data from the first nine months of 2017 offer further evidence that the individual market has been stabilizing and insurers are regaining profitability, even as political and policy uncertainty and the repeal of the individual mandatepenalty as part of tax reform legislation cloud expectations for 2018 and beyond.

Third quarter financial data reflects insurer performance in 2017 through September, before the Administration ceased payments for cost-sharing subsidies effective October 12, 2017. The loss of these payments during the fourth quarter of 2017 will diminish insurer profits, but nonetheless, insurers are likely to see better financial results in 2017 than they did in earlier years of the ACA Marketplaces.

We use financial data reported by insurance companies to the National Association of Insurance Commissioners and compiled by Mark Farrah Associates to look at the average premiums, claims, medical loss ratios, gross margins, and enrollee utilization from third quarter 2011 through third quarter 2017 in the individual insurance market.1 Third quarter data is year-to-date from January 1 – September 30. These figures include coverage purchased through the ACA’s exchange marketplaces and ACA-compliant plans purchased directly from insurers outside the marketplaces (which are part of the same risk pool), as well as individual plans originally purchased before the ACA went into effect.

Medical Loss Ratios

As we found in our previous analysis, insurer financial performance as measured by loss ratios (the share of health premiums paid out as claims) worsened in the earliest years of the Affordable Care Act Marketplaces, but began to improve more recently. This is to be expected, as the market had just undergone significant regulatory changes in 2014 and insurers had very little information to work with in setting their premiums, even going into the second year of the exchange markets.

Loss ratios began to decline in 2016, suggesting improved financial performance. In 2017, following relatively large premium increases, individual market insurers saw significant improvement in loss ratios, averaging 81% through the third quarter. Third quarter loss ratios tend to follow the same pattern as annual loss ratios, but in recent years have been lower than annual loss ratios.2 Though 2017 annual loss ratios are likely to be impacted by the loss of cost-sharing subsidy payments during the last three months of the year, this is nevertheless a sign that individual market insurers on average were beginning to stabilize in 2017.

Margins

Another way to look at individual market financial performance is to examine average gross margins per member per month, or the average amount by which premium income exceeds claims costs per enrollee in a given month. Gross margins are an indicator of performance, but positive margins do not necessarily translate into profitability since they do not account for administrative expenses. As with medical loss ratios, third quarter margins tend to follow a similar pattern to annual margins, but generally look more favorable as enrollees are still paying toward their deductibles in the early part of the year, lowering claims costs for insurers.

Looking at gross margins, we see a similar pattern as we did looking at loss ratios, where insurer financial performance improved dramatically through the third quarter of 2017 (increasing to $79 per enrollee, from a recent third quarter low of $10 in 2015). Again, third quarter data tend to indicate the general direction of the annual trend, and while annual 2017 margins are unlikely to end as high as they are in the third quarter, these data suggest that insurers in this market are on track to reach pre-ACA individual market performance levels.

Underlying Trends

Driving recent improvements in individual market insurer financial performance are the premium increases in 2017 and simultaneous slow growth in claims for medical expenses. On average, premiums per enrollee grew 17% from third quarter 2016 to third quarter 2017, while per person claims grew only 4%.

Figure 3: Average Third Quarter Individual Market Monthly Premiums and Claims Per Person, 2011 – 2017
One concern about rising premiums in the individual market was whether healthy enrollees would drop out of the market in large numbers rather than pay higher rates. While the vast majority of exchange enrollees are subsidized and sheltered from paying premium increases, those enrolling off-exchange would have to pay the full increase. As average claims costs grew very slowly through the third quarter of 2017, it does not appear that the enrollees today are noticeably sicker than last year.

On average, the number of days individual market enrollees spent in a hospital through the third quarter of 2017 was similar to third quarter inpatient days in the previous two years. (The third quarter of 2014 is not necessarily representative of the full year because open enrollment was longer that year and a number of exchange enrollees did not begin their coverage until mid-year 2014).

Figure 4: Average Third Quarter Individual Market Monthly Hospital Patient Days Per 1,000 Enrollees, 2011 – 2017
Taken together, these data on claims and utilization suggest that the individual market risk pool is relatively stable, though sicker on average than the pre-ACA market, which is to be expected since people with pre-existing conditions have guaranteed access to coverage under the ACA.

Discussion

Third quarter results from 2017 suggest the individual market was stabilizing and insurers in this market were regaining profitability. Insurer financial results as of the third quarter 2017 – before the Administration’s decision to stop making cost-sharing subsidy payments and before the repeal of the individual mandate penalty in the tax overhaul – showed no sign of a market collapse. Third quarter premium and claims data from 2017 support the notion that 2017 premium increases were necessary as a one-time market correction to adjust for a sicker-than-expected risk pool. Although individual market enrollees appear on average to be sicker than the market pre-ACA, data on hospitalizations in this market suggest that the risk pool is stable on average and not getting progressively sicker as of late 2017. Some insurers have exited the market in recent years, but others have been successful and expanded their footprints, as would be expected in a competitive marketplace.

While the market on average is stabilizing, there remain some areas of the country that are more fragile. In addition, policy uncertainty has the potential to destabilize the individual market generally. The decision by the Administration to cease cost-sharing subsidy payments led  some insurers to leave the market or request larger premium increases than they would otherwise. A few parts of the country were thought to be at risk of having no insurer on exchange, though new entrants or expanding insurers have since moved in to cover all areas previously at risk of being bare. Signups through the federal marketplace during the recently completed open enrollment period were higher than many expected, which could help to keep the market stable. However, continued policy uncertainty and the repeal of the individual mandate as part of tax reform legislation complicate the outlook for 2018 and beyond.

Methods

We analyzed insurer-reported financial data from Health Coverage Portal TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners. The dataset analyzed in this report does not include NAIC plans licensed as life insurance or California HMOs regulated by California’s Department of Managed Health Care; in total, the plans in this dataset represent at least 80% of the individual market. All figures in this data note are for the individual health insurance market as a whole, which includes major medical insurance plans sold both on and off exchange. We excluded some plans that filed negative enrollment, premiums, or claims and corrected for plans that did not file “member months” in the third quarter but did file third quarter membership.

To calculate the weighted average loss ratio across the individual market, we divided the market-wide sum of total incurred claims by the sum of all health premiums earned. Medical loss ratios in this analysis are simple loss ratios and do not adjust for quality improvement expenses, taxes, or risk program payments. Gross margins were calculated by subtracting the sum of total incurred claims from the sum of health premiums earned and dividing by the total number of member months (average monthly enrollment) in the individual insurance market.

 

Source:

Cox C., Semanskee A., Levitt L. (4 January 2018). "Individual Insurance Market Performance in Late 2017" [web blog post]. Retrieved from address https://www.kff.org/health-reform/issue-brief/individual-insurance-market-performance-in-late-2017/


FREE ACA RESOURCES FOR SMALL BUSINESSES

From The ACA Times, we've pulled this article that lists out some helpful resources for small businesses.


The federal government provides free online resources to help small businesses better understand the requirements of the Affordable Care Act (ACA) and how they might be able to offer health insurance to their employees. Here are some we thought might be helpful.

How the Affordable Care Act affects small businesses: This web page hosted by HealthCare.gov explains how the ACA can impact a small business with 1 to 50 full-time equivalent employees.

SHOP Guide: This web page on Healthcare.gov provides information for small businesses on how they can offer a Small Business Health Options Program (SHOP) insurance to their employees. The web page has links to help businesses learn more about SHOP and whether they qualify to offer such coverage to employees.

The Small Business Health Care Tax Credit: Healthcare.gov, the Taxpayer Advocate Service and the IRS both provide web pages that provide information that helps small businesses determine if they are eligible to take advantage of tax credits if they offer SHOP to their employees.

The Future of SHOP: The Centers for Medicare and Medicaid Services (CMS) is providing information on how CMS will be exploring a more efficient implementation of the Federally-facilitated SHOP Marketplaces in order to promote insurance company and agent/broker participation and make it easier for small employers to offer SHOP plans to their employees, while maintaining access to the Small Business Health Care Tax Credit.

 

Read the original article here.

Source:
Sheen R. (21 November 2017). "FREE ACA RESOURCES FOR SMALL BUSINESSES" [Web blog post]. Retrieved from address https://acatimes.com/free-aca-resources-for-small-businesses/


More than Half of Uninsured People Eligible for Marketplace Insurance Could Pay Less for Health Plan than Individual Mandate Penalty

Things are not looking up for the uninsured. Pay less and reach out to your health insurance professionals today. Want more facts? Check out this blog article from Kaiser Family Foundation.


new Kaiser Family Foundation analysis finds that more than half (54% or 5.9 million) of the 10.7 million people who are uninsured and eligible to purchase an Affordable Care Act marketplace plan in 2018 could pay less in premiums for health insurance than they would owe as an individual mandate tax penalty for lacking coverage.

Within that 5.8 million, about 4.5 million (42% of the total) could obtain a bronze-level plan at no cost in 2018, after taking income-related premium tax credits into account, the analysis finds.

Most people without insurance who are eligible to buy marketplace coverage qualify for subsidies in the form of tax credits to help pay premiums for marketplace plans (8.3 million out of 10.7 million). Among those eligible for premium subsidies, the analysis finds that 70 percent could pay less in premiums than what they’d owe as a tax penalty for lacking coverage, with 54 percent able to purchase a bronze plan at no cost and 16 percent contributing less to their health insurance premium than the tax penalty they owe.

Among the 2.4 million uninsured, marketplace-eligible people who do not qualify for a premium subsidy, 2 percent would be able to pay less for marketplace insurance than they’d owe for their 2018 penalty, the analysis finds.

The Affordable Care Act’s individual mandate requires that most people have health coverage or be subject to a tax penalty unless they qualify for certain exemptions. The individual mandate is still in effect, though Congress may consider repealing it as part of tax legislation.

Consumers can compare their estimated 2018 individual mandate penalty with the cost of marketplace insurance in their area with KFF’s new Individual Mandate Penalty Calculator.

The deadline for ACA open enrollment in most states is Dec. 15, 2017.

 

You can read the original article here.

Source:

Kaiser Family Foundation (9 November 2017). "ANALYSIS: More than Half of Uninsured People Eligible for Marketplace Insurance Could Pay Less for Health Plan than Individual Mandate Penalty" [Web blog post]. Retrieved from address https://www.kff.org/health-reform/press-release/analysis-more-than-half-of-uninsured-people-eligible-for-marketplace-insurance-could-pay-less-for-health-plan-than-individual-mandate-penalty/