The approaching ACA premium tax moratorium – take 2

In 2010, Congress scheduled the 2014 Affordable Care Act premium tax. Then in 2015 Congress introduced a one-year moratorium on the premium tax that would take place in 2017. This past January, Congress placed another moratorium for the ACA premium tax in 2019. Continue reading to learn more.


In 2010, Congress scheduled the 2014 introduction of the Affordable Care Act premium tax (aka the health insurer fee). Then, via the PACE Act of October 2015, Congress placed a one-year moratorium on this 4% or so premium tax for calendar year 2017. You might recall our ensuing discussion a couple of years ago about how employers sponsoring fully insured medical, dental and/or vision plans could leverage this 2017 moratorium to their advantage.

See also: ACA: 4 things employers should focus on this fall

Meanwhile, did you notice back in January that Congress placed another moratorium on this tax, this time for 2019? To review:

  • 2014-2016 – Tax applies
  • 2017 – Under moratorium
  • 2018 – Tax applies
  • 2019 – Under moratorium
  • 2020 – Tax scheduled to return

Fortunately, in moratorium years, fully insured medical, dental and vision premiums should be about 4% lower than they would have been otherwise, with these savings passed along proportionately by most employers to their plan participants.

Unfortunately, the budgetary challenge of this on-again-off-again Congressional approach is that when the tax returns, fully insured renewals naturally go up about 4% more than they would have otherwise. For example, an 8% premium increase becomes 12%.

See also: Proposals for Insurance Options That Don’t Comply with ACA Rules: Trade-offs In Cost and Regulation

Another complication occurs as employers annually compare the expected and maximum costs of self-funding their plans versus fully insuring the plans. Because this tax generally does not apply to self-funded plans, in “tax applies” years, any expected savings from self-funding will show about 4% higher than in moratorium years. This math especially complicates the financial comparison of level funding contracts to fully insured contracts (almost all level funding products are self-funded contracts).

With the Jan. 1 fully insured medical, dental and vision renewals beginning to cross our desks, what should employers do?

First, they should review the renewal’s rating methodology page and ensure that this tax was not included in the proposed 2019 premiums. If the rating methodology page was not provided, request it. If this request fails, ask for written confirmation that this tax is not included in your plan’s 2019 premiums.

Second, when comparing 2019 expected and maximum mature self-funded plan costs to 2019 fully insured premiums, extend the analysis to 2020 and project what will happen when this 4% fully insured tax tide returns.

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

Finally, complicating matters, several states, including Maryland, introduced new or higher state premium taxes for 2019. Ask your benefits consultant if these actions will impact your plans. For Maryland employers sponsoring fully insured plans, for example, the new additional one-year premium tax will essentially cancel out the 2019 ACA premium tax moratorium.

SOURCE: Pace, Z (27 September 2018) "The approaching ACA premium tax moratorium – take 2" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/the-approaching-obamacare-premium-tax-moratorium?brief=00000152-14a5-d1cc-a5fa-7cff48fe0001


Two opportunities created by association health plans

The new regulations around association health plans (AHPs) — which loosen restrictions for small businesses, franchises and associations — create two distinct opportunities in the benefits industry.

The first is for brokers, who will be crucial advisors to employers eligible for the new coverage options now available.

The second opportunity is for benefits and HR tech vendors, who will be instrumental in managing the transactional and administrative challenges that would otherwise hinder AHP success.

What challenges do association health plans represent? Let’s consider an example — the Nashville Hot Chicken restaurant franchise.

Let’s say Nashville Hot Chicken has 1,000 franchisees, each with five full-time employees. Before AHP options became available to this organization, these five-employee groups would either have had to pursue small group coverage, or employees would have had to find individual plans.

Both options likely would have been prohibitively expensive for the organization or the employees. With the new AHP regulations, however, these 1,000 franchisees may be able to pull all 5,000 workers together and create a large group benefits plan.

In doing so, they would reap the advantages of collective purchasing, just like large groups do. However, this AHP would not work like a regular group plan.

If a regular group has 5,000 employees, they would all be part of a centrally-operated payroll system and the insurance companies would receive just one check for all of the employees enrolled at the group. But under an AHP of franchisees, all the payroll systems would operate independently, and there is no clear, centralized entity to pay carriers.

This creates a massive administrative headache for Nashville Hot Chicken corporate, as well as all the individual franchise owners. In other words, who is going to manage the AHP?

Here’s where the brokers come in. Employers need brokers to walk them through all the complexities of AHPs, including sourcing carriers, third-party vendors, and compliance needs.

It would also be incredibly impractical to manage 5,000 employees through 1,000 separate businesses without a benefits and HR platform.

But brokers can provide a solution to this challenge by adopting a platform. With a benefits and HR system, the various administrative differences from franchisee to franchisee can be accounted for, while still allowing the 5,000-life group to enroll in the group offering.

By removing the administrative headache, benefits tech makes AHPs a real option for Nashville Hot Chicken. But it also gives the tech-savvy broker a clear leg up on the competition. A broker without a tech solution will be at a severe disadvantage for Nashville Hot Chicken’s business compared to a broker who has a platform.

So as small employers, franchisees and industry associations band together for group coverage, benefits tech can give brokers a competitive differentiator for this new business segment.

Read the article.

Source:
Tolbert A. (1 March 2018). "Two opportunities created by association health plans" [Web Blog Post]. Retrieved from address https://www.benefitspro.com/2018/03/01/two-opportunities-created-by-association-health-pl/


Apple launching concierge health care centers for employees

Did you know Apple is now offering healthcare centers for their employees? Check out this article from Benefit Pro for further information.


This spring, Apple employees will see the first phase of Apple’s new approach to employee health care: on-site health clinics.

According to Healthcare IT News, Apple plans to launch a group of internal health centers as it moves to boost the health and wellness of its employees. According to the report, the company has already “quietly published a webpage for the program, called AC Wellness Network, which includes a description of the company’s goals as well as information on a number of open positions.”

“AC Wellness Network believes that having trusting, accessible relationships with our patients, enabled by technology, promotes high-quality care and a unique patient experience,” Apple has said on the webpage. It continues, “The centers offer a unique concierge-like healthcare experience for employees and their dependents. Candidates must have an appreciation for the patient experience and passion for wellness and population health—integrating best clinical practices and technology in a manner that drives patient engagement.”

Apple’s move comes in the wake of an earlier declared partnership among Amazon, JPMorgan Chase and Berkshire Hathaway for their own independent health care company intended to bolster employee health at lower cost than conventional providers.

AC Wellness, says the report, will exist as “an independent medical practice,” although the company is a subsidiary of Apple. Job listings include not just physicians but also such positions as workflow designers, and the website listings suggest the first centers will be located in Santa Clara, California and in the company’s Cupertino, California campus.

Other recent health care steps taken by the company, according to an HRDive report, include its January announcement that it is making personal health records accessible on the latest iPhones, as well as its exploration of ways its Apple Watch could have medical applications, like detecting irregular heartbeats in wearers.

According to a CNBC report, some former Stanford Health Care employees have been affiliated with AC Wellness for at least five months. Says Healthcare IT News, “[t]hese sources also said that Apple will use the centers as a testing ground for its upcoming health and wellness products prior to large-scale consumer rollout, and that the company notified third-party vendors this week about its upcoming health clinics.”

Read the article.

Source:
 Satter M. (1 March 2018). "Apple launching concierge health care centers for employees" [Web Blog Post]. Retrieved from address https://www.benefitspro.com/2018/03/01/apple-launching-concierge-health-care-centers-for/

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/


While Talk About Opioids Continues In D.C., Addiction Treatment Is In Peril In States

How is Washington handling the opioid crisis? Let's find out in this article from Kaiser Health News.


Opioids were on the White House agenda Thursday — President Trump convened a summit with members of his administration about the crisis. And Congress authorized funds for the opioid crisis in its recent budget deal — but those dollars aren’t flowing yet, and states say they are struggling to meet the need for treatment.

The Oklahoma agency in charge of substance abuse has been told by the state’s legislature to cut more than $2 million from this fiscal year’s budget.

“Treatment dollars are scarce,” said Randy Tate, president of the Oklahoma Behavioral Health Association, which represents addiction treatment providers.

It’s like dominoes, Tate said. When you cut funding for treatment, other safety-net programs feel the strain.

“Any cuts to our overall contract,” he said, “really diminish our ability to provide the case management necessary to advocate for homes, food, shelter, clothing, primary health care and all the other things that someone needs to really be successful at tackling their addiction.”

In just three years, Oklahoma’s agency in charge of funding opioid treatment has seen more than $27 million dollars chipped away from its budget — thanks to legislative gridlock, slashed state taxes and a drop in oil prices (with the additional loss in state tax revenue that resulted).

Jeff Dismukes, a spokesman for Oklahoma’s Department of Mental Health and Substance Abuse Services, says the already lean agency has few cost-cutting options left.

“We always cut first to administration,” he said, “but there’s a point where you just can’t cut anymore.”

The agency may end up putting off payments to treatment providers until July — the next fiscal year. Tate says that could be devastating.

“Very thinly financed, small rural providers are probably at risk of going out of business entirely — up to and including rural hospitals,” he said.

Getting treatment providers to open up shop in rural areas is really hard, even in good times, and more financial uncertainty could make that problem worse. In the meantime, according to an Oklahoma state commission’s opioid report, just 10 percent of Oklahomans who need addiction treatment are getting it.

That statistic is similar in Colorado. And as 2018 began, Colorado’s escalating opioid crisis got worse, when the state’s largest drug and alcohol treatment provider, Arapahoe House, shut its doors.

The facility provided recovery treatment to 5,000 people a year. Denise Vincioni, who directs another treatment center, the Denver Recovery Group, says other facilities have scrambled to pick up the patients.

Most of Arapahoe’s clients were on Medicaid. Autumn Haggard-Wolfe, a two-time Arapahoe House client who is now in recovery, worries the facility’s closing will have dire consequences, especially for people who need inpatient care, as she did.

“I feel like the only other option right now in therapy would be jail for people,” she said, “and people die in there from withdrawing.”

Arapahoe House’s CEO blamed its closure on the high cost of care and poor government reimbursement for services.

The mother of Colorado state lawmaker Brittany Pettersen struggled with addiction, and was treated at Arapahoe House. Pettersen says treatment centers rely on a crazy quilt of funding sources and are chronically underfunded — often leaving people with no treatment options.

“We have a huge gap in Colorado,” Pettersen said, “and that was before Arapahoe House closed.”

She is pushing legislation in the state to increase funding for treatment. But to get tens of millions of dollars in federal matching funds, Colorado lawmakers need to approve at least $34 million a year in new state spending.

That price tag may simply be too high for some lawmakers. But either way, she added, “It’s going to take a lot to climb out of where we are.”

Colorado did get new federal funds to fight the opioid crisis through the 21st Century Cures Act, passed in December of 2016, but it was just $7.8 million a year for two years — divvied up among a long list of programs.

Read the article.

Source:
 Daley J.,Fortier J. (5 March 2018). "While Talk About Opioids Continues In D.C., Addiction Treatment Is In Peril In States" [Web Blog Post]. Retrieved from address https://khn.org/news/while-talk-about-opioids-continues-in-dc-addiction-treatment-is-in-peril-in-states/

National ACA Marketplace Signups Dipped a Modest 3.7 Percent This Year

In this article from Kaiser Family Foundation, we are going to take a brief look at the ACA sign-ups this year.


Overall ACA marketplace signups for 2018 dropped by 3.7 percent compared to last year’s enrollment period, a new analysis from the Kaiser Family Foundation finds.

11,760,533 people signed up for 2018 health insurance coverage on the ACA individual marketplaces, amid steep reductions in federal funding for outreach and navigators, an enrollment period half as long, and a climate of political uncertainty surrounding the law. The federal government also terminated cost-sharing subsidy payments to insurers in advance of the open enrollment period, leading to increases in premiums but also increased premium subsidies for many consumers that in some cases led to reductions in what they had to pay for coverage.

As a group, the 15 states plus the District of Columbia with state-based marketplaces, including those using the Healthcare.gov enrollment platform, exceeded last year’s totals this year by .2 percent, while the 34 states that relied on the federal healthcare.gov marketplace saw total signups drop by about 5.3 percent. State-based marketplaces control their own funding for outreach and consumer assistance.

Fifteen states and the District of Columbia exceeded 2017 signups in 2018 – eight of these were state-based marketplaces, three were state-based marketplaces using the Healthcare.gov enrollment platform (KY, NV, and OR), and five were federal Healthcare.gov marketplaces.

Rhode Island (12.1%), Kentucky (10.4%), and Washington State (7.6%) saw the largest share increases in signups, while Louisiana (-23.5%), West Virginia (-19.5%), and Arizona (-15.6%) had the largest drop in shares of signups.

Read the original article here.

Source:
Kaiser Family Foundation (7 February 2018). "National ACA Marketplace Signups Dipped a Modest 3.7 Percent This Year" [Web Blog Post]. Retrieved from address https://www.kff.org/health-reform/press-release/national-aca-marketplace-signups-dipped-a-modest-3-7-percent-this-year/

Algorithmic Bias – What is the Role of HR?

How should HR professionals deal with the forthcoming algorithmic bias issue? Find out in this article.


Merriam-Webster defines ‘algorithm’ as step-by-step procedure for solving a problem…In an analog world, ask anyone to jot down a step-by-step procedure to solve a problem – and it will be subject to bias, perspective, tacit knowledge, and a diverse viewpoint. Computer algorithms, coded by humans, will obviously contain similar biases.

The challenge before us is that with Moore’s Law, cloud computing, big data, and machine learning, these algorithms are evolving, increasing in complexity, and these algorithmic biases are more difficult to detect – “the idea that artificially intelligent software…often turns out to perpetuate social bias.”

Algorithmic bias is shaping up to be a major societal issue at a critical moment in the evolution of machine learning and AI. If the bias lurking inside the algorithms that make ever-more-important decisions goes unrecognized and unchecked, it could have serious negative consequences, especially for poorer communities and minorities.”What is the role of HR in reviewing these rules? What is the role of HR in reviewing algorithms and code? What questions to ask?

In December 2017, New York City passed a bill to address algorithmic discrimination.Some interesting text of the bill, “a procedure for addressing instances in which a person is harmed by an agency automated decision system if any such system is found to disproportionately impact persons;” and “making information publicly available that, for each agency automated decision system, will allow the public to meaningfully assess how such system functions and is used by the city, including making technical information about such system publicly available where appropriate;”

Big data, AI, and machine learning will put a new forward thinking ethical burden on the creators of this technology, and on the HR professionals that support them. Other examples include Google Photos incorrect labeling or Nikon’s facial detection. While none of these are intentional or malicious, they can be offensive, and the ethical standards need to be vetted and reviewed. This is a new area for HR professionals, and it’s not easy.

As Nicholas Diakopoulos suggests, “We’re now operating in a world where automated algorithms make impactful decisions that can and do amplify the power of business and government. As algorithms come to regulate society and perhaps even implement law directly, we should proceed with caution and think carefully about how we choose to regulate them back.”

The ethical landscape for HR professionals is changing rapidly.

Read more.

Source:

Smith R. (15 February 2018). "Algorithmic Bias – What is the Role of HR?" [Web Blog Post]. Retrieved from address https://blog.shrm.org/blog/algorithmic-bias-what-is-the-role-of-hr

HHS Nominee Vows To Tackle High Drug Costs, Despite His Ties To Industry

What is President Trump’s solution for fighting high drug prices? From Kaiser Health News, check out this article on the new Department of Health and Human Services (HHS) nominee.


Senate Democrats on Tuesday pressed President Donald Trump’s nominee for the top health post to explain how he would fight skyrocketing drug prices — demanding to know why they should trust him to lower costs since he did not do so while running a major pharmaceutical company.

Alex M. Azar II, the former president of the U.S. division of Eli Lilly and Trump’s pick to run the Department of Health and Human Services, presented himself as a “problem solver” eager to fix a poorly structured health care system during his confirmation hearing before the Senate Finance Committee. Azar said addressing drug costs would be among his top priorities.

But armed with charts showing how some of Eli Lilly’s drug prices had doubled on Azar’s watch, Democrats argued Azar was part of the problem. Sen. Ron Wyden of Oregon, the committee’s top Democrat, said Azar had never authorized a decrease in a drug price as a pharmaceutical executive.

“The system is broken,” Wyden said. “Mr. Azar was a part of that system.”

Azar countered that the nation’s pharmaceutical drug system is structured to encourage companies to raise prices, a problem he said he would work to fix as head of HHS.

“I don’t know that there is any drug price of a brand-new product that has ever gone down from any company on any drug in the United States, because every incentive in this system is towards higher prices, and that is where we can do things together, working as the government to get at this,” he said. “No one company is going to fix that system.”

Azar’s confirmation hearing Tuesday was his second appearance before senators as the nominee to lead HHS. In November, he faced similar questions from the Senate Health, Education, Labor and Pensions Committee during a courtesy hearing.

If confirmed, Azar would succeed Tom Price, Trump’s first health secretary, who resigned in September amid criticism over his frequent use of taxpayer-paid charter flights. A former Republican congressman who was a dedicated opponent of President Barack Obama’s signature health care law, Price had a frosty relationship with Democrats in Congress as he worked with Republicans to try to undo the law.

Price and the Trump administration often turned to regulations and executive orders to undermine the Affordable Care Act, since Republicans in Congress repeatedly failed to enact a repeal. “Repeal and replace” has been the president’s mantra.

But at the hearing, Azar was circumspect about his approach, noting that his job would be to work under existing law. “The Affordable Care Act is there,” he said, adding that it would fall to him to make it work “as best as it possibly can.”

Senate Republicans touted Azar’s nearly six years working for the department under President George W. Bush, including two years as a deputy secretary. Committee Chairman Orrin Hatch (R-Utah) praised Azar’s “extraordinary résumé,” adding that, among HHS nominees, he was “probably the most qualified I’ve seen in my whole term in the United States Senate.” Hatch, who is the longest-serving Republican senator in history, has been a senator for more than 40 years.

In addition to drug costs, Azar vowed to focus on the nation’s growing opioid crisis, calling for “aggressive prevention, education, regulatory and enforcement efforts to stop overprescribing and overuse,” as well as “compassionate treatment” for those suffering from addiction.

Pressed about Republican plans to cut entitlement spending to compensate for budget shortfalls, Azar said he was “not aware” of support within the Trump administration for such cuts.

“The president has stated his opposition to cuts to Medicaid, Medicare or Social Security,” Azar said. “He said that in the campaign, and I believe he has remained steadfast in his views on that.”

But Democrats pushed back, pointing out that Trump had proposed Medicaid cuts in his budget request last year. Sen. Sherrod Brown (D-Ohio) said such cuts would hurt those receiving treatment for opioid addiction.

“What happens to these people?” he said.

Despite such Democratic criticism, Azar is likely to be confirmed when the full Senate votes on his nomination. An HHS spokesman Tuesday pointed reporters to an editorial in STAT supporting Azar, written by former Senate majority leaders Bill Frist and Tom Daschle — a Republican and a Democrat. “We need a person of integrity and competence at the helm of the Department of Health and Human Services,” they wrote. “The good news is that President Trump has nominated just such a person, Alex Azar.”

Read further.

Source:

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/


WHY IT MATTERS THAT MORE PEOPLE SIGNED UP FOR ACA HEALTH COVERAGE IN 2018

From The ACA Times, let's take a look at ACA Health Coverage in 2018.


It was meant to have the opposite effect.

The Trump administration’s decision to undermine the Affordable Care Act (ACA) by shortening the annual open enrollment period to 45-days and cutting funding to promote open enrollment was predicted to reduce the number of people who might seek insurance coverage for 2018 on HealthCare.gov.

Instead, more than 600,000 people signed up for health insurance under the ACA in the first four days of enrollment. According to Reuters: “The Centers for Medicare & Medicaid Services, a division of the Department of Health and Human Services, said that during the period of Nov. 1 through Nov. 4, 601,462 people, including 137,322 new consumers, selected plans in the 39 states that use the federal website HealthCare.gov.”

Access to healthcare remains top of mind for Americans. For instance, exit polls in Virginia for state elections found healthcareto be the most pressing issue on the minds of voters who elected a Democratic governor in that state. And entrepreneurs and small businesses owners and employees are among those that benefit greatly from having access to healthcare insurance plans through the ACA.

For employers, all this, along with recent guidance from the IRS, points to the ACA continuing strong and the employer mandate being enforced. If you haven’t done so already, now is the time to assess your compliance with the ACA and what data you need to file ACA related forms with the IRS for the 2017 tax year.

 

Read the original article.

Source:
Sheen R. (20 November 2017). "WHY IT MATTERS THAT MORE PEOPLE SIGNED UP FOR ACA HEALTH COVERAGE IN 2018" [Web blog post]. Retrieved from address https://acatimes.com/why-it-matters-that-more-people-signed-up-for-aca-health-coverage-in-2018/