Competition and Premium Costs in Single-Insurer Marketplaces: A Study of Five Rural States.

Issue: In 2017, five states--Alabama, Alaska, Oklahoma, South Carolina, and Wyoming--had only one issuer participating in their health care marketplaces, limiting consumer choice and competition among insurers. Goal: Examine the history of participation in the individual market from 2010 (before the Affordable Care Act was enacted) to 2017, and analyze premium changes among marketplace plans. Methods: Robert Wood Johnson Foundation's HIX Compare, which provides national data on the marketplaces from 2014 to 2017. Findings and Conclusions: In 2010, the individual insurance market was already concentrated in the five study states, with Blue Cross and Blue Shield (BCBS) plans covering the majority of enrollees. By 2015, with the marketplaces in full swing, more issuers were competing in the five states. But by 2016, co-ops were facing bankruptcy and left the marketplaces in these states; and in 2017, citing large financial losses, national issuers UnitedHealthcare, Aetna, and Humana also exited, leaving only a single BCBS plan in each state. Three of the five states experienced substantially higher annual premium increases than the national average. Policy options with bipartisan support, such as resuming cost-sharing reduction payments and reestablishing reinsurance and risk corridors, could help attract new or returning issuers to marketplaces in these states.

Why Are the Health Insurance Marketplaces Thriving in Some States but Struggling in Others?

Issue: In 2017, health insurance marketplaces in some states were thriving, while those in other states were struggling. What explains these differences? Goal: Identify factors that explain differences in issuers' participation levels in state insurance marketplaces. Methods: Analysis of the Robert Wood Johnson Foundation's HIX Compare dataset, and the National Association of Insurance Commissioners' 2010 Supplemental Health Care Exhibit Report. Findings and Conclusions: State policies and insurance regulations were key factors affecting the number of issuers participating in the marketplaces in 2017. Marketplaces run by states had more issuers than states that rely on the federally facilitated marketplace. States with fewer than four issuers tended to have policies in place that could have been destabilizing--for example, permitting the sale of plans not compliant with the Affordable Care Act's requirements regarding essential health benefits or guaranteed issue. Consumers in states that did not take steps to enforce these insurance market reforms still benefited from their protections, however; they were just enforced at the federal level. States with more issuers were also more likely to have expanded Medicaid. States with fewer issuers tended to be rural and have smaller populations, more concentrated hospital markets, and lower physician-to-population ratios.

The ACA's Cost-Sharing Reduction Plans: A Key to Affordable Health Coverage for Millions of U.S. Workers.

Issue: Without the cost-sharing reductions (CSRs) made available by the Affordable Care Act, health plans sold in the marketplaces may be unaffordable for many low-income people. CSRs are available to households earning between 100 percent and 250 percent of the federal poverty level that choose a silver-level marketplace plan. In 2016, about 7 million people received cost-sharing reductions that substantially lowered their deductibles, copayments, coinsurance, and out-of-pocket limits. Goal: To examine variations in consumer cost-sharing reductions between silver-level plans with CSRs to traditional marketplace plans and to employer-based insurance. Methods: Data analysis of 1,209 CSR-eligible plans sold in individual marketplaces in all 50 states and Washington, D.C. Key findings and conclusions: Cost-sharing amounts in silver plans with CSRs are much less than those in non-CSR base silver plans; silver plans with CSRs generally offer far better financial protection than those without. General annual deductibles range from $246 for CSR silver plans with a platinum-level actuarial value (94%) to as much as $3,063 for non-CSR silver plans. Out-of-pocket limits vary from $6,223 in base silver plans to $1,102 in silver plans with CSRs and a platinum-level actuarial level.

Changes in Consumer Cost-Sharing for Health Plans Sold in the ACA's Insurance Marketplaces, 2015 to 2016.

This brief examines changes in consumer health plan cost-sharing--deductibles, copayments, coinsurance, and out-of-pocket limits--for coverage offered in the Affordable Care Act's marketplaces between 2015 and 2016. Three of seven measures studied rose moderately in 2016, an increase attributable in part to a shift in the mix of plans offered in the marketplaces, from plans with higher actuarial value (platinum and gold plans) to those that have less generous coverage (bronze and silver plans). Nearly 60 percent of enrollees in marketplace plans receive cost-sharing reductions as part of income-based assistance. For enrollees without cost-sharing reductions, average copayments, deductibles, and out-of-pocket limits remain considerably higher under bronze and silver plans than under employer-based plans; cost-sharing is similar in gold plans and employer plans. Marketplace plans are more likely than employer-based plans to impose a deductible for prescription drugs but no less likely to do so for primary care visits.

Consumer Cost-Sharing in Marketplace vs. Employer Health Insurance Plans, 2015.

Using data from 49 states and Washington, D.C., we analyzed changes in cost-sharing under health plans offered to individuals and families through state and federal exchanges from 2014 to 2015. We examined eight vehicles for cost-sharing, including deductibles, copayments, coinsurance, and out-of-pocket limits, and compared findings with cost-sharing under employer-based insurance. We found cost-sharing under marketplace plans remained essentially unchanged from 2014 to 2015. Stable premiums during that period do not reflect greater costs borne by enrollees. Further, 56 percent of enrollees in marketplace plans attained cost-sharing reductions in 2015. However, for people without cost-sharing reductions, average copayments, deductibles, and out-of-pocket limits under catastrophic, bronze, and silver plans are considerably higher than under employer-based plans on average, while cost-sharing under gold plans is similar employer-based plans on average. Marketplace plans are far more likely than employer-based plans to require enrollees to meet deductibles before they receive coverage for prescription drugs.

Choosing the 'best' plan in a health insurance exchange: actuarial value tells only part of the story.

In the health insurance exchanges that will come online in 2014, consumers will be able to compare health plans with respect to actuarial value, or the percentage of health care costs that a plan would pay for a standard population. This analysis illustrates the out-of-pocket costs that might result from plans with various plan designs and actuarial values. We find that average out-of-pocket expense declines as actuarial values rise, but two plans with similar actuarial values can produce very different outcomes for a given person. The overall affordability of a plan also will be influenced by age rating, income-related premium subsidies, and out-of-pocket subsidies. Actuarial value is a useful starting point for selecting a plan, but it does not pinpoint which plan will produce the best overall value for a particular person.

Does the Congressional Budget Office underestimate savings from reform? A review of the historical record.

When the Congressional Budget Office (CBO) "scores" legislation, or assesses the likely cost impact, it requires substantial evidence that a cost-saving initiative has historically achieved savings. The agency has difficulty addressing the impact of multiple changes made simultaneously without historical precedent where there is an interaction effect among proposed changes. This study examines CBO scoring of major reform legislation enacted during each of the past three decades, including the prospective payment system for hospitals in the 1980s, the Balanced Budget Act of the 1990s, and the Medicare Modernization Act of 2003. In contrasting actual spending with predicted spending, CBO, in all three cases, substantially underestimated savings from these reform measures.

Financial protection afforded by employer-sponsored health insurance: current plan designs and high-deductible health plans.

This article provides the first national estimates of actuarial values and out-of-pocket spending from the era of nonrestrictive managed care that began in the late 1990s. Employer plans paid about 84 percent of total medical expense for those with employer-sponsored coverage in 2004, about 1 percent less than in 2000, and high users faced potential out of pocket spending in the thousands of dollars when they received a portion of their care out of network. Since 2004, more employers have offered plans with higher deductibles coupled with employer-funded personal accounts. These arrangements can result in low out of pocket costs for many employees, but high users will face substantially higher costs. Many employers adopting high-deductible plans are not contributing to personal accounts. Those who are concerned about higher out-of-pockets might consider income-related cost sharing, educational efforts to communicate the savings that can result from using in-network providers, and continued availability of managed care options that limit out-of-pocket spending.

Potentially inappropriate medication use by Medicaid+Choice beneficiaries in the last year of life.

BACKGROUND: Regardless of the payer and the period studied the prevalence of potentially inappropriate medication use in the elderly ranged from 21% to 40%. OBJECTIVE: To look at potentially inappropriate prescribing in a group of Medicare+Choice beneficiaries in their last year of life (LYOL) in a large national managed care organization. RESEARCH DESIGN: Retrospective review of Medicare+Choice decedents' drug claims and enrollment data collected between January 1998 and December 2000, supplemented by the Medicare denominator file and 1990 Census data. SUBJECTS: Four thousand six hundred two beneficiaries in a large national managed care organization. MEASURES: We analyzed the relationship between disagreement with the Beers' criteria and sociodemographic descriptors, insurance characteristics, and cause of death. We used logistic regression techniques to estimate factors associated with the disagreement. RESULTS: Two thousand thirty-one beneficiaries (44%) had at least one claim in the LYOL that disagreed with a Beers' criterion, 15% experienced more than one unique Beers' disagreement. The most common disagreements were for the use of propoxyphene (15.0%), followed by zolpidem (3.8%), and amitriptyline (2.8%). Based on total claims, cancer patients were most likely to receive propoxyphene (35.3%) followed by patients with a heart condition (29.6%). A large proportion of the potentially inappropriate prescribing involves psychoactive drugs. The logistic model showed fewer Beers' criteria breaches associated with being male and being non-white. Beers' breaches were more common if the beneficiary has increasing prescription use or died from cancer. CONCLUSION: This study showed that many beneficiaries have prescriptions that contravene the Beers' criteria.

Grandfathered, Grandmothered, And ACA-Compliant Health Plans Have Equivalent Premiums.

Many small employers offer employees health plans that are not fully compliant with Affordable Care Act (ACA) provisions such as covering preventive services without cost sharing. These "grandfathered" and "grandmothered" plans accounted for about 65 percent of enrollment in the small-group market in 2014. Premium costs for these and ACA-compliant plans were equivalent.

Consumers Buy Lower-Cost Plans On Covered California, Suggesting Exposure To Premium Increases Is Less Than Commonly Reported.

With the notable exception of California, states have not made enrollment data for their Affordable Care Act (ACA) Marketplace plans publicly available. Researchers thus have tracked premium trends by calculating changes in the average price for plans offered (a straight average across plans) rather than for plans purchased (a weighted average). Using publicly available enrollment data for Covered California, we found that the average purchased price for all plans was 11.6 percent less than the average offered price in 2014, 13.2 percent less in 2015, and 15.2 percent less in 2016. Premium growth measured by plans purchased was roughly 2 percentage points less than when measured by plans offered in 2014-15 and 2015-16. We observed shifts in consumer choices toward less costly plans, both between and within tiers, and we estimate that a $100 increase in a plan's net annual premium reduces its probability of selection. These findings suggest that the Marketplaces are helping consumers moderate premium cost growth.

Prescription drug spending for Medicare+Choice beneficiaries in the last year of life.

BACKGROUND: In 2006, Medicare implemented its prescription benefit plan. Therefore, insights into medication costs at the end of life may help guide clinicians to navigate Medicare Part D coverage for chronically ill individuals. OBJECTIVES: We examined drug spending by disease and demographics for Medicare+Choice (M+C) beneficiaries in the last year of life (LYOL). RESEARCH DESIGN: Retrospective review of M+C decedents' drug claims and enrollment data collected between January 1998 and December 2000, supplemented by the Medicare denominator file and 1990 Census data. SUBJECTS: Four thousand six hundred two beneficiaries in a large national managed care organization. MEASURES: We analyzed the relationship between prescription drug expenditures and sociodemographic descriptors, insurance characteristics, and cause of death. RESULTS: The mean annual number of prescriptions filled was 36.9; the managed care organization (MCO) paid $539 and beneficiaries paid $627. Higher expenditures were significantly correlated with female gender, higher number of comorbidities, and whether beneficiaries obtained the insurance as an employer-based retiree benefit. Minority beneficiaries had 26% fewer prescriptions. Increasing levels of annual median household income corresponded with a 20% increase in the number of prescriptions and a 25% increase in mean out-of-pocket expenses, between those with a median household income of less than $20,000 and those with $40,000 or greater. In the LYOL, chronic obstructive pulmonary disease and diabetes had the highest average number of prescriptions and total expenditures. Individuals dying from strokes or other unclassifiable conditions had the lowest average number of prescriptions and average total expenditures. CONCLUSION: Medication expenditures in the LYOL were highly dependent upon selected sociodemographic, insurance characteristics, and disease states.

Health benefits in 2005: premium increases slow down, coverage continues to erode.

This paper reports findings on the state of job-based health insurance in spring 2005 and how it has changed during recent years. Premiums rose 9.2 percent, the first year of single-digit increases since 2000. The percentage of firms offering health benefits has fallen from 69 percent in 2000 to 60 percent in 2005. Cost sharing did not grow appreciably in the past year. Enrollment in preferred provider organizations (PPOs) grew from 55 percent in 2004 to 61 percent in 2005, while enrollment in health maintenance organizations (HMOs) fell from 25 percent to 21 percent of the total.

What high-deductible plans look like: findings from a national survey of employers, 2005.

This paper documents the availability, enrollment, premiums, and cost sharing for high-deductible health plans that are offered with a health reimbursement arrangement (HRA) or are health savings account (HSA)-qualified plans. Almost 4 percent of employers that offer health benefits offer one of these arrangements in 2005, covering about 2.4 million workers. Deductibles, as expected, are relatively high, averaging dollar 1,870 for single coverage and dollar 3,686 for family coverage in high-deductible health plans with an HRA and dollar 1,901 for single coverage and dollar 4,070 for family coverage in HSA-qualified high-deductible health plans. One in three employers offering a high-deductible health plan that is HSA-qualified do not contribute to HSAs established by their workers.

Health benefits offer rates: is there a nonresponse bias?

OBJECTIVE: To determine whether a nonresponse bias exists in the offer rate for health benefits in firms with fewer than 50 workers and to present a simple adjustment to correct for observed bias. DATA SOURCES: The 2003 Employer Health Benefits Survey (EHBS) conducted by the Kaiser Family Foundation and Health Research and Educational Trust, and a follow-up survey of nonrespondents to the 2003 EHBS. STUDY DESIGN: We conducted a follow-up survey to the 2003 EHBS to collect health benefits offering data from firms with fewer than 50 workers. We used McNemar's test to verify that the follow-up survey provided results comparable to the EHBS, and t-tests were used to determine nonresponse bias. We applied a simple weighting adjustment to the EHBS. DATA COLLECTION: The data for both the EHBS and the follow-up survey were collected by the same survey research firm. The EHBS interviews the person most knowledgeable about the firm's health benefits, while the follow-up survey interviews the first person who answers the telephone whether they are the most knowledgeable or not. Principal Findings. Firms with 3-9 workers were more likely to exhibit a bias than were firms with 10-24 workers and 25-49 workers. Although the calculated bias for each size category was not significant, there is sufficient evidence to warrant caution when reporting offer rates. CONCLUSIONS: Survey nonresponse in the EHBS produces an upward bias on estimates for the offer rates of small firms. Although not significant, this upward bias is because of nonresponse by small firms that do not offer health benefits. Our research is limited in that we only control for differences in the size of the firm.

Collectively bargained health plans: more comprehensive, less cost sharing than employer plans.

National statistics on the cost and provisions of collectively bargained health plans show them to have similar single premiums, but lower family premiums, compared to employer-based plans not subject to collective bargaining. Union members contribute 4 percent and 6 percent of the cost of their premiums for single and family coverage, respectively, versus 18 percent and 29 percent for workers in employer-based plans. Cost sharing in collectively bargained plans is considerably less than in employer-based plans; coverage for prescription drugs is similar.

An Early Look At SHOP Marketplaces: Low Premiums, Adequate Plan Choice In Many, But Not All, States.

The Affordable Care Act created the Small Business Health Options Program (SHOP) Marketplaces to help small businesses provide health insurance to their employees. To attract the participation of substantial numbers of small employers, SHOP Marketplaces must demonstrate value-added features unavailable in the traditional small-group market. Such features could include lower premiums than those for plans offered outside the Marketplace and more extensive choices of carriers and plans. More choices are necessary for SHOP Marketplaces to offer the "employee choice model," in which employees may choose from many carriers and plans. This study compared the numbers of carriers and plans and premium levels in 2014 for plans offered through SHOP Marketplaces with those of plans offered only outside of the Marketplaces. An average of 4.3 carriers participated in each state's Marketplace, offering a total of forty-seven plans. Premiums for plans offered through SHOP Marketplaces were, on average, 7 percent less than those in the same metal tier offered only outside of the Marketplaces. Lower premiums and the participation of multiple carriers in most states are a source of optimism for future enrollment growth in SHOP Marketplaces. Lack of broker buy-in in many states and burdensome enrollment processes are major impediments to success.

In Second Year Of Marketplaces, New Entrants, ACA 'Co-Ops,' And Medicaid Plans Restrain Average Premium Growth Rates.

Premiums for health insurance plans offered through the federally facilitated and state-based Marketplaces remained steady or increased only modestly from 2014 to 2015. We used data from the Marketplaces, state insurance departments, and insurer websites to examine patterns of premium pricing and the factors behind these patterns. Our data came from 2,964 unique plans offered in 2014 and 4,153 unique plans offered in 2015 in forty-nine states and the District of Columbia. Using descriptive and multivariate analysis, we found that the addition of a carrier in a rating area lowered average premiums for the two lowest-cost silver plans and the lowest-cost bronze plan by 2.2 percent. When all plans in a rating area were included, an additional carrier was associated with an average decline in premiums of 1.4 percent. Plans in the Consumer Operated and Oriented Plan Program and Medicaid managed care plans had lower premiums and average premium increases than national commercial and Blue Cross and Blue Shield plans. On average, premiums fell by an appreciably larger amount for catastrophic and bronze plans than for gold plans, and premiums for platinum plans increased. This trend of low premium increases overall is unlikely to continue, however, as insurers are faced with mounting medical claims.

Individual insurance: how much financial protection does it provide?

This paper examines the comparative financial protection provided by individual and group health insurance. Data sources include two national surveys of employer-based health plans and e-health insurance listings for individual coverage on the World Wide Web. Data on the use and cost of services are from the National Medical Expenditure Survey (NMES), a national household survey of Americans. We estimate that individual insurance pays on average 63 percent of the health care bill, whereas group health insurance pays 75 percent. Deductibles are much higher in individual insurance, and covered benefits are more meager. At 200 percent of poverty, the top 25 percent of health care users with individual coverage would spend 11 percent of their income for out-of-pocket health care expenses, as opposed to 6 percent for persons with group coverage.

Self-insurance in times of growing and retreating managed care.

This paper examines trends in self-insurance and in the content of self-insured plans from 1993 to 2001. The percentage of employees enrolled in self-insured plans fell during these years. Much of the decrease was attributable to the decline of indemnity insurance and the rise of HMO and point-of-service plan enrollment. If the product mix had remained constant throughout these years, self-insured enrollment would have grown between 1993 and 1996 and then declined to its current 50 percent level. As a result of the Health Insurance Portability and Accountability Act (HIPAA), the use of preexisting condition clauses declined dramatically in self-insured plans. Self-insured and purchased plans cost similar amounts and provide similar benefits. Cost sharing is somewhat lower in self-insured PPO plans. During periods of rapid inflation, premiums increase more slowly for self-insured than for fully insured plans.