Expanding Insurance Coverage to Undocumented Immigrants in Connecticut.

Policymakers in Connecticut are considering various state-funded policy options to improve insurance coverage among undocumented and legally present recent immigrants in the state - almost 60 percent of whom lack health insurance. In particular, they are removing immigration status requirements from Medicaid eligibility. They are also considering whether to provide state-funded subsidies to undocumented immigrants enrolled in individual market plans. A key challenge for this analysis was determining what share of undocumented immigrants would be likely to take up insurance coverage if it were available to them. Because few states have expanded coverage to their undocumented populations and because the denominator is uncertain, estimates of take-up rates are highly uncertain. There is similar uncertainty in estimating how much health care undocumented populations will use once they become insured. To address these uncertainties, the authors conducted sensitivity analyses that varied both the take-up and utilization rates. Using the RAND Corporation's COMPARE microsimulation model, the authors estimate the impacts of each policy scenario on enrollment, premiums, state spending, and hospital spending on uncompensated care. Their analysis suggests that removing immigration status requirements for Medicaid and individual market subsidy eligibility would decrease uninsurance among the undocumented and legally present recent immigrant populations by 32 to 37 percent and could improve insurance coverage and affordability in Connecticut for these populations while not substantially impacting other Connecticut residents.

Increasing Subsidies and Expanding Health Insurance Options in Connecticut.

Policymakers in Connecticut are considering various options to increase the affordability of insurance in the state, such as expansions to premium and cost-sharing reduction subsidies on the state's health insurance marketplace, as well as expanded plan offerings, including extending eligibility for the state employee health plan (SEHP) to other groups and a publicly contracted, privately operated plan (the public option plan) offered to individuals on the marketplace. The authors used the RAND Corporation's COMPARE microsimulation model to estimate the impacts of such policy options. For each policy scenario, they calculated enrollment, premiums, consumer spending, and state spending and considered whether the results differed by race, ethnicity, or income group. The individual market reforms substantially increased affordability for people with incomes between 175 and 200 percent of the federal poverty level (FPL), reducing out-of-pocket spending as a share of income by 50 percent in some scenarios. Changes to affordability for higher-income groups were smaller, in part because the proposed policy changes for people with incomes between 200 and 400 percent of FPL were relatively modest and focused only on reducing cost-sharing (not premiums). New costs to the state for 2023 ranged from $19 million to $94 million, depending on the scenario. All four SEHP specifications led to the same bottom-line conclusion that offering a SEHP plan would improve insurance coverage and affordability for those eligible for the plan. Expanding eligibility for the SEHP holds promise for stabilizing or reducing consumer costs, improving plan generosity, and bringing more people into the market.

Summary of the Current Status of Health Insurance Enrollment in Connecticut.

The state of Connecticut is considering a number of policy options to improve health insurance affordability, access, and equity. To create policies designed to increase insurance coverage and access to care in underserved communities and reduce racial and ethnic disparities, state policymakers need an accurate picture of the current distributions of insurance enrollment across these dimensions. The authors combine data from the American Community Survey Public Use Microdata Sample, which includes demographic characteristics, as well as insurance status, with various data sources from the state to provide a fuller picture of insurance enrollment among those under the age of 65 in Connecticut. They also use existing high-level estimates of 2020 insurance enrollment to provide estimates of how enrollment in the state was affected during the early months of the pandemic. The authors find that insurance enrollment in Connecticut in 2019 was generally high but that there were substantial differences in insurance coverage by race and ethnicity. Asian individuals had the highest rates of employer-sponsored insurance coverage, and Black individuals had the highest rates of Medicaid coverage. Hispanic individuals had a higher rate of Medicaid coverage than non-Hispanic individuals. High-level estimates of changes in insurance coverage during the early months of the COVID-19 pandemic suggest that uninsurance decreased slightly, Medicaid coverage increased, and private insurance coverage fell. This study provides the state of Connecticut with estimates of enrollment in detailed health insurance categories by age, gender, race, and ethnicity and highlights the need for better, more-detailed health insurance enrollment data.

The Effect of the Medicare Advantage Value-Based Insurance Design Model Test on Utilization in 2017.

In 2015, the Centers for Medicare and Medicaid Services announced the Medicare Advantage (MA) Value-Based Insurance Design (VBID) model test, which allows MA insurers to use flexible benefit design strategies, such as reduced cost-sharing, to encourage beneficiaries with chronic disease to use high-value care. During the first year of implementation (2017), nine MA insurers offered VBID in 45 health plans to a total of 96 053 eligible beneficiaries. We used MA encounter data to estimate the impact of VBID on health services utilization in 2017 using a difference-in-differences research design. We found that VBID increased use of 10 out of 18 targeted services, and led to general increases in primary care visits, specialty care visits, and drug fills across eligible beneficiaries. The model was also associated with increases in ambulatory care sensitive inpatient and emergency department visits, an unanticipated effect that may be temporary. Overall, our findings suggest that VBID successfully increased the use of high-value services among eligible MA beneficiaries, an important first step along the pathway to better chronic disease management, lower spending, and improved beneficiary health.

Do Financial Incentives Affect Utilization for Chronically Ill Medicare Beneficiaries?

OBJECTIVE: The objective of this study was to examine the price sensitivity for provider visits among Medicare Advantage beneficiaries. DATA SOURCES: We used Medicare Advantage encounter data from 2014 to 2017 accessed as part of an evaluation for the Center for Medicare & Medicaid Innovation. STUDY DESIGN: We analyzed the effect of cost-sharing on the utilization of 2 outcome categories: number of visits (specialist and primary care) and the probability of any visit (specialist and primary care). Our main independent variable was the size of the copayment for the visit, which we regressed on the outcomes with several beneficiary-level and plan-level control variables. DATA COLLECTION/EXTRACTION METHODS: We included beneficiaries with at least 1 of 4 specific chronic conditions and matched comparison beneficiaries. We did not require beneficiaries to be continuously enrolled from 2014 to 2017, but we required a full year of data for each year they were observed. This resulted in 371,140 beneficiary-year observations. PRINCIPAL FINDINGS: Copay reductions were associated with increases in utilization, although the changes were small, with elasticities <-0.2. We also found evidence of substitution effects between primary care provider (PCP) and specialist visits, particularly cardiology and endocrinology. When PCP copays declined, visits to these specialists also declined. CONCLUSIONS: We find that individuals with chronic conditions respond to changes in copays, although these responses are small. Reductions in PCP copays lead to reduced use of some specialists, suggesting that lowering PCP copays could be an effective way to reduce the use of specialist care, a desirable outcome if specialists are overused.

Insurers' perspectives on MA value-based insurance design model.

OBJECTIVES: Value-based insurance design (VBID) lowers cost sharing for high-value healthcare services that are clinically beneficial to patients with certain conditions. In 2017, the Center for Medicare and Medicaid Innovation began a voluntary VBID model test in Medicare Advantage (MA). This article describes insurers' perspectives on the MA VBID model, explores perceived barriers to joining this model, and describes ways to address participation barriers. STUDY DESIGN: A descriptive, qualitative study. METHODS: In spring/summer 2017, we conducted semistructured interviews with 24 representatives of 10 nonparticipating MA insurers to learn why they did not join the model test. We interviewed 73 representatives of 8 VBID-participating insurers about their participation decisions and implementation experiences. All interview data were analyzed thematically. RESULTS: Fewer than 30% of eligible insurers participated in the first 2 years of the model test. The main barriers to entry were a perceived lack of information on VBID in MA, an expectation of low return on investment, concerns over administrative and information technology (IT) hurdles, and model design parameters. Most VBID participants encountered administrative and IT hurdles but overcame them. CMS made changes to the model parameters to increase the uptake. CONCLUSIONS: The model uptake was low, and implementation challenges and concerns over VBID effectiveness in the Medicare population were important factors in participation decisions. To increase uptake, CMS could consider providing in-kind implementation assistance to model participants. Nonparticipants may want to incorporate lessons learned from current participants, and insurers should engage their IT departments/vendors early on.

Expanding Enrollment Without the Individual Mandate: Options to Bring More People into the Individual Market.

Issue: Recent changes to the Affordable Care Act, including elimination of the individual mandate penalty, the halting of federal payments for cost-sharing reductions, and expanded access to short-term plans, may reduce enrollment in the individual market. Goal: Analyze options to increase enrollment, accounting for recent policy changes. Methods: RAND's COMPARE microsimulation model is used to analyze six policies that would expand access to tax credits, increase their generosity, and fund a reinsurance program. Key Findings and Conclusions: The options would increase individual market enrollment by 400,000 to 3.2 million in 2020. Net increases in total enrollment (300,000 to 2.4 million) are smaller because of offsetting decreases in employer-sponsored insurance. The largest gains are possible through two options: large-scale investment in reinsurance, and extension of tax credits to higher-income people combined with increases in the generosity of existing tax credits. If funded through a fee on health plans, reinsurance could be implemented without increasing the federal deficit. Additional taxpayer costs would increase by $1 billion to $23 billion, depending on the policy. While enhanced tax credits for young adults would lead to small coverage gains, they would entail the lowest costs to taxpayers among the six options.

Changes in Hospital Inpatient Utilization Following Health Care Reform.

OBJECTIVE: To estimate the effects of 2014 Medicaid expansions on inpatient outcomes. DATA SOURCES: Health Care Cost and Utilization Project State Inpatient Databases, 2011-2014; population and unemployment estimates. STUDY DESIGN: Retrospective study estimating effects of Medicaid expansions using difference-in-differences regression. Outcomes included total admissions, referral-sensitive surgical and preventable admissions, length of stay, cost, and patient illness severity. FINDINGS: In 2014 quarter four, compared with nonexpansion states, Medicaid admissions increased (28.5 percent, p = .006), and uninsured and private admissions decreased (-55.1 percent, p = .001, and -6.6 percent, p = .052), whereas all-payer admissions showed little change. Uninsured expansion effects were negative for preventable admissions (-24.4 percent, p = .068), length of stay (-9.3 percent, p = .039), total cost (-9.2 percent, p = .128), and illness severity (-4.5 percent, p = .397). Significant positive expansion effects were found for Medicaid referral-sensitive surgeries (11.8 percent, p = .021) and patient illness severity (2.3 percent, p = .015). Private and all-payer expansion effects for outcomes other than admission volume were small and mainly nonsignificant (p > .05). CONCLUSION: Medicaid expansions did not change all-payer admission volumes, but they were associated with increased Medicaid and decreased uninsured volumes. Results suggest those previously uninsured with greater needs for inpatient services were most likely to gain coverage. Compositional changes in uninsured and Medicaid admissions may be due to selection.

A Comprehensive Assessment of Four Options for Financing Health Care Delivery in Oregon.

This article describes four options for financing health care for residents of the state of Oregon and compares the projected impacts and feasibility of each option. The Single Payer option and the Health Care Ingenuity Plan would achieve universal coverage, while the Public Option would add a state-sponsored plan to the Affordable Care Act (ACA) Marketplace. Under the Status Quo option, Oregon would maintain its expansion of Medicaid and subsidies for nongroup coverage through the ACA Marketplace. The state could cover all residents under the Single Payer option with little change in overall health care costs, but doing so would require cuts to provider payment rates that could worsen access to care, and implementation hurdles may be insurmountable. The Health Care Ingenuity Plan, a state-managed plan featuring competition among private plans, would also achieve universal coverage and would sever the employer-health insurance link, but the provider payment rates would likely be set too high, so health care costs would increase. The Public Option would be the easiest of the three options to implement, but because it would not affect many people, it would be an incremental improvement to the Status Quo. Policymakers will need to weigh these options against their desire for change to balance the benefits with the trade-offs.

Private Health Insurance Exchanges: Early Evidence and Implications for the Future.

Private health insurance exchanges offer employer health insurance, combining online shopping, increased plan choice, benefit administration, and cost-containment strategies. This article examines how private exchanges function, how they may affect employers and employees, and the possible implications for the Affordable Care Act's (ACA's) Small Business Health Options Program (SHOP) Marketplaces. The authors found that private exchanges could encourage employees to select less-generous plans. This could expose employees to higher out-of-pocket costs, but premium contributions would drop substantially, so net spending would decrease. On the other hand, employee spending may increase if, in moving to private exchanges, employers decrease their health insurance contributions. Most employers can avoid the ACA's "Cadillac tax" by reducing the generosity of the plans they offer, regardless of whether they move to a private exchange. There is not yet enough evidence to determine whether the private exchanges will become prominent in the insurance market and how they will affect employers and their employees.

Association Between the Opening of Retail Clinics and Low-Acuity Emergency Department Visits.

STUDY OBJECTIVE: We assess whether the opening of retail clinics near emergency departments (ED) is associated with decreased ED utilization for low-acuity conditions. METHODS: We used data from the Healthcare Cost and Utilization Project State Emergency Department Databases for 2,053 EDs in 23 states from 2007 to 2012. We used Poisson regression models to examine the association between retail clinic penetration and the rate of ED visits for 11 low-acuity conditions. Retail clinic "penetration" was measured as the percentage of the ED catchment area that overlapped with the 10-minute drive radius of a retail clinic. Rate ratios were calculated for a 10-percentage-point increase in retail clinic penetration per quarter. During the course of a year, this represents the effect of an increase in retail clinic penetration rate from 0% to 40%, which was approximately the average penetration rate observed in 2012. RESULTS: Among all patients, retail clinic penetration was not associated with a reduced rate of low-acuity ED visits (rate ratio=0.999; 95% confidence interval=0.997 to 1.000). Among patients with private insurance, there was a slight decrease in low-acuity ED visits (rate ratio=0.997; 95% confidence interval=0.994 to 0.999). For the average ED in a given quarter, this would equal a 0.3% reduction (95% confidence interval 0.1% to 0.6%) in low-acuity ED visits among the privately insured if retail clinic penetration rate increased by 10 percentage points per quarter. CONCLUSION: With increased patient demand resulting from the expansion of health insurance coverage, retail clinics may emerge as an important care location, but to date, they have not been associated with a meaningful reduction in low-acuity ED visits.

Gaining Coverage Through Medicaid Or Private Insurance Increased Prescription Use And Lowered Out-Of-Pocket Spending.

A growing body of literature describes how the Affordable Care Act (ACA) has expanded health insurance coverage. What is less well known is how these coverage gains have affected populations that are at risk for high health spending. To investigate this issue, we used prescription transaction data for a panel of 6.7 million prescription drug users to compare changes in coverage, prescription fills, plan spending, and out-of-pocket spending before and after the implementation of the ACA's coverage expansion. We found a 30 percent reduction in the proportion of this population that was uninsured in 2014 compared to 2013. Uninsured people who gained private coverage filled, on average, 28 percent more prescriptions and had 29 percent less out-of-pocket spending per prescription in 2014 compared to 2013. Those who gained Medicaid coverage had larger increases in fill rates (79 percent) and reductions in out-of-pocket spending per prescription (58 percent). People who gained coverage who had at least one of the chronic conditions detailed in our study saw larger decreases in out-of-pocket spending compared to those who did not have at least one condition. These results demonstrate that by reducing financial barriers to care, the ACA has increased treatment rates while reducing out-of-pocket spending, particularly for people with chronic conditions.

Harnessing Private-Sector Innovation to Improve Health Insurance Exchanges.

Overhauling the individual health insurance market-including through the creation of health insurance exchanges-was a key component of the Patient Protection and Affordable Care Act's multidimensional approach to addressing the long-standing problem of the uninsured in the United States. Despite succeeding in enrolling millions of Americans, the exchanges still face several challenges, including poor consumer experience, high operational and development costs, and incomplete market penetration. In light of these challenges, analysts considered a different model for the exchanges-privately facilitated exchanges-which could address these challenges and deepen the Affordable Care Act's impact. In this model, the government retains control over sovereign exchange functions but allows the private sector to assume responsibility for more-peripheral exchange functions, such as developing and sustaining exchange websites. Although private-sector entities have already undertaken exchange-related functions on a limited basis, privately facilitated exchanges could conceivably relieve the government of its responsibility for front-end website operations and consumer decision-support functions entirely. A shift to privately facilitated exchanges could improve the consumer experience, increase enrollment, and lower costs for state and federal governments. A move to such a model requires, nonetheless, managing its risks, such as reduced consumer protection, increased consumer confusion, and the possible lack of a viable revenue base for privately facilitated exchanges, especially in less populous states. On net, the benefits are large enough and the risks sufficiently manageable to seriously consider such a shift. This paper provides background information and more detail on the analysts' assessment.

Current and Projected Characteristics and Unique Health Care Needs of the Patient Population Served by the Department of Veterans Affairs.

The Veterans Access, Choice, and Accountability Act of 2014 addressed the need for access to timely, high-quality health care for veterans. Section 201 of the legislation called for an independent assessment of various aspects of veterans' health care. The RAND Corporation was tasked with an assessment of the current and projected demographics and health care needs of patients served by the Department of Veterans Affairs (VA). The number of U.S. veterans will continue to decline over the next decade, and the demographic mix and geographic locations of these veterans will change. While the number of veterans using VA health care has increased over time, demand will level off in the coming years. Veterans have more favorable economic circumstances than non-veterans, but they are also older and more likely to be diagnosed with many health conditions. Not all veterans are eligible for or use VA health care. Whether and to what extent an eligible veteran uses VA health care depends on a number of factors, including access to other sources of health care. Veterans who rely on VA health care are older and less healthy than veterans who do not, and the prevalence of costly conditions in this population is projected to increase. Potential changes to VA policy and the context for VA health care, including effects of the Affordable Care Act, could affect demand. Analysis of a range of data sources provided insight into how the veteran population is likely to change in the next decade.

Rethinking the Affordable Care Act's "Cadillac tax": A More Equitable Way to Encourage "Chevy" Consumption.

The Affordable Care Act's "Cadillac tax" will apply a 40 percent excise tax on total employer health insurance premiums in excess of $10,200 for single coverage and $27,500 for family coverage, starting in 2018. Employer spending on premiums is currently excluded from income and payroll taxes. Economists argue that this encourages overconsumption of health care, favors high-income workers, and reduces federal revenue. This issue brief suggests that the Cadillac tax is a "blunt instrument" for addressing these concerns because it will affect workers on a rolling timetable, does relatively little to address the regressive nature of the current exclusion, and may penalize firms and workers for cost variation that is outside their control. Replacing the current exclusion with tax credits for employer coverage that scale inversely with income might allow for regional adjustments in health care costs and eliminate aspects of the tax exclusion that favor high-income over low-income workers.

Improving The Affordable Care Act: An Assessment Of Policy Options For Providing Subsidies.

A key challenge of health reform efforts is to make health insurance affordable for individuals and families who lack coverage without harming those with coverage or increasing federal spending. The Affordable Care Act (ACA) addresses this challenge in part by providing tax subsidies to qualified individuals for purchasing individual insurance and retaining tax exemptions for employer and employee contributions to the cost of premiums of employer-sponsored insurance. These tax exemptions cost approximately $250 billion annually in lost tax revenue and have been criticized for favoring higher earners and conferring preferential treatment of employer-sponsored over individual insurance. We analyzed three options for leveling the financial playing field between the two insurance markets by reallocating the value of tax benefits of employer coverage. We found that one option that uses the subsidy formula employed in the insurance Marketplaces under the ACA for both the individual and employer-sponsored insurance markets, and additionally requires the subsidy to be at least $1,250 without an upper income limit on subsidy eligibility imposed, could expand insurance coverage and reduce individual market premiums relative to the ACA with no additional federal spending.

Early Marketplace Enrollees Were Older And Used More Medication Than Later Enrollees; Marketplaces Pooled Risk.

Little is known about the health status of the 7.3 million Americans who enrolled in insurance plans through the Marketplaces established by the Affordable Care Act in 2014. Medication use may provide an early indicator of the health needs and access to care among Marketplace enrollees. We used data from January-September 2014 on more than one million Marketplace enrollees from Express Scripts, the largest pharmacy benefit management company in the United States. We compared the characteristics and medication use between early and late Marketplace enrollees and between all Marketplace enrollees and enrollees with employer-sponsored insurance. Among Marketplace enrollees, we found that those who enrolled earlier (October 2013-February 2014) were older and used more medication than later enrollees. Marketplace enrollees, as a whole, had lower average drug spending and were less likely to use most medication classes than the employer-sponsored comparison group. However, Marketplace enrollees were more likely to use medicines for hepatitis C and particularly for HIV.

More choice in health insurance marketplaces may reduce the value of the subsidies available to low-income enrollees.

Federal subsidies available to enrollees in health insurance Marketplaces are pegged to the premium of the second-lowest-cost silver plan available in each rating area (as defined by each state). People who qualify for the subsidy contribute a percentage of their income to purchase coverage, and the federal government covers the remaining cost up to the price of that premium. Because the number of plans offered and plan premiums vary substantially across rating areas, the effective value of the subsidy may vary geographically. We found that the availability of more plans in a rating area was associated with lower premiums but higher deductibles for enrollees in the second-lowest-cost silver plan. In rating areas with more than twenty plans, the average deductible in the second-lowest-cost silver plan was nearly $1,000 higher than it was in rating areas with fewer than thirteen plans. Because premium costs for second-lowest-cost silver plans are capped, deductibles may be a more salient measure of plan value for enrollees than premiums are. Greater standardization of plans or an alternative approach to calculating the subsidy could provide a more consistent benefit to enrollees across various rating areas.

Assessing Alternative Modifications to the Affordable Care Act: Impact on Individual Market Premiums and Insurance Coverage.

The goals of the Affordable Care Act (ACA) are to enable all legal U.S. residents to have access to affordable health insurance and to prevent sicker individuals (such as those with preexisting conditions) from being priced out of the market. The ACA also instituted several policies to stabilize premiums and to encourage enrollment among healthy individuals of all ages. The law's tax credits and cost-sharing subsidies offer a "carrot" that may encourage enrollment among some young and healthy individuals who would otherwise remain uninsured, while the individual mandate acts as a "stick" by imposing penalties on individuals who choose not to enroll. In this article, the authors use the COMPARE microsimulation model, an analytic tool that uses economic theory and data to predict the effects of health policy reforms, to estimate how eliminating the ACA's individual mandate, eliminating the law's tax credits, and combined scenarios that change these and other provisions of the act might affect 2015 individual market premiums and overall insurance coverage. Underlying these estimates is a COMPARE-based analysis of how premiums and insurance coverage outcomes depend on young adults' propensity to enroll in insurance coverage. The authors find that eliminating the ACA's tax credits and eliminating the individual mandate both increase premiums and reduce enrollment on the individual market. They also find that these key features of the ACA help to protect against adverse selection and stabilize the market by encouraging healthy people to enroll and, in the case of the tax credit, shielding subsidized enrollees from premium increases. Further, they find that individual market premiums are only modestly sensitive to young adults' propensity to enroll in insurance coverage, and ensuring market stability does not require that young adults make up a particular share of enrollees.