Alternatives to the ACA's Affordability Firewall.

The Affordable Care Act (ACA) was designed to increase health insurance coverage while limiting the disruption to individuals with existing sources of insurance coverage, particularly those with employer-sponsored insurance (ESI). To limit disruption to those with coverage, the ACA implements the employer mandate, which requires firms with more than 50 employees to offer health insurance or face penalties, and the individual "affordability firewall," which limits subsidies to individuals lacking access to alternative sources of coverage that are "affordable." This article examines the policy impacts of the affordability firewall and investigates two potential modifications. Option 1, which is the "entire family" scenario, involves allowing an exception to the firewall for anyone in a family where the family ESI premium contribution exceeds 9.5 percent of the worker's household income. In Option 2, the "dependents only" scenario, only dependents (and not the worker) become eligible for Marketplace subsidies when the ESI premium contribution exceeds 9.5 percent of the worker's household income. Relative to the ACA, RAND researchers estimate that nongroup enrollment will increase by 4.1 million for Option 1 and by 1.4 million for Option 2. However, the number without insurance only declines by 1.5 million in Option 1 and 0.7 million in Option 2. The difference between the increase in nongroup enrollment and the decrease in uninsurance is primarily due to ESI crowd-out, which is more pronounced for Option 1. Researchers also estimated that about 1.3 million families who have ESI and unsubsidized nongroup coverage under current ACA policy would receive Marketplace subsidies under the alternative affordability firewall scenarios. For these families, health insurance coverage would become substantially more affordable; these families' risk of spending at least 20 percent of income on health care would drop by more than two thirds. We additionally estimated that federal spending will increase by $8.9 billion and $3.9 billion for Options 1 and 2, respectively, relative to the ACA.

Modeling employer self-insurance decisions after the Affordable Care Act.

OBJECTIVE: To present a microsimulation model that addresses the methodological challenge of estimating the firm decision to self-insure. METHODOLOGY: The model considers the risk that the firm bears when self-insuring and the opportunity to mitigate that risk by purchasing stop-loss insurance. The model makes use of a structural, utility maximization framework to account for numerous aspects of the firm decision, and a multinomial probit to reproduce the elasticity of the firm's demand for health insurance. FINDINGS AND CONCLUSIONS: Our simulations provide three important conclusions. First, they project significant increases in self-insurance rates among small firms--presumably induced by the desire to avoid ACA's rate-banding and risk adjustment regulations-only if generous stop-loss policies become widely available. Second, they show that this increase would be due to this hypothetical adoption of widespread, generous reinsurance by the market and not by passage of the ACA. Third, even with a substantial increase of self-insurance rates among small firms, they project negligible adverse selection in the exchanges, as indicated by our finding that the increase in exchange premium is less than 0.5% when assuming very generous stop-loss policies after implementation of the ACA.

The Affordable Care Act and Health Insurance Markets: Simulating the Effects of Regulation.

The Affordable Care Act changes the rating regulations governing the nongroup and small group markets while simultaneously encouraging enrollment through a combination of subsidies, tax credits, and tax penalties. In this study, the authors estimate the effects of the Affordable Care Act on health insurance enrollment and premiums for ten states (Florida, Kansas, Louisiana, Minnesota, New Mexico, North Dakota, Ohio, Pennsylvania, South Carolina, and Texas) and for the nation overall, with a focus on outcomes in the nongroup and small group markets. The authors also consider the implications of two decisions confronting states: whether to expand their Medicaid programs to cover all adults with incomes below 138 percent of the federal poverty level and whether to merge or combine their small group and nongroup risk pools. The authors conclude that the Affordable Care Act will lead to an increase in insurance coverage and higher enrollment in the nongroup market. However, data limitations and uncertainties about insurer behavior make estimates uncertain, particularly when considering outcomes for the nongroup market. They find that the law has little effect on small group premiums and find large variation in the effects for nongroup premiums across states. The analysis suggests that comparisons of average premiums with and without the Affordable Care Act may overstate the potential for premium increases.

Small firms' actions in two areas, and exchange premium and enrollment impact.

The Affordable Care Act changed the regulations governing small firms' health insurance premiums. However, small businesses can avoid many of the new regulations by self-insuring or maintaining grandfathered plans. If small firms with healthy and lower-cost enrollees avoid the regulations, premiums for coverage sold through insurance exchanges could be unaffordable. In this analysis we used the RAND Comprehensive Assessment of Reform Efforts microsimulation model to predict the effects of self-insurance and grandfathering exemptions on coverage and premiums available through the exchanges. We estimate that Affordable Care Act regulations restricting employers' ability to offer grandfathered plans will result in lower premiums on plans available through the exchanges and will have small negative effects on enrollment in the exchanges. Our results suggest that these regulations are essential to keeping premiums on the Small Business Health Options Program (SHOP) exchanges affordable. Our analysis also found that Affordable Care Act regulations limiting self-insurance will reduce enrollment in the exchanges somewhat, without substantially affecting exchange premiums.

Employer Self-Insurance Decisions and the Implications of the Patient Protection and Affordable Care Act as Modified by the Health Care and Education Reconciliation Act of 2010 (ACA).

The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 (ACA) changes the regulatory environment within which health insurance policies on the small-group market are bought and sold. New regulations include rate bands that limit premium price variation, risk-adjustment policies that will transfer funds from low-actuarial-risk to high-actuarial-risk plans, and requirements that plans include "essential health benefits." While the new regulations will be applied to all non-grandfathered fully insured policies purchased by businesses with 100 or fewer workers, self-insured plans are exempt from these regulations. As a result, some firms may have a stronger incentive to offer self-insured plans after the ACA takes full effect. In this article we identify factors that influence employers' decisions to self-insure and estimate how the ACA will influence self-insurance rates. We also consider the implications of higher self-insurance rates for adverse selection in the non-self-insured small-group market and whether enrollees in self-insured plans receive different benefits than enrollees in fully-insured plans. Results are based on data analysis, literature review, findings from discussions with stakeholders, and microsimulation analysis using the COMPARE model. Overall, we find little evidence that self-insured plans differ systematically from fully insured plans in terms of benefit generosity, price, or claims denial rates. Stakeholders expressed significant concern about adverse selection in the health insurance exchanges due to regulatory exemptions for self-insured plans. However, our microsimulation analysis predicts a sizable increase in self-insurance only if comprehensive stop-loss policies become widely available after the ACA takes full effect and the expected cost of self-insuring with stop-loss is comparable to the cost of being fully insured in a market without rating regulations.

Establishing State Health Insurance Exchanges: Implications for Health Insurance Enrollment, Spending, and Small Businesses.

The RAND Corporation's Comprehensive Assessment of Reform Efforts microsimulation model was used to analyze the effects of the Patient Protection and Affordable Care Act (PPACA) on employers and enrollees in employer-sponsored health insurance, with a focus on small businesses and businesses offering coverage through health insurance exchanges. Outcomes assessed include the proportion of nonelderly Americans with insurance coverage, the number of employers offering health insurance, premium prices, total employer spending, and total government spending relative to what would have been observed without the policy change. The microsimulation predicts that PPACA will increase insurance offer rates among small businesses from 53 to 77 percent for firms with ten or fewer workers, from 71 to 90 percent for firms with 11 to 25 workers, and from 90 percent to nearly 100 percent for firms with 26 to 100 workers. Simultaneously, the uninsurance rate in the United States would fall from 19 to 6 percent of the nonelderly population. The increase in employer offer rates is driven by workers' demand for insurance, which increases due to an individual mandate requiring all people to obtain insurance policies. Employer penalties incentivizing businesses to offer coverage do not have a meaningful impact on outcomes. The model further predicts that approximately 60 percent of businesses will offer coverage through the health insurance exchanges after the reform. Under baseline assumptions, a total of 68 million people will enroll in the exchanges, of whom 35 million will receive exchange-based coverage from an employer.

Modeling health care policy alternatives.

BACKGROUND: Computer models played an important role in the health care reform debate, and they will continue to be used during implementation. However, current models are limited by inputs, including available data. Aim. We review microsimulation and cell-based models. For each type of model, we discuss data requirements and other factors that may affect its scope. We also discuss how to improve models by changing data collection and data access procedures. MATERIALS AND METHODS: We review the modeling literature, documentation on existing models, and data resources available to modelers. Results. Even with limitations, models can be a useful resource. However, limitations must be clearly communicated. Modeling approaches could be improved by enhancing existing longitudinal data, improving access to linked data, and developing data focused on health care providers. DISCUSSION: Longitudinal datasets could be improved by standardizing questions across surveys or by fielding supplemental panels. Funding could be provided to identify causal parameters and to clarify ranges of effects reported in the literature. Finally, a forum for routine communication between modelers and policy makers could be established. CONCLUSION: Modeling can provide useful information for health care policy makers. Thus, investing in tools to improve modeling capabilities should be a high priority.

Could we have covered more people at less cost? Technically, yes; politically, probably not.

The process by which Congress considers legislation rarely affords the public an opportunity to examine how the outcomes might change if components of the law were structured differently. We evaluated how the recently enacted health reform law performed relative to a large number of alternative designs on measures of effectiveness and efficiency. We found that only a few different approaches would produce both more newly insured people and a lower cost to the government. However, these are characterized by design options that seemed political untenable, such as higher penalties, lower subsidies, or less generous Medicaid expansion.

Osmotic shock and the strength of viral capsids.

Osmotic shock is a familiar means for rupturing viral capsids and exposing their genomes intact. The necessary conditions for providing this shock involve incubation in high-concentration salt solutions, and lower permeability of the capsids to salt ions than to water molecules. We discuss here how values of the capsid strength can be inferred from calculations of the osmotic pressure differences associated with measured values of the critical concentration of incubation solution.