Earlier this week, I began drafting this column focusing on the ongoing saga of the Affordable Care Act, American Health Care Act, repeal and replace efforts, and the chances of a death spiral or explosion of Obamacare. One of my colleagues here suggested that rather than issue it in today’s MHA Today edition, I could publish it in a leather-bound three-volume set to break it up. Message received. I’ll try to hit the high points.
Yesterday, Aetna announced that it will be pulling out of the Iowa health insurance marketplace, following Blue Cross Blue Shield’s announcement that it would exit earlier in the week. Assuming no new insurers enter, Iowa will have only one insurer statewide in the 2018 individual marketplace.
Iowa isn’t Missouri. However, a similar scenario could occur here. Aetna and UnitedHealthcare have already left Missouri’s marketplace. Last year, every Missouri county had three or more plans. In 2017, more than 80 percent of Missouri counties have just one insurance provider offering policies.
Anthem, one of the four remaining insurers in Missouri’s marketplace, is reviewing whether it will offer Missouri plans in 2018. If Anthem were to withdraw, 72 Missouri counties would become marketplace deserts. Another big player in Missouri is Blue Cross/Blue Shield of Kansas City. If BC/BS of KC were to leave the market, another 25 counties would have no insurers offering plans. If both were to pull participation, 97 of Missouri’s 114 counties, and the City of St. Louis, would have no marketplace offering.
Volatility in the individual market isn’t new — there have been ups and downs since it was established. However, long-term stability is dependent on a functioning risk pool. And, the pool has never balanced — largely because the market’s participants have been skewed toward older, sicker enrollees.
The ACA included three premium stabilization programs — risk adjustment, reinsurance and risk corridors. The programs — known as the “three R’s” — have been ineffective in stabilizing the marketplace. This has led to higher federal spending, accelerating premiums, growing insurer losses and a systematic exodus from the marketplace.
The marketplace was designed to provide coverage options to individuals not eligible for ACA Medicaid-expansion, and who do not receive insurance through an employer. The premise was to create a large enough group market from individual purchasers, working through the federal and state exchanges, to create a balanced risk pool. Moreover, both insurers and enrollees were partially shielded from the costs — largely through the “three R’s” and premium assistance.
Although millions of Americans enrolled, including as many as 290,000 Missourians in 2016, far too many individual market-eligible Americans opted to not participate. The decision was largely economic — the cost of insurance exceeded the cost of a penalty, especially in the first two years. As a result, insurers’ anticipated risk didn’t match the enrolled population. And, each year, insurers asked for large increases in premiums and premium assistance payments to offset the imbalance in the risk pool.
Further uncertainty was added when one of the first executive actions of the Trump administration was to direct the Internal Revenue Service to disregard the ACA’s individual mandate penalty. It is not known how much the change will or has influenced participation. It certainly provides a disincentive for individuals in good health to participate. In fact, during the 2017 open enrollment 45,000 fewer Missourians participated than in 2016.
If Missouri were to experience the exodus of the two large insurers — as we’ve modeled — there’s no question the death spiral and explosion of the individual marketplace would occur. However, the individual insurance marketplace is only one aspect of the ACA. To fundamentally overhaul the law would have much greater consequences. Moreover, those consequences will be felt beyond the marketplace.
This week, Kaiser Health News released new research revealing that 61 percent of Americans believe President Trump and the current Congress are now responsible for the fate of the nation’s health care system. Also this week, Gallop released new polling data finding that, for the first time since it began asking in 2012, a majority of Americans support the ACA. Finally, new polling from the AP of 18 to 30 year old Americans found that 63 percent support the ACA, with one important caveat — they don’t support the individual mandate.
Millennial libertarian feelings aside, fixing the individual mandate and individual health insurance marketplace is essential to addressing “Obamacare” woes. This week’s announcement by members of the U.S. House that a high risk-pool investment would be added to the AHCA by amendment signals their recognition of the problem. However, Missouri’s experience with a high-risk pool is cautionary.
Fixing the risk pool will require more, not less, participation. That means fixing a part of the law that has never been popular by including more young and healthy participants.
It’s a quagmire. Then again, so is kicking 20 million Americans out of the ranks of the insured.
Who knew building a health care system could be so complicated.
Let me know what you’re thinking.
Herb B. Kuhn
MHA President and CEO
In This Issue
CMS Releases Hospital Compare Outpatient Preview Reports
USDA Accepts Applications For Rural Cooperative Development Grants
April 6, 2017
House Advances Motorcycle Helmet Repeal
Committee Revises Right To Shop Proposal
MLN Connects Provider eNews Available
HIDI Releases First Quarter FFY 2017 Inpatient, Outpatient, Missouri Databases
CMS Updates EHR Known Issues Documents
CMS Announces Education Session
HRSA Accepts Applications For Nursing Scholarships
MHA Submits Second Request To WPS
April 5, 2017
Prescription Drug Monitoring Opponent Shifts Stance
Committees Approve Hospital Licensure Changes
CMS Releases HQR 11.1
CMS Announces Preview Period For IQR Hospital-Specific Reports
Stratis Health Releases FLEX Program Guide
CDC Announces Million Hearts Hypertension Control Challenge Details
CMS Releases Hospital Quality Report Center Spring 2017 Newsletter
April 4, 2017
State House Approves Prescription Drug Monitoring Legislation
House Advances Medicaid Waiver Task Force Bill
CMS Finalizes 2018 Medicare Advantage And Part D Updates
MHA Award Reminders: Aim for Excellence, Visionary Leadership
FLEX Program Releases Educational Resources For Participating CAHs
CMS Releases Inpatient Quality Reporting Checklist
AHA Urges MedPAC To Delay Vote
April 3, 2017
NQF Advocates For Quality Measurement Reduction
TJC Seeks Comments On Proposed Suicide Prevention Revisions
CMS Announces 60-Day Period For CLFS Enforcement Discretion
CMS Proposes Delay Of Home Health CoPs
AAP Hosts Zika Update Webinar
MO HealthNet Posts Clinical Practice Guidelines
MHPPS Offers Free Recruiting Workshop
NRHA Announces April Webinars