Healthcare.gov enrollment declines; plan affordability a factor

The Government Accountability Office (GAO) found that in 2018, 5 percent fewer people enrolled in healthcare.gov individual market health insurance plans available on the exchanges than in 2017, most attributable to plan affordability. The GAO noted that premiums increased more than expected in 2018, detracting from enrollment. Conversely, larger tax credits helped exchange enrollment. Additionally, the report found that HHS reduced its consumer outreach for the 2018 open enrollment period (GAO Report, GAO 18-565, July 24, 2018).

Background

The exchanges, established by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-149) allow consumers to enroll during an annual open enrollment period. HHS, along with other agencies, conduct outreach for the open enrollment period to encourage enrollment. The GAO report examined both outreach and enrollment for the exchanges using healthcare.gov.

According to the report, about 8.7 million consumers enrolled in heathcare.gov plans during the open enrollment period for 2018 coverage, five percent less than the 9.2 million enrolled for 2017 coverage. This decline represents a trend from the 2016 plan year, when 9.6 million consumers enrolled in these plans. Moreover, in 2018, enrollees new to healthcare.gov coverage comprised a smaller proportion of total enrollees in 2018 compared to 2017.

Affordability

Plan affordability likely played a “major role” in 2018 exchange enrollment. For example, in 2018, premiums across all healthcare.gov plans increased by an average of 30 percent. The GAO stated that because of the premium increases, plans were less affordable as compared to 2017 for exchange consumers without advance premium tax credits. Most stakeholders interviewed chalked up lower enrollment to decreased affordability of plans.

Although premium affordability reportedly played a role in enrollment, interviews with shareholders revealed that other factors likely affected 2018 healthcare.gov exchange enrollment. Many reported that there was consumer confusion about the ACA and its status, including the possibility or repeal or replace. As a result, the confusion played a “major role” in detracting from 2018 healthcare.gov enrollment. Other shareholders, however, dismissed this viewpoint, pointing to other factors for the decline.

As for consumer outreach, the report revealed that HHS drastically reduced the amount it spent on paid advertising, a 90 percent reduction, compared with advertising spending for the 2017 open enrollment period. Notwithstanding, HHS declared its advertising campaign in 2018 success. The GAO found that HHS reduced navigator funding by 42 percent for the 2018 open enrollment period compared to 2017. According to HHS, this was the result in a shift in its priorities, specifically HHS using a narrower approach and with “problematic data.” This included some consumer application data HHS acknowledged was unreliable and some “navigator organization-reported goal data that were based on an unclear description of the goal, and which HHS and navigator organizations likely interpreted differently.”

No targets

HHS did not set numeric enrollment targets for open enrollment in 2018, as it had in the past. According to the report, the lack of these numeric targets hampered HHS’ ability to evaluate its performance related to the specific open enrollment period, which in turn made it more difficult for HHS to make informed decisions related to its resources.

The GAO recommended that the HHS ensure that the data it uses to determine navigator organization awards is accurate, and recommended that HHS set numeric enrollment targets. Additionally, the GAO recommended that the HHS assess other aspects of the consumer experience. HHS agreed with all but the recommendation to set numeric enrollment targets

The ACA makes a measureable difference with HIV coverage

People with HIV experienced significant coverage gains under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) as a result of Medicaid expansion, the creation of the health insurance marketplaces, and the elimination of pre-existing condition exclusion. According to a Kaiser Family Foundation (KFF) Issue Brief, as long as the future of the ACA remains uncertain, those access and coverage gains are at risk.

Baseline

To develop a baseline for understanding current access to care for people with HIV, KFF examined multiple variables across the three main pathways for HIV coverage and care: (1) Medicaid, (2) private insurance and the ACA marketplace, and (3) the Ryan White HIV/AIDS program. KFF considered factors like states’ Medicaid expansion status, the number of health insurance issuers per county, and AIDS Drug Assistance Program (ADAP) eligibility levels.

Medicaid 

Prior to the ACA’s Medicaid expansion, most individuals with HIV obtained Medicaid coverage through the disability pathway, meaning that coverage was often not obtained prior to a beneficiary’s development of AIDS. Currently, 62 percent of people with HIV live in a Medicaid expansion state, where care is more likely to be accessible through the income pathway, regardless of disability level. Additionally, 24 states provide Medicaid coverage through the disability pathway above the federally mandated level of 73 percent of the federal poverty level (FPL).

Marketplaces 

In 33 states, where 83 percent of people with HIV live, there are three or more issuers in the ACA marketplace. While five states—Arkansas, Oklahoma, South Carolina and Wyoming—had only one issuer in 2017, some states had several. For example, Wisconsin had 15 insurers, New York had 14, and California had 11. KFF also looked at issuer representation in counties with high incidence of people with HIV. While 43 percent of people with HIV live in one of the eighteen (18) states with an average of three or more issuers per county, the majority of people with HIV—57 percent—live in one of the 33 states with less competition—one or two issuers per county.

Ryan White

The Ryan White HIV/AIDS Program provides outpatient HIV care and treatment to low and moderate income individuals. The program serves more than half of the people diagnosed with HIV in the country. The average eligibility level for the medication assistance program is 386 percent FPL. While 17 states use an eligibility level of 400 percent, 72 percent of people with HIV live in a state with eligibility levels at or above the national average. While the Ryan White program would continue to operate with an ACA repeal, many individuals currently covered by marketplace or Medicaid plans would likely turn to the program for coverage. Due to the program’s limited resources, KFF estimates that such an over-reliance could cause individuals to lose access to care.

Highlight on Minnesota: Health plans’ red ink worst in a decade

Nonprofit insurers in Minnesota reported an operating loss of $687 million on nearly $25.9 billion in revenue for 2016, according to a trade group for insurers, the Minnesota Council of Health Plans. The financial results were the worst in a decade, with losses in both the state public health insurance programs and the marketplace where individuals purchase coverage for themselves.

Overall, revenue from premiums increased 4 percent over the prior year, while expenses increased 6 percent to $26.6 billion. State public programs accounted for more than half of the overall losses, followed by continued losses in the individual market. According to the report, on average, health insurers paid $763 per second for care. To pay those bills, insurers withdrew nearly $560 million from state-mandated medical reserves. The bulk of the financial losses reported did not result from the employer group and Medicare markets, which remained steady, and where most Minnesotans get health insurance.

In the individual market, Blue Cross and Blue Shield of Minnesota said it lost $142 million for 2016, compared to a $265 million deficit the previous year. The decline mirrored the drop in enrollment, the insurer noted, rather than an improvement in the business. Over the last 10 years, health insurers returned a profit in seven. The numbers reported by the trade group focused solely on revenue and income from the health insurance business, as investment returns made by insurers were not counted in the numbers. Some saw hope in the overall numbers, however, noting that the market was not in a “death spiral,” as some health law critics have argued, because many insurers in 2016 saw slight improvements from the previous year.

Kusserow on Compliance: GAO reported continued fraud vulnerability under the Affordable Care Act

The Government Accountability Office (GAO) issued a report that the Affordable Care Act (ACA) marketplaces remain “vulnerable to fraud,” after the agency successfully applied for coverage for multiple fake people, who hadn’t filed tax returns for 2014 but were still able to get tax credits to help pay their monthly premiums for 2016 coverage. The GAO engaged in testing by using undercover attempts to obtain health-plan coverage from the federal marketplace and selected state marketplaces for 2015. The tests found the federal marketplace and selected state marketplaces approved each of 10 fictitious application for subsidized health plans. All 10 were approved, even though eight of these 10 fictitious applications failed the initial online identity-checking process.

Four applications used Social Security numbers that were never been issued. Other applicants obtained duplicate enrollment or obtained coverage by claiming that their employer did not provide insurance that met minimum essential coverage. Three of GAO’s applications were approved for Medicaid, although GAO provided identity information that would not have matched Social Security. For two applications, the marketplace or state Medicaid agency directed the fictitious applicants to submit supporting documents, and GAO provided fake information that resulted in the applications were approved. A third marketplace did not seek supporting documentation, and the application was approved by phone. CMS, California, Kentucky, and North Dakota, advised the GAO that they are only inspecting for supporting documentation that has obviously been altered; otherwise documentation submitted would not be questioned for authenticity.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.