Policies to strengthen nongroup insurance markets could fix ACA problems

Enrollment and stability in the nongroup insurance market continues to be threatened by the uncertainty of support for the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Faced with the concerns in this environment, the Robert Wood Johnson Foundation and Urban Institute issued a report, Stabilizing and Strengthening Nongroup Markets, expressing the opinion that “[t]argeted policies could fix the ACA’s problems without sacrificing its gains in coverage, affordability, and access to care.” The report identifies policies that would stabilize the nongroup insurance markets, encourage insurer participation, improve affordability, and rein in premium growth. Some policies would be implemented immediately and others would be implemented in the long term; however, solving the problems will take significant political action.

“Strategies that increase the buying power of enrollees and increase enrollment would make participation more attractive to insurers.” To strengthen ACA marketplaces, the report suggested that policymakers learn from the Medicare Advantage and Medicare Part D markets that successfully compete with the traditional Medicare program.

The current climate

The report pointed out that neither Congress nor the Trump Administration has committed to paying cost-sharing reductions, and the administration signaled it does not intend to enforce the individual mandate penalties. Open enrollment periods have been shortened and federal outreach and enrollment funds will be cut 40 percent in the Navigator program, while the ACA advertising effort will be cut 90 percent. In addition, HHS will limit access to healthcare.gov every week during the 2018 open enrollment period. Such actions will reduce coverage.

Short-term commitments

According to the report, the federal government must commit to (1) reimbursing insurers on an ongoing basis for cost-sharing reductions; (2) enforcing the individual mandate penalties; (3) increasing funding for outreach and enrollment assistance; and (4) permanently reinstating a government-funded reinsurance for nongroup markets.

Long-term commitments

Long-term recommendations addressed in the report include strengthening marketplaces, expanding coverage, reducing premiums and cost-sharing requirements, and encouraging the broadest range of insurers to participate. In addition, the federal government should permit states to expand Medicaid, eliminate non-ACA-compliant nongroup insurance products, and reverse current administrative decisions that hinder enrollment. The report noted that the lack of insurer competition is associated with higher benchmark premiums because it eliminates insurer negotiating leverage.

The report suggests that improving affordability would increase coverage, reduce the number of people uninsured, and bring more healthy enrollees into the insurance pool, lowering average premiums. Other long term policy recommendations include providing additional financial assistance to lower premiums and cost-sharing requirements for nongroup coverage, attaching premium tax credits to gold rather than silver plans lowering out-of-pocket costs for all enrollees receiving tax credits, and increasing cost-sharing subsidies for people with lower incomes.

Additional policies

To strengthen the nongroup insurance market, the report described three additional policies:

1. Benchmark premiums. Changing the way benchmark premiums are calculated affects the size of nongroup premium tax credits allowing people to choose from more plans without additional premium contributions.
2. Capping payment rates. Payment rates charged to nongroup insurers by health care providers could be capped, making it easier for insurers to enter new marketplaces and counteracting provider monopolies.
3. Standardize insurance options sold in the nongroup market. Standardizing the insurance options sold in the nongroup market could reduce the complexity of the enrollment process, improving comparability and facilitating price competition.

According to the report, “nongroup insurance markets must become larger, less expensive for consumers in both premiums and out-of-pocket costs, and less financially risky for insurers.”

States adopting ACA’s health care provisions provide more access to care

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) “has significantly affected health insurance coverage and access among U.S. adults. However, the law gives states flexibility in implementing certain provisions, leading to wide variations between states in consumers’ experience,” according to a report issued on March 22, 2017, by the Commonwealth Fund. The Commonwealth Fund analyzed the Commonwealth Fund Biennial Health Insurance Survey, 2016, which was conducted by Princeton Survey Research Associates International, to compare the differences in insurance coverage, access to care, costs of care, and medical bill and debt problems in California, Florida, New York, and Texas, the nation’s four largest states.


The uninsured rate has fallen in all four states since 2012. The report noted the following variations for 2016:

  • The uninsured rates among adults age 19 to 64 varied from 7 percent in New York and 10 percent in California to 16 percent in Florida and 25 percent in Texas.
  • The proportions of residents reporting problems getting needed care because of cost was significantly lower in California and New York than in Florida and Texas.
  • Lower percentages of Californians and New Yorkers reported having a medical bill problem in the past 12 months or have accrued medical debt compared to Floridians and Texans.
  • The uninsured rates for young adults were 8 percent in California, 10 percent in New York, 23 percent in Florida, and 30 percent in Texas.
  • The uninsured rates for adults with incomes below the federal poverty level were 9 percent in California, 15 percent in New York, 22 percent in Florida, and 39 percent in Texas.
  • Adults in small firms are more likely to be uninsured in Florida (24 percent) and Texas (37 percent) than in California (14 percent) or New York (12 percent).
  • Cost-related access problems impacted 28 percent of Californians, 29 percent of New Yorkers, 41 percent of Floridians, and 45 percent of Texans.
  • Medical debt impacted 29 percent of Californians and New Yorkers, while 41 percent of Floridians and 44 percent of Texans were impacted by medical debt.

Factors influencing variations

Factors that might explain the variations include (1) whether the state expanded Medicaid eligibility, (2) whether it ran its own health insurance marketplace, (3) what the uninsured rate was prior to the ACA, (4) differences in the cost protections provided by private health plans; and (5) demographic differences.

California and New York both operate their own health insurance marketplaces and have expanded eligibility for Medicaid to adults with incomes at or below the federal poverty level. Florida and Texas use the federal marketplace to enroll residents in health plans and did not expand Medicaid eligibility. In addition, the report noted that the higher rate of insurance coverage and lower deductibles in California and New York likely played a role in the two states’ lower rates of cost-related access problems.

Although Florida and Texas experienced enrollments in private plans through the health insurance marketplace, they have made less progress covering uninsured residents. Of the four states included in the report, Texas had the highest uninsured rate in every age group for 2016. A contributing factor for Texas’ higher uninsured rate is the number of undocumented immigrants residing in Texas. The ACA does not provide access to any new coverage options for undocumented immigrants.

OIG identifies top 10 challenges in fulfilling HHS’ mission

Going into the new year, the HHS Office of Inspector General (OIG) will continue to focus on administration, quality health care, program integrity, and the improvement of electronic health records (EHR) and health information technology (IT). The OIG has identified its top 10 management and performance challenges, and has expressed its commitment to assisting in transitioning between administrations.

Effective administration

The OIG finds effective administration to be a challenge in many areas. The Medicaid program is a particular area of concern due to the 72 million enrollees that the program serves and the expansions implemented under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). In particular, CMS needs complete and accurate data about managed care, states need to fully implement all program integrity tools, and corrective action plans to address improper payments must be developed. These issues are representative of the OIG’s challenges in operating the entirety of HHS, which reported total costs of about $1 trillion in fiscal year (FY) 2015. The OIG must continue taking corrective actions, resolving deficiencies, and monitoring contracts. Other particular administrative challenges are grants, the health insurance marketplaces, and Part A and Part B program integrity.

Other issues

The OIG faces several issues within the realm of IT. Cybersecurity has been a growing concern due to the significant increase in the frequency of data breaches. Additionally, despite HHS’ investments in health IT and interoperability, the agency still has steps to take to ensure widespread use and adoption of EHRs and other health IT. The rest of the top challenges focus on serving the population: ensuring that vulnerable populations receive quality care; monitoring food, drug, and medical device safety; and addressing drug abuse in Part D and Medicaid.

Voters split on ACA, but most say Rx drug costs are unreasonable

The majority of Americans—including Democrats, Republicans, and independents—support several policy changes to control the cost of prescription drugs, according to a September 2016 Kaiser Family Foundation (KFF) Health Tracking Poll. The poll found, however, that Americans remain divided on whether the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) is working well, with 47 percent reporting an unfavorable view and 44 percent reporting a favorable one.

Drug costs

According to a KFF press release, the poll, taken between September 14 and 20, 2016, found that 77 percent of Americans view drug costs as unreasonable, up from 72 percent in an August 2015 poll, and only 21 percent seeing drug costs as reasonable. Despite these findings, the poll found that 73 percent of Americans say paying for their drugs is easy and 26 percent say it is difficult to pay for their drugs. The poll also found that the majority of Americans favor the following policies:

  • 82 percent favor allowing the federal government to negotiate with drug companies to get a lower price on medications for people on Medicare;
  • 78 percent favor limiting the amount drug companies can charge for high-cost drugs for illnesses like hepatitis or cancer;
  • 66 percent favor creating an independent group that oversees the pricing of prescription drugs;
  • 86 percent favor requiring drug companies to release information to the public on how they set drug prices; and
  • 71 percent favor allowing Americans to buy prescription drugs imported from Canada.

The poll, however, also found that only 47 percent of Americans favor eliminating drug advertisements and 42 percent favor encouraging people to buy lower cost drugs by requiring them to pay a higher share if they choose a similar, higher cost drug.

Views of the ACA

Not surprisingly, the poll found that a Democrats largely support the ACA, Republicans largely oppose it, and independents lean unfavorable. When asked if the health insurance marketplace in their own state is working well, 48 percent said it was, while 43 percent said it was not. However, when asked if the marketplaces were working well nationally, the percent responding no grew to 49 percent.

The poll also asked an interesting question regarding the public’s awareness of the uninsured rate under the ACA. When asked if the uninsured rate was at an all-time high or low, only 26 percent knew it was at an all-time low, while 21 percent thought it was at an all-time high. Thirty-eight percent of Democrats and those who thought favorably of the ACA were aware of that the uninured rate was at an all-time low. Only 17 percent of Republicans and those who thought unfavorably of the ACA were aware that the uninsured rate was at an all-time low. Twenty-seven percent of independents were aware that it was at an all-time low.

Voting factors

Finally, in polling completed after the first presidential debate, 67 percent of voters say the candidate’s plan to address the future of the ACA is very important. The percentage of voters who say the candidate’s plan to address the following factors is important to their vote is as follows:

  • the cost of health insurance premiums (60 percent);
  • the cost of health insurance deductibles (55 percent);
  • prescription drug prices (51 percent);
  • the number of uninsured Americans (43 percent);
  • the ongoing opioid epidemic (43 percent); and
  • the Zika virus outbreak (26 percent).