Evaluating Individual Market Performance and Stabilization Strategies Jean Marie Abraham, PhD National Health Policy Conference February 4, 2019 Acknowledgement: I am grateful to the Robert Wood Johnson Foundation and Russell Sage Foundation for financial support of research presented here.
Historical Individual Market Performance • 12.7% denied coverage Access • About 33% of 60-64 year olds denied 2014 ACA Provisions : 1) Marketplaces • States averaged 23 individual market Insurer 2) Guaranteed Issue insurers; ranging from 2-52 participation 3) Modified Community Rating 4) AV-Based • 83% of individual plans held were Standardization of Preferred Provider Organizations or Plan Choice Point of Service plans Plans 5) Essential Health Benefits • Average actuarial value was 60% Coverage 6) Premium tax (Bronze-like) generosity credits and CSR • Benefit exclusions (e.g., maternity) subsidies 7) Individual mandate • 50% of PPO/POS plans with deductibles >$3255 • OOP maximum limits: $5,858/$12,077 for Affordability single/family coverage (in $2018) Sources: Individual Health Insurance 2099 Availability and Benefits (AHIP); NAIC 2010 Supplemental Health Care Exhibit Report; Gabel et al. 2012.
Factors Shaping Individual Market Performance Insurers Individuals • Shopping • Participation behavior • Product Space • Preferences • Premium- • Price-sensitivity setting • Propensity to enroll Regulatory Environment Uncertain Political Environment
On-Marketplace Structure at GRA-Level, 2015-2019 100% 90% 80% 70% Percentage of GRAs 60% 50% 40% 30% 20% 10% 0% 2015 2016 2017 2018 2019 1 2 3 4 or more Source: Author’s analysis of 2015-2019 HIX Compare Data
Off-Marketplace Structure at GRA-Level, 2015-2019 100% 90% 80% 70% % of Geographic Rating Areas 60% 50% 40% 30% 20% 10% 0% 2015 2016 2017 2018 2019 0 or 1 2 3 4 or more Source: Author’s analysis of 2015-2019 HIX Compare Data
Quantifying Market Instability and Affected Populations (Abraham, 2019) • 2015-2018 RWJF HIX Compare data augmented with geographic-specific information to understand populations affected by higher instability • Market Instability - Lower: GRAs that experienced gains, no change, or <34% decline in number of insurers offering coverage over time period - Moderate: Declines in insurer participation of between 34.0-66.99% over time period - Higher: GRAs with > 67% decline in insurer participation or monopoly markets as of 2018
Affected Populations Lower Moderate Higher On-Marketplace Instability Instability Instability (n=145) (n=135) (n=216) Average total GRA population 704,393 1,093,155 318,583 Average number of counties in GRA* 7.21 6.98 5.28 Percentage of GRAs that are rural type 9.65 7.4 26.85 Average percentage of GRA population 16.06 15.62 17.78 reporting fair or poor health Average total number of primary care 555 800 209 physicians in GRA Average total number of hospital beds 2010 3119 994 Average local unemployment rate 6.07 6.13 6.74 Average percentage of establishments in 53.18 53.76 53.36 county that have 1-4 employees* Average payroll per worker in GRA ($) 43,392 41,444 37,158 Percentage of GRAs in states that ever 62.76 60.74 22.22 expanded Medicaid via ACA * not statistically different across categories
481 477 Monthly Premium ($) 359 299 Large within- 276 273 and cross-state variation in premium growth over time. 2014 2015 2016 2017 2018 2019 Source: Kaiser Family Foundation, 2019 https://www.kff.org/health-reform/state-indicator/marketplace-average-benchmark- premiums/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Premiums, Affordability and Competition (Drake & Abraham, 2019) • Objective : To investigate how changes in insurer participation and composition in local markets affect health plan affordability for Marketplace enrollees with and without premium subsidies. • Measuring Affordability - Premium levels reflect what is affordable for unsubsidized enrollees. - Premium spreads represent the difference between the benchmark plan and the lowest cost plan premium offered in the market • Data : 2014-2019 QHP Landscape Files augmented with insurer attribute information • Approach : Log-linear regression models for 15,222 county- years to examine the associations of insurer participation and composition with plan affordability, relying on within- county variation over time for identification.
Findings • Minimum Silver Plan • Premium Spreads Premiums - 14.2% higher in monopoly - 20.6% higher in markets vs. those with 3+ monopoly markets insurers vs. 3+ insurers - Markets with BCBS insurer - Markets with a have minimum silver plan BCBS insurer have premiums that are 14.3% premium spreads higher that are 46.3% higher
1332 Waivers for Stabilization • Qualitative study of state reinsurance adoption in Alaska, Minnesota, and Oregon through 1332 mechanism (Zylla, Lukanen, and Blewett, 2018) • Key Findings - Challenges • Securing a state funding source • Navigating the state political climate • Accessing data to inform estimates - Lessons Learned • Tradeoffs associated with condition vs. traditional reinsurance model designs • Long-run, fundamental need to go “upstream” and consider health care costs (e.g., provider market consolidation, prescription drug prices, value-based payment models).
Individual Market: Looking Ahead • What modifications to the existing regulatory structures best promote access to affordable coverage by individuals across the health risk and income distributions and robust insurance market competition based on price and quality rather than risk selection?
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