Chair, ACG National Affairs
This week, Aetna announced that the company intends to withdraw most of its “2017 public exchange expansion plans” and undergo “a complete evaluation of future participation in [its] current 15-state footprint.” Aetna will exit markets in several states, including North Carolina, Pennsylvania, and Florida. In most of these areas, Aetna will still offer individual coverage outside of the ACA exchanges. The insurer will keep selling plans on state exchanges only in Iowa, Delaware, Nebraska, and Virginia. According to reports, Aetna covers only 8% of ACA enrollees. Aetna cited higher-than-expected medical costs as the reason for the decision. A month ago, however, Aetna also warned the U.S. Government that if the company were not allowed to merge with Humana, it might not be financially healthy enough to remain in the ACA health exchanges. The U.S. Government has since moved to block the merger. In July, 2016, Humana also announced that it is pulling out of the Marketplaces in all but a handful of states after a year of nearly $1 billion in losses. In November 2015, the nation’s biggest commercial market insurance issuer, United Health Group, also announced that it would scale back its marketing efforts for products for 2016, and is contemplating leaving the Marketplaces entirely in 2017.
However, Kaiser Permanente also announced this week that it is “absolutely sticking with the exchanges over the long term,” and reminded the public how difficult the individual market was before the ACA went into effect. According to these reports, Kaiser covered about 860,000 people in the individual market as of July 2016 — a majority of whom have bought their health plans through the online exchanges. Most of Kaiser’s ACA enrollees live in California. The Kaiser Family Foundation also reported that 3 years after the ACA’s coverage expansions were fully implemented in California, nearly three quarters (72%) of the state’s previously uninsured residents now have health coverage, compared to 68% last year. The share with coverage is even higher (78%) among those likely eligible for Medi-Cal and private insurance purchased through Covered California,
Health Affairs reported this week that people who got insurance through the ACA were significantly more likely to get prescription medications than they were before, and typically ended up spending less of their own money for those drugs. The researchers analyzed data from more than 6.7 million people who filled prescriptions in January 2012, and followed their patterns of medication use and out-of-pocket spending through December 2014. One third of those people had no health insurance before the ACA.
It is unclear at this time how these latest developments will impact patients in your state as well as your practice’s own health insurance coverage. However, ACG will continue monitor these developments and updated statistics on your behalf. Updated ACA statistics of interest:
- As of March 2016, Qualified Health Plan (QHP) enrollment by individuals purchasing coverage in Federal and State-based Marketplaces totaled 11.1 million consumers. The Federal Government continues to expect that enrollment will ultimately total 10 million by the end of 2016. However, the Congressional Budget Office (CBO) has lowered enrollment projections from roughly 23 million in years 2017 and beyond to roughly 18 million by 2026.
- Based on insurer rate requests, the cost of the second-lowest silver plan in major cities for which data is available will increase by a weighted average of 9% in 2017. Last year, premiums for these plans in corresponding areas increased by 2%. There is substantial variation across markets. Premium changes for the second-lowest silver plans range from a drop of 13% to an increase of 25%.
- One issue: the “Temporary Risk Corridors” program was designed to transfer capital from QHPs that achieve profits exceeding certain thresholds to other QHPs that have net losses beyond certain thresholds, for 2014 through 2016. In October 2015, CMS announced that amounts owed as Risk Corridor payments to poor performing plans significantly exceeded Risk Corridor “collections” that profitable plans owed to CMS. However, a shortfall totaled $2.5 billion for 2014, and as a result, poor performing QHPs can expect to receive only 12.6% of amounts “owed” to them under the Risk Corridor calculation. Similar shortfalls seem likely for 2015, which will be paid this fall.
ACG Update on ACA and Medicaid Expansion:
- 31 states plus Washington D.C. have elected to expand Medicaid program under ACA. Also, in states with significant low-income uninsured populations, roughly 3 million individuals fall into the “Medicaid Coverage Gap,” where they earn too little to qualify for Marketplace subsidies, but too much to qualify for existing (non-expansion) Medicaid coverage.
- According to CMS, the cost of expansion was $6,366 per person for 2015, about 49% higher than previously estimated. Nearly all states utilize some form of Medicaid Managed Care, ranging from full-scale HMO coverage to Primary Care Case Management (PCCM) models.
Whitfield L. Knapple, MD, FACG
Chair, ACG National Affairs Committee