Jennifer Sullivan: Good afternoon and welcome to the Alliance for Health Policy’s Marketplace Open Enrollment Preview Webinar. We’re glad you could join us today. My name is Jennifer Sullivan. I’m the director of policy and programs at the Alliance for Health Policy and I’ll be moderating today’s webinar.
Much of the national discussion around health insurance marketplaces this year has focused on “will they” or “won’t they” debates. Will they or won’t they pass marketplace stabilization legislation? Will they or won’t they continue to fund cost-sharing reductions? Will they or won’t they continue to participate in the marketplace. The “they” changes but the underlying uncertainty doesn’t.
This webinar will attempt to unpack the knowns heading into the upcoming marketplace open enrollment period, including what those currently enrolled in marketplace coverage and those planning to shop for coverage can expect when it comes to plan choices, cost, plan design, and help enrolling.
Today’s webinar is a project of the Alliance for Health Policy and the National Institute for Health Care Management Foundation, in collaboration with the Association of Health Care Journalists. We appreciate the support of our partners at the NIHCM Foundation and AHCJ.
We also wanted to let this audience know that NIHCM is hosting another event this week that our D.C.-based audience may be interested in attending. Transforming Health Care to Drive Value will feature experts on policy, business, and academia, sharing their insights on how to improve health outcomes for Americans while managing the cost of care. You can register for this free lunch briefing later this week on their website at NIHCM.org.
In order to allow for as timely of a discussion as possible and to be nimble to the rapidly-changing realities around the marketplaces, we’re taking a slightly different approach to today’s format. We’ll begin with a presentation from Karen Pollitz from the Kaiser Family Foundation who will share a broad overview of key facts heading into the open enrollment period for 2018 coverage. Then we’ll move to a moderated discussion will all four of our panelists. We welcome you to submit questions at any time throughout the webinar and we’ll get to as many as we can before we conclude at 2:45.
On the right-hand side of your screen, you’ll see a floating toolbar with an orange arrow. The orange arrow allows you to open and close the toolbar. If you open it, you’ll be able to adjust your audio settings. From this toolbar, you can also access a downloadable version of today’s presentation and submit questions for the Q&A portion of the webinar. On our website, Allhealthpolicy.org, you’ll also find additional materials that accompany this webinar, including further reading, expert lists, speaker biographies, and presentations. A recording of today’s webinar will also be available there soon.
Finally, if you’re new to this topic or to the field of health policy, more broadly, we want to make sure you know about the Alliance’s source book on the essentials of health policy. The source book was compiled with support from the NIHCM Foundation. It provides background and current data on key issues, including the marketplaces, Medicaid, and private insurance.
Now, with those housekeeping details taken care of, let’s move to today’s presentation and discussion. We’re very fortunate today to have a panel who can shed light on the current landscape as we enter the marketplace open enrollment period.
Karen Pollitz is a senior fellow at the Kaiser Family Foundation and has held multiple senior roles at the Department of Health and Human Services. Andy Slavitt is a senior advisor to the Bipartisan Policy Center and is a member of its Future of Health Care Initiative. Andy also served as the acting administrator for the Centers for Medicare & Medicaid Services from 2015 to 2017.
Jeanette Thornton is the senior vice president of health plan operations and strategy at America’s Health Insurance Plans where she leads activities on health insurance marketplaces. Finally, Noam Levey is a reporter from the Los Angeles Times and writes about national health care policy out of Washington D.C. He joined the newspaper in 2003 and has reported from Washington since 2006.
Now, at this point, I’m going to turn it over to Karen to provide some key context around the marketplaces, policy changes affecting open enrollment, and the latest findings from Kaiser Family Foundation health tracking polls on consumer awareness. Karen?
Karen Pollitz: Thanks, Jennifer, and good afternoon, everyone. I promised I’d start off with just a few slides reminding us where things stand as the beginning of the fifth open enrollment approaches. Next slide, please.
First, 2017 had been the year when the financial condition of health insurance companies in the non-group market stabilized. We have seen margins climb substantially so far this year, following the 2017 premium increases adopted by most insurers to correct for past underpricing and other implementation changes. The expectation was that, moving forward, insurers would be able to breakeven or even make a profit on the non-group market business this year. Next slide, please.
Also, just a reminder about the non-group market and what that looks like. We estimate there are about 17-and-a-half million people who have non-group health insurance today. Most, nearly 60%, buy this coverage through the marketplace. And the vast majority of marketplace enrollees, about 85%, have subsidies. About four-in-ten non-group enrollees buy coverage off the marketplace. The vast majority of those are in ACA-compliant plans that cover essential health benefits, don’t exclude preexisting condition, and don’t charge more based on health status. Next slide, please.
In addition, the non-group market – it’s important to remember – is the residual market for people who are ineligible for job-based coverage and for public programs. And of course, the largest public program for people under 65 is Medicaid. The Affordable Care Act expanded Medicaid eligibility for adults with income below 138% of the poverty level, and 31 states and the District of Columbia have elected this Medicaid expansion, accounting for more than 15 million covered adults in 2016.
The marketplace is smaller in states that expanded Medicaid because the lowest income cohort of uninsured adults has access to public coverage instead. And research shows that the Medicaid expansion has also helped to stabilize marketplaces, lowering the average risk scores of people who are in private insurance. Next slide, please.
So that’s where we’ve been. This time last year, the expectation was that the marketplace would finally get to steady state with all of the major implementation uncertainties resolved. But instead we’ve had an interesting year with a lot going on that has reintroduced uncertainty for insurers and fueled some confusing among consumers. We had a nearly yearlong debate over repeal of the Affordable Care Act that ended with no legislation enacted.
And then there were a series of administrative actions taken, including shortening the 2018 open enrollment to six weeks, reducing federal spending for advertising about open enrollment by 90%, and grants to federal navigators by 40% on average – although that varies. I’ll come back to that in a minute. And then about a week-and-a-half ago, the President announced that cost-sharing reduction reimbursements to insurers would be terminated immediately. There is a bipartisan effort underway in the Senate to restore these payments – also a lawsuit pending – although, the prospects of all of these activities are still uncertain.
Safe to say, though, uncertainty from all of these different changes did contribute to some insurers deciding to exit the marketplace for 2018. Currently, there are, on average, about 4.3 insurers per state offering marketplace coverage. And in 2018, we expect that will drop to 3.5 insurers per state on average. Next slide, please.
So, Jennifer mentioned we have been doing some tracking polling in September and October to find out what consumers know about the upcoming open enrollment and how they feel about their coverage for the coming year. And our tracking poll does find evidence of confusion and uncertainty among consumers. Following debate over repeal of the Affordable Care Act, nearly 30% of the general public and 40% of the uninsured either think the mandate to have coverage was repealed or are uncertain as to whether the individual mandate remains in effect. Next slide, please.
So, an important thing for consumers to know as open enrollment approaches is that that ACA is still here. There is still a requirement to have health coverage or pay a tax penalty. The penalty for 2018 will be the same in 2018 as it is this year, the greater of $695 per adult or 2.5% of household income above the federal tax filing threshold. To satisfy the mandate, people can sign up for health coverage offered at work or they can apply for Medicaid or CHIP or other public programs nationwide. An estimated 6.7 million uninsured individuals are eligible for Medicaid or CHIP, but not enrolled.
And then people who don’t have access to job-based coverage or public programs can buy individual health insurance. Subsidies are available through the marketplace for people with income up to four times the poverty level. But non-group coverage can only be purchased during open enrollment or at other times during the year, only if people qualify for a special enrollment period. Next slide, please.
Our tracking poll also finds that people don’t know when this coming open enrollment starts and ends. Even among people who are already enrolled in the marketplace, 60% are unaware that open enrollment begins on November 1st; and among the uninsured, 85% don’t know this opening date; and even larger numbers of people are not aware when open enrollment ends this year. Next slide, please.
Consumers need to know that fact. And Healthcare.gov states – actually, everywhere – open enrollment up until now have extended at least through the end of January. But this year, for 2018 coverage, open enrollment will be shorter, just six weeks, starting November 1st and ending December 15 in Healthcare.gov states, which is most of the country; 39 states. Most state-based marketplaces will hold a longer open enrollment this fall.
Now, the deadlines are key. This year, as in the past, people who are already enrolled in marketplace coverage and who don’t act before midnight on December 15th to renew or change their coverage will likely be automatically renewed in their current coverage by the marketplace for another year. And if their current plan is no longer being offered in 2018 and they don’t act, the marketplace will likely automatically select a different plan for those consumers.
Auto-renewal has been a standard practice for a couple of years now. During the last open enrollment period, almost one in four marketplace sign-ups were accomplished by auto-renewal. The advice has always been to actively shop and not to rely on auto-renewal, and this year that is especially good advice. In the past, people could see the results of auto-renewal in January and they still had a month to change if they didn’t like that result. But this year, open enrollment ends just as auto-renewal takes place.
And as we’ll discuss in a minute, there have been a number of marketplace insurers that are leaving for 2018 and also very significant changes taking place in marketplace premiums, different from what we’ve seen in the past. So it really is important for people to log into the marketplace, see their plan choices and costs, and make the choice that’s best for them. Don’t just rely on autopilot. Next slide, please.
Our tracking poll also finds that marketplace consumers are very worried about affordability. A majority are concerned that they won’t be able to continue to afford their coverage next year, due to rising deductibles or to rising premiums. Next slide, please.
So another thing consumers need to know is that the Affordable Care Act subsidies are still here. In particular, cost-sharing subsidies that reduce deductibles and copays under ACA marketplace plans are still available. I’ve hear a number of news reports incorrectly describing that these subsidies are terminating. They are not terminating.
Cost sharing reductions for marketplace enrollees are still there. Eligible people have income up to two-and-a-half times the federal poverty level, and the vast majority of marketplace enrollees are also eligible for these cost-sharing subsidies. They are delivered only through silver plans. You buy a silver plan. Depending on your income, you’re delivered a more generous plan. If you want to jump to the next slide, there’s a picture of this.
Depending on how low your income is, your silver plan will be plus-ed up to something more like a gold or a platinum plan. And then each month, as you make claims that hit that lower deductible, your insurer submits a bill to the federal government to be reimbursed for that cost-sharing reduction. And it’s that reimbursement that the President said he would end. But insurers still are required by law to provide these subsidies.
Anticipating the President had threatened throughout the year to end these payments, insurers in most states raised their premiums for 2018 to offset these lost payments. And the important message for consumers, I think – two important takeaways: one is that the subsidies are still there and two is, when premiums go up to offset these lost payments, in most cases people will be protected because their premium tax credit amount will go up as well. Next slide, please.
Now, the premium increases for 2018 are going to be a little different this year. Depending on what state insurance regulators allowed, insurers took different approaches to raising their 2018 premiums in order to make up for these lost CSR reimbursements. Mostly, the rates are not public yet, but we understand that, for the most part, insurers raised premiums for this reason, just for their silver plans, the middle tier where the cost-sharing subsidies are delivered.
And in many states, insurers applied this CSR rate increase just to their silver marketplace plans, not to their off-marketplace silver plans. In a few states, the regulators required insurance companies to spread the cost of this lost cost-sharing reduction payment across the board to all of their plans, and a few states didn’t allow any special rate increases for this reason. Although, some of those states are now reconsidering and some emergency rate filing is going on. Next slide, please.
The cost of these lost cost-sharing reimbursements to insurers is substantial. All told, those payments were expected to be worth about $10 billion in 2018. We’ve estimated that to make up for those lost payments, insurers would need to raise their silver plan premiums by 15% to 20%, depending on whether it’s a Medicaid expansion state or a non-expansion state. Next slide, please.
So what will this mean for consumers and affordability? People should expect a really different pattern of annual premium changes in 2018, unlike what we’ve seen before. We’re used to premiums going up across the board. In general, though, if all marketplace insurers apply this surcharge just to their silver plans, premiums for the silver plans will go up much more than will premiums for bronze and gold plans.
Importantly, the dollar value of premium tax credits is tied to the cost of the benchmark silver plan. So, premium subsidies generally track the cost of the marketplace silver plan and that protects subsidy-eligible people from premium increases. It’s the federal government, the tax credit, that picks up the rest.
Consumers who are eligible for tax credits and cost-sharing reduction should be able to buy a silver plan again in 2018 and not feel much of any of this cost increase. Consumers with somewhat higher incomes who are eligible for tax credits but not the cost-sharing subsidies, will also be protected from the premium increase if they stay at the silver tier. But in some states, they may find that gold- and bronze-level plans are even more affordable next year than they are currently. And then consumers who aren’t eligible for the subsidy at all will be able to avoid this cost-sharing rate increase if they buy at a different metal level.
Now, of course, in areas where insurers spread this increase all across the board, people who are subsidy-eligible, again, will be protected from the premium increase. But people off the marketplace who aren’t eligible for subsidies will feel this.
I have an example – next slide – of what’s happening in one state. In South Carolina – a simple state to talk about because there’s just one issuer offering marketplace coverage in that state this year and next year. Premiums are increasing, but subsidy-eligible consumers will pay the same or less.
So the benchmark silver plan in the marketplace, this example shows Charleston, South Carolina, for a 30-year-old with income at twice the poverty level. The cost of the benchmark plan for a 30-year-old is going up by more than 30% next year. By contrast, the gold plan is going up about 10% and the off-marketplace silver plan is going up about 13%. But the value of the premium tax credit will also increase dollar-for-dollar.
In this example, for a 30-year-old at twice the poverty level, the unsubsidized premium for the benchmark silver plan is going up by a little over a hundred bucks a month, but the monthly premium tax credit will also rise by about 120 bucks a month. So as a result, people who are eligible in this state for tax credits and for the cost-sharing subsidies can stay at the silver level and really not feel the difference.
And then because the premium tax credit can be applied to any metal-level plan in the marketplace, consumers with slightly higher incomes may find new options. The gold plan in 2018 will be cheaper than the gold plan for someone at the same income this year. And more folks may even be eligible for zero premium bronze plans. And then people who are not eligible for subsidies can still buy the silver off-marketplace plan or any other eligible, but they won’t feel that full 32% rate increase.
Again, the premiums are not public yet, so it’s important for consumers just to know that they’re changing, that the premium increases in 2018 in most places will apply differently than they have in the past, and that will have implications for the amount of subsidy that you’re eligible for. So it’s especially important not to be discouraged by headlines about premium increases. Instead, log into the marketplace, see what your plans are, and what they would cost you. Next slide.
With all these changes, it is very important for consumers to start early. Every open enrollment up until now, there has been a surge of activity in the final days before the deadline. And during these surge times, the marketplace website tends to run sluggish or the screen may freeze, and there could be long waits on hold at the call center. In the past, HHS has allowed an inline extension for people who started their application before midnight on the last day of open enrollment, but hadn’t yet completed enrollment. It’s not clear if those inline extensions will be available for this fifth open enrollment period.
Meanwhile, though, other reasons for people to avoid delays, HHS has announced there will be scheduled maintenance periods when Healthcare.gov will be offline, including Sunday morning. So if you’re making your plans, that’s not a good time to try to get onto your marketplace account. HHS also reduced funding for navigators in the federal marketplace states on average by about 40%.
In a few states, there weren’t any changes in the amount of navigator funding available. But at the other end, Indiana lost more than 80% of its money. And large cutbacks in Ohio prompted the single statewide navigator program in that state to close. If that money isn’t restored to other organizations, Ohio will lose 96% of its federal navigator money for the coming year. In many federal marketplace states, navigator programs that took large cuts have had to lay off staff, reduce hours of operation, or the geographic areas they can serve.
Community health centers and volunteer assister programs are still there and will be available to provide in-person help, as will brokers and agents. But for some people, depending on where you live and the help you need, in-person enrollment help could be harder to find. And even before the finding cuts, it was often hard to get an appointment with anybody for in-person assistant in the final days before open enrollment ended.
Finally, there are some new enrollment and eligibility rule changes that will take effect this fall for, at least, some consumers, relating to federal income tax filing requirements. Also, new potential barriers to signing up for coverage for people who may have missed premium payments in 2017 and owe on unpaid premium debt to their insurers. And I can talk about those more during Q&A if there are questions.
And I would just end by reminding folks that at the Kaiser Family Foundation, we do have a number of resources available to consumers, reporters, and others on open enrollment, including our health reform FAQs. Our subsidy calculator will be updated as soon as we get those premium rates for 2018, and other resources. So I hope you will come to KFF.org and explore all of the materials we make available. Thanks, Jennifer.
Jennifer Sullivan: That’s great. Wonderful. Thank you so much, Karen. Well, that was quite a lot of information. And if you need any clarification on some of the points that Karen brought up, hopefully, we will get to that and have an opportunity to revisit many of these topics in the coming discussion.
So, our discussion today is going to be divided into five main topics, which we’ll move through in the following order: We’ll start will current enrollment and uninsured, take a few questions there; then move onto participation, premiums, and providers; administrative changes for 2018; public awareness; and lastly, the outlook for the future.
We have questions programed up for each of these topics, but if you want to submit questions related to them through the questions feature on the webinar interface, feel free to do that at any time. We may be able to feather some of those in as we move through these sections. And then towards the end of the webinar, we will allot specific time to take additional questions from the audience, via the question feature, of course.
So with that, I actually wanted to go back to you briefly, Karen, and ask a couple of clarifying questions around current enrollment and the uninsured. It’s usually sort of a baseline we use to talk about the marketplaces and what may come to pass in the coming open enrollment period. So who is currently enrolled in coverage for this year? And can you say anything about retention rates for coverage throughout this year compared to, potentially, previous years?
Karen Pollitz: Sure. So we do estimate there are about 17-and-a-half million people who are covered through the marketplace. Most people, true before the Affordable Care Act and still today, who are insured get coverage at work. And then the next largest source of coverage is through public programs, mostly Medicaid and CHIP for people under the age of 65.
There are still about 27 million people, at last count, who are uninsured. And coverage, of course, is not static. People do move in and out of eligibility for coverage depending on their circumstances. Mostly our eligibility for coverage derives from where we work, who we’re related to, and where they work, our income, the state where we live, and other factors.
So, as we move through life and things change, our eligibility for coverage can change and so people do move in and out of coverage. We tend to see the highest level of churn in the non-group market, partly because that’s what it’s there for. It is a residual market. It’s there for people when they are not eligible for either job-based coverage or public program coverage.
There are those – about a third, I guess, of people in the non-group market who come and stay for a long time because that is their ongoing, primary source of coverage. That would be the self-employed, small business owners who don’t sponsor health plans who buy coverage for themselves. Maybe early retirees. If you retire at 60, you may need to stay in this market for five years until Medicare eligibility kicks in and so forth.
Jennifer Sullivan: Great. And then what about the remaining uninsured? We’ve seen with each successive year that the marketplaces have been around, we’ve seen that uninsured rate drop lower and there’s usually been pretty rigorous analysis heading into any given open enrollment period about who we think is still eligible and who might enroll. What does that picture look like this fall?
Karen Pollitz: So we estimate about four-in-ten of the remaining uninsured, the remaining 27 million uninsured, are eligible for financial assistance, but they’re not enrolled. So about 20% are eligible for tax credits through the marketplace, but they’ve not claimed them and signed up for coverage. And about a quarter of the uninsured, we estimate, are eligible for Medicaid or CHIP or another public program, that’s in expansion states as well as in non-expansion states. But for whatever reason, they’re not signed up.
About 60% of the uninsured, we think, are ineligible for any kind of financial health. The uninsured overwhelmingly have low incomes; always did, still do. About 40% of the uninsured are ineligible for financial assistance because their income is too high or because they are offered coverage at work that’s not affordable, but technically it’s affordable. These are the folks in the so-called family glitch. Or they’re ineligible because of their citizenship and immigration status. And then about 10% of the uninsured, about 2.6 million people, are in that coverage gap. They are poor, they have income below the poverty level, but they live in a state that has not expanded Medicaid and so they are ineligible for any financial help at all.
Jennifer Sullivan: Got it. Let’s go ahead and move into the next section of questions. And we are getting questions from the audience that, I think, are clarifying ones, that will be good to address before we get into the meat of this section. Just looking for clarification – and I’d open this up at this point to our other panelists. But looking for clarification as to the difference between the cost-sharing reductions and premium subsidies. We talk a lot about subsidies in the abstract but would somebody be willing to clarify more about the difference between those two forms of assistance? Jeanette, are you unmuted or – yes?
Jeanette Thornton: Sure. I can take that or, Karen, if you’d like to as well?
Karen Pollitz: Jump in, Jeanette. People are sick of hearing from me.
Jeanette Thornton: Okay, I will do that. So, yes, one of the things it’s important to stress that there are two forms of subsidies that are available to people who are purchasing coverage through the individual market, through the exchange. The first is the premium tax credit and this is what is used to actually reduce the out-of-pocket monthly premium bill that an individual is paying for their health insurance coverage.
And there haven’t been any changes with this. There were some proposals as part of the debate around the Affordable Care Act to make some changes, but those have not taken effect or been enacted at this point. So those are those premium tax credits and those are paid to health plans in advance – you’ll hear the term “advanced premium tax credits” – on a monthly basis to actually reduce the amount of money the individual has to pay as part of their bill every month.
The second subsidy, which Karen did a really good job of sort of outlining really to the cost-sharing reduction program. And this subsidy is available to individuals who make under 250% of the federal poverty level. And what this does is it allows people to purchase specific plans – and these are all offered on the silver metal tier – that have a reduced out-of-pocket expenditure for those individuals. So they have a lower deductible, lower copayments, lower coinsurance. It’s tied to their income level. That really makes these plans more affordable for that lower income population.
So, just throwing numbers out there – Karen might have a good example off the top of her head – but instead of having to pay a $200 emergency room copay, these plans have baked in a $50 emergency room copay. And that’s sort of baked into the benefits. You have to be a certain income level and you also have to purchase a silver plan through the exchange to take advantage of that extra benefit.
Jennifer Sullivan: Great.
Noam Levey: This is Noam. Could I just add one additional clarification, which I think is important to understand – and correct me, guys, if I’m getting this wrong. But it’s important to understand that the health plans have to offer these reduced cost-sharing plans, regardless of whether the administration makes these payments to the insurers.
So from the consumer’s perspective, they’re still seeing that reduction in their out-of-pocket cost. What happens as a result of the way the CSRs are structured is that whether or not insurers get reimbursed for offering that lower cost-sharing.
Jeanette Thornton: Exactly. That is…
Andy Slavitt: Hey, this is Andy Slavitt. I just want you to know that I’m on the call.
Jennifer Sullivan: Wonderful. Thanks so much, Andy. I was about to announce you were stuck on a plane. But we’re happy you were able to make it. Thank you.
Andy Slavitt: We just landed.
Jennifer Sullivan: Great. Okay. So I think at this point – those were helpful clarifications from everybody, so thanks for the team effort there. We’re going to move into this second section now on participation, premiums, and providers. And I actually, Andy, was planning to direct this first question at you anyway, so I will.
What effect, in your estimation, will the administration’s decision to stop making those cost-sharing reduction payments to issuers have on open enrollment this fall?
Andy Slavitt: Well, I think there’s a cumulative effect that we – we just saw a study yesterday which showed that over a million people are going to be disenrolled or few people enrolled – I’m not sure exactly how they stated it – because of, I think, really, a combination of things. But this is really all factors related to how the Trump administration has chosen to run open enrollment.
In specific, the cost-sharing reduction payments have done more to create uncertainty and caused insurers to raise their rates. And it’s awfully hard as a competitor in a market like this to offer an insurance plan when there is this level of uncertainty because you don’t know what other insurance companies are going to assume. And if you assume the improper thing, you could end up in a difficult position.
And of course, companies don’t really – as much as people like to feel the negative things they feel about insurance companies, insurance companies don’t like the headlines of raising rates high, particularly if it’s through things that are not their own dealing. So, it’s had, undoubtedly, a dampening effect in competition. It’s had a increase competition in rates. It’s made many Americans – contributed to their feeling that the marketplace isn’t, in fact, offering coverage this year. I think 10% of Americans believe that the ACA’s already been repealed. And of course, it’s reduced the amount of participation.
Jennifer Sullivan: Okay. Jeanette, I’m hoping that I can get you to weigh in on this one. Andy did mention participation. It was in the news cycle more, sort of, the middle of the summer when we were starting to see which areas would have gaps or would have participation, who is participating where.
At this point, HHS does not project any bare counties, but they do project that nearly half of all counties will only have one issuer participating. And I’m just wondering if I can get your reactions to that? How is that affecting premiums and potentially provider networks and enrollee’s access to care?
Jeanette Thornton: Sure, thank you. So one of the things that’s really important to note that when we talk about whether there’s – how many issuers are in a particular area that it really is person-specific. And I think it’s important for people to realize that when we’re talking about a carrier, there are many different plans and products that are available. So many companies that offer coverage through the exchange offer different provider networks, so they might off a plan that’s more like an HMO or more like a preferred provider organization that has a different number of providers in their network.
Another thing that should be made clear is that there is often many different choices available to consumers from different metal tiers – the bronze, silver, gold, platinum – or catastrophic plans for those that are eligible for those. And those all have different cost-sharing. So there is a lot of choice available, even though there is one carrier. Of course we’d like to see as much competition in the market as possible, but I do want people who are facing a situation where there may only be one carrier in their particular state to realize that doesn’t just mean that there’s one particular plan to choose from. There’s often a range of different products and policies that are offered for people.
I think another thing that’s really important – and I think this is something that we stress, and many of the speakers as well, is that it’s really important for people to search on Healthcare.gov to make sure that their particular providers, hospitals, or family physician is in the network, and look at that information when they’re looking for plans through the exchanges. Many of the exchanges do have search tools available that allow you to enter in your specific provider that you’re interested and see which plans include that provider in network. So that’s another important thing that everyone should be doing when they’re shopping for plans.
If I may, Jennifer, can I just go back to the CSR question, briefly?
Jennifer Sullivan: Of course.
Jeanette Thornton: So one of the things I think I just wanted to highlight for everyone, and I think Karen did a really good job of sort of outlining what this really means for consumers, is that it does create some real interesting dynamics in terms of the available premium as it relates to an individual’s tax credit. Plans, we’re anticipating that there may be some decision made to end the cost-sharing reduction subsidies.
As Noam mentioned, plans have to continue to offer these plans with reduced out-of-pocket amounts, so it was built into the premium. I think, though, that means that consumers that are looking for plans are really going to have to shop around and take a look and see, for their individual situation, what that looks like in terms of the available plans and the premiums. So I just wanted to highlight that as well from our perspective.
Jennifer Sullivan: Thank you. Another sort of clarifying question and I’d welcome, actually, anybody to chime in who wants to respond to it. But the focus today is definitely on the marketplace qualified health plans, but I’m wondering if somebody could shed some light on the non-marketplace individual market? How is that different from the plans available through the marketplace and is that a place where consumers could look for coverage this fall?
Jeanette Thornton: So, this is Jeanette.
Karen Pollitz: [Cross Talking] Karen…
Jeanette Thornton: I can – oh, okay. Great.
Karen Pollitz: Go ahead.
Jeanette Thornton: So the one thing that I wanted to flag, and I think it’s important for everyone to know, is that, for health plans that are participating in the exchanges, they are required to offer the same plan off exchange. And so for many people, you can purchase the same plan that you could purchase through the exchange off exchange, and those are required to follow the same set of rules related to premium rating, preexisting conditions, all of that sort of thing. So for many people, especially if you’re higher income and you don’t qualify for a subsidy, you can purchase those same plans off exchange.
Karen Pollitz: And this is Karen. I would just jump in. Depending on where you live and how insurers priced for this termination of their CSR payments, there could be better deals for people off-marketplace if they’re not eligible for subsidies. In the example that I showed you from South Carolina, the benchmark silver plan on the marketplace for a 30-year-old, unsubsidized, is $422 a month next year but off-marketplace, $362. So more than $700 a year cheaper for that same clone plan, but off the marketplace, just because this premium increase will be selectively applied just to the marketplace silver plan.
So people who aren’t eligible for subsidies tend to buy off the marketplace. Some of them buy on the marketplace, and that can be a good idea, particularly if your income has some volatility to it. If you anticipate that, right now, you’re earning more than four-times the poverty level, but you anticipate during the year your income may drop, you can turn on your subsidies mid-year after your income drops, but only if you’re already enrolled in a marketplace plan.
So for that reason, some people like to buy on the marketplace, even when their income is a little bit high. But for the off-marketplace plans, I think it is going to be important for people who are not subsidy-eligible to really take a look and see how the premiums change in 2018. And there may be options to avoid this particular surcharge either by staying off the marketplace altogether or by looking in a metal tier other than silver plans.
Noam Levey: This is Noam. Could I just add one additional thought about this population? I think most of the attention in the last couple of years, from a reporter’s perspective, has been probably rightfully on these marketplaces. They were new and they, obviously, are an entirely new mechanism for organizing the non-group market. A lot of the disruption that has been felt by consumers – particularly those who were in the market before 2014, has been felt by this population, I think it’s fair to say, outside the marketplace, people who, often times, made too much to qualify for subsidies.
And these people, many of them, have really taken it in the teeth. I mean, there obviously are a lot of new protections that have offered benefits to this population. But some of the rate increases that they’ve experienced are really substantial. And from a journalist perspective, I think it’s important to put those concerns in perspective in the sense that this is a relatively small part of the American health care consuming public.
But their concerns and the fact that the market is probably not working for them as well as it should is driving a lot of the grievance and a lot of the complaints about the fact that non-group market reforms in the Affordable Care Act aren’t working. And I would argue, just as a general proposition, that it would be worth reporters focusing in on this population both to chronicle their concerns, but also put them in perspective and explore further why it is that these people are not.
Many of them just simply can’t afford it. This is not one-percenters, necessarily. I mean, these are people who are middle class folks who even $300 for a 30-year-old a month is a lot to be paying for health insurance, so that’s an overarching piece of advice and observation, I guess.
Jennifer Sullivan: Thanks, Noam. That’s helpful. At this point, I think we will move to the third of our five, sort of, main discussion areas and talk more about administrative changes. But I think that was also the perfect segue because, I’m going to skip around a little bit from the questions that you’ll see on the slide in front of you to incorporate things that we’re getting from the audience.
But, Andy, I’m going to direct this one at you to start. Kevin Brady and Orrin Hatch today proposed extending CSRs, but bundling that with a – putting a hold on the individual and employer mandates. Just wondering if you could unpack that a little bit, how you think that that will impact the market?
Andy Slavitt: Well, I don’t think their proposal will impact the market at all because I don’t think it’s going to pass. I think, as we’ve talked about, if you put aside the left and right partisan bickering on cost-sharing reductions, one think is clear is they bring premiums down if they get paid and they reduce deficit by $190 billion over 10 years. So good for tax payers, it’s good for consumers, and I think what’s being proposed by Hatch and Brady is an effort to say, “Let’s hold that hostage because we all agree it’s a good thing. Let’s hold that hostage to taking away pieces of the ACA,” and without any kind of thoughtful instruction in its place.
So we know, based up on (editorial) analysis that, if you take away the individual mandate, it just means that people’s premiums are going to go up even higher. So they’re not proposing anything sensible in its place, like has been proposed in some other settings, even, from Senator Cassidy. So I think this is just a – so I don’t see that as having an impact on open enrollment other than to add to the confusion that I think will make it more challenging to execute a good open enrollment season.
Jennifer Sullivan: And, Noam, I’m going to go back to you on this. Beyond today’s proposal that came out, what else are you hearing about other potential congressional action to restore these payments? And do you think that there’s anything that can be done that would effect this coming year?
Noam Levey: Well, it seems, certainly, that there had been some momentum in the alternative proposal by Senator Lamar Alexander, the chairman of the Health Committee and Murray, the ranking Democrat on that committee. That proposal has gotten bipartisan endorsement with the announcement that every Democratic senator’s behind it. It’s clear that it’s either at 60 or even above 60 in terms of the number of senators who will back it.
But the issue has been always with those negotiations that they have run into criticism by more-conservative Republicans in the House. President Trump has sort of gone back and forth repeatedly over the last few weeks about whether he supports what Alexander and Murray are working on or not. And given now the injection of this Hatch/Brady kind of proposal, which is a marker – I think it can be seen as sort of a marker on the right of what conservatives want on the Hill, it’s unlikely that Congress would be able to pass any stabilization package.
Certainly, they won’t be able to do it before the open enrollment period starts. Maybe not even by the time it closes, especially if that kind of a deal is wrapped into a spending bill at the end of the year. So less and less likely that it will have any impact on the open enrollment this period. Maybe bigger question about whether or not it can help bring some stability to the marketplaces going forward.
Jennifer Sullivan: Okay. I’m going [Cross Talking]…
Andy Slavitt: Just to chime in on Noam’s comments. I think this is a 2019 action, not a 2018 action if Murray/Alexander (were to pass).
Noam Levey: That’s the concise version.
Jennifer Sullivan: So knowing that, Karen, I’m actually going to direct this one at you. Tell us more – you talked a little bit about this in your presentation. But now that we’ve had more discussion, can you sort of revisit the ways that state-based marketplaces are approaching things potentially a little differently than the states with federally-facilitated marketplaces?
Karen Pollitz: Sure. So they do have flexibility. Almost of them, not quite all of them, did decide to have a longer open enrollment than will be true in Healthcare.gov states. Some are going to go all the way to the end of January again this year. Others will go into later in December or mid-January, so people do need to kind of check where they live to find out what are the dates for open enrollment in your state.
States also have flexibility in terms of adopting some of the new rules that have been taking effect. I didn’t talk about new limitations on eligibility for special enrollment periods during the year, but those have now been adopted in the federal marketplace states. There are limits on who’s eligible, in some cases, for these special enrollment periods. And also, a new requirement that people document their eligibility for special enrollment periods before their new coverage can take effect. So this pre-enrollment verification requirement will take a place starting in – well, now in federal marketplace states.
State-based marketplaces have the flexibility to not adopt that or to phase it in more slowly. So I think we’ve also seen in California, for example, the head of that marketplace, like everyone else, sort of saw this potential cliff looming on the cost-sharing payments. And so, early on, instructed issuers how it is that they should price for that, and had kind of a contingency plan in place in case the payments didn’t go away. So I think state-based marketplaces, by and large, have not seen as much of the political back-and-forth over whether we love or hate the affordable care act and whether we’re going to facilitate or under-mind implementation.
I think the state-based marketplaces, by and large, have been a calmer place. Certainly, exceptions. Lord knows, in the first year the websites were terrible in Maryland and Massachusetts, and a couple of the other state-based marketplaces, so this has been a fun ride everywhere. But consumers in those states also have the benefit of the Medicaid expansion, so there have been a lot of differences that make those state-based marketplaces less volatile and maybe even less confusing for consumers, too.
Jennifer Sullivan: Great. Last question in this section. Again, kind of working in reverse order. And I’m going to start with Jeanette for this one. But Karen mentioned in her slides to timing of auto-reenrollment for folks this fall and the end of the open enrollment period coinciding when some of those reenrollments will take place. Just wondering if you can help us understand a little bit more about what that means and what that might mean for people who are in that position of potentially being auto-reenrolled.
Jeanette Thornton: Sure. So I think this is – the auto-enrollment, as Karen mentioned, is a process that’s been underway during past open enrollment periods to ensure that if a consumer, for whatever reason, decides not to go back to the marketplace and shop or update their information, that they’ll assured continuous coverage, they’ll be assured that they’ll have coverage come January 1st.
So, as in past years, consumers who do not take any action during the open enrollment, which is in the federal marketplace between November 1st and December 15th, will be auto-enrolled into the same or similar product. And I’ll talk a little bit more about that in a second.
I will say, leading up to this point, consumers will have gotten several notices: one from the marketplace letting them know that, “Hey, open enrollment is coming. Be sure to go back to the marketplace, and check and update the information to be ensured that you have the best plan that meets your needs. Health plans are also sending notices, arriving in mailboxes very soon, that describe the plans, the premiums, the benefits, and any changes that are taking effect as of January 1st. So consumers will all have that access to that information.
They’ll also be able to log on to Healthcare.gov and see what plan they’ll be auto-enrolled to for January. And so if they decide, “Yep, that’s what I want,” and take no action, they’ll get that coverage January 1st. For consumers who decide and do not take action during the open enrollment, on December 15th they will be auto-enrolled. And that means that they will have coverage effective January 1st.
Now, in most cases, this is the same plan or a plan that’s very similar to the one they had before. In a narrow situation where that person’s carrier has left the market, they’ll be auto-enrolled into a similar plan offered by another issuer. But what’s different this year as compared to last year is last year they were auto-enrolled at the end of December and said, “Wait a minute. That’s not the plan for me.” Open enrollment lasted another six weeks, so they could go back to the marketplace and change their mind for a new plan, effective, say, February 1st or March 1st.
This year, that is not the case. So this is why it’s really important that people go to the marketplace during open enrollment, and check and see what plan they’re going to be auto-enrolled into so they can make any changes during open enrollment. Because when that auto-enrollment process takes place on December 15th they will no longer be in open enrollment. And unless they have a special enrollment period, will not be able to change plans at that point. I hope that made sense. Very complicated topic.
Jennifer Sullivan: No, thank you. I thought that was a very clear explanation. Thank you for that. So, we’re going to move now onto the fourth of our five topics, which is public awareness. And there have been some pretty significant changes in, certainly, the administration’s approach this year to doing outreach for public awareness. But definitely interested in all of our panelists’ perspectives here. I think there has just been a lot of movement on this topic.
But, Andy, let me start with you because you and some former CMS colleagues have been involved in an effort called Get America Covered. And I’m wondering if you can tell us more about that and why that is happening this year.
Andy Slavitt: Sure. If I think back to this time of year last year or the year before or the year before, this was an incredibly exciting time because we were in the process of rolling out a comparison shopping website, we were informing people of coverage for the year. There were just hundreds and hundreds of moving operating pieces, including in-person assistance, people who were trained, and websites, and technology, and brokers, and so forth.
So, that a – and when we had significantly more budget that’s been allocated, this year, the marketing budget’s been cut, I believe, by 90%. The in-person assistance budget has been cut by, I think, 43% – although, someone can check me on that. And there’s just been messages coming out of HHS that have been much more to the frame of, “Why would you want to enroll in something like this when it’s clearly breaking?”
The reality is, though, for millions of Americans, this is a lifeline for them. Obviously, many, many people who got insured for the first time using the open enrollment period. And so what’s interesting is that what we know is that most Americans, actually, who don’t have insurance, we know a few things about them.
One is that they actually want insurance. They think of it as a good thing. Two, the main reason they don’t buy it is they think they can’t afford it. Three, 80%-plus of people who get covered are eligible for a tax credit, and that means that most people can get coverage for under a hundred dollars a month. And when many people find out about that, that’s the only fact they need.
So between that and the deadline, we are trying to get awareness up and try to do the job that is – on the outside, that isn’t getting done within the administration. So we started this organization. It’s called Get America Covered. It’s being run by a couple of people who ran open enrollment for the last four or five years. And there’s a number of people who’ve agreed to help out and support that effort. And hopefully – it’s not going to make up for all those cuts and losses that I talked about, but hopefully it will at least make a start.
Jennifer Sullivan: Great. You mentioned reductions in assistor funding, and I know that Karen has been involved for multiple years in really keeping a finger on the pulse of these programs around the country. So, Karen, I’m just wondering if you can talk more about what’s going on with these programs, and potentially the agent and broker community as well, as we look at this open enrollment period.
Karen Pollitz: Sure. So, a lot of people end up looking for help when they are shopping for coverage and when they are applying for financial assistance through the marketplace for a variety of reasons. They may have insurance literacy issues. They may have really complicated cases. They may not have internet at home. They may not speak English or they may not speak insurance. A lot of people with insurance literacy issues.
And most people, we’ve found through our surveys, just aren’t confident to do this by themselves. It can be kind of complicated. For some people, it’s very straightforward. For other people, because of their family situation, their income, their coverage needs, whatever, it can be more complicated. So millions of people every year do seek help at some level from a professional.
Agents and brokers are there, have always been there, to help sell private insurance to people. A number of insurers have reduced or even ended commissions to brokers to sell coverage through the marketplace, either all year-round or during special enrollment periods. Even in the face of that, I think many brokers have continued to try to help people just because they’re their neighbors and they do try to help.
But we’ve found in our surveys that brokers are less likely to be available to help people who have some in-person assistance needs, particularly people whose income is low and they may end up being eligible for Medicaid and need help enrolling in that problem. People with language issues. People who have administrative problems getting into the marketplace, maybe they can’t pass the automated ID proofing or they’ve got other kinds of marketplace verification problems with respect to their citizenship status or their income that they’re claiming for the coming year and so forth.
So, the marketplace is required and has always made available professional, in-person assistance that is also funded through the marketplace. So these are the navigator programs. They’re not paid by insurance companies. They’re not supposed to have any sort of financial ties to the industry. They are paid employees, basically – or, grantees, I guess, of the marketplace. They are required to work year-round.
They are required to help people not only during open enrollment, but afterwards when they need post-enrollment help, when they have special enrollment needs during the year. They’re required to not only help people enroll, but to conduct outreach, to go to enrollment fairs to help educate people about insurance. So they have a pretty broad job description that is laid out in the law and they’re required to do that.
And the federal marketplace, in order to make sure that these programs were available and that they continued from year-to-year and could develop overtime in their experience, signed three-year agreements with navigator entities in the federal marketplace states. And then right at the beginning of the third year, at the end of this summer, all of the sudden the administration made a change and changed the way that programs would be paid, changed the amount of money that would be available to them.
And so we have seen a pretty dramatic impact on navigator programs in some of the marketplace states. The most dramatic would be those programs that decided they couldn’t continue for the third year. Not too many of those, but a big impact. In Ohio, where I grew up, the single statewide marketplace navigator program closed its doors at the beginning of September and will not be available. And so in a lot of counties, most counties in the states, there won’t be navigator assistance.
The marketplace has also recognized other volunteer programs and enrollment assistor programs through community health centers, which get separate funding from HHS to provide enrollment assistance, so people can still seek help from those programs as well. If you go to Find Local Help on Healthcare.gov, you will see a list of all of the professionals – navigators, marketplace assistance programs, and brokers – who are certified, who’ve passed the training, and are qualified to provide you with enrollment assistance.
So that will be important for people to do. But again, I wouldn’t wait until December 10th because it may be a little trickier this year to get an appointment, depending on where you live. And if you do encounter any other delays from any of the things that we’ve talked about already, there’s a chance that the clock could run out before you get your application all squared away.
Jennifer Sullivan: Perfect. And, Karen, you just mentioned it. You sort of anticipated someone in our audience’s question. But I just want to ask you to repeat it. Where can consumers go to find local navigators or assistors?
Karen Pollitz: If you are in a federal marketplace state and a Healthcare.gov state, there is a button right on the front page. You have to look around for it a little bit. But it says Find Local Help. If you click on that, you can enter your ZIP Code and a radius, and it will present you with a list of all of the certified assist programs, navigator program staff, and also brokers and agents that are available.
If you’re not in a Healthcare.gov state, from Healthcare.gov, you can find a link to your state marketplace and then there will be an equivalent find in-person help button on that webpage as well. And then many states, even in the federal marketplace states – I just did a webinar with folks from several southern states. There are locally-organized, centralized places Insuregeorgia.org or com – my apologies to Sarah for not knowing that off the top of my head. But I think the most direct, simple way for people is to just go to the Find Local Help button on Healthcare.gov.
Jennifer Sullivan: Great. Thank you. So, Jeanette, this next one is for you. And, Noam, I’m going to get to you as well in this section, so just wait. But we’ve heard about some of these freestanding efforts to promote public awareness as well as the navigator and certified application counselor programs. But what are – if anything, what are issuers doing differently to get the word out this year?
Jeanette Thornton: Yes, great question. So, we’re concerned about the lack of available in-person assistance and navigator resources this year. And definitely are concerned about the potential impact of reduced CMS advertising on the availability for these consumers who may not know about the availability of this coverage to find help and enroll.
So from a health plan perspective, our member health insurance plans are increasing their outreach and marketing efforts, given the federal efforts to cut that back. It certainly will not replace the amount of advertising enrollment and outreach that was done prior, but our plans are going to be stepping up. They’re going to be stressing the fact that nothing has changed, have their call centers to answer specific questions people have about plans, benefits, provider networks, et cetera.
So plans will be stepping up their local presence, doing a lot of their own outreach and education and advertising, as well as working with other groups to help ensure that people know that open enrollment is upon us and can get the help they need to get covered.
Jennifer Sullivan: Got it. And as promised, Noam, I wanted to get your take on this. Are these efforts – do they seem to be resonating on the ground? And for reporters who are covering what this means for people and their communities, do you have an recommendations for resources that they might avail themselves of to get the landscape in their community?
Noam Levey: Well, certainly, talking to folks around the country, I’ve heard a lot of anxiety about the drop in the federal effort, both by navigators as well as folks who work in the both health plan space and in the provider community. I think for reporters working around the country, these navigators themselves, whether they have – are in business still in a smaller capacity are great sources for getting a sense of what’s going on.
Health plans themselves, many of us when we were covering the rollout of Healthcare.gov two years ago when data was harder to come by, it was the health plans were seeing a lot of what was going on in real time in terms of what people were trying to sign up for. For health plans, they’re going to be a good resource, I think, for folks.
Many of the federally-qualified health clinics around the country were very involved in past years in getting people signed up, whether or not they were formerly navigators or not. And I think they’re a great resource for reporters who want to check and see what it looks like – what interest looks like. Are people more or less confused? Are more or less people coming in the door?
So those are a few – oh, and I guess disease groups, also, and consumer advocates – Families USA as well as Cancer Society, et cetera – that have worked in the past to get people enrolled in covered. They are sort of on the frontlines in many states and would also be good resources for reporters.
Jennifer Sullivan: Okay. I’m going to just make note about time for our audience. We have less than 10 minutes left and we haven’t quite gotten to the end of our preprogrammed questions, but I’ve been, obviously, inserting questions from you-all as they’ve come in. So if you do have more questions, feel free to use that question button your toolbar to submit them, and we’ll try to get to a few more before 2:45.
But at this point, we’ll switch to our final section here, the outlook for the future. And I actually want to start with a question from the audience here, which is maybe more of a clarification. And I would direct this at Karen first, which is how will any of these changes that we’re talking about affect people who get their coverage through their employers? Where are the intersections there, if any?
Karen Pollitz: So, mostly, people with employer coverage are not affected, really, by any of this. We talk all the time about the marketplace that’s kind of the tail that wags the dog. But it’s important because people move in and out of employer coverage. So I think for people who are in employer coverage, maybe the most important thing about the marketplace is that it’s there and it’s an option, so that you’re not worried about job lock. You do have the opportunity to maybe change jobs or take some time off or you don’t freak out when your kid turns 26 and comes off your plan.
So I think knowing that it’s there, that there is something that is at least roughly equivalent to what most people enjoy at work in terms of the comprehensiveness of coverage and also in terms of the affordability of coverage. So that kind of similarity and availability of the marketplace coverage, I think, is important for people, even if they don’t consciously think about it.
But for the most part, all of this stuff that’s been going on with the open enrollment period and the CSR payments and so forth, people who get coverage at work, they’re not going to feel the difference.
Jennifer Sullivan: Got it. Andy, question for you. So, if I’m a consumer, scratching my head, looking at all of the drama around the Affordable Care Act, around the potential to stabilize or not this year, all of the uncertainty, what would you tell me when I say, “This market looks like it might collapse anyway. I’m not sure I can rely on this.”
Andy Slavitt: So first of all, I think the important benchmark is that, for all of the drama and trauma, the premiums and level of claims, if you will, the amount of expenses in a policy for the exchange now, almost precisely, matches that of an employer-based coverage product, and with very much the same guarantees and protections. So I think the first thing I would say is that we have now equilibrium where the insurers on balance is about the same ratio and with about the same level of premiums as we see in the employer-based market. So this perception, (that’s not actually) the perception.
Now, one of the differences is that that in the employer-based market, your employer pays the lion’s share of your policy and there’s a big tax deduction. And likewise if you qualify for a tax credit in the ACA, you’re similarly protected, if not greater. Now, I think as Noam pointed out earlier, there are people who make – in the middleclass who make more than four-times the poverty level, their policies aren’t necessarily any more expensive than anyone else. They are just the only people who are really paying for this without any kind of support from the government or from an employer or someone, so it feels expensive.
Secondly, I think there’s been a lot of misinformation pushed out purposely, including Trump recently saying that, “Obamacare is over. It’s dead. It’s done. It should never be talked about again.” This kind of messaging gets through to people and it worries people, but it’s misinformation. The reality is that, for more than 80% of the people who buy products on the exchange, they still have plenty of choice and they still have access to health care from between $50 and $100 a month, which is I think a product point that people can afford.
So while there are challenges – and I think we should be very disappointed that our political system is not yet shown itself willing to address these challenges. These challenges are very solvable challenges. They’re the kind of challenges that can be solved with the kind of tools that have been used in states, like the state of Alaska, and which other states – Minnesota, Oklahoma, and others – have been attempting to use.
And I would say that with a cooperative environment,, with a cooperative Congress, with a cooperative White House – and I think we should hold our politicians to a standard which says, keep improving things and keep fixing things. We have a marketplace that is in very strong shape and could be made stronger. And all of the instability challenges, of which there are certainly some, can be addressed with very standard policy tools.
Jennifer Sullivan: Thank you. I’m inclined to stop there, but I am going to ask our last question, because I do want to give the panelists a chance to address it, which is the recent executive order, which, among other things, would permit association health plans. Karen, can you just do a quick overview of what that means and what folks who are thinking about the marketplace this year might need to know about that executive order?
Karen Pollitz: Well, I can try. Also, on the 13th, the President did issue an order, but it was kind of general. So we don’t have a lot of details yet, but he did ask his agencies to come back with recommendations in two areas to make less regulated, I guess I would say, coverage available to small employers – I think just small employers; possibly also to self-employed individuals – through association health plans.
There are association health plans often sponsored by the Chamber of Commerce or the local Auto Dealers Association and so forth. And many small businesses will look there for their coverage options. Mostly small businesses are not buying through the marketplace today. But when they get coverage through associations, these are still what are called ACA-compliant plans. So the law kind of looks inside the association and says, “If you’re making coverage available to a small employer, then the small employer market rules still apply.”
So you can’t charge the small business more because someone in the group is sick. And you can’t offer them a plan that doesn’t cover essential health benefits, that doesn’t have a drug benefit, for example. So the President’s executive order seems to say that he wants to look for ways for association health plans to be expanded or operated differently so that not all of the ACA rules would apply. But we don’t really know how that would work. We’re going to have wait and see what comes back from the agencies.
So there is a concern that this could destabilize the market because some businesses would still be buying plans that follow the ACA rules, including the rating rules, and others wouldn’t. And that that could create adverse selection problems and really destabilize the market. There’s also been history – depending on how the order might go out, there has been a very unfortunate history of fraud, shadow organizations sponsoring association health plans that look legitimate and feel like real health insurance.
But when the small businesses go to make claims, it turns out the sponsors took the premium money and left town. And these fraudulent arrangements evaded both federal and state regulation. And so that’s something that I think some people are worried about, but we’ll really just have to see.
The other element of the executive order was to somehow expand access to short-term non-renewable policies. Those are still out there. They are not ACA-compliant policies, so these are still medically underwritten. You still can’t buy one if you have a preexisting condition. And if you’re healthy and you buy one, and then you get sick, the insurer doesn’t have to renew your coverage. They can just end it. So they’re not guaranteed renewable by definition.
To make these policies easier to spot, the Obama administration required that they really couldn’t be longer – offer more than three months of coverage. And again, we’ll see what the details are, but the President’s executive order seems to suggest that it should be – I don’t know. There should be more of these policies or maybe they would go back to offering 364 days of coverage a year. We’ll just have to see.
Probably no short-term effect on either the shop marketplace or the individual marketplace for 2018, but we’ll just have to see what develops from that executive order and what gets implemented down the road.
Jennifer Sullivan: Great. Thank you. I asked you to bite off a lot in not a lot of time left, so thanks for unpacking that one a bit for us. And thanks to our audience for hanging on a few minutes past our scheduled end time, but that is, unfortunately, all we have time for this afternoon. And like any good policy discussion, we end with a little bit of “let’s wait and see”. But it’s going to be an interesting fall.
So thanks very much to all of our panelists for giving their time generously this afternoon, and to our audience for joining. Finally, also, thanks very much to the National Institute for Health Care Management Foundation and the Association of Health Care Generalists who helped make today’s webinar possible. We do hope that everyone in our audience will take a couple minutes to just give us a little bit of feedback in the evaluation that you’ll get in your inbox momentarily. And feel free to check out the slides as well as a recording of this webinar on Allhealthpolicy.org very soon.
We hope to see you at another Alliance for Health Policy even in the future. Thanks so much. Good afternoon.