Evaluating Individual Market Performance and Stabilization - - PowerPoint PPT Presentation

Jean Marie Abraham, PhD National Health Policy Conference February 4, 2019

Evaluating Individual Market Performance and Stabilization Strategies

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
• About 33% of 60-64 year olds denied

Access

• States averaged 23 individual market

insurers; ranging from 2-52

Insurer participation

• 83% of individual plans held were

Preferred Provider Organizations or Point of Service plans

Plan Choice

• Average actuarial value was 60%

(Bronze-like)

• Benefit exclusions (e.g., maternity)

Coverage generosity

• 50% of PPO/POS plans with deductibles >$3255
• OOP maximum limits: $5,858/$12,077 for

single/family coverage (in $2018)

Affordability

Sources: Individual Health Insurance 2099 Availability and Benefits (AHIP); NAIC 2010 Supplemental Health Care Exhibit Report; Gabel et al. 2012.

2014 ACA Provisions: 1) Marketplaces 2) Guaranteed Issue 3) Modified Community Rating 4) AV-Based Standardization of Plans 5) Essential Health Benefits 6) Premium tax credits and CSR subsidies 7) Individual mandate

Factors Shaping Individual Market Performance Individuals Insurers

Uncertain Political Environment Regulatory Environment

• Participation
• Product Space
• Premium-

setting

• Shopping

behavior

• Preferences
• Price-sensitivity
• Propensity to

enroll

Source: Author’s analysis of 2015-2019 HIX Compare Data

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2015 2016 2017 2018 2019

Percentage of GRAs

On-Marketplace Structure at GRA-Level, 2015-2019 1 2 3 4 or more

Source: Author’s analysis of 2015-2019 HIX Compare Data

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2015 2016 2017 2018 2019

% of Geographic Rating Areas

Off-Marketplace Structure at GRA-Level, 2015-2019

0 or 1 2 3 4 or more

• 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

• ver time period
• Moderate: Declines in insurer participation of between

34.0-66.99% over time period

• Higher: GRAs with > 67% decline in insurer participation
• r monopoly markets as of 2018

Quantifying Market Instability and Affected Populations (Abraham, 2019)

Affected Populations

On-Marketplace

Lower Instability Moderate Instability Higher 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 reporting fair or poor health 16.06 15.62 17.78 Average total number of primary care physicians in GRA 555 800 209 Average total number of hospital beds 2010 3119 994 Average local unemployment rate 6.07 6.13 6.74 Average percentage of establishments in county that have 1-4 employees* 53.18 53.76 53.36 Average payroll per worker in GRA ($) 43,392 41,444 37,158 Percentage of GRAs in states that ever expanded Medicaid via ACA 62.76 60.74 22.22

*not statistically different across categories

273 276 299 359 481 477

2014 2015 2016 2017 2018 2019

Monthly Premium ($)

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

Large within- and cross-state variation in premium growth

• ver time.

• 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.

Premiums, Affordability and Competition (Drake & Abraham, 2019)

• Minimum Silver Plan

Premiums

• 14.2% higher in monopoly

markets vs. those with 3+ insurers

• Markets with BCBS insurer

have minimum silver plan premiums that are 14.3% higher

• Premium Spreads
• 20.6% higher in

monopoly markets

• vs. 3+ insurers
• Markets with a

BCBS insurer have premium spreads that are 46.3% higher

Findings

• 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).

1332 Waivers for Stabilization

• 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?

Individual Market: Looking Ahead