Public Health Insurance Marketplace Still Benefits Consumers
With more payers dropping out of the public health insurance marketplace, many are pointing at the potential for downfall among the state exchanges.
By - The public health insurance marketplace created through the Affordable Care Act (ACA) may have fewer and fewer health plans participating in the coming years since a number of major insurers have dropped out of the exchanges. This would lead to fewer coverage options for the everyday consumer.
UnitedHealthcare was the first national health payer to drop out of the ACA health insurance marketplace and, more recently, Aetna has declared that it will be moving out of most of the exchanges it is currently participating in by 2017.
Aetna has stated that it has experienced major financial losses through the public health insurance marketplace and won’t be able to compete without the certainty of a merger with Humana. This past July, the Department of Justice filed a lawsuit against the impending merger between these two payers, which could dissolve the future of this acquisition.
Earlier this summer, Humana also announced that it will be leaving a number of state exchanges. With more and more payers dropping out, the public health insurance marketplace is likely to have fewer product offerings to enrollees. However, a new analysis from the Department of Health and Human Services (HHS) shows that consumers will still be able to have affordable healthcare coverage even if every premium of health plans sold on the health insurance marketplace were to grow by double digits in 2017.
Even if, for some strange reason, all health plan premium rates were to increase by 25 percent, a total of 73 percent of marketplace consumers would still be able to find coverage with a premium of less than $75 per month, according to an HHS press release.
“Headline rate increases do not reflect what consumers actually pay,” Kathryn Martin, Acting Assistant Secretary for Planning and Evaluation, said in a public statement. “Our study shows that, even in a scenario where all plans saw double digit rate increases, the vast majority of consumers would continue to have affordable options.”
The analysis explains that tax credits will need to increase as the premium costs charged by payers rise. The majority of ACA health insurance marketplace consumers are covered by tax credits so their individual premium costs will not rise since the tax subsidies would grow in parallel with any jumps in premium rates.
Additionally, double-digit premium increases were expected in 2016 but consumers only saw an average of a $4 rise in their premium costs due to these tax subsidies. While these tax subsidies may benefit low-income families, when healthcare payers increase the costs of premiums, the middle-class is hit with higher taxes when the federal government continues to assist with these continually rising healthcare costs.
Another vital point brought from HHS is the opportunity for consumers to shop around for the best health plan to fit their needs. Today, the health insurance marketplace offers consumers the ability to compare costs, plan designs, and provider networks, which enables enrollees to find the plan that suites their healthcare needs.
“Prior to the Affordable Care Act, it was almost impossible to shop around for health insurance. Not only were many Americans barred from coverage due to pre-existing conditions, but those who did have insurance through the individual market were often trapped in a plan, since people with even small health problems could be denied coverage or charged an exorbitant price if they tried to switch plans. Today, any Marketplace consumer can purchase any plan during open enrollment, and Marketplaces let consumers compare prices,” the press release stated.
While there are still some benefits for low-income families to continue enrolling in health plans through the exchanges, the federal government has moved forward with some changes to the public health insurance marketplace that would benefit payers.
Late last month, the Centers for Medicare & Medicaid Services (CMS) announced that new protocols will be brought forward to strengthen the risk adjustment program operating among the exchanges.
In a CMS Blog, Kevin Counihan, CEO of the public marketplace, discussed some of the strategies being used to improve the health insurance exchanges. In order to support payers with more high-risk policyholders, changes will be made to the risk adjustment program such as changing methods for analyzing policyholders who stay with a health plan for less than a year as well as incorporating prescription drug utilization data in analyzing the true medical status of a patient starting in 2018.
“As the Marketplace continues to grow and mature, one of our most important priorities is to study data, listen to a range of market participants, test out different approaches, and adapt to what we see and hear. We have a number of tools to make adjustments like the ones we are proposing today, and are confident in our ability to make the Marketplace an even more attractive market for consumers and health plans alike,” Counihan wrote in the editorial.
To learn more about the changes taking place within the health insurance marketplace, click here.
Dig Deeper:
How Payers Could Succeed in ACA Health Insurance Exchanges
How the Affordable Care Act Changed the Face of Health Insurance
