Exchanges and the ACA

KP Residents Health Policy Elective 10/17

Lest We Forget – Success!

41.7 41.043.3 42.8 43.6

46.048.2

45.9 45.2 44.3

35.7

28.6 28.6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Millions of people in the U.S. younger than 65

without health insurance

Coverage GainsSince Oct 2013

Marketplace& Medicaid

↑17.7 M

Net GainIn Coverage

↑20.0 M

Parents’ Plan to Age 26

↑2.3 M

SOURCE: Axios interpretation of KFF data, July 2017

How Americans Get Health

Insurance, 2017

What the ACA is…What it isn’t…and why.

Patient

Protections ACA

Individual Mandate

Employer Mandate

Age Rating 3:1

Guaranteed Issue/Community Rating

Dependent Coverage to 26

Essential Health Benefits

No Annual & Lifetime Limits

What “the ACA” is…

Affordability

& Funding ACA

Income-Based Subsidies

Cost-Sharing Subsidies

ACA Taxes

MedicaidACA

Expansion to 138% of FPL

Based on Defined Benefits

What “the ACA” is…

What “the ACA” is NOT…and why

The ACA is NOT

• Single Payer

• Universal Coverage

• Cost Control

Because…

• Medicare for all? Medicare at 55? Public option?

• How do you define “Affordable” and what is a “tax?”

• How strong a mandate for individuals, employers, and states?

• Policy ≠ operations

• Death panels, innovation, and reform

Individual Exchanges So Far…

•+

Fairly strong

enrollment

Standard plan

designs simplify

consumer choice

After shaky start,

reasonably good

user experience

Growing consumer

awareness of ACA

benefits

Strong price

competition

and significant

subsidies –

particularly

below 250%

FPL

Open EnrollmentPlan Selections in Individual Exchanges(In millions)

8

11.712.7 12.2

2014 2015 2016 2017

Individual Exchanges So Far…

•▲IT platforms haven’t worked

well in some states

Provider networks

unclear to

consumers

Health plan

quality

deserves

greater priority

Competitor actions

sometimes leave

consumers whipsawed

The strength of the

mandate and the

integrity of the risk

pool are major

issues

Individual ExchangesSuccess Factors

Stable Risk Pool

High Quality, Transparent

Provider Networks

Competing Systems

SHOP – Small Business Exchanges

Employee Choice Participation by Major Market Health Plans

Effective Administration for Group Quoting, Setup & Enrollment

Broker Friendly

Tools

Success Factors

So…what now?

Health Reform 2.0

• Introduced in the House March 6, 2017• Pulled from consideration March 24, 2017• Passed the House May 4, 2017• McCain votes “No” July 27, 2017• Graham-Cassidy attempt September, 2017• Trump Executive Order and CSR

announcement October 12, 2017

Repeal (and Replace?)Major Republican health legislation had several common features:

Exchanges and tax credits Market Rules

Reduced Federal FundingMedicaid

Changed from ACA but

continue as a means of

organizing the individual

market.

Eliminated or made optional for

states - where politically and

procedurally possible

Scaled back or fundamentally

restructuredTax credits and federal

Medicaid spend reduced.

Some increase in high risk

pool spending and other tax

spending

Implementation

• Open enrollment begins Nov. 1 –

shorter than past years

• Federal marketing and outreach

efforts cut back significantly

• Executive Order

- Increasing choice and

competition?

- Dividing the risk pool?

- Weakening the mandate?

• Terminating Cost Sharing

Reduction Payments

Implementation and Stabilization (?)With legislative repeal efforts stalled, the Trump Administration is putting its stamp on

the ACA. In Congress, bipartisan negotiations continue around a stabilization package

Stabilization

• Senate negotiations ongoing

• Fund CSR?

• Reinsurance and outreach

spending?

• Greater state flexibility?

Many ACA Provisions Are Popular

Among Trump Voters

NOTE: Some items asked of half samples. Question wording abbreviated. See Topline for full question wording.

SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted November 15-21, 2016)

16%

49%

60%

62%

66%

68%

71%

72%

75%

83%

Requires nearly all Americans to have health insurance or else pay a fine

Requries employers with 50 or more employees to pay a fine if they don't…

Prohibits insurance companies from denying coverage because of a…

Increases Medicare payroll tax on earnings for upper-income Americans

Gives states the option of expanding their existing Medicaid program to…

Provides financial help to low- and moderate-income Americans to help…

Closes the Medicare prescription drug coverage gap

Creates health insurance exchanges where small businesses and…

Eliminates out-of-pocket costs for many preventive services

Allows young adults to stay on their parents' insurance plans until age 26

Among Trump Voters: Percent who favor each of the following specific elements of the health care law:

Percent of Adults Who Went Without Care

Because of Costs,

2013, 2014, and 2015

0

10

20

30

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Note: States are arranged in rank order based on their current data year (2015) value.a at least -0.5 standard deviation change (at least 2 percentage points) between 2014 and 2015. b at least -0.5 standard deviation change (at least 2 percentage points) between 2013 and 2015.

Data: Behavioral Risk Factor Surveillance System (BRFSS), 2013, 2014, and 2015.

Cumulative Increases in Health Insurance

Premiums, Workers’ Contributions to

Premiums, Inflation, and Workers’ Earnings,

1999-2016

98%

160%

213%

92%

167%

242%

24%45%

60%

21%35%

44%

0%

50%

100%

150%

200%

250%

300%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Health Insurance Premiums

Workers' Contribution to Premiums

Workers' Earnings

Overall Inflation

SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2016. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2016; Bureau of Labor Statistics, Seasonally

Adjusted Data from the Current Employment Statistics Survey, 1999-2016 (April to April).

Questions