The Affordable Care Act: An Early Progress Report
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The Affordable Care Act: An Early Progress Report David Grande, MD, MPA Senior Fellow, Leonard Davis Institute of Health Economics Assistant Professor of Medicine University of Pennsylvania February 5, 2014
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The Affordable Care Act: An Early Progress Report. David Grande, MD, MPA Senior Fellow, Leonard Davis Institute of Health Economics Assistant Professor of Medicine University of Pennsylvania February 5, 2014. Coverage. Financial security Better health. Insurance Pricing. - PowerPoint PPT Presentation
Transcript of The Affordable Care Act: An Early Progress Report
The Affordable Care Act:An Early Progress Report
David Grande, MD, MPASenior Fellow, Leonard Davis Institute of Health Economics
Assistant Professor of MedicineUniversity of Pennsylvania
February 5, 2014
Coverage
Financial securityBetter health
Insurance Pricing• We can experience rate – vary premiums
based on health status– More affordable insurance for the healthy– Sick get priced out
• We can community rate - “everyone” is charged same premium – More affordable insurance for the sick– Healthy don’t want to join and drop out
• Insurance market outside of ESI has been a failure
Eliminate Medical
Underwritingor
“pre-existing conditions” Individual
Mandate
Subsidize or Provide
Coverage
The Affordable Care Act
Affordability
• How much do you have to pay for insurance? (i.e. premium credits)– Premium contributions as % of income
• How much cost sharing do you have to shoulder at the point of care? (i.e. cost-sharing subsidies)– Cost sharing subsidies increase actuarial value of
insurance for low income individuals (70-94%)
Source: Kaiser Family Foundation: Summary of the New Health Reform Law
Example: • 35 year old earning $30,000 per year
(260% of FPL) • Contribute 8.4% of income ($210/month)• Calculate subsidy from “benchmark Silver
plan” • $287-$210 = $77/month – apply to any plan
• Subsidies tied to prices in local markets• Individual $ exposure: age, income, benefit
design• Public $ exposure: prices in local markets
Source: Center for Budget and Policy Priorities; HealthCare.gov
Coverage Projections 2019
No Reform Reform (2014 Update)0
10
20
30
40
50
60
70
55
30
12
13
12
Uninsured New MedicaidNew Marketplace Coverage Shift to Marketplaces
Source: Congressional Budget Office, February 2014
It will take about 3 years…
2014 2015 2016 2017 2018 2019
-30
-20
-10
0
10
20
30
812 12 12 12 126
13
22 24 25 25
Uninsured MedicaidExchanges Shifts to Exchanges
Marketplace Enrollment as % Eligible by State
~2 million enrolled(January 2014)
Massachusetts
South Dakota
Oklahoma
Louisiana
Hawaii
West Virginia
Wyoming
South Carolina
Missouri
Virginia
Georgia
Tennessee
Utah
Maryland
Alabama
Pennsylvania
Delaware
New Hampshire
Montana
Nevada
North Carolina
Michigan
New York
Kentucky
Connecticut
Washington
0% 5% 10% 15% 20% 25% 30% 35% 40%
6.4%
8.0%
15.2%
33.4%
Source: Kaiser Family Foundation
Awareness of Marketplaces Among Uninsured December 2013
Yes69%
No21%
DK10%
HealthCare.Gov States
Yes54%No
35%
DK11%
State Marketplace States
Source: Robert Wood Johnson Foundation / Perry Undem Research/Communication 2014
77% have not visited MarketplaceWhy not?
Deadlines keep changing
Waiting until after the holidays
Don’t' want health insurance
Haven't had time
Other
Not sure
Haven't heard about it
Waiting Until Problems Fixed
Can't Afford Insurance
0% 10% 20% 30% 40% 50%
40%
Source: Robert Wood Johnson Foundation / Perry Undem Research/Communication 2014
What do they know about the ACA?
Mandate
Ways to Apply
Community Rating
Subsidies
Open Enrollment
Comprehensive Benefits
Medicaid Expansion
0% 10% 20% 30% 40% 50% 60% 70%
65%
54%
49%
41%
40%
28%
25%
Source: Robert Wood Johnson Foundation / Perry Undem Research/Communication 2014
If the young and healthy don’t buy…will there be a “death spiral”?
Temporary Reinsurance ProgramAdverse Selection – Catastrophic Losses
within a Plan
Goal: Protect against actuarial uncertainty in early years of ACA (encourage plan participation)
Temporary Risk Corridor ProgramAdverse Selection – Sicker than Expected
Enrollees within a Plan (Marketplace Plans)
Goal: Protect against actuarial uncertainty in early years of ACA (encourage plan participation)
Risk Adjustment ProgramAdverse Selection Across Plans
Goal: Long-term mechanism to guard against cream skimming in community rated private market
Source: Kaiser Family Foundation
Healthy PA Proposal
• Changes to existing Medicaid program– Collapse to 2 plans – low risk & high risk– Charge monthly premiums > 50% FPL– More limited benefits
• Expansion population– Marketplace plans– Requirements:• Wellness program (HRA, annual exam, timely payment)• Job search requirements
Healthy PA Questions
• Disruptions of coverage due to premiums– Experience in other states: 10-50% disenrollment
• Administrative burden– Verification systems
• Cost neutrality– What are the assumptions?
The Future
• Coverage: – likely close to target
• Risk Pool: – unknown but risk of premium spike low– premiums lower than expected
• Satisfaction: – Resolution of early enrollment problems– Limited networks– High deductibles
• Politics: – Will states get on board with implementation?
Google Searches 9-29-13 through 2-1-14
Week 1
Week 3
Week 5
Week 7
Week 9
Week 11
Week 13
Week 15
Week 17
Week 19
Week 21
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HealthCare.gov ObamaCare Affordable Care ActSource: Google Trends
