Many Americans who bought health insurance through exchanges operated by states or the federal government have a good understanding of how their plan works, but also are afraid they can’t afford medical services, according to research published Monday by the Deloitte Center for Health Solutions.
A report scheduled for release Monday by a conservative-leaning think tank accuses state officials of misleading the federal government and the public about the Massachusetts Health Connector’s readiness to launch its new website in October 2013.
The report from the Pioneer Institute draws on public audit reports and interviews with anonymous people described as “whistle-blowers” to detail what they characterize as a bungled effort by the University of Massachusetts Medical School, software developer CGI, and the Connector to upgrade the Connector’s software in 2012 and 2013.
The Connector — designed to link people with health insurance when they don’t have another source — eventually ended its relationships with UMass and CGI.
Earlier this year the U.S. Supreme Court heard arguments in King v. Burwell, a case critical to the future of the Affordable Care Act (ACA, or so-called Obamacare). Readers interested in the details of the case should find them elsewhere. Suffice it to say here that the case concerns whether individuals can receive tax credits for buying health insurance on exchanges established by the federal government, though the text of the ACA indicates such subsidies are provided for those buying coverage through an “exchange established by the State.”
The case has the potential to invalidate substantial subsidies now being provided by federal taxpayers to millions of Americans using federal exchanges in 37 different states. Given the uncertainty created by the pending case, legislators on both sides of the aisle are considering how to react to various possible scenarios arising from a court decision. The House and Senate each recently passed budget resolutions allowing budget targets to be revised in the event of subsequent legislation modifying the ACA. The Senate resolution specifies that such legislation must be deficit-neutral.
Has the effort peaked to sign up uninsured Americans for coverage? The announcement that the nonprofit organization Enroll America is laying off staff and redirecting its focus in the face of funding cuts comes amid inconsistent sign-ups during the second Affordable Care Act open-enrollment period and concerns about affordability.
A recent New York Times analysis compared Kaiser Family Foundation estimates of potential enrollees with sign-up data from the Department of Health and Human Services. While some states that signed up few people in 2014 recovered during the 2015 open enrollment, other states lagged: “California, the state with the most enrollments in 2014, increased them by only one percentage point this year, despite a big investment in outreach. New York improved by only two percentage points. Washington’s rates are unchanged.”
Most states could not post consistent gains in both open-enrollment periods. An official from Avalere Health, a consulting firm, told the Times that she was “starting to wonder if we’ve overestimated the whole thing.”
The Centers for Disease Control and Prevention (CDC) has released early estimates of health insurance and access to health care for January through September 2014. The National Health Insurance Survey (NHIS) is (in my opinion) the most effective survey of health insurance, because it asks people three different but important questions: Are they uninsured at the time of the survey? Have they been uninsured for at least part of the year? Have they been uninsured for more than a year?
As shown in Figure 2, the proportion of long-term uninsured is about the same as it was circa 2000. The proportion of short-term uninsured has shrink a little in Obamacare’s first year.
New analysis from Avalere finds that while exchanges have succeeded in enrolling very low-income individuals, they continue to struggle to attract middle and higher income enrollees.
Specifically, as of the close of the 2015 open enrollment period, exchanges using HealthCare.gov had enrolled 76 percent of eligible individuals with incomes between 100 and 150 percent of the federal poverty level (FPL) or $11,770 to $17,655. However, participation rates declined dramatically as incomes increase and subsidies decrease. For instance, only 16 percent of those earning 301 to 400 percent FPL picked coverage through an exchange, even though they may be eligible for premium subsidies.
“People receiving more generous subsidies are expected to enroll in the exchanges at higher rates. However, participation levels decline as incomes increase, even among individuals who would be eligible for both premium subsidies and cost-sharing reductions,” said Elizabeth Carpenter, director at Avalere.
It’s spring in Washington, and time to resume one of the capital’s favorite sports. No, not baseball, but throwing mud at the Supreme Court. Pending cases include the legal status of same-sex marriage and whether the IRS can provide billions of dollars in Obamacare subsidies without explicit congressional authorization. Partisans have launched a preemptive bid to undermine the legitimacy of the forthcoming decisions by accusing the court of “activism” for involving itself at all.
These increasingly transparent attempts to discredit the court should be rejected.Every case involving plausible abuses of power requires judicial engagement — conscientious, impartial truth-seeking, grounded in evidence — rather than reflexive deference to the political branches.
Take the Obamacare case. At issue in King v. Burwell is a section of the Affordable Care Act concerning tax credits for buying health insurance from government-operated healthcare exchanges. Congress wanted states to set up their own exchanges, but it lacks constitutional authority to force them. So Congress opted for a stick-and-carrot approach, authorizing tax credits for insurance policies purchased “through an Exchange established by the State.” As a backup, the ACA directed federal bureaucrats to set up federally operated exchanges in states that declined to set up their own.
Heather Higgins: The thing that I do that spends actually most of my time and is not something that is terribly sexy for donors, but that I think is hugely important is work on Obamacare. That’s kind of how I backed into the political stuff. I had been very involved in 2009 in trying to help fund and orchestrate and message the entire battle against Obamacare because there was no infrastructure on the right that was really set up to do that. And then coming out of that had the epiphany that since Reid and Pelosi were not moving, maybe the way to do that was to go into the Massachusetts race for Ted Kennedy’s seat, that special election which was being run on the issues that had polled well in September, which were the national security issue and the economy, and instead redefine the race as being about healthcare and the 41st vote, which every political consultant I took that to thought that I was on drugs and that that was a waste of money. So we wound up being the only independent expenditure in Scott Brown’s first race to make it be about healthcare and the 41st vote. [Applause.] Thank you.
And then in the summer of 2010 I was appalled that nobody was talking about Obamacare so we created the Repeal Pledge which is actually the only pledge about Obamacare that still exists of the ones that were started then; and coming out of the 2010 election where we had used it, I looked for the group to join to think strategically about not working at cross purposes between what the Senate might do, the House might do, the court case from Florida that was then rising up to the Supreme Court, what outside grassroots group could do, and there was none. So I’ve started something called the Repeal Coalition which meets every 3 to 4 weeks in the Capitol. It has leadership staff from both the House and the Senate. It has a lot of staff from different Members and Senators. It has a lot of outside groups that are policy wonks to grassroots groups, and we talk about all the things we wish that would get done that don’t get done, and we talk about things that sound like good ideas and figure out if they’re dumb ideas and try and prevent dumb things happening. There is an overriding purpose to this which is remembering, of course, the long-term goal.
During the recent oral argument in King v. Burwell — the Supreme Court case deciding if providing subsidies to buy health insurance in the 36 states utilizing federal health care exchanges is allowed under the Affordable Care Act (ACA) — Justice Kennedy suggested that disallowing subsidies might be unconstitutionally coercive because “states are being told either create your own exchange, or we’ll send your insurance market into a death spiral.” Are “death spirals” real, or just a way to frighten the public?
The death spiral will purportedly happen like this: disallowing federal exchange subsidies will make insurance less affordable for the 87% of federal exchange enrollees currently receiving subsidies. These people will no longer be required to buy insurance since the ACA’s individual mandate only applies to individuals who have access to affordable insurance. Since the ACA imposes community rating, requiring roughly the same premium for all individuals in a given plan with only small adjustments for their risk characteristics, and guaranteed issue of insurance regardless of the enrollee’s health, the old and unhealthy will continue to buy coverage but the young and healthy will forego coverage. The resulting higher risk pool of enrollees will increase the average cost of individuals remaining in the non-group insurance market, both on and off the exchanges, resulting in increased premiums that will drive out more low cost, healthy patients eventually destroying the market.
Two economic simulations predict that “adverse selection,” where healthier people leave the insurance market and sicker people stay in causing premiums to rise, will occur if the King plaintiffs prevail. The Urban Institute predicted discontinuing federal exchange subsidies would result in premium increases of 35% and enrollment declines of 69% in the individual health insurance market. The Rand Corporation made similar predictions.
But it is hard to reconcile these forecasts with studies of earlier state insurance market “reforms” that created market conditions similar to those that would result if federal exchange subsidies are disallowed. These studies suggest adverse selection would be minimal and would not lead to a “death spiral,” that is, it would not lead to a self-reinforcing cycle of adverse selection in which each time premiums rise, more people exit, leading to a sicker, more expensive risk pool and market collapse.
On Monday, the Supreme Court denied certiorari in Coons v. Lew, a constitutional challenge to provisions in the Affordable Care Act (ACA) creating the Independent Payment Advisory Board (IPAB), an independent federal agency charged with responsibility for controlling the growth of health-care costs by constraining the growth of Medicare.
IPAB is controversial, and potentially unconstitutional (as even fervent ACA advocates admit). Nonetheless, the denial of certiorari was to be expected. IPAB is not yet operational, so (as the U.S. Court of Appeals for the Ninth Circuit concluded) a challenge of this sort isn’t ripe. If and when the IPAB is up and running — and begins making changes to Medicare that affect providers or beneficiaries — there will be ample time to consider the constitutionality of Congress’s creation.
Alternatively, Congress could repeal or reform IPAB itself, as some have suggested. Given that the text of the ACA expressly limits Congress’s ability to amend these portions of the law, such legislative action could itself prompt litigation and perhaps even High Court review.
The Court’s denial of certiorari in the Coons case does not mean the justices won’t revisit the ACA next term. Another cert petition is pending in Mayhew v. Burwell, Maine’s challenge to the constitutionality of the ACA’s maintenance of eligibility requirements for Medicaid. According to Maine (and supporting amici), the federal government’s threat to withhold all Medicaid funding should Maine restrict Medicaid eligibility below pre-existing levels is unconstitutionally coercive and violates the Medicaid holding of NFIB v. Sebelius.
If, as oral argument in King v. Burwell suggested, some of the justices are interested in revisiting federalism concerns about the ACA, Mayhew is a potential vehicle. Indeed, although the U.S. Court of Appeals for the First Circuit found Maine’s arguments unconvincing, Maine’s position would get a boost should the the federal government prevail in King on federalism grounds.