Consultant: Higher Cost Sharing, Narrow ACA Networks Here to Stay

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By Sara Hansard

Oct. 5 — Higher cost sharing for health insurance enrollees and narrower networks are here to stay, a health-care consultant who was the first head of the federal office that ran the Affordable Care Act exchanges said Oct. 5.

From the outset of implementing the ACA, the two main strategies for keeping prices down have been managing networks and higher cost sharing for enrollees, said Joel Ario, a managing director of Manatt Health Solutions and the first director of the Department of Health and Human Services' Office of Health Insurance Exchanges. He spoke at a briefing on the third ACA open enrollment, which will take place Nov. 1 through Jan. 31, 2016, for the 2016 plan year.

Ario also said that while premiums in some ACA individual markets are rising sharply for 2016, overall premiums are stabilizing compared with sharp increases that occurred in that market prior to the ACA. “Affordability is still Job No. 1 for the exchanges,” he said.

Focus on Decision-Support Tools

D.C. Health Benefit Exchange Authority Executive Director Mila Kofman said the District of Columbia's exchange is focusing on improving its consumer decision-support tools in 2016, allowing users to enter data on their health-care needs to get information on premiums, deductibles, coinsurance and copayments. The exchange also includes directories in English and Spanish showing which physicians are in plan networks, she said.

The D.C. exchange, which has close to 25,000 enrollees through its individual marketplace and more than 21,000 congressional and small business enrollees through its Small Business Health Options Program, has seen issuers reduce the number of products to concentrate on the most popular offerings, and the products being offered in 2016 will be more standardized than they were in 2015, Kofman said. The exchange will offer 136 small group plans and 26 individual plans in 2016, she said.

Kofman said that in November tax information will be available through the federal exchange to find premium subsidy recipients who didn't file tax returns as required by the ACA. Those that don't file tax returns are not eligible to continue receiving the premium subsidies.

IRS `Not Helpful'

Kofman was critical of the Internal Revenue Service, which she said “is just not helpful” to exchanges in trying toimplement the ACA. The IRS has been late in providing technical specifications needed by the exchanges to file required monthly reports, and it refused the D.C. exchange's request to get a list of subsidy recipients who haven't filed tax returns in order for the exchange to conduct outreach and encourage those people to file their returns late so they wouldn't lose subsidies, Kofman said. “The IRS has not shown evidence that they recognize some of the challenges that we face,” she said.

Peter Van Loon, director of exchange solutions and information technology at Access Health CT in Connecticut, said individual consumers are “getting a lot more sophisticated” about asking where they can go to get the most affordable quality health care. “The individuals are focusing on the absolute cost of health care now,” he said during the forum. The Connecticut exchange has about 97,000 individual enrollees, he told Bloomberg BNA after the forum.

Connecticut has seen an “emergence of provider organizations taking risk and acting as their own insurers,” Van Loon said. “I think that in the future we'll start to see providers on the exchanges directly.”

2016 Premium Findings

At a separate Capitol Hill briefing Oct. 5 on the third open enrollment period, Jon Gabel, a senior fellow at the University of Chicago's National Opinion Research Center (NORC), provided some details of a NORC analysis of 2016 premiums in five northeastern states that have posted information on their websites.

Based on findings from those states it appears that “average premium increases will be higher than last year,” and benchmark silver-tier plans, on which federal premium subsidies are based, are showing greater increases than average increases for other silver plans, Gabel said.

“The averages are going up but it is not a catastrophe as some have reported,” Gabel said. The increases are “more in line with employer-based health insurance,” where the historic average is about 7 percent, rather than the 4 percent average increases seen over the last four years, he said. Cost sharing remains stable, he said.

Median Benchmark Plan Increase

The average premium increase in the five states for 2016 is 4.9 percent and the median is 2.1 percent, Gabel said. The average increase for benchmark plans is 6.7 percent, with the median increase 5.8 percent.

The maximum out-of-pocket expenses consumers could pay in exchange plans in the five states studied by NORC are increasing an average of 5.8 percent, “but it's almost entirely due to Maryland,” Gabel said. Maryland's increase was 18.4 percent, according to Gabel’s slide presentation. The median increase in out-of-pocket expenses is 2.3 percent, he said.

On Oct. 1 the Kaiser Family Foundation posted 2016 increases in benchmark plans for 14 states showing an average increase of 4.4 percent, Gabel said.

Gabel cautioned that “there are great differences from state to state.”