Health Insurance Report™ helps you track and analyze legal, legislative, and regulatory developments affecting the health-insurance industry throughout implementation of the Affordable Care Act...
By Sara Hansard
Jan. 16 --The need for higher enrollment by young, healthy people in the health insurance marketplaces created by the Affordable Care Act was highlighted by health-care industry executives Jan. 16 at a Bloomberg BNA event.
Only about 24 percent of the nearly 2.2 million people who signed up from Oct. 1 through Dec. 28 were between ages 18 and 34, according to a report issued Jan. 13 by the Centers for Medicare & Medicaid Services .
“We need to get that number up,” said Dan Durham, vice president, policy and regulatory affairs, for America's Health Insurance Plans (AHIP). “I think there's still time to do that. That's critical to ensuring a broad and stable risk pool, which will have an impact on pricing for plans in 2015,” he said at the Bloomberg BNA 2014 Outlook on Health Care discussion.
Joel Ario, a managing director of Manatt Health Solutions and former director of the Office of Health Insurance Exchanges in the Department of Health and Human Services, said that the low number of young enrollees in the marketplaces so far is “a little concerning,” as it is significantly lower than the approximately 40 percent of the uninsured who are in the 18-to-34 age range.
But John Gorman, founder and executive chairman of Gorman Health Group LLC, predicted that many young people will enroll in coverage in March, when the 2014 enrollment period ends. Tax preparation services H&R Block and Jackson Hewitt Tax Service are highlighting the ACA, and they will help people apply for ACA subsidies for health insurance, he said. “A lot of kids in their 20s and 30s are going to jump at this when you combine that with the fact that Jackson Hewitt and H&R Block actually help advance their tax refunds,” which can be used to pay the first couple of months' premiums, he said.
Although the health insurance marketplaces are working better for consumers, health insurers continue to face challenges getting people enrolled, Durham said. “There are a lot of manual work-arounds that plans have to engage in, and that takes a lot of time, a lot of effort, more resources that were not anticipated, because all these systems were supposed to be automated by now,” he said.
Health plans continue to experience missing enrollment records, situations where “orphan” individuals enrolled in the federal marketplace, but the plan has no record of it, Durham said. Plans also are having problems with premium discrepancies, and they are seeing duplicate enrollment records, he said.
When consumers' circumstances change--having a child, getting married or divorced or moving to another state--it has an impact on the plans that are available and on premiums, Durham said.
“Plans can't change anything that affects premium under the current guidance. That has to be done by the federal exchange,” Durham said. The federal call center is telling people they need to contact plans for changes, while plans are telling people they don't have the authority to make the changes, he said.
Plans are beginning to put bids together for 2015 marketplace premiums, Durham said. A proposed notice of benefit and payment parameters rule must be finalized, and a timeline with details of what is required for qualified health plan applications in 2015 is expected to be issued in February, he said.
Durham repeated the health insurance industry's call to repeal the ACA health insurance tax, which he said will add $8 billion in upward pressure on premiums in 2014, and will jump to $11.3 billion in 2015.
The outlook panel also discussed the networks available to ACA plan enrollees. “There is going to be push-back” around network adequacy standards, primarily from state regulators, Ario said.
However, “the ACA anticipates narrow network competition,” Ario said. “One of the purposes of an exchange is to provide a broad range of choices, and if you're going to provide a broad range of choices, you want differences--real, meaningful differences--between the choices that people are going to be offered.”
A study released in December 2013 by McKinsey & Co. found that 70 percent of the plans offered have narrow networks, Ario said. It may be appropriate for regulators to examine whether insurers are adequately disclosing the fact that their marketplace plans have narrow networks, he said. “If the narrow networks are done right and people understand them, I think they're good,” he said.
What the health insurance industry calls “high-value” networks “help both lower the price of the product, as well as ensure quality,” Durham said.
Prices charged by health-care providers vary widely across the country, and studies have shown little correlation between amounts charged and quality and outcomes that patients receive, Durham said. The McKinsey study found that high-value networks lower premiums by 26 percent, he said.
Individuals can select broader networks, Durham said. The CMS has reported that people have a choice of 53 plans on average, he said.
Network adequacy rules and laws implemented by states and the federal government “are sufficient at this point to ensure that these networks provide the type of quality care that's needed for consumers,” Durham said.
High cost-sharing levels that plan enrollees face for marketplace plans will likely shock many people, Ario said. People need to understand that they should pick plans that are appropriate to their health-care needs, since bronze-tier plans that carry the lowest premiums also have the highest cost-sharing requirements, he said. The ACA caps out-of-pocket expenses, a requirement that was delayed by the Obama administration until 2015.
“This law is going to empower consumers, but also expect more from consumers over time,” Ario said. Health insurance will return to being oriented to covering catastrophic expenses, like most forms of insurance, he said.
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