Status of Affordable Care Act Repeal/Replace

Transcription

1 Status of Affordable Care Act Repeal/Replace June 26, 2017 National Coalition for Cancer Survivorship Karen Pollitz, Senior Fellow Kaiser Family Foundation

2 Exhibit 1 Uninsured rate is at lowest in history, but public doesn t know it Share of nonelderly population uninsured: * Since the 2010 health care law was passed, has the share of people who are uninsured Decreased (correct answer) Increased Stayed about the same Don t know/refused 2% 31% 26% 41% Note: 2016 data is for Q1-3 only. Source: CDC/NCHS, National Health Interview Survey; Kaiser Family Foundation Health Tracking Poll (March 6-12, 2017)

3 Exhibit 2 Pre-ACA, the uninsured had low or modest income, and were generally ineligible for Medicaid or job-based plans Family Work Status Family Income 400% FPL and Above No 21% Workers Part-Time Workers 16% 1 or More Full- Time Workers 63% % FPL 10% 14% % FPL 37% <100% FPL 38% Total = 47.3 Million Uninsured The federal poverty level was $23,050 for a family of four in Data may not total 100% due to rounding. SOURCE: KCMU/Urban Institute analysis of 2013 ASEC Supplement to the CPS.

4 Exhibit 3 ACA expanded health coverage through Medicaid and the Marketplaces Medicaid/ Other Public, 20.8% Medicaid/ Other Public, 26% Employer- Sponsored, 55.7% Uninsured, 17.7% Employer- Sponsored, 56% Uninsured, 10% Private Non-Group, 5.8% 267 million non-elderly 271 million non-elderly Private Non-Group, 8% SOURCE: KFF analysis of the 2013, 2016 Current Population Survey, US Census Bureau.

5 Exhibit 4 The uninsured rate has decreased everywhere, but especially in Medicaid expansion states 2013 as of June % 15% 14% 8% Medicaid Expansion States Non-Expansion States NOTE: Uninsured rates for 2016 are as of June SOURCE: Emily P Zammitti, Robin A Cohen, and Michael E Martinez, Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, January-June 2016, (Hyattsville, MD: National Center for Health Statistics, November 2016),

6 Exhibit 5 To date, 32 states, led by Republican and Democrat governors, have elected the ACA Medicaid expansion WA OR NV CA AK ID UT AZ* MT* WY CO NM HI ND SD NE KS OK TX MN WI* IA* IL MO AR* MS LA MI* OH IN* KY TN AL VT NY PA WV VA NC SC GA FL ME NH* MA CT RI NJ DE MD DC 32 Expansion States Democratic Governor (14 States + DC) Republican Governor (16 States) Independent Governor (1 State) States not Implementing Expansion (19 States)

7 Exhibit 6 ACA transformed non-group health insurance market Discrimination based on health status prohibited Pre-ACA, insurers denied coverage, charged more based on health status, excluded coverage for pre-existing conditions Policies redefined to provide major medical coverage (EHB, OOP limits) Pre-ACA, insurance defined as anything sold by licensed health insurer; exclusions, coverage limits, mini-meds were common Individual mandate Pre-ACA, voluntary coverage made insurers fear adverse selection Subsidize premiums (to 400% FPL) and cost sharing (to 250% FPL) Pre-ACA, non-group coverage unsubsidized. 90% of uninsured had income <400% FPL; 75% of uninsured had income <250% FPL New Marketplaces deliver subsidies, provide standard comparison info and inperson help to consumers Pre-ACA, lack of transparency in insurance, help through brokers/insurance sales force.

8 Exhibit 7 Transition to reformed market challenging in Early years of ACA implementation were difficult transition Insurers adopted an entirely new business model, faced new competition Many insurers underpriced policies in early years to gain market share Average 2014 premiums much lower than predicted 2017 premium increases largely corrected for previous under-pricing Most enrollees eligible for subsidies, shielded from 2017 rate increases Market enrollment grew 50% from pre-aca and holding steady Industry experts confirm insurers are getting the hang of new ACA market* The U.S. ACA individual market shows signs of improvement, as most insurers' 2016 results were better than 2015 results. But the market is still developing and will need a couple more years to reach target profitability. The ACA individual market is not in a "death spiral * S&P Global, The US ACA Individual Market Showed Progress in 2016, but Still Needs Time to Mature, April 7, 2017

9 Exhibit 8 Average Individual Market Gross Margins Per Member Per Month, $43.60 $39.53 $37.20 $13.54 $6.54 -$ Source: Kaiser Family Foundation analysis of data from Mark Farrah Associates Health Coverage Portal TM

10 Exhibit 9 ACA marketplace signups (millions) End of Open Enrollment, 2014 End of Open Enrollment, 2015 End of Open Enrollment, 2016 End of Open Enrollment, 2017 Source: 0&selectedDistributions=number-of-individuals-who-have-selected-a-marketplace-plan

11 Exhibit 10 Marketplace Plan Enrollment Changes During Year End of Open Enrollment, Dec-14 End of Open Enrollment, Dec-15 End of Open Enrollment, Jun-16 End of Open Enrollment, Feb-17 Enrollment in millions Source: HHS/ASPE and CMS enrollment reports.

12 Exhibit 11 Insurer Marketplace Participation by County in 2017 Source: Kaiser Family Foundation analysis of data from the 2017 QHP Landscape file released by healthcare.gov on October 24, Note: We define the number of insurers in a single county as the number of insurers (grouped by parent company or group affiliation) that offer at least one silver plan in the county. For states that do not use healthcare.gov in 2017, insurer participation is estimated based on information gathered from state exchange websites, insurer press releases, and media reports as of August 26, States that do not use healthcare.gov in 2017 are: California, Colorado, Connecticut, District of Columbia, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont, and Washington. See the interactive map here: nsurerparticipation

13 Exhibit 12 In selected areas in 2017, other factors impacted market competition and stability Risk scores highest in areas that did not expand Medicaid In states that extended grandmothered plans (pre-2014, underwritten), profitability of ACA compliant plans is lower In rural areas with sparse population, it is especially hard for multiple insurers to compete Even pre-aca, a single health insurer held majority market share in most states Midstream changes to ACA introduced added challenges: Congressional cuts to ACA Risk Corridor program cut payments expected by many insurers As result, prior to 2016 election, some insurers in some areas decided to exit marketplaces in 2017 Source:

14 Exhibit 13 For 2018, new uncertainty worries insurers in all states Every time something new (and potentially disruptive) is thrown into the works, it impedes the individual market's path to stability. * Anthem BCBS of Ohio recently announced exiting 20 counties in 2018 "A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules and guidance. Will cost sharing reduction (CSR) payments continue? Estimated cost is $10 billion in 2018; To recoup losses and remain in marketplace, insurers would need to increase premiums 19% Will the individual mandate be enforced? CBO estimates repeal of mandate, alone, could increase premiums 20% How will the next Open Enrollment Period be conducted? Administration cancelled outreach, advertising for final days of OE4 OE5 will be shortened from 12 weeks to 6 weeks ACA described as horrible health care, collapsing, a disaster * S&P Global, The US ACA Individual Market Showed Progress in 2016, but Still Needs Time to Mature, April 7, 2017

15 Exhibit 14 President Trump: Insurance for everybody Much less expensive and much better Much lower deductibles. Washington Post, January 15, 2017

16 Exhibit 15 House American Health Care Act (AHCA) by the numbers* Reduce Federal revenue by $1 trillion over 10 years Reduce Federal health spending by more than $1 trillion over 10 years, including $834 billion in Medicaid outlays $192 billion in reduced premium subsidies for individual market $98 billion from repeal of cost sharing subsidies for individual market Patient and State Stability Fund provides $138 billion/9 years to offset impacts $100 billion for high-risk pools, reinsurance, cost sharing help, other options/9 years $15 billion earmarked for federal reinsurance (invisible high risk program)/9 years $15 billion earmarked for maternity/mental health/substance abuse services (2020 only) $8 billion to help people subject to health status rating in waiver states/5 years Net deficit reduction of $119 billion over 10 years CBO estimates number of uninsured individuals will grow by 23 million to 51 million (19% of nonelderly population) by million lose Medicaid, 9 million lose private coverage * Congressional Budget Office estimates May 24, 2017

17 Exhibit 16 Key Medicaid Provisions of the AHCA Phases-out Medicaid Expansion Ends enhanced match 1/1/2020 for expansion adults Grandfathers continuously enrolled expansion adults with higher match Converts full Medicaid program to capped financing in 2020 Ends open-ended federal financing to limit federal spending Establishes per person spending cap by eligibility group: children, disabled, elderly, expansion adults, and other adults based on 2016 spending Amounts increased over time by an inflation factor States have option for block grant for children and adults Safety Net Pool $10 billion for for non-expansion states, and eliminates DSH cuts Eliminates Medicaid funding for family planning

18 Exhibit 17 AHCA changes affect the entire Medicaid program Traditional Expansion Group 14 $ Million were newly eligible $68 Billion in Federal Funds for Expansion (94%) Medicaid s 74.4 million beneficiaries include: 1 in 2 low-income individuals 2 in 5 children 3 in 5 nursing home residents 59 $452 2 in 5 people with disabilities 1 in 5 Medicare beneficiaries $261 Billion in Federal Funds for Traditional (58%) Medicaid Enrollment 2Q FY Million Medicaid Spending FY 2015 $524 Billion NOTES: Enrollment data for 2 quarters FY 2016 (maximum for the time period) for 31 states that implemented the Medicaid expansion as of January 2016 (Louisiana expanded Medicaid on 7/1/16 and has no data reported). SOURCE: KCMU analysis of data from Medicaid Budget and Expenditure System (MBES).

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20 Exhibit 19 Reducing federal funds through per capita cap or block grant: Shifts costs and risks to states, beneficiaries, and providers if states restrict eligibility, benefits, and provider payment Locks in historic spending patterns Limits state capacity to improve provider payments; expand community based care for elderly and disabled; expand eligibility Limits states ability to respond to rising health care costs, increases in enrollment due to a recession, or a public health emergency such as the opioid epidemic, HIV, Zika, etc. Leads to more low income uninsured Americans

21 Exhibit 20 CBO Estimates of Reductions in Federal Medicaid Spending in the American Health Care Act (AHCA) for Coverage Provisions Dollars in Billions (Reduction in Federal Medicaid Spending = $834 billion) $14 -$26 -$65 -$89 In $ million Medicaid enrollees 24% in federal funds 23 million in uninsured 51 million uninsured -$117 -$129 -$139 -$150 CBO Estimate of H.R As Passed by the House on May 4, 2017,

22 Exhibit 21 Key Private Insurance Provisions in the AHCA Repeal individual and employer mandate replace with late enrollment penalty Retain most ACA market rules/health plan standards Guaranteed issue Modified community rating, with changes: Age rating 5:1 Late enrollment penalty = 30% premium surcharge State waivers Pre-ex exclusion periods prohibited Essential health benefits for individual/small group market (state waivers) Lifetime annual limits prohibited (for essential health benefits) Limits on annual OOP cost sharing (metal tiers sunset 2020) Repeal/replace ACA subsidies Total subsidies reduced 40% on average in 2020, 50% on average by 2026; deeper cuts for low income, older adults, residents in high-cost areas Premium subsidies now based on income, age, health plan cost, geography will be replaced by flat tax credits based on age ($2,000-$4,000) No tax credit for plans that cover abortion Cost sharing subsidies repealed State waivers for EHB; community rating for people with coverage gap New Patient State Stability Fund ($138 billion over 9 years)

23 Exhibit 22 Impact on individual health insurance market? Premiums expected to rise 15-20% per year in due to mandate repeal From , non-group premiums expected to fall 10% below baseline Stability Fund used primarily for reinsurance, lowering average premiums 5:1 age rating combined with 2:1 age subsidies causes disproportionate coverage loss among older adults; younger age mix lowers average premiums Repeal of metal levels will raise deductibles generally, lowering average premiums CBO estimates 14 million will lose/leave individual health insurance by 2026 Will states elect EHB waivers? Average premiums will decline if policies cover less People who need medical services could be underinsured; mini-meds re-emerge Will states elect community rating waivers/health status rating for break in coverage? 27 million people experienced gap in coverage in million (23%) had declinable pre-existing conditions

24 Exhibit 23 Senate Better Care Reconciliation Act similar to House bill with some key differences $1 trillion in tax cuts House Phase out Medicaid expansion in 2020 Convert Medicaid funding to per capita cap Repeal individual and employer mandates New continuous coverage requirements Keep ACA insurance market rules, but Increase age rating to 5:1 States can waive essential benefits rules States can waive rating rules Replace income-based premium subsidy with flat tax credit Repeal cost sharing subsidies in 2020 And deductibles will rise New State Stability Fund $138 billion/9 years Same Senate Phase out Medicaid expansion Similar, growth rates vary Same No provision Keep ACA insurance market rules, but Increase age rating to 5:1 States can waive essential benefits rules Income-based tax credits (0-350% FPL), base reduced, much more so for older adults Repeal cost sharing subsidies in 2020 (but fund through 2019 And deductibles will rise New State Stability Fund $112 billion/9 years

25 Exhibit 24 Next Steps in Senate Under Senate rules, Senate bill must achieve at least as much deficit reduction as the House bill; Congressional Budget Office (CBO) score pending 51 vote majority not yet certain Procedural (Byrd Rule) challenges could arise Further amendments to discussion draft are possible