Choice in Health Insurance Marketplace Plans Linked to Lowered Premium Growth in 2015
A Department of Health and Human Services (HHS) report indicates that the number of Federally-facilitated Marketplace (FFM)-eligible consumers who could choose from at least three issuers increased from 70% in 2014 to 86% in 2015, and that increases in competition resulted in lower premium growth. The average growth of second lowest cost silver plan premiums was 8.4 percentage points lower in counties with a net gain of at least one issuer in 2015 compared to counties with the same or fewer issuers. Across all FFM states, only 8% of counties experienced a net loss of issuers and the average growth rate for second lowest cost silver premiums was 2%.
CMS Allows State-Based Marketplaces to Continue Using Federal Exemptions Service
CMS released new guidance that allows State-based Marketplaces (SBMs) to continue utilizing the Department of Health and Human Services (HHS) to process exemptions from the individual shared responsibility payment. Previously, SBMs were provided the option to leverage the federal process or develop their own for the 2014 or 2015 coverage years, but were required to establish their own process by the start of the 2016 open enrollment period. SBMs must inform HHS in writing whether they will adopt the HHS option. An SBM electing to establish its own process is not required to set up an electronic system to do so.
Health Spending Projected to Increase by 5.8% Annually Over Next Ten Years
According to a new report released by CMS, the growth in national health care expenditures is estimated to average 5.8% for 2014 through 2024, an increase from the historically low average 4% increase seen from 2008-2013. While growth is expected to be higher than in recent years, it is substantially lower than prior decades; from 1990 to 2007, the average annual increase in health care spending was 7.3%. The share of the economy devoted to health care is estimated to increase from 17.4% of GDP in 2013 to 19.6% in 2024. This growth in health expenditures is partially attributed to individuals having obtained health insurance coverage as a result of the Affordable Care Act, overall economic growth leading to more people obtaining care, and an aging population.
Almost 72 Million People Enrolled In Medicaid or CHIP
According to CMS’s latest Medicaid/CHIP enrollment report, 71.6 million people are enrolled as of May 2015, representing 12.8 million new enrollees since October 2013, when the initial Marketplace open enrollment period began. Enrollment in Medicaid expansion states has increased by approximately 29% since October 2013 while states that have not expanded Medicaid reported an increase of approximately 10% over the same period.
Inspector General Finds Low Enrollment and Budget Deficits in CO-OPs
HHS' Office of the Inspector General released a report on enrollment and sustainability trends for the Consumer Operated and Oriented Plan (CO-OP) program, established by the ACA to expand the number of health insurance plans available in marketplaces. The report found that 21 of 23 total CO-OPs had incurred net losses as of December 31, 2014 and that 13 of the 23 CO-OPs had significantly lower enrollment than initially projected. The OIG recommends CMS continue to place underperforming CO-OPs on corrective action plans, work with state insurance departments to address underperforming CO-OPs, establish criteria for when a CO-OP is no longer sustainable, and pursue remedies for recovery of funds from terminated CO-OPs in accordance with loan agreements. CMS concurred with the recommendations and is taking additional steps to oversee CO-OP compliance including external audits, site visits, and additional financial reporting.