In-Person Assistors Critical to SBM Enrollment, Survey Finds
State-based Marketplaces (SBMs) unanimously cited in-person outreach and enrollment assistance as “critical” in facilitating coverage sign-ups, according to a Commonwealth Fund survey that asked SBMs to identify strategies they feel most impact enrollment. The survey also found that SBMs are responding to concerns about affordability by emphasizing the availability of financial assistance and conveying “a realistic expectation” of premiums. SBMs are increasingly engaging brokers as well, which stems in part from reduced funding for SBM-run assistance programs. SBMs also reported a significant positive impact from technology changes, including the addition of consumer decision-support tools and “simplified” online applications. The authors conclude by noting that further reductions in funding for enrollment assistance could materially weaken future enrollment growth.
Reinsurance Limited Insurers’ Financial Losses in 2014, Report Finds
More than a third of insurers experienced improved or sustained profitability in 2014, the first full year of the ACA’s insurance reforms, though profitability worsened for the remainder of insurers, according to a report from The Commonwealth Fund that analyzed the financial performance of 144 carriers. Insurers that underestimated their claim costs did “considerably worse” than their competitors, though “serious adverse” effects were concentrated among a minority of insurers. The best performing quartile of insurers in the individual market had an average profit of 8.5% compared to an average loss of 21.8% by the worst performing quartile, a difference the authors attribute primarily to the differences between premiums and medical claims. Medical claims averaged 20% less than premiums for the top quartile, but exceeded premiums by 5% for the lowest quartile. The authors also stressed that the ACA’s reinsurance program “substantially buffered” insurers from negative financial impacts in 2014, but noted that insurers may need to increase premiums when the program begins phasing out in 2017.
CMS Increases Income Verification Threshold, Improving Consumer Experience
CMS is reducing the number of consumers that must supply paper documentation to verify their income by adjusting the threshold at which an “income data matching issue” is triggered. Current policies require HealthCare.gov applicants to submit documentation to CMS to verify their income if their attested household income is more than 10% different from what appears in electronic data sources. CMS is increasing that threshold to 25%, or $6,000 (whichever is greater). CMS is recommending that State-based Marketplaces adopt similar thresholds and will require HHS approval if states want to implement thresholds outside of the 10%-25% range. The change will be in effect for HealthCare.gov prior to the start of the 2017 open enrollment period, while State-based Marketplaces can adopt new thresholds at any point during the 2017 plan year.
California: Marketplace Premiums Expected to Increase 13% on Average
Preliminary rates for health plans offered through Covered California, the State-based Marketplace, will increase an average of 13.2% for 2017, higher than the 8% increase projected in the Marketplace’s proposed FY 2016-2017 budget. Covered California noted that despite the increase in average premiums, almost 80% of consumers willing to switch to a different plan on the Marketplace could either pay less than they currently pay or would experience a rate increase of no more than 5%. Covered California premiums increased by an average of 4% in 2016 and by 4.2% in 2015.
Massachusetts: Small Group Market Waiver Extended
CMS has extended a waiver of the ACA's small group rate setting requirements, allowing the State to continue maintaining its small group rating factors, such as group size and industry, through the end of 2018. CMS originally granted a transition period in 2013 due to Governor Charlie Baker's (R) concerns that a transition to the federal rules would cause a spike in small business premiums. The transition period has been extended each year since then. CMS has indicated that this will be the "final one-year extension" and that Massachusetts must be fully compliant by January 1, 2019.
Oregon: CO-OP Enrollees Can Apply Healthcare Spending to New Plans
The 12,000 individual policyholders impacted by Oregon Health CO-OP’s closure will receive credit for deductibles paid and money contributed to out-of-pocket maximums when they purchase new coverage, effective August 1, during a special enrollment period. The impact on the CO-OP’s 10,000 small and large group customers will vary across insurers. This development follows the CO-OP’s July 8 announcement that it would close due to financial difficulties.