The Scoop: health insurance news – October 21, 2020

HealthCare.gov’s insurer participation grows while benchmark premiums shrink

This week, CMS published its annual report of insurer participation and premium changes for the 36 states that use the federally run exchange (HealthCare.gov). It provides a wealth of information, including these highlights:

• Average benchmark premiums are dropping by 2 percent for 2021. This is the third year in a row with a decrease in average benchmark premiums; they fell by 4 percent for 2020 and by 1.5 percent for 2019. The benchmark plan is the second-lowest-cost Silver plan in each area, and premium subsidies are based on the cost of benchmark plans. (When benchmark premiums decrease, so do premium subsidy amounts.)
• Although overall average benchmark premiums are decreasing, there’s still considerable variation from one state to another. Average benchmark premiums are dropping by 29 percent in Iowa, but increasing by 29 percent in North Dakota.
• There are 181 health insurance companies that will offer 2021 coverage in the exchanges in the 36 states that use HealthCare.gov. This is an increase from 175 in 2020 (and up from 159 if we don’t count Pennsylvania and New Jersey, both of which used HealthCare.gov in 2020 but have transitioned to their own enrollment platforms for 2021).
• Sixteen states that use HealthCare.gov have more participating exchange insurers for 2021 than they had this year. As we discussed last week, several of the states that run their own exchanges are also seeing an increase in the number of participating insurers for 2021.
• As Andrew Sprung has noted, there are likely to be more low-cost and zero-premium gold plans available in 2021, after premium subsidies are applied.

It’s important to note that although the CMS report has been widely touted as “premiums decreasing by 2 percent,” that’s only referring to the average benchmark premiums. The benchmark plan isn’t necessarily the same plan from one year to the next, and there are numerous other plans available in each area.

If we look at overall average rate changes from 2020 to 2021, a Kaiser Family Foundation analysis indicates a median increase of 1.1 percent. And Charles Gaba has thus-far calculated a slight overall rate increase as well, although that could change as more states are added to the tally. As we highlighted last week, overall rates in some states are increasing, while rates in other states are decreasing. You can click on a state on this map to see our overview of how premiums are changing for 2021.

Trump administration approves 1115 waivers for Nebraska, Georgia

Within the past week, CMS has approved 1115 waivers that had been submitted last year by Nebraska and Georgia.

Nebraska expanded Medicaid as of this month, but the 1115 waiver allows the state to begin adding additional benefits (dental, vision, over-the-counter medications) as of April 2021, for enrollees who comply with various care and case management requirements. Starting in April 2022, the additional benefits will also be contingent on the enrollees working (or going to school, volunteering, etc.) at least 80 hours per month. While basic Medicaid benefits will not be contingent on working at least 80 hours per month, public health experts have criticized Nebraska’s program for being too complex, for enrollees and administrators alike. Nebraska has published answers to various FAQs about the approved waiver.

Georgia has not yet expanded Medicaid. The 1115 waiver calls for the state to partially expand Medicaid as of July 2021, and also incorporates a Medicaid work requirement of at least 80 hours per month. Coverage will only be available to people earning up to 100 percent of the poverty level, as opposed to 138 percent as would be the case if the state fully expanded Medicaid. (In 2020, 100 percent of the federal poverty level for a single person is $12,760.) Enrollees with income above 50 percent of the poverty level will have to pay premiums for their coverage.

Because Georgia is not fully expanding Medicaid, the federal government will only pay 67 percent of the cost; if the state were to fully expand Medicaid, the federal government would pay 90 percent of the cost. And due to the complexity of the waiver, Joan Alker, of the Georgetown Center for Children and Families, notes that Georgia “may end up spending more on admin than coverage.”

Medicaid work requirements are facing an uphill legal battle after being overturned in other states in recent years. The Trump administration is asking the Supreme Court to uphold the legality of Medicaid work requirements, but work requirements as a condition of eligibility are also paused at the moment due to the COVID pandemic. (The additional federal funding that states are receiving to address the pandemic comes with a requirement that enrollees’ coverage not be terminated during the emergency period.)

Urban Institute projects 69% increase in uninsured rate if ACA is overturned

On November 10, just a week after election day, the Supreme Court will hear oral arguments in the California v. Texas (Texas v. U.S.) lawsuit. The Trump administration and 18 states, led by Texas, are asking the Court to overturn the ACA, while 21 states, led by California, are working to protect the ACA. A ruling from the court is expected next year.

The Urban Institute published a comprehensive analysis last week, projecting that if the ACA is overturned, the uninsured rate in the U.S. would increase by 69 percent by 2022, with more than 21 million people joining the ranks of the uninsured. The report breaks out the projections by income level, state of residence, demographics, and changes in both private coverage and Medicaid.

For another take on this, Charles Gaba has compiled a similar analysis based on projected coverage losses in each Congressional district in the country.

KFF examines pandemic’s effect on healthcare utilization, health insurance premiums

The Kaiser Family Foundation hosted a webinar this week in conjunction with experts from EPIC and IQVIA, discussing what we know —and what we don’t yet know — about the COVID pandemic’s impact on healthcare utilization and health insurance premiums. (Slides from the presentation are available here.) The entire webinar is well worth watching, but some of the highlights include:

• Although the median premium change across all individual marketplace plans is an increase of 1.1 percent for 2021, the median rate change associated with the COVID pandemic is 0.0 percent. Some insurers did incorporate small rate increases based on anticipated cost increases due to COVID, but some did not incorporate a COVID rating in their filings and others incorporated in a small rate decrease due to COVID. (These factors include pent-up demand for care that was delayed this year, the cost of vaccines and COVID treatments, changing demographics in the individual market caused by job losses, etc.) But the primary point is that nearly all of this is still very uncertain at this point.
• There were sharp decreases in healthcare utilization earlier this year, including preventive care such as cancer screenings and vaccinations. Much of that has returned to nearly normal levels, but there are still concerns that the missed preventive care could result in worse health outcomes in the months and years ahead.
• Among people who have lost their employer-sponsored health coverage amid the pandemic, people in states that have expanded Medicaid are three times as likely to enroll in Medicaid as people in states that have not expanded Medicaid.
• Medicaid enrollment tends to lag behind spikes in unemployment. Unemployment reached record high levels this year, and Medicaid enrollment is likely to continue to increase in the coming months. It’s worth noting that the upcoming open enrollment period for individual market coverage could lead to an increase in Medicaid enrollments, particularly in states that have expanded Medicaid under the ACA and thus make it easier for low-income exchange applicants to be directed to the Medicaid system.
• Telehealth has gone from accounting for about 1 percent of medical claims at the start of the year to about 8 percent now.
• Black, Hispanic, and Asian Americans have been more likely to be hospitalized due to COVID and more likely to die from it than White Americans.

New guide details how Medicare enrollees in each state receive supplemental benefits from Medicaid

Medicare is a federal program that provides health coverage for Americans who are at least 65 or who are disabled. Medicaid is jointly run by the state and federal governments, and provides coverage to people with limited means. Millions of Americans who have Medicare also receive supplemental benefits from Medicaid, but the specific eligibility details vary from state to state. There’s also state-level variation on things like Medicaid estate recovery and rules for asset transfers prior to Medicaid eligibility. This fall, Josh Shultz has compiled a particularly useful resource that details how this all works in each state. You can click on a state on this map for more details.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.