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Planned report from HIMSS Health Business Solutions Committee to Explore Long-Term Viability of Expanded Coverage under the ACA

The Accountable Care Act (ACA) is credited with extending insurance to more than 20 million previously uninsured Americans through Medicaid Expansion programs and the introduction of Health Insurance Marketplaces.  But three years into its implementation 19 states have yet to expand their Medicaid programs, co-ops are failing, and commercial insurers, citing unbearable financial losses, are exiting public health insurance marketplaces.  Can the health insurance coverage provisions of the ACA withstand the test of time?

Since the Accountable Care Act (ACA) went into effect in January 2014, the United States has experienced an unprecedented reduction in the percentage of uninsured Americans - from 16.2% in the last quarter of 2013 to 10.7% in the last quarter of 2015.[1]  But with several major carriers announcing their withdrawals from public health insurance marketplaces, and an estimated 17% of individuals eligible for public marketplace coverage expected to have only one plan to choose from in 2017,[2] many are wondering about the future of public marketplaces.  Bloomberg's Max Nisen said, "Back when UnitedHealth was the only insurance company bailing out, it was easy to dismiss as just one company trying to boost the bottom line...But when all five big insurers are bleeding money, it's clear you've got bigger problems."[3]

There are several contributing factors to these financial losses.  First, not all states chose to expand their Medicaid program as they were allowed to do under the ACA.  Second, the rate of attrition within the public marketplaces of some states is more than double the national average.[4]  And third is the loss of risk corridor program funds.  In 2014 carriers requested $2.87 billion in risk corridor payments; they received only $362 million - slightly more than 10% of what was promised them.[5]  It was this financial blow that sounded the death knell for nearly half of insurance cooperatives created under the ACA and set the stage for carriers such as United, Aetna, Humana and several Blue Cross Blue Shield plans to withdraw from public marketplaces[6].

The initial impact of carriers withdrawing from public exchanges is clear:  consumers eligible for coverage under public health exchanges will have considerably fewer choices; premiums for the remaining insurers will continue to increase; and small employers may have even fewer options for providing coverage to their employees.  The long-term impact is less certain.  Are there policy corrections that can be made to protect the financial viability of public marketplaces?  With healthcare spending now accounting for 18 percent of our GDP[7] and CMS projecting that healthcare spending will continue to grow over the next five years,[8] can we as a nation even afford to maintain Obamacare?  The HIMSS Health Business Solutions Committee will attempt to answer these and other important marketplace-related questions in an upcoming issues brief to be published in November 2016.  Watch for additional announcements about the paper in coming months.

About the author: Pam has more than 25 years' healthcare industry experience. As the Senior Director of Health Business Solutions for HIMSS, she oversees the overall management and strategy development for HIMSS Health Business Solutions initiatives.

 

[1] The Kaiser Commission on Medicaid and the Uninsured.  "Key Facts about the Uninsured Population."  The Kaiser Family Foundation.  October 2015.

[2]"Aetna announces it will leave exchanges in 11 states.'  PBS Newshour transcript of Alison Stewart Interview with Zach Tracer, Bloomberg News.  August 20, 2016.

[3] Chandler, Adam.  "Why is Aetna Leaving Most of Its Obamacare Exchanges?"  The Atlantic.  August 16, 2016.

[4] Norris, Louise.  "Mississippi health insurance marketplace:  28% decline in total enrollment during first quarter."  Healthinsurance.org.  July 30, 2016.In

[5] Haskins, Justin.  "New Report:  Insurers Leaving Obamacare Exchanges in Droves."  Townhall.  August 11, 2016.

[6] Pear, Robert.  "Marco Rubio Quietly Undermines Affordable Care Act."  New York Times.  December 9, 2015.

[7] Pate, Dr. David C.  "St. Luke's CEO Dr. David Pate Fact Checks the President on the Affordable Care Act."  Health Executives Network.  http://healthcareexecutivesnetwork.org/fact-check/.  August 29, 2016.

[8] Haskins, Justin.  "New Report:  Insurers Leaving Obamacare Exchanges in Droves."  Townhall.  August 11, 2016.