Insurance Market Reform

The individual insurance market has changed substantially under the ACA. Starting in 2014, the health law put in place new rules for what types of plans can be sold, required insurance companies to guarantee access to everyone regardless of health status, and limited the factors insurers could use in setting premiums. As of the end of open enrollment in 2014, 8 million people had signed up for coverage through the Marketplaces. However, it has been unclear precisely how many of these Marketplace enrollees were previously uninsured or how many would have purchased individual coverage directly from an insurer in the absence of the ACA. This analysis of recently-submitted 2014 filings by insurers to state insurance departments shows that 15.5 million people had major medical coverage in the individual insurance market – both inside and outside of the Marketplaces – as of December 31, 2014. Enrollment was up 4.8 million over the end of 2013, a 46 percent increase.

The Affordable Care Act (ACA) set new standards for the adequacy of health insurance, including limits on out-of-pocket cost-sharing and requirements that insurers cover a minimum set of health benefits. Yet while we know that access to health insurance has improved, our understanding of consumers’ experiences with plans’ cost-sharing, provider networks, and benefit design is lacking. One source of information about consumers’ coverage experiences are the state-run Consumer Assistance
Programs (CAPs) call centers, which receive calls from consumers on a wide range of issues, from those seeking coverage to those with coverage that is not meeting their needs. These programs provide a unique lens on consumer experiences with coverage both before and after the ACA went into full effect in 2014. They can help us understand how consumers have benefited from the insurance reforms, and where there may still be gaps or problems with their insurance coverage.
 

For the past three years, the Affordable Care Act (ACA) has required health insurers to pay out a minimum percentage of premiums in medical claims or quality improvement expenses—known as a medical loss ratio (MLR). Insurers with MLRs below the minimum must rebate the difference to consumers. This issue brief finds that total rebates for 2013 were $325 million, less than one-third the amount paid out in 2011, indicating much greater compliance with the MLR rule. In the first three years under this regulation, total consumer benefits related to the medical loss ratio—both rebates and reduced overhead—amounted to over $5 billion. This was achieved without a great exodus of insurers from the market.

For the past three years, the Affordable Care Act (ACA) has required health insurers to pay out a minimum percentage of premiums in medical claims or quality improvement expenses—known as a medical loss ratio (MLR). Insurers with MLRs below the minimum must rebate the difference to consumers. This issue brief finds that total rebates for 2013 were $325 million, less than one-third the amount paid out in 2011, indicating much greater compliance with the MLR rule. In the first three years under this regulation, total consumer benefits related to the medical loss ratio—both rebates and reduced overhead—amounted to over $5 billion. This was achieved without a great exodus of insurers from the market.

On February 27, 2015, the U.S. Department of Health and Human Services published the Notice of Benefit and Payment Parameters for 2016 Final Rule, which included several provisions pertaining to form review.  This analysis, prepared by the Georgetown University Health Policy Institute’s Center on Health Insurance Reforms, provides a brief summary of the key provisions specific to form review and other notable provisions specific to the 2016 plan year.  Included in the final rule are provisions on enrollment periods, definition of habilitative services, meaningful access to coverage materials, annual update to cost-sharing limits, pediatric age, and the drug exceptions process.

The failure of the health insurance cooperative operating in Iowa and Nebraska, together with the significant financial losses experienced by most others, have raised questions about the viability of the Affordable Care Act’s Consumer Operated and Oriented Plan (CO-OP) program. The program, which offers low-interest loans to co-ops, was designed to inject competition into highly concentrated markets and provide more affordable, consumer-focused alternatives to traditional insurance companies. This new blog post explains what’s behind the CO-OP program’s mixed performance so far and also points to reasons why success is still within reach.