Insurance Market Reform

The Affordable Care Act (ACA) created the Consumer Operated and Oriented Plan (CO-OP) Program to provide consumer-focused health insurance options. But the CO-OP experience to date reveals factors that limit market competition. This report considers the challenges that CO-OPs have faced through analysis of plan, pricing, and enrollment data for six CO-OPs. It describes how CO-OPs responded to the prohibition on using federal loans for marketing, problems associated with outsourcing health plan functions, CO-OP plan design and pricing strategies, dynamics of both high and low enrollment, and challenges related to the ACA’s premium stabilization programs. It includes a discussion of the role of federal and state policy decisions in adding to rather than reducing barriers to market entry for CO-OPs.

On November 9, 2015, the Centers for Medicare & Medicaid Services released the final 2017 essential health benefits benchmark plan for each state. A summary of benchmark plan coverage and the supporting plan document, as well as a list of how many prescription drugs are covered in each United States Pharmacopeia (USP) category and class were posted. The final list includes feedback received during the 30-day comment period.

As drug prices have been rising, insurers have been shifting the costs to consumers by creating specialty drug tiers that require patients to pay a large percentage of the total cost or very high copays. This blog post looks at how a number of states have already moved ahead with legislative and regulatory action to help consumers. The authors outline states’ approaches to addressing this issue, including caps on drug spending and, within state marketplaces, standardized insurance benefit designs that limit the number of drug tiers or have fixed copayments.

The Affordable Care Act’s (ACA) standards for essential health benefits are intended to ensure that health plans meet the coverage needs of individuals and small businesses. This blog post explains that most states are continuing to define their essential benefits much as they had originally—despite the opportunity to revisit this decision for 2017 and beyond. The authors explore how the states chose the health plan that would serve as the benchmark for essential benefits, and how the limited data available from insurers is making it challenging to assess whether the essential benefits policy is working.

This brief uses data submitted by insurers on medical loss ratios (MLRs) from 2010 to 2014 to assess how the Affordable Care Act’s (ACA’s) provisions impacted states’ individual health insurance markets. It compares average net MLRs by state and examines the distribution of net MLRs across insurers in each state. In the individual market, researchers found: average net MLRs rose because of rising net claims relative to net premiums, almost all states had average net MLRs higher than 80 percent by 2014, and average net MLRs varied from 83 percent at the 25th percentile to 99 percent at the 75th percentile.