The state Department of Human Services’ monthly report on enrollment in the Private Option health insurance program — Arkansas’s version of the Medicaid expansion enabled by Obamacare, or the federal Affordable Care Act — shows even broader popularity than expected, more than 300,000 covered against an expected 250,000.
Gov. Asa Hutchinson didn’t exactly cheer the news of an expanded population of Arkansans having health coverage. He said the numbers illustrated the need for changes he’s proposed that will discourage people from obtaining coverage, such as added premiums.
“We’re concerned about the growing numbers and controlling costs, and that is one of the reasons that the reforms under Arkansas Works are very important,” Hutchinson said in a statement to the Arkansas Democrat-Gazette.
Sure, it costs less if fewer are covered and those who are covered pay more.
Meanwhile, the federal Health and Human Services Department today plans a news conference to discuss rate increases by private insurance companies offering private option coverage in the marketplace (almost 10 percent for Blue Cross, for example). Says HHS; “consumers will continue to have affordable coverage options, even if all Marketplace final health insurance premium rates were to increase by double digits next year in Arkansas.” I presume this refers to the fact that a significant percentage of those with the coverage (almost three-quarters in Arkansas) will qualify for tax credits that will offset increases. HHS has reported here before and in other states that, in addition to tax credits which cover premium increases, patients can shop around. Rates are lower than predicted in the rollout and some short-term impact on rates is expected to dissipate in the next few years.
UPDATE: Here’s the HHS report on why Arkansas consumers are largely protected from recently announced insurance rate increases.
Since the Affordable Care Act became law, health care prices have risen at the lowest rate in 50 years, and premiums for the 150 million Americans with employer-sponsored insurance have grown at some of the slowest rates on record. Today, a new HHS analysis finds that HealthCare.gov consumers would continue to have affordable coverage options, even if all Marketplace final health insurance premium rates were to increase by double digits next year. In a hypothetical scenario where all rates increase by 25 percent, the vast majority of Arkansas consumers (69%) would be able to purchase coverage for less than $75 per month, according to today’s report. All Marketplace premiums will be finalized and public in October.
“Headline rate increases do not reflect what consumers actually pay,” said Kathryn Martin, Acting Assistant Secretary for Planning and Evaluation. “Our study shows that, even in a scenario where all plans saw double digit rate increases, the vast majority of consumers would continue to have affordable options.”
Two important features of the Marketplace protect Arkansas consumers from the impact of rate increases.
· Tax credits go up along with premiums. Tax credits are designed to protect consumers from rate increases and keep coverage affordable, increasing by whatever amount the cost of the second-lowest-cost silver, or benchmark plan increases. So if all premiums in a market go up by similar amounts, the large majority of consumers in that market will not have to pay more, since tax credits will increase in parallel. Last year, despite headlines projecting double-digit rate increases, the average premium increased just $4 per month for HealthCare.gov consumers with tax credits, and 7 out of 10 Marketplace consumers could purchase 2016 coverage for less than $75 per month. Even if premiums and tax credits rise, the overall cost of the ACA is still below CBO’s original projections. CBO’s recent projections estimate that for 2019 coverage, ACA coverage will cost $49 billion less than originally predicted.
· Consumers can shop around to find the best plan. Prior to the Affordable Care Act, it was almost impossible to shop around for health insurance. Not only were many Americans barred from coverage due to pre-existing conditions, but those who did have insurance through the individual market were often trapped in a plan, since people with even small health problems could be denied coverage or charged an exorbitant price if they tried to switch plans. Today, any Marketplace consumer can purchase any plan during open enrollment, and Marketplaces let consumers compare prices, plan designs, and networks to find the best choice for them. Last year, more than 22%, or 10,285 returning Arkansas HealthCare.gov consumers switched plans. They saved an average of $20 per month.
Current Marketplace rates are well below initial Congressional Budget Office (CBO) projections.
· Independent researchers recently calculated that 2016 Marketplace rates are anywhere between 12 percent and 20 percent below what CBO initially predicted.
· 2017 Marketplace rate increases are subject to a number of predictable upward pressures that will dissipate next year.
o The end of the ACA’s temporary reinsurance program in 2016 puts upward pressure on 2017 rate increases that won’t exist for 2018 and beyond.
o Evidence suggests that some issuers priced below cost for 2014, reflecting the uncertainties of a new market and a desire to offer strongly competitive initial rates. With two full years of experience, many issuers are making one-time adjustments this year to bring premiums in line with observed costs.
· CBO’s projections show that the law is working to cover the uninsured, while costing less than expected. Recent estimates find that the law’s coverage provisions will cost 28 percent less in 2019 than in CBO’s original projections.
The Marketplace is providing 63,357 Arkansas consumers with coverage they value, because it improves their access to care and financial security.
· Nearly 4 out of 5 Marketplace consumers are very or somewhat satisfied with their health insurance. Importantly, they are just as satisfied with their coverage as people with employer plans.
· Marketplace consumers are accessing primary, specialist, and other care they need at rates similar to people with employer coverage and far higher than the uninsured, thanks in part to moderate cost sharing.
· The share of families struggling to pay medical bills fell for all income groups between 2013 and 2015, and fell the most for the moderate-income families most likely to have gained coverage through the Marketplace.