On September 6, the Government Accountability Office (GAO) released a report entitled, "In Most States and New Exchanges, Enrollees Continued to be Concentrated among Few Issuers in 2014." The report reviews concentration of insurers in the individual, small group, and large group markets for the years 2011, 2012, 2013, and 2014.
Not surprisingly, the GAO found that insurance markets were highly concentrated both before and after the Affordable Care Act's insurance market reforms went into effect in 2014, although the individual and small group markets have become somewhat more concentrated. In 2011, the three largest insurers had 80 percent or more of the individual and small group markets in 33 states each. By 2014 the number of such states increased to 41 for the individual market and 40 for the small group market. In most of these highly concentrated states a single insurer had at least 50 percent of the market in 2014, and in five states the largest insurer had at least 90 percent of at least one market. In most states the largest insurer in a state market remained the same throughout the period, usually a Blue Cross Blue Shield insurer.
How Has The ACA Changed Health Insurance Markets?
Although concentration of insurance markets was continuous throughout the period, the ACA has in fact changed health insurance markets. First, the ACA marketplaces tend to have fewer participants than the market as a whole and to be more concentrated than the overall market. On average, there were five insurers in each marketplace in 2014 compared to an average of 22 insurers in the overall individual market. In most states the market share of the largest insurer and largest three insurers was greater in the marketplace than in the overall individual market. In some states, however, the overall market leader in the exchange in 2014 was different than the overall market leader in the state as a whole in the earlier years.
Second, a number of small insurers exited the individual market, and to a lesser extent the small and large group markets, between 2013 and 2014. In the individual market 46 states had a net decrease in the number of insurers in the market between 2013 and 2014, with an average of four insurers exiting the market in each state. Fewer states saw decreases in the number of insurers in the small and large group markets and some states saw increases. In most states insurers exiting the market had a very small market share, less than 1 percent. It would be interesting to know what these insurers were like, but I would assume that many were plans that offered minimal benefits or that carefully risk selected their enrollees.
Third, 79 percent of the 123 new insurers that entered the market in 2014 participated in the exchanges. Though most of them had small market shares, 10 new insurers had more than 10 percent of the individual market and 12 took between 5 and 10 percent. Two entering insurers had 80 percent or more of their individual exchange market. Unfortunately, many of the new entrants were CO-OPs, which had an average market share of 19 percent in the individual exchange markets and 28 percent of the small group exchange markets in which they participated, and many are no longer with us.
It is likely that insurance markets have become even more concentrated since 2014 and would become even more concentrated if pending mergers are approved. The GAO report reminds us that concentration is not new, but that the ACA has in fact changed the insurance landscape.
In Reversal, Court Says ACA Internal Appeals Procedures Apply To Governmental Plans
Also on September 6, Judge Denis Hurley of the United States District Court for the Eastern District of New York granted a motion for reconsideration and reversed an earlier decision in Semente v. Empire HealthChoice Assurance. A central question in the case is whether the internal appeals procedures of the ACA apply to governmental plans. The ACA clearly applies these procedures to ERISA (Employee Retirement Income Security Act) plans, but governmental plans are expressly not governed by ERISA and the court had earlier held that governmental plans were not subject to the ACA's claims procedures. That decision was in line with an earlier holding from California that the ERISA internal review procedures incorporated by the ACA do not apply to governmental plans.
Judge Hurley noted that the ACA claims procedure section governs "group health plans." The ACA defines "group health plan" as "an employee welfare benefit plan (as defined in section 3(1) of [ERISA]). ERISA § 3(1) defines "employee welfare benefit plan" as:
any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident . . .
A subsequent section of ERISA excludes governmental plans from the scope of ERISA, but that section is not incorporated into the ACA. The ACA, the court concluded, meant to extend the coverage of the ERISA claims procedures to governmental plans.
ERISA not only excludes from its coverage governmental plans but also church plans. And the protections of the ACA have been held to be inapplicable to retiree plans, which arguably fall within ERISA's group health plan definition. If the Semente decision is upheld and followed it could have important ramifications for the scope of the protections offered by the ACA.
CDC Reports Coverage Gains
In the midst of disturbing news regarding 2017 marketplace premium increases and insurer exits, it is important to remember that the Affordable Care Act is still accomplishing its basic purpose — expanding insurance coverage. On September 7, the Centers for Disease Control National Center for Health Statistics released their quarterly report of estimates of health insurance coverage from the National Health Interview Survey.
The survey found that in the first quarter of 2016, only 27.3 million (8.6 percent) of Americans remained uninsured. This number was down 1.3 million from 2015 and down 21.3 million from 2010, when over 18 percent of the population was uninsured. Only 5 percent of children aged 0-17 were uninsured in the first quarter of 2016.
The percentage of adults aged 18 to 24 who are uninsured has fallen from 31.5 to 13.7. The uninsured rate has fallen among all racial and ethnic groups, with Hispanics accounting for the largest decreases but also the largest percentage remaining uninsured.
The levels of both private and public coverage have been growing as the number of uninsured has fallen, with 70.2 percent of the population now covered through private coverage and 19.5 through public coverage. Marketplace coverage of adults aged 18 to 64 expanded from 8.6 million in 2015 to 9.2 million in 2016, while coverage of children through the marketplace increased from 1.2 to 1.6 million. The rate of uninsured adults aged 18 to 64 has fallen from 18.4 to 9.2 percent between 2013 to 2016 in Medicaid expansion states and from 22.7 to 16.7 percent in non-expansion states.
The uninsured rate among poor and near-poor adults aged 18 to 64 has fallen from around 43 percent in 2010 to about 24 percent in 2016, but did not change significantly between 2015 and 2016. The rate of coverage among adults aged 18 to 64 who are not poor fell from around 13 percent in 2010 to 7.6 percent in 2015, but decreased from 7.6 to 6.5 percent from 2015 to 2016, suggesting that part of the increase in total coverage is from an expansion of employment-based coverage.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2cJazYu
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