ACA Exchange Update: Looming Deadlines and Massive Uncertainty

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Despite rapidly approaching deadlines, the fate of the Health Insurance Marketplace — also called health insurance exchanges — remains unclear.

As we discuss some of the issues and trends, keep these two 2017 dates in mind: Sept. 27 is the deadline for insurers to sign contracts to participate in the exchanges, and Nov. 1 is the first day of open enrollment.

Deadline extension and CSR uncertaintyJust last week, on Aug.10, insurers received a three-week extension to finalize how much their exchange plans will cost. However, the new Sept. 5 deadline does little to help with planning because the administration has yet to address the fate of the cost-sharing reduction payments [1] (CSRs).

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CSRs compensate insurers for subsidizing the out-of-pocket costs of lower-income enrollees. President Trump has repeatedly threatened to cut off those payments [2]. Accordingly, as The New York Times puts it, many payors are “building in an uncertainty tax [3].”

Uncertainty is the watchword: The Congressional Budget Office [4] cited several factors that could lead insurers to stop selling on the exchanges. In addition to the CSR issue, it noted the lack of profitability and substantial uncertainty about enforcement of the individual mandate.

There’s a bit of irony to this. Early results from 2017 suggest the individual market is stabilizing and insurers in this market are regaining profitability, according to Kaiser Family Foundation [5] analysis. But that’s not enough to offset other concerns.

Who’s in, who’s out

Come Sept. 5 we’ll have a clearer idea of who’s in, who’s out and what consumers will pay, but the 2018 picture is already taking shape.

In February, Humana announced plans to leave the exchanges completely. Anthem recently announced plans to drop out of Nevada and about half of the counties in Georgia. Molina Healthcare said there were too many unknowns [6] to commit to participation beyond 2017. UnitedHealth has exited most of the exchanges, and Cigna is still deciding [7].

In contrast, Kaiser, which has a presence in nine states, will offer [8] exchange plans in all of them. Centene announced [9] plans to add three new states and expand in the states where it already has exchange plans.

What this means for states

In 2014, there was an average of 5.0 insurers participating [10] in each state’s exchanges. That rose to 6.0 in 2015, dropped to 5.6 in 2016 and 4.3 this year.

In terms of coverage, 16 counties [11] — almost all of them in Nevada — face the possibility of entering 2018 with no exchange plan available. In addition, more than 1,400 counties (2.5 million current enrollees) may have only one insurer available [12]. Keep in mind, however, that insurers have until Sept. 27, 2017, to make a final decision.

Consumers on the exchanges

Roughly 10.3 million individuals [13] are enrolled via these exchanges. More than 80 percent receive subsidies [14]. Generally, they are sicker and more costly [15] than other individuals, but hospitalization data [5] suggest that they are not getting progressively sicker.

Enrollment dropped in 2017, and it could drop even more, given the uncertainty future of the ACA. Another factor that could affect enrollment: Open enrollment for 2018 is much shorter than in past years, at least for states using HealthCare.gov. It begins Nov. 1, 2017, and ends Dec. 15, 2017. State-run exchanges have been encouraged to follow suit [16], but Colorado, for example, has already announced that its enrollment period will run from Nov. 1, 2017, through Jan. 12, 2018.

What’s next?

Key members of both major parties [17]are interested in middle ground, and a group of conservative and liberal health policy experts is pressing [18] the administration and Congress to take steps to shore up coverage under the Affordable Care Act. The average American wants action, too: According to an August Kaiser Family Foundation poll [19], nearly 80 percent want the ACA to work.

But for now, it’s largely in the hands of the administration. As Secretary Tom Price, M.D., has pointed out [20], the ACA includes the phrase “the secretary shall” or “the secretary may” 1,442 times. This gives him — and the administration — discretion in how to implement the law.

For now, we just need to watch and wait. By this time next month, we’ll know a lot more about the fate of the exchanges.

Mr. Hugh Sullivan is considered an industry thought leader and has spoken on numerous occasions at local, regional and national healthcare forums.

He is currently a member of the HFMA and ACA International and has served as a board member of WEDI, a nonprofit organization focused on the use of health IT to improve healthcare information exchange.

Hugh has a BS, in Logistics Systems Management, from Colorado Technical University. He enjoys being a husband and father to his wife and three boys as well as occasional round of golf.

Follow Hugh @hughdsullivan

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