Thanks to daylight savings in March, CHIR had more time to keep up with the latest health policy research. Last month, we read studies about Affordable Care Act (ACA) Marketplace plans and enrollee characteristics, Georgia’s reinsurance waiver, and Oregon’s hospital price cap.
Health Insurance Marketplaces: 10 Years of Affordable Private Plan Options
Office of the Assistant Secretary for Planning and Evaluation (ASPE), Office of Health Policy. March 22, 2024. Available here.
To commemorate the 10th anniversary of the ACA Marketplaces, ASPE researchers analyzed a decade of plan premiums, plan selections, Advanced Premium Tax Credits (APTCs), and enrollee characteristics to understand trends in Marketplace enrollment, plan affordability, insurer participation, and the overall insured rate.
What it Finds
- Over the last decade, Marketplace enrollment has nearly tripled: in 2024, 21.4 million individuals selected plans, compared to 8 million in 2014.
- More than 5 million of these enrollees were new to the Marketplace.
- From 2020 to 2024 alone, plan selections during the annual open enrollment period more than doubled.
- Between 2023 and 2024, 44 states had double digit rates of growth in plan selections. Five states––California, Florida, Georgia, North Carolina, and Texas––had more than one million plan selections each in 2024.
- Marketplace enrollment has contributed to an historically low uninsured rate. In 2013, just prior to the inaugural year of Marketplace coverage, 20.4 percent of non-elderly adults and 6.5 percent of children were uninsured. By 2023, the uninsured rate was nearly cut in half to 11.4 percent of non-elderly adults and 3.4 percent of children.
- Racial and ethnic disparities in uninsurance have also decreased; between 2020 and 2023 alone, plan selections on the federal Marketplace platform, HealthCare.gov, essentially doubled for Black and Latino enrollees.
- Across all years of HealthCare.gov’s operation, a majority of enrollees had household incomes between 100 and 200 percent of the Federal Poverty Level (FPL).
- Following the American Rescue Plan Act’s expansion of APTC eligibility, the rate of HealthCare.gov enrollees with incomes above 400 percent of FPL more than tripled (1.7 percent to 6.6 percent).
- In 2024, the majority of enrollees (80 percent) could select a plan with a monthly premium of $10 because of enhanced APTCs.
- Marketplace competition has also improved in recent years: in 2024, 96 percent of consumers had a choice between at least three different insurers.
Why it Matters
The ACA improved health insurance access, quality, and affordability. The Marketplaces created under the law provide a crucial source of coverage and financial assistance to people who do not qualify for public programs or job-based health insurance. After a rocky start as well as some intermittent declines in enrollment and insurer participation, record signups and robust competition in recent years show how far the ACA’s Marketplaces have come. Policies that bolster the Marketplaces, including the temporary expansion of APTCs, have further expanded access to affordable, comprehensive coverage. Given revived discussions about repealing the ACA, policymakers should consider the historic coverage gains at risk, including and especially among underserved populations.
Georgia’s Reinsurance Waiver Associated With Decreased Premium Affordability and Enrollment
David M. Anderson, Ezra Golberstein, and Coleman Drake. Health Affairs. March 2024. Available here.
In this study, researchers from Duke University, the University of Minnesota, and the University of Pittsburgh analyzed the effects of Georgia’s reinsurance waiver on Marketplace premiums, minimum costs of coverage, and enrollment rates among subsidized Marketplace enrollees.
What it Finds
- Reinsurance reduced monthly pre-subsidy premiums in the sample Georgia counties by an average of 20 percent.
- After implementation of the waiver, the average lowest silver plan premium declined by 20.8 percent ($96.90).
- Reinsurance raised the minimum cost of enrolling in a subsidized Marketplace plan in Georgia by roughly 30 percent.
- Reinsurance reduced premium “spreads”—the difference between the lowest-cost plan and the benchmark plan—indicating an increase in the minimum cost of subsidized coverage.
- Silver plans had the largest premium spread reduction (43 percent) while bronze plan premium spreads declined by almost 30 percent.
- Georgia’s subsidized Marketplace enrollment declined for individuals with incomes between 201–400 percent FPL due to reinsurance. The decline was the greatest for people with the 251–300 percent FPL range—enrollment in this income group fell by 35.5 percent.
- Enrollment among people with incomes below 201 percent FPL did not significantly change, tracking the availability of zero- or nearly zero-premium plans for people in this income bracket due to the subsidy expansion under the American Rescue Plan Act.
Why it Matters
Section 1332 of the ACA permits states to waive certain provisions of the law while adhering to certain guardrails, including standards for coverage affordability. Reinsurance waivers are by far the most popular 1332 waiver among states––by the end of 2023, sixteen states had implemented reinsurance waivers with the goal of reducing premiums, increasing insurer competition, lowering consumer cost sharing, and incentivizing enrollment. While reinsurance waivers can accomplish these goals, in Georgia, the benefits of reinsurance were not experienced uniformly across enrollees. Further research is needed to assess the full effects of reinsurance, both with and without APTC subsidy enhancements.
Hospital Facility Prices Declined As A Result Of Oregon’s Hospital Payment Cap
Roslyn C. Murrary, Zach Y. Brown, Sarah Miller, Edward C. Norton, and Andrew M. Ryan. Health Affairs. March 2024. Available here.
Researchers from the University of Michigan and Brown University analyzed 2014–2021 data from the Oregon All Payer All Claims Reporting Program database, assessing the impact of a law implemented in 2019 that caps hospital prices for state employee health plan enrollees at 200 percent of Medicare for in-network hospitals and 185 percent of Medicare for out-of-network hospitals. They compared claims from state employee health plan enrollees to claims from other commercial plan enrollees not subject to the hospital price caps.
What it Finds
- The hospital price cap applies to one-third (24) of Oregon’s hospitals that, combined, have historically accounted for two-thirds of the state’s hospital spending.
- The state employee plan covers 15 percent of Oregon’s total commercially insured population.
- In the first two years the price cap was in effect, prices for outpatient procedures declined by 25.4 percent for state employee plan enrollees compared to commercially insured enrollees.
- In the first year after implementation, there were no statistically significant reductions in hospital prices.
- In the second year after implementation, the cap on hospital payments resulted in a reduction of inpatient and outpatient facility prices (an average reduction of $2,774.20 and $130.50 per service, respectively).
- Total savings from the first two years was approximately $107.5 million (4 percent of total plan spending).
- Following implementation, price variation for inpatient and outpatient prices declined, coinciding with average hospital prices moving toward the new Medicare benchmark.
- Prior to implementation, eleven of the hospitals subject to the cap had average inpatient hospital prices relative to Medicare below the new law’s cap for in-network hospitals, while thirteen hospitals had relative prices above the cap. All but one hospital subject to the cap had average outpatient hospital prices relative to Medicare above the cap.
- After implementation, relative inpatient prices declined for hospitals with prices above the cap but increased for around half of the hospitals that previously had prices below the cap. Outpatient relative prices declined across all hospitals.
- The authors found no evidence of spillover effects to non-state employees or hospitals outside the preview of the legislation.
Why it Matters
On average, commercial plans typically pay hospitals 247 percent of Medicare rates, a gap that drives significant health care spending and frustrates cost containment. To narrow this gap, Oregon implemented a hospital payment cap. As other states consider the policy options to address high hospital prices––including cost growth benchmarks, public options, increased price transparency, and enhanced merger view––Oregon’s price cap offers another potential solution. This analysis shows that capping hospital prices can help lower payments and reduce price variation, making the policy an attractive option to contain health care spending. However, the authors note that success depends on various factors, including the benchmark, the level of the cap, and how to measure and enforce compliance. The authors did not discuss if the payment cap affected hospital networks or enrollees’ access to in-network hospitals.
