As part of The Commonwealth Fund’s efforts to inform health reform policy and implementation, the Program on Affordable Health Insurance envisions an equitable and efficient system of health coverage that makes comprehensive, continuous, and affordable coverage available to all Americans. The program supports activities to:
- provide timely analysis of changes to employer-based health insurance, health plans in the individual market, and public insurance programs for people under age 65, and estimate the impact of those changes on the number of people insured and the quality of coverage
- document how being uninsured, or underinsured, affects personal health, finances, and job productivity
- inform federal and state policymakers and the media about the provisions of the Affordable Care Act and related federal regulations, along with their implications for people and employers
- inform implementation of the reform law at the federal and state levels, through tracking surveys of key population groups, interactive tools to monitor state progress, and analysis of key reform provisions and regulatory guidance
- analyze and develop new policy options for expanding and stabilizing health insurance coverage, making coverage more affordable, and optimizing administrative efficiency.
The most recent U.S. census data reveal that the number of people without health insurance in the United States climbed steadily over the last decade, rising from 36.6 million in 2000 to 50 million in 2010. By 2011, however, the number had fallen by 1.3 million, to 48.6 million people, the largest one-year drop in the past decade. This improvement was likely driven by an increase in the number of young adults with coverage, a result of the Affordable Care Act’s provision allowing those under age 26 to enroll in a parent’s health plan. The nearly four-point decline in the uninsured rate for young adults (ages 19 to 25), from 31.4 percent to 27.7 percent in 2009, foreshadows the expected gains in coverage for many other Americans once all of the law’s provisions are rolled out over the next few years.
Trends in insurance coverage and consumer spending on health care underscore why these reforms are so important. Rising health care costs and sluggish income growth have made health insurance less protective for millions of Americans. Deductibles for employer-based plans doubled between 2003 and 2010, while an estimated 29 million insured adults under age 65 were underinsured, given their high out-of-pocket costs relative to income, compared with 16 million people in 2003. Both trends have had serious financial and health consequences for U.S. families.
By 2022, the Affordable Care Act reforms are expected to reduce the number of uninsured people from a projected 60 million, in the absence of the law, to 27.1 million. This will be achieved through a substantial expansion in Medicaid eligibility and through premium and cost-sharing subsidies that will make it easier for small businesses and individuals to afford private plans purchased through new insurance exchanges. In addition, new regulations will ban insurers from charging people more based on health or gender, prevent insurers from barring enrollment because of a preexisting health condition, and establish a new standard for essential health benefits. To ensure the law is implemented effectively, policymakers will need information about the impact these and other reforms have on the affordability and quality of coverage, as well as about aspects of the law that might require modification.
Disseminating Information About Health Insurance Reform
The Commonwealth Fund’s Program on Affordable Health Insurance has been closely monitoring implementation of the Affordable Care Act, the associated federal regulations, and state activity. Once President Obama signed the act into law, the Fund launched an online interactive timeline to guide policymakers, the media, and the public through the law’s provisions and dates of implementation—one of many tools available in the Health Reform Resource Center on commonwealthfund.org. In posts to The Commonwealth Fund Blog, Fund staff and grantees are also providing analysis of federal regulations as they are issued, including rules governing health insurance exchanges, premium tax credits, the essential health benefit standard, medical loss ratio requirements for insurers, and state and federal review of premium increases in the individual and small-group markets.
The program continued to contribute to The Commonwealth Fund’s Realizing Health Reform’s Potential issue brief series, explaining how provisions of the Affordable Care Act may benefit different groups, improve insurance coverage, and boost overall health system performance. Among the topics covered in the past year were: the health care experiences of U.S. women compared with those in other industrialized countries; the loss health benefits among the newly unemployed; and Pre-existing Condition Insurance Plans.
The Affordable Health Insurance program has also contributed to a new Commonwealth Fund publication series, Tracking Trends in Health System Performance. Briefs in the series highlighted results from the Fund’s new online longitudinal health care tracking surveys of young adults and people with low and moderate incomes, documenting a substantial income-based divide in insurance and health care use, coverage gaps that lead to difficulties getting timely care, and the enrollment of millions of young men and women in their parents’ health plans shortly after the reform law was enacted.
Analyzing Key Reform Implementation Issues
The new health insurance exchanges are the centerpiece of the Affordable Care Act’s private health coverage reforms. By 2022, more than 20 million individuals and small-business employees will obtain their coverage through these managed marketplaces. State officials are currently drawing up plans to demonstrate to the Department of Health and Human Services how they intend to operate their exchanges or whether they are electing to partner with the federal government to implement them.
Drawing from research by grantee Sara Rosenbaum, J.D., of George Washington University, The Commonwealth Fund launched an interactive Web tool to enable side-by-side comparisons of state insurance exchange laws and executive orders. Users of the tool can find information about each state’s approach to governance and board membership, standards for certifying health plans, strategies for combatting adverse selection, and coordination with public insurance programs. The tool will be updated over time. In a Fund issue brief, Rosenbaum and colleagues report that the exchanges established thus far are designed as publicly accountable entities with flexibility in how they operate.
In another Fund issue brief, Wake Forest University School of Law professor Mark Hall, J.D., and Harvard School of Public Health economist Katherine Swartz, Ph.D., examine the activities of exchanges in California, Colorado, and Maryland, three states that have made significant progress but that now face a challenging set of decisions related to exchange financing and mitigating gaps in coverage and care among people who change their source of coverage. In July 2012, Commonwealth Fund vice president Sara Collins co-moderated a panel discussion at an Alliance for Health Reform briefing on insurance exchanges and the upcoming Medicaid expansion in the wake of the Supreme Court decision on the Affordable Care Act.
Earlier in the year, the Fund sponsored a set of papers in the journal Health Affairs (Feb. 2012) that dealt with implementation of the Small Business Health Options Program, more commonly known as the SHOP exchanges. Articles by Timothy Jost, J.D., of the Washington and Lee University School of Law, Jon Kingsdale, Ph.D., former director of the Massachusetts Commonwealth Health Insurance Connector Authority, Terry Gardiner of the Small Business Majority, and William Kramer of the Pacific Business Group on Health, among others, examined the potential of SHOP exchanges to provide affordable options for small employers, who currently face high premiums and administrative costs when they insure their employees. A related webinar moderated by Sara Collins drew an audience of more than 400 small and large employers, state policymakers, and industry stakeholders. On The Commonwealth Fund Blog, the Fund’s Sara Collins and Tracy Garber continue to update states’ progress in establishing exchanges.
Affordability and Cost Protection of Coverage Under Reform
For years, many U.S. households have faced sharp growth in their health care costs. Even for those who are continuously covered, it can be difficult to afford medical expenses when they are very high relative to income. Cathy Schoen and her Commonwealth Fund colleagues have found that people who are “underinsured” in this way are nearly as likely as those who are uninsured to skip needed health care and to have problems paying medical bills. According to a Fund study published in Health Affairs (Sept. 2011), the number of underinsured adults rose by 80 percent between 2003 and 2010, from 16 million to 29 million.
Numerous health reform provisions, some of which have already gone into effect, are aimed at making health insurance coverage more comprehensive and controlling growth in premiums. For example, insurance carriers selling policies in the individual and small-group insurance markets are required to spend at least 80 percent of their premiums on medical care and quality improvement, as opposed to administration and profits. Starting this year, insurers that do not meet these thresholds must pay rebates to enrollees. With Commonwealth Fund support, Wake Forest’s Mark Hall and Michael McCue, D.B.A., of Virginia Commonwealth University estimated the amount of rebates expected in each state if the new rules had been in effect a year earlier. The researchers found that nationally, consumers would have received nearly $2 billion in rebates if the new “medical loss ratio” rules had been in effect in 2010. Ultimately, many insurance carriers reduced spending on administrative costs in 2011, paying out a total of $1 billion in rebates to policyholders.
Consumer protections enumerated in the “Patient Bill of Rights” have also been put in place. Insurers may no longer impose lifetime limits on benefits; retroactively cancel, or rescind, coverage when an individual gets sick; or impose preexisting condition exclusions on children. In an issue brief published in March 2012, Georgetown University’s Kevin Lucia, J.D., and colleagues reported that 49 states and the District of Columbia had taken legislative or regulatory action to implement these reforms in their states.
Tracking the Uninsured and Underinsured
To track changes in health insurance coverage and health care experiences as health reform is implemented, the Fund’s Affordable Health Insurance program launched a series of three longitudinal, nationally representative online surveys in 2011 to follow randomly selected panels of adults over the next several years. The first issue brief from the surveys, The Income Divide in Health Care, which drew on findings from the Commonwealth Fund Health Insurance Tracking Survey of U.S. Adults, focused on the health care experiences of adults with low incomes. According to the brief, nearly three of five adults in families earning less than $30,000 for a family of four were uninsured for a time in 2011, and two of five were uninsured for one or more years. Low- and moderate-income adults who were uninsured during the year were much less likely to have a regular source of health care than people in the same income range who had coverage all year.
A second Fund brief based on data from that survey, Gaps in Health Insurance (April 2012), found that compared with adults who had continuous coverage, those who were not covered for even a short period were less likely to have a regular doctor and less likely to be up-to-date with recommended preventive care screenings. Losing or changing jobs was the primary reason people experienced a gap in coverage. A separate Fund–sponsored analysis, led by Pamela Farley Short, Ph.D., of Pennsylvania State University, found 89 million people—36.3 percent of Americans ages 4 to 64—were uninsured for at least one month between 2004 and 2007, including 23 million who lost coverage more than once. Starting in 2014, health insurance options provided by the Affordable Care Act should substantially reduce the chance that people will experience gaps in health coverage when their employment circumstances change.
The Health Insurance Tracking Survey of Young Adults yielded a third issue brief, Young, Uninsured, and in Debt (June 2012). The researchers found that as a result of the Affordable Care Act’s provision permitting children to remain on their parent’s private insurance plans until their 26th birthday, 13.7 million Americans between 19 and 25 stayed on or enrolled in their parent’s health plan in 2011, including 6.6 million who likely would not have been able to do so prior to the passage of the law.
The Program on Affordable Health Insurance will continue to monitor the impact of the Affordable Care Act on the nation’s uninsured and underinsured populations and inform policymakers and federal officials about ways to ensure the reforms achieve their goals.
- Timothy Jost, in collaboration with Mark Hall and Katherine Swartz, will continue to examine the creation of state insurance exchanges in six key states. Their work will provide recommendations to state and federal officials, legislators, and regulators for ensuring that these crucial components of health reform function as intended.
- States have considerable discretion in shaping the health plans qualified to be sold through the exchanges, in terms of how the plans meet population needs, the dynamics of insurance markets, and health system performance goals. To learn what health plans in the new state insurance exchanges will look like, Sara Rosenbaum and her team at George Washington University will analyze new state legislative activity in 2012, state and federal requests-for-proposals for the qualified health plans that will be sold through the exchanges, and health plan contracts.
- To inform federal efforts for ensuring that the law’s health coverage provisions are being implemented consistently and with the best interests of consumers in mind, Georgetown University’s Kevin Lucia and his team will track and analyze how states are implementing their exchanges and planning to enforce compliance with the new rules through legislation, regulation, and guidance.
- The Fund’s Affordable Health Insurance program will continue to track trends in the affordability of health coverage. Using the federal Medical Expenditure Panel Survey, Peter Cunningham, Ph.D., of the Center for Health System Change is monitoring the level of medical cost burden faced by Americans, including insurance premiums and out-of-pocket expenses.
- The Fund’s Biennial Health Insurance Survey has been tracking trends in insurance coverage and quality for over a decade. The sixth biennial survey was fielded in 2012, and the results, including important data on trends in coverage and health care spending, will be published early in 2013. At the same time, the Fund’s new series of longitudinal tracking surveys will continue to provide timely data on the experiences of low-income adults, young adults, and older adults as health reform is implemented.
- At the University of Kansas Center for Research, Jean Hall, Ph.D., will continue tracking state enrollment and patient experiences in Pre-existing Condition Insurance Plans during their final year of operation. The research team will develop policy options to ease the transition of enrollees into coverage offered through the insurance exchanges.
- The National Opinion Research Center’s Jon Gabel will administer a survey to small employers about their experience in providing health insurance benefits and their needs and preferences regarding the purchase of coverage. Understanding the perspectives of small firms should aid policymakers as they set up the SHOP exchanges.