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June 23, 2014

Washington Health Policy Week in Review Archive 0d110dcc-4667-44ec-b7f7-dc2c19a6d00b

Newsletter Article


Population of Uninsured Americans Fell in 2013, CDC Says

By Rebecca Adams, CQ HealthBeat Associate Editor

June 19, 2014 -- The percentage of Americans without health insurance fell to 14.4 percent in 2013, down from a high of 16 percent in 2010, according to new survey data from the Centers for Disease Control and Prevention (CDC).

Two CDC reports extrapolated results from surveys of 104,203 people. Last year, approximately 44.8 million people did not have coverage at the time the interviews were done. About 55.4 million people, or 17.8 percent of Americans, had been uninsured for at least part of the year, and 33.4 million, or 10.7 percent, had been uninsured for more than a year.

The studies provide a baseline look at the number of people without coverage in 2013, the year before benefits began under the health care law (PL 111-148, PL 111-152). The law allowed people to buy new federally-regulated and subsidized insurance with coverage starting on Jan. 1. States also were able to expand Medicaid to more people with benefits for newly-eligible people starting on Jan. 1.

The age group with the highest number of uninsured in 2013 was people 25 to 34 years old, followed by those 18 to 24 years old. Insurers and federal officials have devoted enormous resources to encouraging younger adults to sign up for coverage in the new plans offered through the marketplaces because those people are presumed to be healthier on average and their premiums could subsidize medical expenses of older, sicker people.

The 2013 results showed significant regional variations in coverage rates. Only about 3.8 percent were uninsured in Washington, D.C., and 5.2 percent were without coverage in Massachusetts. But 24.8 percent were uninsured in Nevada and 24.7 percent were uninsured in Florida.

The data offer a look at coverage from 1997 through 2013. The percentage of people who did not have insurance at the time that they were interviewed was as low as 14.2 percent in 1999, 2001 and 2005. Two additional questions about Medicare and Medicaid coverage were asked starting in 2005.

The percentage of people relying on government-funded health care has increased dramatically since 1997, in large part because of the Children's Health Insurance Program. In 2013, about 23.8 percent of Americans received public coverage, compared to about 13.6 percent in 1997. During that time, the percentage of children with government-financed coverage almost doubled, to 42.2 percent in 2013, up from 21.4 percent in 1997. The share of adults 18 to 64 years old receiving government coverage rose to 16.7 percent in 2013, compared to 10.2 percent 16 years earlier.

The adults were more than three times as likely as children to be uninsured at the time of the interview. There were no significant changes between 2012 and 2013 in the percentage of uninsured people at the time of interview for all of the age groups.

The health care law is expected to continue to expand the number of people receiving government-funded coverage.

Private health coverage has been on the decline for years. About 61 percent of Americans under 65 had private health insurance last year, down from 70.8 percent in 1997.

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Report Projects Medicaid Enrollment Surge Under Health Law

By Rebecca Adams, CQ HealthBeat Associate Editor

June 19, 2014 -- Medicaid and Children's Health Insurance Program enrollment will increase under the health care law by an average of 38.5 percent in seven cities where eligibility is expanding, according to a report by the Robert Wood Johnson Foundation. In seven other cities studied by the foundation where Medicaid eligibility is not changing, enrollment is projected to grow by 10.7 percent by 2016.

The report's authors modeled the impact of Medicaid expansion on the uninsured rate and federal funding in 14 cities, which are located both in states that are expanding Medicaid and are not. The cities are Atlanta; Charlotte; Chicago; Columbus, Ohio; Denver; Detroit; Houston; Indianapolis; Los Angeles; Memphis, Tenn.; Miami; Philadelphia, Phoenix, and Seattle.

Cities in states that are not expanding Medicaid would gain billions of dollars in federal revenue if the state broadened eligibility, according to the report.

If Georgia expanded Medicaid, Atlanta would see a federal spending increase from $1.9 billion to $4.8 billion. Houston would get an increase to $16.4 billion in federal spending from $9.9 billion, and Philadelphia would receive an increase from $4.5 billion to $12.6 billion, according to the report.

The Robert Wood Johnson Foundation presents generally favorable views of the health care law.

The federal government has promised to pay all of the costs for newly eligible people for the first three years and at least 90 percent of those costs later. But skeptics wonder if federal officials can carry through on that commitment.

Critics also note that states will have to pay for a growing number of Medicaid recipients that do not get the high federal matching rate as more people who qualified under the traditional guidelines, and less generous matching rates, sign up.

The report says that if Medicaid eligibility were broadened in the seven cities that are not yet expanding, the uninsured rates would fall by more than 50 percent in every city except Houston, which would see the uninsured rate fall by 44.8 percent.

Immigrants who are not in the country legally are not eligible for Medicaid, so cities such as Houston, Los Angeles, and Miami that have somewhat high populations of those residents would continue to have higher uninsured rates than other cities.

The uninsured population is expected to fall significantly in the places where eligibility for the program is broadening. The number of uninsured will drop by an average of 56.5 percent in the seven cities that will add more people to the Medicaid rolls, with decreases ranging from 48.8 percent in Denver to 65.8 percent in Detroit.

So far, 26 states and the District of Columbia have expanded eligibility under the law (PL 111-148, PL 111-152). In each of the 14 cities, at least 40 percent of the uninsured population has income under the Medicaid expansion threshold of 138 percent of the federal poverty level, according to estimates through a model used in the report.

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Most Marketplace Plan Buyers Had Been Uninsured, Study Shows

By Kerry Young, CQ HealthBeat Associate Editor

June 19, 2014 -- The majority of people who bought insurance through health law marketplaces, or exchanges, were previously uninsured, according to a study that honed in on the experiences of people who purchased plans in the individual market.

The study is the first of series planned by the Kaiser Family Foundation designed to answer some common questions about who was enrolling through the marketplaces. These state and federal web-based programs are a defining feature of the implementation of the 2010 health law (PL 111-148, PL 111-152).

"There has been considerable debate about how many people signing up for coverage in the new exchanges were uninsured. Our survey reveals that the majority of people who enrolled in the new exchanges were previously uninsured," said Drew Altman, president and chief executive of the nonprofit foundation in a release.

This survey was conducted from early April to early May, and included a random sample of 742 adults who bought their own insurance.

"This is a market very much in flux, and we will track experiences and perceptions over time as new people enroll and those already in the market gain more experience using their new plans," said Liz Hamel, director of the foundation's Public Opinion and Survey Research in a statement. "While the share of the overall population enrolled in the non-group market is small, their views and experiences will have outsized significance in terms of whether the ACA is viewed as a success or not."

Kaiser said that nearly six in 10 people, or 57 percent, of those who purchased through marketplaces had been uninsured just prior to obtaining coverage. Of this group, most had been without coverage for at least two years.

The Kaiser findings differed from some other estimates. A report from Rand Corp. released in April pegged the previously uninsured population at roughly a third. Looking at results through mid-March, Rand research found that of a total of 3.9 million people enrolled in marketplace plans, only 1.4 million had been previously uninsured. The researchers noted that their "data do not fully capture the surge in enrollment that occurred in late March 2014."

On a recent call with reporters, Larry Levitt, senior vice president of Kaiser, said that the timing of research makes a difference in the results.

"Ours is the most current survey," he said.

Some of the findings in the Kaiser survey were not surprising.

"Those who are most likely to feel they have benefited from the law are people receiving government financial assistance for exchange plan premiums (60 percent benefited), while those most likely to feel they have been negatively affected by the law are people who experienced a plan cancellation in the past year (57 percent negatively affected)," Kaiser reported in a summary of the work.

In general, people buying their own insurance were more likely to have a favorable view of the 2010 law than the public at large, which includes many people who have coverage through their employers. According to the survey, the people buying their own insurance were about evenly split between favorable (47 percent) and unfavorable (43 percent views. Adults nationwide in the same age range have an unfavorable view of the law (46 percent) than a favorable one (38 percent).

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Simpler Enrollment Application Planned for Fall Health Law Sign-Up

By Rebecca Adams, CQ HealthBeat Associate Editor

June 17, 2014 -- Federal officials and software engineers are working on a simplified application to install on the federal insurance website during the upcoming enrollment period. The goal is to make things easier both for consumers and the website, which collapsed under the pressure of high volume during the first days of last fall's sign-up window.

Application 2.0 will be "for people who don't have complicated financial assistance needs, so we think it could be a high percentage of people who are signing up," said Paul Smith, a software engineer who was part of the technical rescue team that helped Obama administration officials patch in the months after its disastrous launch on Oct. 1.

Smith continues to advise federal officials as they prepare for the second sign-up period, which will run from Nov. 15 through Feb. 15. He spoke at a conference organized by Enroll America, the organization that led efforts to mobilize uninsured people to sign up for coverage.

The simplified application could be likened to a 1040-EZ form for taxpayers with uncomplicated situations and will ask fewer questions.

"I think there will be a few other things like that, that will provide better user experience and at the same time take the heavyweight transactions off of the main system," said Smith.

However, Smith said that there is limited time to add new functions to Federal officials and contractors are still working on back-end issues that had been expected to be finished months ago, such as an electronic system to pay insurers. In the meantime, insurance companies are invoicing federal officials to get subsidies for consumers covered by their plans.

Besides adding the simpler application, fixing the back-end problems and bringing a portal for small businesses online, the federal website consumers use in November will look much the same. Consumers can still use now to sign up if they are eligible for special enrollment periods.

"That's not a long runway to do a lot of big changes, so the system that crossed the finish line in April is largely the one that will start the starting line on November 15," said Smith.

On an earlier panel, former Health and Human Services Secretary Kathleen Sebelius said the "most terrifying days" in the federal government's efforts to fix the flawed enrollment website were at the end of November.

Federal officials had promised that the website would work well for the "vast majority" of consumers by the end of the month. During those final days, Sebelius recalled thinking, "I really hope this is going to work."

She said she felt "great validation" on Dec. 1, when the website performed much better than in previous weeks.

When open enrollment started on Oct. 1, the federal website was so flawed that only six people in the entire country were able to enroll on the first day. Later that month, federal officials and contractors were able to start making fixes that would result in improvements each week.

Sebelius said that she's seen a lot of political campaigns, but that Enroll America's work to sign people up for coverage was "the most amazing effort I've ever seen in my life."

She added that the Obama administration's outreach effort before the open enrollment period started was outspent by negative publicity from critics by 4 to 1. Federal officials faced attacks from right-wing media, opponents among the leadership in Congress, shadow political organizations and hostile governors, she said.

Sebelius spoke on a panel with Kentucky Gov. Steve Beshears, Kaiser Family Foundation President Drew Altman, and Independence Blue Cross President and CEO Daniel Hilferty.

Beshears called Sebelius a "hero," adding he "never saw anybody take so much abuse, undeserved abuse" during the troubled launch of the new marketplaces under the law (PL 111-148, PL 111-152).

Altman noted that the remarkable thing about the polls his nonpartisan foundation produces is that they have changed so little over time. No matter what happens with the health care law, the public's views are distributed almost perfectly along partisan lines.

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Health Law Subsidies Deliver 76 Percent Average Savings, Report Finds

By Melissa Attias, CQ Roll Call

June 19, 2014 -- People who signed up for subsidized coverage on the health care law's federal insurance marketplace are paying on average 76 percent less in premiums than they would have paid without the financial assistance, the Department of Health and Human Services (HHS) reported last week.

Senior HHS officials touted the report as evidence that the subsidies provided under the law (PL 111-148, PL 111-152) are working as intended to make premiums affordable and that the marketplace is boosting competition in the insurance market. Speaking to reporters on a conference call, they said they expect similar insurer and plan participation next year, which they said will help keep premiums down.

But some of the figures in the report are limited to the insurance marketplace run by the federal government in 36 states and exclude large states such as New York and California that operate their own marketplaces. The report also did not distinguish which individuals had paid their premiums, though the officials said they hope to have that information later this year.

"The findings in this brief represent early analyses for the first year of the marketplace, and we expect this new, competitive health insurance market will continue to evolve," the report stated.

Douglas Holtz-Eakin, the president of the conservative American Action Forum and a former Congressional Budget Office director, said the report only tells part of the story by focusing on averages. He also said it fails to note that consumers could wind up repaying a portion of their subsidies if they provide incorrect information about their incomes.

According to HHS, about 87 percent of individuals who signed up for coverage through the federal marketplace chose plans with subsidies. For those enrollees, the report said the amount of the average subsidy was $264, bringing the average monthly premium from $346 to $82.

The report also found that 69 percent of the people who chose plans with subsidies had premiums of $100 per month or less after the subsidies kicked in and that almost half have premiums of $50 or less after the financial assistance. Sixty-five percent of the individuals who picked so-called silver plans—one of the metal tiers of plans sold in the new marketplace—chose the lowest- or second-lowest-cost option, the report noted.

In addition, HHS released figures on the number of options consumers had to choose from when they selected plans in the federal and state marketplaces. The report found that 82 percent of those who are eligible to buy marketplace coverage live in rating areas with three to 11 insurers, with that figure rising to 96 percent when areas with two or more insurers are included. Individuals eligible to purchase marketplace coverage can select from five insurers and 47 plans across all metal levels on average, the report adds.

The department also found that having an additional insurer in a rating area is linked to a 4 percent drop on average in premiums for the second-lowest-cost silver plan.

"Areas with a greater number of issuers also tend to offer a wider range of choices for consumers among plan types (e.g. PPOs, HMOs, CO-OPs) that appear to result in greater variation in premiums across the rating areas, suggesting complex competitive interactions," the report concluded. "If more issuers come into the marketplace in future years, it seems likely not only that consumers will have a greater choice of plans, but also that the benchmark plan (second-lowest-cost silver plan) will become even more affordable."

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Orszag Sees No Big Uptick in Health Care Spending

By John Reichard, CQ HealthBeat Editor

June 17, 2014 -- The release of preliminary data earlier this year showing that health care spending surged 9.9 percent during the first quarter was widely interpreted as evidence that the long term slowdown in health care spending was ending. That hasn't turned out to be the case, says former Congressional Budget Office (CBO) Director Peter Orszag.

"Now, we actually have that data," Orszag said in an interview recently posted on the website Vox. "They show from the first quarter of 2014, health care spending only increased by 2.9 percent. That's before taking out inflation; in real terms spending growth was basically zero."

The government said April 30 that health care spending rose 9.9 percent during the first quarter of 2014 as people who gained insurance coverage under the health care overhaul law (PL 111-148, PL 111-152) apparently began using more medical services.

The preliminary estimate was made by the Bureau of Economic Analysis. Obama administration officials cautioned at the time that the main survey the bureau uses to track health care spending for the first quarter wouldn't be available until June, meaning there could still be significant revisions.

Jason Furman, chairman of the Council of Economic Advisers, said then that the preliminary results tracked with expectations as the health law rollout continued. "The sharp increase in estimated utilization appears to have been driven by greater use of health care services by people who gained insurance coverage during the first quarter because of the Affordable Care Act," Furman said.

In the Vox interview Orszag said that comparing the first three months of 2014 to the preceding three months shows that health spending actually declined.

"This survey is the basis for the estimates, but there are other elements, so we'll see what happens with the revisions," he said. "I am absolutely sure that the 9.9 percent annualized growth that was reported with preliminary estimates will be revised down significantly."

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