Physicians for Fair Coverage, Research by Avalere, July 2018
The expansion in coverage due to the Affordable Care Act (ACA) increased the number of insured Americans by 20 million. Although access to health insurance has expanded significantly in recent years, and the ACA instituted important protections for patients, those who gained insurance through ACA health insurance exchanges are being offered plans that make them bear an increasing portion of their healthcare costs since the law was implemented. Access to health insurance is not sufficient if patients cannot afford to purchase coverage or utilize their benefits due to high premiums, high out-of-pocket costs, limited networks, and insufficient state and federal patient protections.
This paper outlines the key challenges facing patients in plans insurance companies offer through ACA health insurance exchange markets and details the changes in patient cost-sharing. This paper will demonstrate that:
1. Health plan networks have grown increasingly narrow, limiting patient access to in-network providers, with specialties like anesthesiologists, radiologists, and emergency physicians often out-of-network in exchange plans;
2. Non-subsidized exchange marketplace premiums have increased faster relative to other markets, such as employer-sponsored insurance and Medicare Advantage, since 2014;
3. Deductibles and maximum out-of-pocket limits (MOOPs) have grown across all payers, placing a higher financial burden on sicker patients;
4. Despite the growth in deductibles and MOOPs, cost-sharing for services after the deductible has remained relatively constant, though patients are increasingly required to pay coinsurance to access their care; and
5. Federal and state rules around network adequacy have not kept pace with the growing patient burden.
* In 2017, 68% of healthcare plans in the exchange market offered restrictive networks, compared with 48% in 2014.
* Average ACA exchange market premiums increased 28% from 2014 to 2017.
* Plans covered between 34% – 66% fewer providers than other markets.
* Almost 90% of enrollees in ACA exchange plans had deductibles above $1,300, the IRS definition of a high deductible plan.
* Several top insurance companies saw profit margins in Q1 for 2018 that were the highest in a decade, and all six of the largest insurance companies paid their CEOs over $17 million in 2017.
By Don McCanne, M.D.
A decade ago the individual health insurance market was in total disarray and thus was one of the primary motivators to enact the Affordable Care Act (ACA). Under ACA these plans became more tightly regulated and subsidies inversely related to income were provided to make the premiums and cost-sharing more affordable. How is this working?
To try to keep premiums affordable, the more popular plans were designed to have low actuarial values – the insurers pay a lower percentage of the allowed charges – and the insurers were allowed to limit their networks enabling them to negotiate lower prices. This kept costs down for those eligible for subsidies and credits, but for middle-income individuals who were not eligible, out-of-pocket spending has been excessive and often not affordable.
Has the situation improved since the plans were first implemented? No, it’s worse now. Premiums have increased, high deductibles have become routine, and the use of restrictive networks has expanded, all this while profit margins have increased for the top insurers and their CEOs.
The problem is that this is the nature of private health insurance. Plans are designed to be successful business products. To improve markets they shift risk and costs to patients and they impair patient access to health care through network restrictions and the financial barriers of high deductibles.
Does anybody believe it will get better? Are insurers going to lower their premiums, lower their deductibles, and expand their networks while covering all essential health care benefits? No, they are going to continue to squeeze to enhance their margins. We can anticipate even higher deductibles, higher coinsurance instead of copays, greater tiering of health care services and products, more restrictive access, especially to specialized services, and the new thing will be the introduction of plans with sharply curtailed benefits such as the association health plans that the Trump administration will be pushing.
Yet the politicians have been saying that we need to protect our current system but add the option of being able to purchase a public plan. Some are now latching on to the Medicare for all rhetoric but when pressed they say, “yes, Medicare for all by allowing a buy-in to the Medicare program” – merely a public option with a new but misleading label. Merely adding a public option to our highly dysfunctional, fragmented financing system will have virtually no impact on resolving the problems inherent in our system.
If we want true universality, comprehensiveness, equity, assured access, and affordability for every one us, we are going to have to dump the current system and enact and implement a well designed, single payer, expanded and improved Medicare for all. Nothing else will do, that is unless we are ready to nationalize our entire health care delivery system and convert it into a national health service. Shall we do a poll?
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