We’ve all heard about the insurers that are pulling out of Affordable Care Act marketplaces, but sometimes you have to see it to really get it. This map is based on data from the Kaiser Family Foundation for the first four years of the ACA marketplaces. You can really see the difference in 2017, when high-profile insurance exits left 21 percent of all ACA customers with only one insurer in their area.
Yesterday, the Department of Health and Human Services (HHS) issued a proposed rule designed to lay the groundwork for stabilizing the individual and small group health insurance markets.
Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges by Michael Geruso, Timothy J. Layton, Daniel Prinz :: SSRNFebruary 12, 2017
By steering patients to cost-effective substitutes, the tiered design of prescription drug formularies can improve the efficiency of healthcare consumption in the presence of moral hazard. However, a long theoretical literature describes how contract design can also be used to screen consumers by profitability. In this paper, we study this type of screening in the ACA Health Insurance Exchanges. We first show that despite large regulatory transfers that neutralize selection incentives for most consumer types, some consumers are unprofitable in a way that is predictable by their prescription drug demand. Then, using a difference-in-differences strategy that compares Exchange formularies where these selection incentives exist to employer plan formularies where they do not, we show that Exchange insurers design formularies as screening devices that are differentially unattractive to unprofitable consumer types. This results in inefficiently low levels of coverage for the corresponding drugs in equilibrium. Although this type of contract distortion has been highlighted in the prior theoretical literature, until now empirical evidence has been rare. The impact on out-of-pocket costs for consumers affected by the distortion is substantial — potentially thousands of dollars per year — and the distortion creates an equilibrium in which contracts that efficiently trade off moral hazard and risk protection cannot exist.
Healthcare.gov enrollment came in well below what was anticipated last month. After running very slightly ahead of last year’s numbers in December, January brought the news that about 400,000 fewer people had enrolled on the federal exchanges than did so in 2016. Those are scary numbers, not so much for the absolute size of the decline — it’s roughly 4 percent — but because any backwards movement is very bad news for the exchanges.
About 9.2 million people signed up through HealthCare.gov, the insurance marketplace serving most states, said the Health and Human Services department. That’s about 500,000 fewer customers than had enrolled last year in those same 39 states, or slippage of around 5 percent.
California and the District of Columbia through their state-run marketplaces, and Florida and Virginia through the federal marketplace, approved nine of the 12 fictitious applicants GAO created for special enrollment and subsidies. That’s because there are no laws requiring marketplaces to verify whether someone is eligible for special enrollment outside the normal enrollment period for life events, like gaining a dependent through marriage or a making permanent move.
Health insurers get 1.6 percent of $6 billion they are owed for costly ACA customers – The Washington PostDecember 15, 2016
Hundreds of insurers selling health plans in Affordable Care Act marketplaces are being paid less than 2 percent of nearly $6 billion the government owes them for covering customers last year with unexpectedly high medical expenses.The $96 million that insurers will get is just one-fourth of the sum that provoked an industry outcry a year ago, when federal health officials announced that they had enough money to pay health plans only 12.6 percent of what the law entitles them to receive.