Narrow Provider Networks for Employer Plans by Mark A. Hall, Paul Fronstin :: SSRN

January 5, 2017

The authors conducted in-depth qualitative research to examine questions around provider networks in employer health plans, particularly the development of so-called “narrow networks,” which have grown in the individual market exchanges under the Patient Protection and Affordable Care Act of 2010 (ACA). These narrow networks are characterized by offering considerably fewer health providers than is typical in the group market, and they are formed primarily based on price discounting. The research includes the review of peer-reviewed journals, news sources, and public policy reports; structured interviews with a convenience sample of human resource benefit directors at 11 large employers; and field research by health-policy experts in a dozen states. This paper describes the research in more detail and analyzes the reported facts and viewpoints.

Major findings include the following: Narrow provider networks are receiving renewed attention, following their increasing prominence in the ACA’s individual (nongroup) marketplace exchanges, which are highly price-competitive. So far, this renewed interest in narrow networks has not translated strongly to employers. For example, in 2016, only 7 percent of employers with health plans offered a narrow network. Also, in 2014, employers ranked narrow networks the least effective among several strategies to manage health insurance costs. Reasons employers give for their subdued interest include absence of a track record showing sustained (year-over-year) savings; concern about antagonizing workers; spotty availability of narrow networks, especially in rural areas; greater interest currently in other cost-savings strategies; and reluctance to adopt substantial changes in benefit structures until the future of the ACA’s so-called “Cadillac tax” is resolved. There are signs that employers’ interest in narrow networks may grow in the near future. More than one-third of employers with health plans that have 5,000 or more workers now offer some type of alternative network, including tiered or “high-performance” networks. Field reports indicate increasing adoption of narrow networks by both large and small employers, particularly in urban markets around the country. Where narrow networks are offered, their adoption could be increased by giving workers stronger financial incentives to consider them. Offering workers a fixed (“defined”) contribution that does not vary by choice of plan is one way to confer such incentives, and private exchanges are a way to offer workers a broader range of choice. Currently, however, neither defined contributions nor private exchanges are widely used by employers.

Source: Narrow Provider Networks for Employer Plans by Mark A. Hall, Paul Fronstin :: SSRN


Did Obamacare Really Insure 20 Million?

December 13, 2016

A recent analysis by The Heritage Foundation’s Edmund Haislmaier and Drew Gonshorowski uses the more accurate method, taking actual enrollment data from Medicaid and private insurance companies to assess the impact Obamacare has had on coverage.

The researchers found that just over 14 million people gained coverage from the end of 2013 to the end of 2015. Of those 14 million, 11.8 million gained their insurance through Medicaid and 2.2 million through private coverage.

Source: Did Obamacare Really Insure 20 Million?


Geographical Distribution of Emergency Department Closures and Consequences on Heart Attack Patients by Yu-Chu Shen, Renee Hsia :: SSRN

December 10, 2016

We develop a conceptual framework and empirically investigate how a permanent emergency department (ED) closure affects patients with acute myocardial infarction (AMI). We first document that large increases in driving time to closest ED are more likely to happen in low-income communities and communities that had fewer medical resources at baseline. Then using a difference-in-differences design, we estimate the effect of an ED closure on access to cardiac care technology, treatment, and health outcomes among Medicare patients with AMI who lived in 24,567 ZIP codes that experienced no change, an increase of <10 minutes, 10 to <30 minutes, and ≥30 minutes in driving time to their closest ED. Overall, access to cardiac care declined in all communities experiencing a closure, with access to a coronary care unit decreasing by 18.64 percentage points (95% CI -30.15, -7.12) for those experiencing ≥30-minute increase in driving time. Even after controlling for access to technology and treatment, patients with the longest delays experienced a 6.58 (95% CI 2.49, 10.68) and 6.52 (95% CI 1.69, 11.35) percentage point increase in 90-day and 1-year mortality, respectively, compared with those not experiencing changes in distance. Our results also suggest that the predominant mechanism behind the mortality increase appeared to be time delay as opposed to availability of specialized cardiac treatment.

Source: Geographical Distribution of Emergency Department Closures and Consequences on Heart Attack Patients by Yu-Chu Shen, Renee Hsia :: SSRN


Health Reform and Health Insurance Coverage of Early Retirees by Helen Levy, Tom Buchmueller, Sayeh Nikpay :: SSRN

December 6, 2016

This paper presents evidence of the dynamics of health insurance coverage between 2008 and 2014 among early retirees, defined as individuals ages 55 to 64 who are not in the labor force. We focus on three questions. First, how did insurance coverage change among early retirees in 2014, when the new ACA options became available, compared with trends in coverage from 2008 to 2013? Second, are there differences between states that did and did not implement the ACA’s Medicaid expansion in January 2014? Third, how did the income gradient in insurance coverage for early retirees change in 2014, both overall and in states with or without Medicaid expansion? We find that between 2013 and 2014, the fraction of early retirees without health insurance declined significantly from 14.7 percent to 11.2 percent, reversing a trend toward increasing uninsurance in recent years. This change was driven by increases in both Medicaid and private non-group coverage. Gains in coverage were larger in states that implemented the Affordable Care Act’s Medicaid expansion in January 2014 than in states that did not. The gains in coverage disproportionately benefited low-income early retirees, and therefore reduced the gradient in coverage with respect to income. There is no evidence of an acceleration of the decline in employer-sponsored coverage for early retirees, either overall or in states that expanded Medicaid. These results suggest that the major coverage provisions of the ACA have increased coverage among early retirees, with particularly large gains among those with very low income in states that expanded Medicaid.

Source: Health Reform and Health Insurance Coverage of Early Retirees by Helen Levy, Tom Buchmueller, Sayeh Nikpay :: SSRN


Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges by Michael Geruso, Timothy J. Layton, Daniel Prinz :: SSRN

December 1, 2016

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.

Source: Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges by Michael Geruso, Timothy J. Layton, Daniel Prinz :: SSRN


Hundreds on Medicaid waiting list in Illinois die while waiting for care | Illinois Policy | Illinois’ comeback story starts here

November 25, 2016

The state’s most recent enrollment reports show more than 650,000 able-bodied adults have enrolled in Medicaid since the Obamacare expansion, and this enrollment shows no sign of slowing down. This is nearly twice as many adults as the state said would ever enroll and more than the state said would ever even be eligible.

Expansion costs are also significantly over projections. Despite promises from the administration of former Gov. Pat Quinn that total expansion costs would “only” hit $2.7 billion in the first two years, costs actually came in at $4.7 billion – 70 percent higher than promised.

Source: Hundreds on Medicaid waiting list in Illinois die while waiting for care | Illinois Policy | Illinois’ comeback story starts here


Caught in the Gap Between Status and No-Status: Lawful Presence Then and Now by Sara N. Kominers :: SSRN

November 24, 2016

Where the line is drawn between noncitizens who are incorporated into American society and those who are not has changed greatly over time, resulting in the creation of a gray area where certain immigrants fall between those with lawful immigration status and those with no status at all. These individuals are granted “lawful presence” which permits them to remain and work in the United States, but does not provide them with a path to citizenship. The number of people in this ambiguous category continues to grow and may dramatically expand again soon as President Obama recently exerted broad scale executive action in response to Congress’ refusal to reform immigration laws.

This article looks at the ways immigration law grants lawful presence and the changing responses of the legal system in dealing with this “gap” between status and no-status. The recent exclusion of Deferred Action for Childhood Arrivals from the Affordable Care Act and other essential health insurance programs serves as a case study to demonstrate how inconsistently laws handle this middle category of people today. The consequences of such a narrow division between who receives benefits and who does not is that the gap between status and no-status widens, encouraging state lawmakers to further discriminate against this group. I argue that the struggle over where the line should be drawn to decide which noncitizens should and should not have access to essential rights and benefits is exacerbated by the tension between a progressive President and a conservative Congress. In a system where the Executive branch may confer lawful presence but only Congress can confer lawful status, hundreds of thousands of people are caught in the gap. I conclude by arguing that as the number of people in this gray area continues to grow, courts should lean toward inclusion rather than exclusion of lawfully present noncitizens in resolving this tension in the law.

Source: Caught in the Gap Between Status and No-Status: Lawful Presence Then and Now by Sara N. Kominers :: SSRN