ACA Exchanges

Experts Challenge Specter of ‘Widespread’ ACA Enrollment Fraud

In recent letters to two federal watchdog agencies, Republican leaders of key House committees demand an investigation into “widespread” improper enrollment in Affordable Care Act exchange plans, citing the findings of a paper from Paragon Health Institute, a right-leaning think tank.

Health policy experts who spoke to AIS Health agree that that there are incentives for enrollees — and the brokers who help them find coverage — to estimate their income in such a way that they will qualify for the richest ACA subsidies. However, they aren’t convinced that there’s large-scale enrollment fraud taking place.

In their paper, the Paragon researchers estimate that 4 million to 5 million people are improperly enrolled in $0-premium (or fully subsidized) ACA exchange plans as of 2024, costing taxpayers between $15 billion and $20 billion.

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Study Outlines Limits on Medicaid-to-ACA-Plan Pipeline

As states resumed their Medicaid eligibility redeterminations last spring, some experts suggested that officials should prioritize helping Medicaid managed care (MMC) enrollees who were losing coverage enroll in a plan from the same carrier in the Affordable Care Act (ACA) individual marketplace. Private insurers like Centene Corp. have also emphasized this strategy, with the goal of stemming member attrition. However, a new study from Health Affairs suggests that “a within-carrier transition is likely to be possible only for roughly half of Medicaid managed care enrollees.”

By examining Clarivate’s InterStudy enrollment data from 2021, researchers found that in 2021, 52.1% of MMC members were enrolled by a carrier that also had a plan on the ACA marketplace in the same county. Among all MMC enrollees, 24.5% were in counties where the largest insurer was the same in both Medicaid and the ACA marketplace. In 10.3% of the 2,625 counties with MMC, all MMC enrollees were in a plan offered by an insurer that also had a marketplace plan.

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Appeals Court Leaves Preventive Services Coverage Mandate in Limbo — What’s Next?

Legal odds are growing long for the Affordable Care Act’s preventive services coverage mandate after a June 21 appeals court decision, which didn’t resolve a lawsuit that could undermine the legal authority of federal preventive services experts to recommend those services be covered free of charge by health plans. The next stage of the Braidwood v. Becerra suit will be decided by either the conservative Supreme Court or a federal judge who has issued a series of rulings undermining the ACA.

The U.S. Court of Appeals for the Fifth Circuit found that the federal government can still require health plans to provide some preventive services to plan members free of charge under the Affordable Care Act — for now. The ruling still leaves open the possibility that, in the end, Braidwood could upend the preventive services coverage regime set up by the ACA. In the next step of Braidwood, the Biden administration must decide whether to petition the Supreme Court for an appeal, or let the case be decided by Texas District Court Judge Reed O'Connor, who has repeatedly ruled against provisions of the ACA.

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Insurers, Brokers Decry Think Tank’s ACA, Employer Plan Proposals

With two recent papers, a right-leaning think tank has managed to draw the ire of a wide array of health benefits stakeholders — including the top insurer trade group, a major health insurer, employers, unions, agents and brokers.

Both papers come at a time when health care industry stakeholders are increasingly trying to read the tea leaves to determine what policies President Joe Biden or former President Donald Trump would embrace if reelected.

In a paper published in May, the Paragon Health Institute argues that not only should federal policymakers end the enhanced Affordable Care Act subsidies that have been in place since 2021, but they should also cap the current open-ended tax exclusion for employer-sponsored health insurance.

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Reports Underscore Risk of Failing to Extend Enhanced ACA Subsidies

Recent analyses from the Congressional Budget Office (CBO), Centers for Disease Control and Prevention (CDC), and the Urban Institute all demonstrate the impact that’s been made by the supersizing of Affordable Care Act exchange subsidies — as well as the damage to coverage rates and insurance markets that could be wrought if they aren’t extended past 2025.

The enhanced subsidies have been in place since March 2021 after the passage of the American Rescue Plan Act. They both increased the level of advance premium tax credits available to lower-income individuals (making $0-premium plans widely available to that cohort) and expanded eligibility for APTC to middle-income Americans for the first time.

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What Happens If Enhanced Premium Tax Credits Expire?

If enhanced Affordable Care Act subsidies are extended past 2025, 17.4 million people would receive subsidized coverage next year, compared with 10.2 million if only original advance premium tax credits (APTC) are in place, a recent Urban Institute analysis shows. Meanwhile, four million more uninsured people will be covered in 2025 if the subsidy enhancements are extended.

The enhanced APTCs — which were initially passed as part of the 2021 American Rescue Plan Act and extended as part of the 2022 Inflation Reduction Act — resulted in lower premiums for ACA marketplace enrollees at all income levels and allowed many low-income enrollees to access $0-premium plans. If Congress doesn’t act, the credits will expire at the end of the 2025 plan year.

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ICHRAs: Poised for Major Growth or Overhyped ‘Niche Market’?

During Oscar Health, Inc.’s recent Investor Day presentation, CEO Mark Bertolini declared that “ICHRA’s time has come,” referring to Individual Coverage Health Reimbursement Arrangements, which the insurer said it believes is the key to expanding its presence in the individual insurance market. However, some industry experts and two much larger health insurers aren’t convinced that these alternatives to traditional employer-sponsored plans are poised for their big break.

“They’ve done a really good job getting a lot of attention on something that’s really a non-issue,” Ari Gottlieb, principal of health care consulting firm A2 Strategies, says of Oscar’s ability to generate headlines about the ICHRA’s market potential.

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Elevance Execs Dish on ACA Exchange, Commercial Segment Strategies

Although improving Medicare Advantage margins has been the hottest topic recently in managed care, executives at Elevance Health, Inc. at a recent investor conference made some noteworthy comments about the firm’s commercial and Affordable Care Act exchange businesses — both of which insurers are talking more glowingly about amid government-business headwinds.

Regarding the company’s ACA exchange business, “we certainly aren’t looking for membership over margin,” Morgan Kendrick, president for the insurers commercial and specialty health benefits segment, said during a June 12 question-and-answer session at the Goldman Sachs Global Healthcare Conference.

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Since 2010, Some Minority Groups’ Uninsured Rates Have Dropped by Half

Uninsured rates among Black, Latino, Asian and Native American communities plummeted from 2010 to 2022, as more people gained health care coverage through federal health care programs and employer-sponsored plans, according to reports released by HHS.

The uninsured rate for Black Americans under age 65 dropped from 20.9% to 10.8% between 2010 and 2022, and the rate dropped from 32.7% to 18.0% for Latino Americans during that time. Meanwhile, the uninsured rate went from 16.6% to 6.2% for Asian Americans, Native Hawaiians and Pacific Islanders (AANHPI), and from 32.4% to 19.9% for American Indians and Alaska Natives (AI/AN).

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News Briefs: State Officials Urge SCOTUS Review of PBM Regulation Case

A bipartisan group of state attorneys general recently filed an amicus brief with the Supreme Court, asking it to review an appeals court decision that limited states’ ability to regulate PBMs. In August 2023, the U.S. Court of Appeals for the Tenth Circuit ruled to block an Oklahoma law that contained provisions such as setting uniform standards for pharmacy networks and banning PBMs from using discounts to drive customers to pharmacies owned by their parent companies. That ruling was the result of a challenge to the Oklahoma law brought by the Pharmaceutical Care Management Association (PCMA). In PCMA v. Mulready, the PBM trade group argued that Oklahoma’s law is preempted by the Employee Retirement Income Security Act of 1974 (ERISA) and the statues governing Medicare Part D. But in their brief urging the Supreme Court to review the case, Minnesota Attorney General Keith Ellison (D) and his colleagues argue that the Tenth Circuit’s broad approach to federal preemption would “severely and unduly impede states’ abilities to protect their residents and regulate businesses.” In a similar case regarding an Arkansas law regulating PBMs, Rutledge v. PCMA, the Supreme Court rejected the PBM trade group’s ERISA-preemption argument.

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