ACA Exchanges

Marketplace MLR Rebates Likely to Drop After Record Highs

Health insurers will likely issue about $1 billion in medical loss ratio (MLR) rebates this year, according to data from the Kaiser Family Foundation (KFF) and Mark Farrah Associates. That amount is a drop from both 2020 and 2021, which set the all-time highs for MLR rebates disbursed since the Affordable Care Act came into effect. Experts tell AIS Health, a division of MMIT, that the dropoff in rebates is related to pandemic utilization and a more stable policy environment for the individual marketplace.

Health plans selling insurance on the individual, small group and fully insured large group markets are required to return any premium revenue that is not spent on care (or care quality improvements) to members.

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Marketplace, MCOs Will Face a Rocky Transition When PHE Ends

When the Biden administration ends the COVID-19 public health emergency (PHE), states will disenroll millions of Medicaid beneficiaries — and insurers will have to take Medicaid MCO members off their books. Experts tell AIS Health, a division of MMIT, that carriers can take steps to retain some of those members by helping them enroll in Affordable Care Act (ACA) marketplace coverage — but say the number of people who make the switch will be far lower than the number of people who joined the Medicaid rolls during the pandemic (see infographic).

Medicaid and individual exchange enrollment have both boomed with the higher federal funding that was included in the American Rescue Plan Act (ARPA) — and both segments’ total enrollment and enrollee profiles will change significantly when that extra funding ends.

Feds Approve Virginia Individual Market Reinsurance Program

HHS and the Treasury Department on May 19 approved Virginia’s waiver for a state reinsurance program starting on Jan. 1, 2023. Although states have been less aggressive when it comes to applying for reinsurance programs recently, the looming expiration of enhanced premium tax credits in the individual marketplace could create renewed interest in reinsurance, policy experts tell AIS Health, a division of MMIT. That would be welcome news for insurers who are in favor of such programs because they incentivize more individuals to enroll in plans, create a more balanced risk pool and help insurers deal with large claims.

Reinsurance programs are primarily focused on lowering premiums for individuals who did not previously qualify for subsidies on the Affordable Care Act exchanges. In early 2021, the American Rescue Plan Act (ARPA) made enhanced subsidies available to people whose incomes are above 400% of the federal poverty level, the previous threshold, leading to a smaller number of people who benefited from reinsurance.

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Marketplace, MCOs Will Face a Rocky Transition When PHE Ends

When the Biden administration ends the COVID-19 public health emergency (PHE), states will disenroll millions of Medicaid beneficiaries — and insurers will have to take Medicaid MCO members off their books. Experts tell AIS Health, a division of MMIT, that carriers can take steps to retain some of those members by helping them enroll in Affordable Care Act (ACA) marketplace coverage — but say the number of people who make the switch will be far lower than the number of people who joined the Medicaid rolls during the pandemic (see infographic).

Medicaid and individual exchange enrollment have both boomed with the higher federal funding that was included in the American Rescue Plan Act (ARPA) — and both segments’ total enrollment and enrollee profiles will change significantly when that extra funding ends.

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AHIP: States Should ‘Carefully Consider’ Basic Health Program

With millions of people at risk of losing Medicaid coverage once the COVID-19 public health emergency ends, two states are setting up insurance programs designed to scoop up people who make too much for Medicaid and find Affordable Care Act exchange coverage unaffordable.

If Oregon and Kentucky follow through on their plans to set up Basic Health Programs (BHPs), they’ll join just two other states — New York and Minnesota — that have taken advantage of an often-overlooked provision of the ACA, Section 1331. However, there is some evidence that health insurers are wary of BHPs gaining traction.

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Court Will Rule Soon on ACA’s Preventive Coverage Mandate

Although the Affordable Care Act has now survived multiple legal challenges heard by the Supreme Court, the 12-year-old law does not appear to be home free yet. A case currently pending before a Texas district court — which could make it up to the highest court in the land — threatens to dismantle the ACA’s mandate that group and individual health plans must fully cover preventive services such as birth control and vaccines.

If the lawsuit is successful in striking down or weakening one of the ACA’s more popular provisions, it would also raise the question of whether private health plans would stop covering certain preventive services with zero cost sharing. According to industry experts, the answer isn’t so simple.

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News Briefs: CMS Finalizes Rule Mandating Standard ACA Exchange Plans

CMS on April 28 finalized the 2023 Notice of Benefit and Payment Parameters for Affordable Care Act exchange plans, cementing its proposal to require insurers to offer standardized plans on HealthCare.gov. In a provision opposed by the insurance industry at large, the Biden administration will require issuers offering Qualified Health Plans (QHPs) on the federal exchange to offer standardized plan options at every network type, at every metal level and throughout every service area where non-standardized options are offered, starting in 2023. Those plans also will be differentially displayed on HealthCare.gov “to help consumers make more informed choices about their coverage.” Another major provision included in the annual omnibus rule governing the ACA exchanges is the addition of new network adequacy standards that require QHPs to “ensure that certain classes of providers are available within required time and distance parameters.”

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Average ACA Benchmark Plan Premium Continues to Drop in 2022

The national average premium for the second-lowest-cost silver plan, or benchmark plan, sold through the Affordable Care Act exchanges is $438 per month in 2022, a 1.8% drop compared to 2021, according to an Urban Institute analysis. Average benchmark premiums, by state, ranged from $309 in New Hampshire to $766 in West Virginia. The premium variation was associated with the type and number of insurers participating in a region. The presence of a Medicaid insurer led to lower benchmark premiums. In 2021, the benchmark premium in a rating region with only one insurer was $189.5 higher per month than in regions with five or more insurers.

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News Briefs: Public Health Emergency Gets Another Extension

The Biden administration extended the COVID-19 pandemic public health emergency (PHE) through July 15. The PHE declaration makes possible enhanced Medicaid funding — in exchange for states pausing eligibility redeterminations — and expanded telehealth flexibilities for Medicare and Medicaid beneficiaries. As a condition of receiving enhanced federal funds during the PHE, states are required to ensure continuous Medicaid and CHIP coverage for most enrollees, leading to a nearly 18% jump in Medicaid enrollment. CMS has promised to give states at least 60 days’ notice prior to ending the PHE and 12 months after the month in which the PHE ends to complete eligibility redeterminations. Ultimately, “with the recent rollover of COVID-19 hospitalization activity, we would not be surprised if this is the last extension of the COVID-19-related PHE by the Biden administration,” Citi analyst Jason Cassorla predicted.

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Amid ‘Family Glitch’ Fix, Enhanced ACA Subsidy Expiration Looms

While the Biden administration has proposed a long-awaited fix for the Affordable Care Act’s “family glitch” — potentially making coverage more affordable for thousands — the looming expiration of major ACA subsidy expansion threatens to overshadow that progress.

Health insurers that spoke to AIS Health, a division of MMIT, seem concerned about the potential drawback of generous financial help for exchange enrollees, but are not necessarily ready to hit the panic button yet.

“We have the unfortunate benefit, I’d characterize it, as having been through in the past other situations where there was uncertainty about the future of the market,” says Bill Tuthill, vice president of market strategy and federal markets for Highmark Inc. Perhaps the most frightening times occurred when all or major parts of the ACA were in danger of being struck down by the Supreme Court — but that threat didn’t pan out, Tuthill tells AIS Health, a division of MMIT.

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