Marketplace Open Enrollment Preview

1:30 – 1:35 p.m.          Welcome and Introductions

• Jennifer Sullivan
  Alliance for Health Policy

1:35 – 1:50 p.m.          Context Entering Open Enrollment for 2018

• Karen Pollitz
  Kaiser Family Foundation

1:50 – 2:30 p.m.          Moderated Discussion

• Karen Pollitz
  Kaiser Family Foundation
• Andy Slavitt, @ASlavitt
  Bipartisan Policy Center
• Jeanette Thornton
  America’s Health Insurance Plans
• Noam Levey, @NoamLevey
  Los Angeles Times

2:30 – 2:45 p.m.          Question and Answer Session

Jennifer Sullivan: Good afternoon and welcome to the Alliance for Health Policy’s Marketplace Open Enrollment Preview Webinar. We’re glad you could join us today. My name is Jennifer Sullivan. I’m the director of policy and programs at the Alliance for Health Policy and I’ll be moderating today’s webinar.   Much of the national discussion around health insurance marketplaces this year has focused on “will they” or “won’t they” debates. Will they or won’t they pass marketplace stabilization legislation? Will they or won’t they continue to fund cost-sharing reductions? Will they or won’t they continue to participate in the marketplace. The “they” changes but the underlying uncertainty doesn’t.   This webinar will attempt to unpack the knowns heading into the upcoming marketplace open enrollment period, including what those currently enrolled in marketplace coverage and those planning to shop for coverage can expect when it comes to plan choices, cost, plan design, and help enrolling.   Today’s webinar is a project of the Alliance for Health Policy and the National Institute for Health Care Management Foundation, in collaboration with the Association of Health Care Journalists. We appreciate the support of our partners at the NIHCM Foundation and AHCJ.   We also wanted to let this audience know that NIHCM is hosting another event this week that our D.C.-based audience may be interested in attending. Transforming Health Care to Drive Value will feature experts on policy, business, and academia, sharing their insights on how to improve health outcomes for Americans while managing the cost of care. You can register for this free lunch briefing later this week on their website at NIHCM.org.   In order to allow for as timely of a discussion as possible and to be nimble to the rapidly-changing realities around the marketplaces, we’re taking a slightly different approach to today’s format. We’ll begin with a presentation from Karen Pollitz from the Kaiser Family Foundation who will share a broad overview of key facts heading into the open enrollment period for 2018 coverage. Then we’ll move to a moderated discussion will all four of our panelists. We welcome you to submit questions at any time throughout the webinar and we’ll get to as many as we can before we conclude at 2:45.   On the right-hand side of your screen, you’ll see a floating toolbar with an orange arrow. The orange arrow allows you to open and close the toolbar. If you open it, you’ll be able to adjust your audio settings. From this toolbar, you can also access a downloadable version of today’s presentation and submit questions for the Q&A portion of the webinar. On our website, Allhealthpolicy.org, you’ll also find additional materials that accompany this webinar, including further reading, expert lists, speaker biographies, and presentations. A recording of today’s webinar will also be available there soon.   Finally, if you’re new to this topic or to the field of health policy, more broadly, we want to make sure you know about the Alliance’s source book on the essentials of health policy. The source book was compiled with support from the NIHCM Foundation. It provides background and current data on key issues, including the marketplaces, Medicaid, and private insurance.   Now, with those housekeeping details taken care of, let’s move to today’s presentation and discussion. We’re very fortunate today to have a panel who can shed light on the current landscape as we enter the marketplace open enrollment period.   Karen Pollitz is a senior fellow at the Kaiser Family Foundation and has held multiple senior roles at the Department of Health and Human Services. Andy Slavitt is a senior advisor to the Bipartisan Policy Center and is a member of its Future of Health Care Initiative. Andy also served as the acting administrator for the Centers for Medicare & Medicaid Services from 2015 to 2017.   Jeanette Thornton is the senior vice president of health plan operations and strategy at America’s Health Insurance Plans where she leads activities on health insurance marketplaces. Finally, Noam Levey is a reporter from the Los Angeles Times and writes about national health care policy out of Washington D.C. He joined the newspaper in 2003 and has reported from Washington since 2006.   Now, at this point, I’m going to turn it over to Karen to provide some key context around the marketplaces, policy changes affecting open enrollment, and the latest findings from Kaiser Family Foundation health tracking polls on consumer awareness. Karen?   Karen Pollitz: Thanks, Jennifer, and good afternoon, everyone. I promised I’d start off with just a few slides reminding us where things stand as the beginning of the fifth open enrollment approaches. Next slide, please.   First, 2017 had been the year when the financial condition of health insurance companies in the non-group market stabilized. We have seen margins climb substantially so far this year, following the 2017 premium increases adopted by most insurers to correct for past underpricing and other implementation changes. The expectation was that, moving forward, insurers would be able to breakeven or even make a profit on the non-group market business this year. Next slide, please.   Also, just a reminder about the non-group market and what that looks like. We estimate there are about 17-and-a-half million people who have non-group health insurance today. Most, nearly 60%, buy this coverage through the marketplace. And the vast majority of marketplace enrollees, about 85%, have subsidies. About four-in-ten non-group enrollees buy coverage off the marketplace. The vast majority of those are in ACA-compliant plans that cover essential health benefits, don’t exclude preexisting condition, and don’t charge more based on health status. Next slide, please.   In addition, the non-group market – it’s important to remember – is the residual market for people who are ineligible for job-based coverage and for public programs. And of course, the largest public program for people under 65 is Medicaid. The Affordable Care Act expanded Medicaid eligibility for adults with income below 138% of the poverty level, and 31 states and the District of Columbia have elected this Medicaid expansion, accounting for more than 15 million covered adults in 2016.   The marketplace is smaller in states that expanded Medicaid because the lowest income cohort of uninsured adults has access to public coverage instead. And research shows that the Medicaid expansion has also helped to stabilize marketplaces, lowering the average risk scores of people who are in private insurance. Next slide, please.   So that’s where we’ve been. This time last year, the expectation was that the marketplace would finally get to steady state with all of the major implementation uncertainties resolved. But instead we’ve had an interesting year with a lot going on that has reintroduced uncertainty for insurers and fueled some confusing among consumers. We had a nearly yearlong debate over repeal of the Affordable Care Act that ended with no legislation enacted.   And then there were a series of administrative actions taken, including shortening the 2018 open enrollment to six weeks, reducing federal spending for advertising about open enrollment by 90%, and grants to federal navigators by 40% on average – although that varies. I’ll come back to that in a minute. And then about a week-and-a-half ago, the President announced that cost-sharing reduction reimbursements to insurers would be terminated immediately. There is a bipartisan effort underway in the Senate to restore these payments – also a lawsuit pending – although, the prospects of all of these activities are still uncertain.   Safe to say, though, uncertainty from all of these different changes did contribute to some insurers deciding to exit the marketplace for 2018. Currently, there are, on average, about 4.3 insurers per state offering marketplace coverage. And in 2018, we expect that will drop to 3.5 insurers per state on average. Next slide, please.   So, Jennifer mentioned we have been doing some tracking polling in September and October to find out what consumers know about the upcoming open enrollment and how they feel about their coverage for the coming year. And our tracking poll does find evidence of confusion and uncertainty among consumers. Following debate over repeal of the Affordable Care Act, nearly 30% of the general public and 40% of the uninsured either think the mandate to have coverage was repealed or are uncertain as to whether the individual mandate remains in effect. Next slide, please.   So, an important thing for consumers to know as open enrollment approaches is that that ACA is still here. There is still a requirement to have health coverage or pay a tax penalty. The penalty for 2018 will be the same in 2018 as it is this year, the greater of $695 per adult or 2.5% of household income above the federal tax filing threshold. To satisfy the mandate, people can sign up for health coverage offered at work or they can apply for Medicaid or CHIP or other public programs nationwide. An estimated 6.7 million uninsured individuals are eligible for Medicaid or CHIP, but not enrolled.   And then people who don’t have access to job-based coverage or public programs can buy individual health insurance. Subsidies are available through the marketplace for people with income up to four times the poverty level. But non-group coverage can only be purchased during open enrollment or at other times during the year, only if people qualify for a special enrollment period. Next slide, please.   Our tracking poll also finds that people don’t know when this coming open enrollment starts and ends. Even among people who are already enrolled in the marketplace, 60% are unaware that open enrollment begins on November 1st; and among the uninsured, 85% don’t know this opening date; and even larger numbers of people are not aware when open enrollment ends this year. Next slide, please.   Consumers need to know that fact. And Healthcare.gov states – actually, everywhere – open enrollment up until now have extended at least through the end of January. But this year, for 2018 coverage, open enrollment will be shorter, just six weeks, starting November 1st and ending December 15 in Healthcare.gov states, which is most of the country; 39 states. Most state-based marketplaces will hold a longer open enrollment this fall.   Now, the deadlines are key. This year, as in the past, people who are already enrolled in marketplace coverage and who don’t act before midnight on December 15th to renew or change their coverage will likely be automatically renewed in their current coverage by the marketplace for another year. And if their current plan is no longer being offered in 2018 and they don’t act, the marketplace will likely automatically select a different plan for those consumers.   Auto-renewal has been a standard practice for a couple of years now. During the last open enrollment period, almost one in four marketplace sign-ups were accomplished by auto-renewal. The advice has always been to actively shop and not to rely on auto-renewal, and this year that is especially good advice. In the past, people could see the results of auto-renewal in January and they still had a month to change if they didn’t like that result. But this year, open enrollment ends just as auto-renewal takes place.   And as we’ll discuss in a minute, there have been a number of marketplace insurers that are leaving for 2018 and also very significant changes taking place in marketplace premiums, different from what we’ve seen in the past. So it really is important for people to log into the marketplace, see their plan choices and costs, and make the choice that’s best for them. Don’t just rely on autopilot. Next slide, please.   Our tracking poll also finds that marketplace consumers are very worried about affordability. A majority are concerned that they won’t be able to continue to afford their coverage next year, due to rising deductibles or to rising premiums. Next slide, please.   So another thing consumers need to know is that the Affordable Care Act subsidies are still here. In particular, cost-sharing subsidies that reduce deductibles and copays under ACA marketplace plans are still available. I’ve hear a number of news reports incorrectly describing that these subsidies are terminating. They are not terminating.   Cost sharing reductions for marketplace enrollees are still there. Eligible people have income up to two-and-a-half times the federal poverty level, and the vast majority of marketplace enrollees are also eligible for these cost-sharing subsidies. They are delivered only through silver plans. You buy a silver plan. Depending on your income, you’re delivered a more generous plan. If you want to jump to the next slide, there’s a picture of this.   Depending on how low your income is, your silver plan will be plus-ed up to something more like a gold or a platinum plan. And then each month, as you make claims that hit that lower deductible, your insurer submits a bill to the federal government to be reimbursed for that cost-sharing reduction. And it’s that reimbursement that the President said he would end. But insurers still are required by law to provide these subsidies.   Anticipating the President had threatened throughout the year to end these payments, insurers in most states raised their premiums for 2018 to offset these lost payments. And the important message for consumers, I think – two important takeaways: one is that the subsidies are still there and two is, when premiums go up to offset these lost payments, in most cases people will be protected because their premium tax credit amount will go up as well. Next slide, please.   Now, the premium increases for 2018 are going to be a little different this year. Depending on what state insurance regulators allowed, insurers took different approaches to raising their 2018 premiums in order to make up for these lost CSR reimbursements. Mostly, the rates are not public yet, but we understand that, for the most part, insurers raised premiums for this reason, just for their silver plans, the middle tier where the cost-sharing subsidies are delivered.   And in many states, insurers applied this CSR rate increase just to their silver marketplace plans, not to their off-marketplace silver plans. In a few states, the regulators required insurance companies to spread the cost of this lost cost-sharing reduction payment across the board to all of their plans, and a few states didn’t allow any special rate increases for this reason. Although, some of those states are now reconsidering and some emergency rate filing is going on. Next slide, please.   The cost of these lost cost-sharing reimbursements to insurers is substantial. All told, those payments were expected to be worth about $10 billion in 2018. We’ve estimated that to make up for those lost payments, insurers would need to raise their silver plan premiums by 15% to 20%, depending on whether it’s a Medicaid expansion state or a non-expansion state. Next slide, please.   So what will this mean for consumers and affordability? People should expect a really different pattern of annual premium changes in 2018, unlike what we’ve seen before. We’re used to premiums going up across the board. In general, though, if all marketplace insurers apply this surcharge just to their silver plans, premiums for the silver plans will go up much more than will premiums for bronze and gold plans.   Importantly, the dollar value of premium tax credits is tied to the cost of the benchmark silver plan. So, premium subsidies generally track the cost of the marketplace silver plan and that protects subsidy-eligible people from premium increases. It’s the federal government, the tax credit, that picks up the rest.   Consumers who are eligible for tax credits and cost-sharing reduction should be able to buy a silver plan again in 2018 and not feel much of any of this cost increase. Consumers with somewhat higher incomes who are eligible for tax credits but not the cost-sharing subsidies, will also be protected from the premium increase if they stay at the silver tier. But in some states, they may find that gold- and bronze-level plans are even more affordable next year than they are currently. And then consumers who aren’t eligible for the subsidy at all will be able to avoid this cost-sharing rate increase if they buy at a different metal level.   Now, of course, in areas where insurers spread this increase all across the board, people who are subsidy-eligible, again, will be protected from the premium increase. But people off the marketplace who aren’t eligible for subsidies will feel this.   I have an example – next slide – of what’s happening in one state. In South Carolina – a simple state to talk about because there’s just one issuer offering marketplace coverage in that state this year and next year. Premiums are increasing, but subsidy-eligible consumers will pay the same or less.   So the benchmark silver plan in the marketplace, this example shows Charleston, South Carolina, for a 30-year-old with income at twice the poverty level. The cost of the benchmark plan for a 30-year-old is going up by more than 30% next year. By contrast, the gold plan is going up about 10% and the off-marketplace silver plan is going up about 13%. But the value of the premium tax credit will also increase dollar-for-dollar.   In this example, for a 30-year-old at twice the poverty level, the unsubsidized premium for the benchmark silver plan is going up by a little over a hundred bucks a month, but the monthly premium tax credit will also rise by about 120 bucks a month. So as a result, people who are eligible in this state for tax credits and for the cost-sharing subsidies can stay at the silver level and really not feel the difference.   And then because the premium tax credit can be applied to any metal-level plan in the marketplace, consumers with slightly higher incomes may find new options. The gold plan in 2018 will be cheaper than the gold plan for someone at the same income this year. And more folks may even be eligible for zero premium bronze plans. And then people who are not eligible for subsidies can still buy the silver off-marketplace plan or any other eligible, but they won’t feel that full 32% rate increase.   Again, the premiums are not public yet, so it’s important for consumers just to know that they’re changing, that the premium increases in 2018 in most places will apply differently than they have in the past, and that will have implications for the amount of subsidy that you’re eligible for. So it’s especially important not to be discouraged by headlines about premium increases. Instead, log into the marketplace, see what your plans are, and what they would cost you. Next slide.   With all these changes, it is very important for consumers to start early. Every open enrollment up until now, there has been a surge of activity in the final days before the deadline. And during these surge times, the marketplace website tends to run sluggish or the screen may freeze, and there could be long waits on hold at the call center. In the past, HHS has allowed an inline extension for people who started their application before midnight on the last day of open enrollment, but hadn’t yet completed enrollment. It’s not clear if those inline extensions will be available for this fifth open enrollment period.   Meanwhile, though, other reasons for people to avoid delays, HHS has announced there will be scheduled maintenance periods when Healthcare.gov will be offline, including Sunday morning. So if you’re making your plans, that’s not a good time to try to get onto your marketplace account. HHS also reduced funding for navigators in the federal marketplace states on average by about 40%.   In a few states, there weren’t any changes in the amount of navigator funding available. But at the other end, Indiana lost more than 80% of its money. And large cutbacks in Ohio prompted the single statewide navigator program in that state to close. If that money isn’t restored to other organizations, Ohio will lose 96% of its federal navigator money for the coming year. In many federal marketplace states, navigator programs that took large cuts have had to lay off staff, reduce hours of operation, or the geographic areas they can serve.   Community health centers and volunteer assister programs are still there and will be available to provide in-person help, as will brokers and agents. But for some people, depending on where you live and the help you need, in-person enrollment help could be harder to find. And even before the finding cuts, it was often hard to get an appointment with anybody for in-person assistant in the final days before open enrollment ended.   Finally, there are some new enrollment and eligibility rule changes that will take effect this fall for, at least, some consumers, relating to federal income tax filing requirements. Also, new potential barriers to signing up for coverage for people who may have missed premium payments in 2017 and owe on unpaid premium debt to their insurers. And I can talk about those more during Q&A if there are questions.   And I would just end by reminding folks that at the Kaiser Family Foundation, we do have a number of resources available to consumers, reporters, and others on open enrollment, including our health reform FAQs. Our subsidy calculator will be updated as soon as we get those premium rates for 2018, and other resources. So I hope you will come to KFF.org and explore all of the materials we make available. Thanks, Jennifer.   Jennifer Sullivan: That’s great. Wonderful. Thank you so much, Karen. Well, that was quite a lot of information. And if you need any clarification on some of the points that Karen brought up, hopefully, we will get to that and have an opportunity to revisit many of these topics in the coming discussion.   So, our discussion today is going to be divided into five main topics, which we’ll move through in the following order: We’ll start will current enrollment and uninsured, take a few questions there; then move onto participation, premiums, and providers; administrative changes for 2018; public awareness; and lastly, the outlook for the future.   We have questions programed up for each of these topics, but if you want to submit questions related to them through the questions feature on the webinar interface, feel free to do that at any time. We may be able to feather some of those in as we move through these sections. And then towards the end of the webinar, we will allot specific time to take additional questions from the audience, via the question feature, of course.   So with that, I actually wanted to go back to you briefly, Karen, and ask a couple of clarifying questions around current enrollment and the uninsured. It’s usually sort of a baseline we use to talk about the marketplaces and what may come to pass in the coming open enrollment period. So who is currently enrolled in coverage for this year? And can you say anything about retention rates for coverage throughout this year compared to, potentially, previous years?   Karen Pollitz: Sure. So we do estimate there are about 17-and-a-half million people who are covered through the marketplace. Most people, true before the Affordable Care Act and still today, who are insured get coverage at work. And then the next largest source of coverage is through public programs, mostly Medicaid and CHIP for people under the age of 65.   There are still about 27 million people, at last count, who are uninsured. And coverage, of course, is not static. People do move in and out of eligibility for coverage depending on their circumstances. Mostly our eligibility for coverage derives from where we work, who we’re related to, and where they work, our income, the state where we live, and other factors.   So, as we move through life and things change, our eligibility for coverage can change and so people do move in and out of coverage. We tend to see the highest level of churn in the non-group market, partly because that’s what it’s there for. It is a residual market. It’s there for people when they are not eligible for either job-based coverage or public program coverage.   There are those – about a third, I guess, of people in the non-group market who come and stay for a long time because that is their ongoing, primary source of coverage. That would be the self-employed, small business owners who don’t sponsor health plans who buy coverage for themselves. Maybe early retirees. If you retire at 60, you may need to stay in this market for five years until Medicare eligibility kicks in and so forth.   Jennifer Sullivan: Great. And then what about the remaining uninsured? We’ve seen with each successive year that the marketplaces have been around, we’ve seen that uninsured rate drop lower and there’s usually been pretty rigorous analysis heading into any given open enrollment period about who we think is still eligible and who might enroll. What does that picture look like this fall?   Karen Pollitz: So we estimate about four-in-ten of the remaining uninsured, the remaining 27 million uninsured, are eligible for financial assistance, but they’re not enrolled. So about 20% are eligible for tax credits through the marketplace, but they’ve not claimed them and signed up for coverage. And about a quarter of the uninsured, we estimate, are eligible for Medicaid or CHIP or another public program, that’s in expansion states as well as in non-expansion states. But for whatever reason, they’re not signed up.   About 60% of the uninsured, we think, are ineligible for any kind of financial health. The uninsured overwhelmingly have low incomes; always did, still do. About 40% of the uninsured are ineligible for financial assistance because their income is too high or because they are offered coverage at work that’s not affordable, but technically it’s affordable. These are the folks in the so-called family glitch. Or they’re ineligible because of their citizenship and immigration status. And then about 10% of the uninsured, about 2.6 million people, are in that coverage gap. They are poor, they have income below the poverty level, but they live in a state that has not expanded Medicaid and so they are ineligible for any financial help at all.   Jennifer Sullivan: Got it. Let’s go ahead and move into the next section of questions. And we are getting questions from the audience that, I think, are clarifying ones, that will be good to address before we get into the meat of this section. Just looking for clarification – and I’d open this up at this point to our other panelists. But looking for clarification as to the difference between the cost-sharing reductions and premium subsidies. We talk a lot about subsidies in the abstract but would somebody be willing to clarify more about the difference between those two forms of assistance? Jeanette, are you unmuted or – yes?   Jeanette Thornton: Sure. I can take that or, Karen, if you’d like to as well?   Karen Pollitz: Jump in, Jeanette. People are sick of hearing from me.   Jeanette Thornton: Okay, I will do that. So, yes, one of the things it’s important to stress that there are two forms of subsidies that are available to people who are purchasing coverage through the individual market, through the exchange. The first is the premium tax credit and this is what is used to actually reduce the out-of-pocket monthly premium bill that an individual is paying for their health insurance coverage.   And there haven’t been any changes with this. There were some proposals as part of the debate around the Affordable Care Act to make some changes, but those have not taken effect or been enacted at this point. So those are those premium tax credits and those are paid to health plans in advance – you’ll hear the term “advanced premium tax credits” – on a monthly basis to actually reduce the amount of money the individual has to pay as part of their bill every month.   The second subsidy, which Karen did a really good job of sort of outlining really to the cost-sharing reduction program. And this subsidy is available to individuals who make under 250% of the federal poverty level. And what this does is it allows people to purchase specific plans – and these are all offered on the silver metal tier – that have a reduced out-of-pocket expenditure for those individuals. So they have a lower deductible, lower copayments, lower coinsurance. It’s tied to their income level. That really makes these plans more affordable for that lower income population.   So, just throwing numbers out there – Karen might have a good example off the top of her head – but instead of having to pay a $200 emergency room copay, these plans have baked in a $50 emergency room copay. And that’s sort of baked into the benefits. You have to be a certain income level and you also have to purchase a silver plan through the exchange to take advantage of that extra benefit.   Jennifer Sullivan:     Great.   Noam Levey: This is Noam. Could I just add one additional clarification, which I think is important to understand – and correct me, guys, if I’m getting this wrong. But it’s important to understand that the health plans have to offer these reduced cost-sharing plans, regardless of whether the administration makes these payments to the insurers.   So from the consumer’s perspective, they’re still seeing that reduction in their out-of-pocket cost. What happens as a result of the way the CSRs are structured is that whether or not insurers get reimbursed for offering that lower cost-sharing.   Jeanette Thornton: Exactly. That is…   Andy Slavitt: Hey, this is Andy Slavitt. I just want you to know that I’m on the call.   Jennifer Sullivan: Wonderful. Thanks so much, Andy. I was about to announce you were stuck on a plane. But we’re happy you were able to make it. Thank you.   Andy Slavitt: We just landed.   Jennifer Sullivan: Great. Okay. So I think at this point – those were helpful clarifications from everybody, so thanks for the team effort there. We’re going to move into this second section now on participation, premiums, and providers. And I actually, Andy, was planning to direct this first question at you anyway, so I will.   What effect, in your estimation, will the administration’s decision to stop making those cost-sharing reduction payments to issuers have on open enrollment this fall?   Andy Slavitt: Well, I think there’s a cumulative effect that we – we just saw a study yesterday which showed that over a million people are going to be disenrolled or few people enrolled – I’m not sure exactly how they stated it – because of, I think, really, a combination of things. But this is really all factors related to how the Trump administration has chosen to run open enrollment.   In specific, the cost-sharing reduction payments have done more to create uncertainty and caused insurers to raise their rates. And it’s awfully hard as a competitor in a market like this to offer an insurance plan when there is this level of uncertainty because you don’t know what other insurance companies are going to assume. And if you assume the improper thing, you could end up in a difficult position.   And of course, companies don’t really – as much as people like to