ACA Impact A Mixed Bag After One Year

Sept. 28--The health insurance marketplaces continue to have problems, but doomsday predictions of skyrocketing premiums and a government takeover of the private health care market under the Affordable Care Act have yet to materialize.

"It's still very much a mixed bag, but it's definitely working better than the worst fears had predicted," said Greg Lawson, a Statehouse liaison and policy analyst with the right-leaning The Buckeye Institute For Public Policy Solutions.

The Affordable Care Act, President Barack Obama's signature health care law, is hardly an unqualified success. Unverified enrollments could force more than 100,000 policyholders nationwide to forfeit coverage. But as the insurance marketplaces approach their one-year anniversary, evidence suggests the ACA has met or exceeded its most important goal -- providing health coverage to millions of Americans who otherwise couldn't qualify for coverage or afford to buy it.

Nationwide, the health law's insurance programs have reduced the overall uninsured population by 26 percent, according to the U.S. Department of Health and Human Services, which runs the federal marketplaces in Ohio and 35 other states.

Statewide, 154,668 Ohioans signed up for marketplace coverage during the inaugural six-month enrollment period that began last October, according to HHS figures. That helped drive the state's uninsurance rate down by about 6 percent, according to statewide polling data.

More than 85 percent of Ohio enrollees qualified for federal tax credit subsidies available to most people with annual incomes up to four times the federal poverty level, or about $46,000 for an individual or $94,000 for a family of four.

Subsidies worth at least $32 million a month have helped hold down premium costs in Ohio to an average of $121 a month for the just over 130,000 Ohioans receiving financial assistance, HHS reported. That came despite dire warnings from the Ohio Department of Insurance that marketplace premiums would be unaffordable for most consumers.

Premiums will vary by insurer when the marketplaces open for enrollment again on Nov. 15, but average premiums for the benchmark plans -- the plans upon which subsidies are based -- are expected to decline by 0.7 percent in Ohio, based on a recent study by the Kaiser Family Foundation.

Potential cost savings could draw even more people into the private health insurance market, and that doesn't include the 367,395 previously uninsured Ohioans who gained coverage this year under expanded Medicaid eligibility requirements, established by the health care law and pushed through in the state by Gov. John Kasich.

Nearly 8 million newly eligible Americans are now enrolled in Medicaid and the Children's Health Insurance Program (CHIP), compared to before open enrollment in the marketplaces began.

Uninsured rate decreases

Growth in the number of Ohioans with health insurance has helped push the state's uninsurance rate to its lowest level in more than a decade, according to an Ohio Health Issues Poll released last month. The poll showed 11 percent of Ohio adults under age 65 lacked health coverage this year, compared to 17 percent last year.

Ohio's uninsurance rate is now the lowest it has been since at least 2006, according to the poll from the Cincinnati-based independent nonprofit, Interact for Health.

"Whether you're a supporter or detractor, you can't deny that more people have gained coverage as a result of the health care law," said John Bowblis, a health industry economist and professor at Miami University in Oxford. "The intent of the law was to get the uninsurance rate down to zero. It hasn't achieved that yet. But more people have health insurance now than if the (ACA) had not had not become law."

At least 7.3 million people are now enrolled in health insurance plans and paying premiums on state and federal marketplaces, the Obama administration announced earlier this month. That was revised downward from the approximately 8 million consumers who were reported to have selected health care plans, but the higher number included people who hadn't necessarily paid their premiums.

Even with revision, however, the enrollment still beat the administration's original forecast of 7 million signups in the first year.

Dayton-based CareSource added 32,000 new members as a result of the state's online health care marketplace.

That's well ahead of initial projections from Ohio's largest Medicaid managed care provider, which began selling commercial insurance in the marketplace this year under the brand name, CareSource Just4Me.

"Our projections a year ago were about 15,000 paid in the first year," said Scott Streator, vice president of CareSource's health insurance marketplace product line. "We're very pleased that we more than doubled our projections, and this was despite the cranky website last October that we were all dependent on."

Streator was referring to the Healthcare.gov website, the main portal for enrollment in marketplace plans in Ohio and 35 other states, which was plagued by technical glitches and server problems that crippled the website's launch last October.

What's next?

The Affordable Care Act is blurring the lines between health care and health insurance.

Starting next year, Dayton-based Premier Health, the largest hospital system in southwest Ohio, will begin selling private health plans on and off Ohio's health insurance marketplace as well as Medicare Advantage plans for seniors.

Hospital officials acknowledged the move was sparked, in part, by financial incentives built into the health care law that reward hospitals for keeping patients healthy instead of just treating them when they're sick.

"In the coming years, more and more of a health care delivery system's reimbursements are going to be tied to those value metrics," said Mike Maiberger, Premier's senior vice president for value based services. "In other words, how effective are you in improving the health of your population, not just doing procedures and treating illness?"

The insurance plan being offered by Premier will give the hospital network another tool to effectively manage the health of the populations it serves, Maiberger said.

"Getting into the insurance business is really a vehicle that allows us to spread our population health platform over a larger scale or population of people," Maiberger said. "We want to be able to improve the health of the entire community that we serve. In order to do that, we had to move beyond (self-insuring) or own employees and offer products in the marketplace."

Enrollment to jump

Marketplace enrollment is expected to jump to 13 million in 2015, according to the Congressional Budget Office's latest projections, and new provisions of the law are expected to drive signups.

Next year will be the first year that the so-called employer mandate will be implemented, forcing employers with 50 or more full-time workers to provide health coverage or pay a tax penalty.

In addition, the individual tax penalty for not having insurance will increase from a maximum of 1 percent of income or $95 this year to 2 percent of income or $325 per person next year.

"As people begin to realize that if they don't have health insurance they're going to get hit with a penalty and also realize that over time that penalty is just going to get larger, that's going to push people toward joining the marketplace and push down the uninsurance rate even lower," Bowblis said.

But the mandates -- considered the teeth of the law -- also carry real and and potentially negative consequences, such as encouraging small businesses that offer health insurance to dump their group health plans and move their workers to the Obamacare exchanges to avoid the cost of providing insurance.

And while businesses with fewer than 50 full-time employees are exempt from many of the requirements of the Affordable Care Act, the health care law may force some of those businesses to hold back on hiring to avoid crossing the employment threshold.

"If you're a company debating about hiring that extra person and then be subject to some of the taxation issues...it may make you decide differently in terms of hiring people, and that's not helping the economy," The Buckeye Institute's Lawson said.

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