The federal government's latest health reform tweaks could complement or disrupt the transition to new insurance marketplaces, depending in part on how consumers fair in the last month of open enrollment.
Among other changes and final rules released as part of an announcement of transitional policies, the Centers for Medicare & Medicaid Services is letting states and insurers decide whether to continue health plans not compliant with the Affordable Care Act for another two years, through 2016, following a one-year extension of those plans announced last November.
State governors and insurance regulators are being given a fair amount of flexibility for the policy: they can extend the policies for less than two years, or only extend individual or small group plans, as well as both. Twenty eight states ended up deciding to extend pre-2014 plans, including Florida, Illinois, Pennsylvania and Texas, although it's not clear how many insurers have decided to continue offering discontinued plans or how many of the estimated 1.5 million eligible consumers are staying in old plans.
(Source: Commonwealth Fund, Georgetown University Health Policy Institute)
That tweak, a solution to the "if you like your plan you can keep it" quagmire, follows another ACA triage from CMS that may be just as significant -- offering tax credits retroactively to consumers buying plans outside of state and federally-run insurance exchanges.
Under the policy, insurance marketplaces like Cover Oregon with "exceptional circumstances" can make premium tax credits and cost-sharing reductions available to consumers on a retroactive basis, both for policies purchased (or in the process of being purchased) through public exchanges and those bought through private exchanges, brokers or directly from insurers.
That raises the question of whether some state exchanges are in such disrepair that they might end up defaulting to the federal exchange -- as the board of Maryland Health Connection is considering -- and fail to garner enough enrollees in the first year to create sustainable risk pools and generate revenue to fund HIX operations.
According to a Rand Corporation analysis, as many as 500,000 Americans could decide to keep their pre-ACA health plans, a relatively small proportion of the six million consumers that the Congressional Budget Office is now expecting to enroll in public exchange plans.
Problems for exchanges could start to emerge if most of the people staying in old plans are young, and if young people in general forgo exchange plans or insurance altogether and simply pay the individual mandate penalty.
It's too early to estimate demographic data on exchange enrollees, but some surveys support recent decisions by state exchanges to ramp up outreach to millennials: Less than 30 percent of uninsured millennials queried in a December Harvard poll are planning to buy coverage in public exchanges and about half are skeptical of the ACA's benefits.
To try to convince millennials otherwise, Covered California is hitting college campuses with ads like "A round of shots for less than a round of shots" and "X-rays for less than video games," as the LA Times reported, while Get Covered Illinois is partnering with The Onion to run outreach ads and Washington Healthplanfinder is banking on a commercial with fictitious rappers to communicate the benefits of insurance.
Aside from millennials, getting consumers broadly enrolled through public exchanges remains the main challenge. While the regulatory tweaks are aimed at providing consumers, state governments, employers and the insurance industry with flexibility, the efforts could also have the effect of leaving everyday Americans confused.
As Adam Hamm, North Dakota's insurance commissioner and president of the National Association of Insurance Commissioners, argued in a media release, the changes have "the potential to create confusion surrounding available options for health insurance and uncertainty in the restructured marketplace."
And then there is the issue of improving the shopping experience of the first open enrollment period. While many exchange goers may have had fairly easy, if drawn-out, experiences online, the extreme cases could threaten the image of exchanges going forward.
One such case was Nevadan Claudia Lamb, who described her experience trying to enroll in a Nevada Health CO-OP plan through Nevada Health Link as "appalling."
With a policy expiring at the end of 2013, she and her husband got to work selecting a plan last October, only to find herself uninsured for the first time in a decade this past January and covering medication costs out-of-pocket. "We have had two applications accepted and then rescinded without notice or communication," Lamb said in testimony to the exchange's board. "I've spent at least 120 hours on the phone and several hundred more waiting for calls from (Nevada Health Link) that never came."
"Finally, on Jan. 15, 2014 we found out why." Her "squeaky clean, never-been arrested husband" had been erroneously classified as an incarcerated felon. It wasn't until a month later that that problem was resolved by the exchange -- after KOLO8 News Now told her story, Lamb said.