What’s the latest in health policy research? The Essential Scan, produced by the Schaeffer Initiative for Innovation in Health Policy, aims to help keep you informed on the latest research and what it means for policymakers. If you’d like to receive the biweekly Essential Scan by email, you can sign up here.
ACA’s financial protections not only for the individual market, benefit tens of millions of privately insured Americans
Graphic Credit: Schaeffer Initiative
Loren Adler and Paul B. Ginsburg find that the Affordable Care Act’s (ACA) financial protections guarding against catastrophic health insurance costs have eliminated lifetime limits on total health care coverage for an estimated 109 million privately insured Americans and increased the number of those with annual total out-of-pocket (OOP) maximums by an estimated 24 million. The authors note these guarantees are not without tradeoff. According to a 2009 study, an increase of the lifetime limits from $1 million to $10 million raised premiums an estimated 1 percent. But, they write, these tradeoffs are “not an unreasonable cost for beneficiaries to pay for the protection against catastrophic costs.” The authors’ analysis highlights important yet underreported protections created by the ACA that are not currently a part of all Republican health reform proposals. Full article here.
“Not only is there an opportunity for more consumer assistance, but policymakers need to address the degree to which insurance agent incentives are at odds with their clients’ interests.” – Paul B. Ginsburg, PhD, Director of the Schaeffer Initiative
“This figure shows the importance of outreach by the exchanges to enroll members. This is a transitory market and efforts must be made in any voluntary scheme to make sure healthy people enroll.” – Dana Goldman, PhD, Director of the USC Schaeffer Center
Vicki Fung, Catherine Y. Liang, Karen Donelan and coauthors estimate that nearly one in three Californians insured in the individual market and eligible for the ACA premium subsidies or cost-sharing reduction payments did not receive the financial assistance as a result of selecting plans off the exchange or non-silver tiered on-exchange plans. Among beneficiaries eligible for both forms of financial assistance, 14 percent forfeited the support by enrolling in off-exchange plans, of which over 40 percent reported having no source of enrollment assistance. Another 20 percent of fully eligible enrollees selected non-silver tiered on-exchange plans. Among those eligible only for premium assistance, 25 percent enrolled off the exchange and 32 percent enrolled in non-silver tiered plans. These findings provide detail on individual market enrollees’ financial assistance uptake, highlighting the need and potential impact of improved consumer assistance efforts within the individual market. Full article here.
Neeraj Sood, Abby Alpert, Kayleigh Barnes and co-authors find that a payment reform targeting home health care costs saw greater reductions to both treatment intensity and costs in more competitive provider markets than in less competitive markets. Analyzing a 1997 payment reform targeting home health agencies, the authors evaluate treatment intensity and costs for patients discharged from a hospital for a stroke, hip fracture, or lower extremity joint replacement from 1996 to 2000. Following the reform, the most competitive quartile in the provider market saw reductions of $220 in costs and 2.5 home health days per stroke patient over the reductions achieved in the least competitive quartile. Because pre-reform costs and intensity were higher in more competitive markets-a result of competition on the basis of quality and amenities under a cost-based payment structure-the higher relative reductions led to a convergence across geographic areas as “high-cost” providers left more competitive provider markets. These findings suggest that payment reforms such as bundled payments can utilize competitive pressures to reduce health care costs and geographic variation of health care spending. Full article here.
Prescription drug utilization increases 19 percent under Medicaid expansion, no drops in utilization for uninsured or privately insured
Ausmita Ghosh, Kosali Simon, and Benjamin D. Sommers find that prescription drug use increased by 19 percent in states that implemented the ACA’s Medicaid expansion compared to those that did not over the first 15 months following expansion. The greatest increases were seen in diabetes medications (24 percent), contraceptives (22 percent), and cardiovascular drugs (21 percent). In effect, the overall increase of 19 percent translates to seven new prescriptions a year for each newly enrolled Medicaid beneficiary. Prior to Medicaid expansion, the authors observed that states had similar rates of prescription drug utilization. Post-expansion, prescription drug utilization did not change among uninsured or privately insured beneficiaries, suggesting that the increase in prescriptions was not merely shifts in payment from the individual or private insurer to Medicaid. Further research is needed to determine whether the observed increased use of prescription drugs, particularly for chronic conditions, yields improved health outcomes or downstream health savings. Full article here.
Eric T. Roberts, Michael E. Chernew, and J. Michael McWilliams find that insurers with larger market shares negotiated lower rates with provider groups than did smaller market share insurers. Insurers with a market share of 15 percent or greater negotiated office visit rates 21 percent lower with the same provider group than insurers with market shares of 5 percent or less. Yet the authors find that a 10 percentage point increase in provider market share is associated with a $3.16 increase in the cost of office visit rates. The authors’ findings provide evidence of the impact of insurer and provider market powers on prices, and suggest insurance mergers may yield lower negotiated rates; however, additional study is needed to assess the extent to which consumers benefit from insurers’ increased bargaining power. Full article here.