Californians Brace For Increased Healthcare Premiums If Federal Subsidies Expire

Californians brace for increased healthcare premiums if federal subsidies  expire - Los Angeles TimesSource: Los Angeles Times, by Melody Gutierrez and Anabel Sosa

For the last two years, Syd Winlock has had a major burden lifted from his surgically repaired shoulder.

Federal subsidies passed as part of a temporary pandemic relief package have drastically cut how much he pays in healthcare premiums, allowing the Sacramento-area small-business owner to purchase an insurance plan during the last two years that provided better coverage for his shoulder and knee replacements.

Those federal subsidies, however, will expire at the end of this year if Congress does not extend the program. His “very manageable” price — about $700 a month for him and his wife — will increase to $2,300, Winlock said.

“Even if we went to a lesser-type policy, it would still be about $1,800 a month,” Winlock, 63, said. “I mean, that’s more than my mortgage.”

Roughly 150,000 lower- and middle-income Californians would be similarly priced out of coverage by the rising premiums if the federal subsidies are not extended, a Covered California analysis recently estimated.

The federal subsidies were passed in early 2021 as part of the Biden administration’s American Rescue Plan Act, which temporarily provided help to Americans to recover from the economic and health effects of the COVID-19 pandemic.

Under the act, health insurance premiums were capped at 8.5% of a household’s income. That significantly dropped monthly payments and led to more consumers signing up through Covered California, the insurance marketplace created by the 2010 Affordable Care Act for working-age people who aren’t covered by a health plan at their job.

Enrollment in the state’s exchange has hit a record-high 1.8 million, of which Covered California reported that 92% received some form of subsidy.

“These enhanced subsidies have fundamentally delivered affordability and delivered on the promise of the Affordable Care Act in the way that it was intended,” said Jessica Altman, executive director of Covered California.

“There were a lot of people who said things like, ‘Oh, my gosh, you know, for the first time I can afford my health insurance and my child care….’ This is particularly important given the inflationary environment we are in now.”

More than 1 million lower-income earners — individuals making between $17,775 and $32,200 and families of four with income between $36,570 and $66,250 — would see their premiums more than double if Congress doesn’t extend the program, according to the Covered California analysis. Monthly premiums for middle-income earners would increase, on average, by $272 per member next year.

John Baackes, the chief executive of L.A. Care, a health insurance plan serving Los Angeles County’s poorest and most vulnerable residents, said that although the enhanced subsidies don’t expire until the end of the year, the window for Congress to act is growing smaller because of its monthlong August recess. At that point, legislation typically slows down in an election year.

Baackes said health plans will need time to send renewal notices to consumers of anticipated rates for the 2023 coverage year, which are mailed in October.

“So we’re very concerned about it,” Baackes said. “The American Rescue Plan provided increased subsidies that are really a wonderful thing. And many of our members benefited from it.”

With open enrollment beginning one week before the Nov. 8 midterm elections, Democrats on Capitol Hill are increasingly eager to prevent consumers from receiving notices about huge increases in insurance premiums before voters go to the polls. But the debate about whether to extend the subsidies or — as some have pushed — make them permanent has been hamstrung by wrangling over the price tag and the effect on skyrocketing inflation.

Keeping the subsidies an additional three years would cost $74 billion, while the price tag for making them permanent is $220 billion over the first 10 years, according to the Congressional Budget Office.

Gov. Gavin Newsom and state lawmakers proposed spending $304 million in separate state healthcare subsidies to lessen the burden if the federal program is not extended. That money, which is included in a state budget that is expected to be finalized this month, would offset premium increases for more than 700,000 residents.

However, those state-funded subsidies will cover only a fraction of the federal premium discount currently available under the American Rescue Plan, which provided $1.7 billion to California in each of the last two years to help with healthcare costs.

“Nearly half of the folks in Covered California are paying less than $10 a month,” said Anthony Wright, the executive director of Health Access California, a consumer group that is pushing Congress to make the increased federal subsidies permanent. “We live in a high-cost-of-living state, so people will have to make decisions about how much healthcare they can afford.”

That worries Tuan Nguyen, a caregiver in the Silicon Valley city of Milpitas. Having been diagnosed six years ago with a rare and painful disorder called glossopharyngeal neuropathy, Nguyen said he has to buy more costly insurance coverage that allows him to see particular specialists.

“I need the healthcare plan,” said Nguyen, 44. “I need to see my doctor. I need my treatment. These are things that are a necessary part of my life, and they’re all very expensive and getting much harder to afford.”

Reducing the number of uninsured residents in the state has been a top priority for Newsom and legislative leaders, who in 2019 approved legislation creating a fee for anyone who does not have insurance. The individual mandate was intended to induce younger and healthier individuals to buy coverage through Covered California to widen the pool and lower rates overall as Democratic leaders move California closer to universal coverage.

As part of that effort, California has incrementally expanded eligibility for Medi-Cal, the state’s healthcare program for the poor, to certain age groups of low-income people regardless of immigration status. California’s pending budget would offer Medi-Cal to the final remaining age group in 2024, opening the healthcare program to residents 26 to 49 years old regardless of immigration status. Newsom said the move will make California “the first state in the country to achieve universal access to health coverage.”

Miranda Dietz, a research and policy associate at UC Berkeley Labor Center, said the significant increase in the number of Californians with health insurance over the last two years would be in jeopardy without the federal subsidies. Dietz co-wrote a study in partnership with the UCLA Center for Health Policy Research that projects that as many as 1 million people will forgo insurance in California next year if federal subsidies expire.

“It makes it so it’s very disheartening to take away these extra subsidies that have been really crucial in improving affordability for folks,” Dietz said. “It’s a real blow towards that goal of universal coverage and more affordable coverage.”

The added cost of premiums “will be a real struggle for folks who are deciding between rent and groceries,” Dietz said.

For Winlock, the small-business owner, the added cost if federal subsidies are not extended would be temporary. Next year, Winlock and his wife turn 65 and will qualify for Medicare. In the meantime, he would probably look for the cheapest plan possible and hope for the best.

“We probably would look at some alternative ways to get healthcare,” Winlock said. “We certainly wouldn’t be able to afford mainstream healthcare. It is just out of our budget.”

Can California Keep Offering Cheap Health Care? Here’s What State Network’s New CEO Says

Can California keep offering cheap health care? Here's what state network's  new CEO says | Nation |

Source: The Sacramento Bee, by Cathie Anderson

Jessica Altman took over in March as chief executive officer of Covered California, and even as she was settling into a new home in Sacramento she also was making the rounds with congressional leaders to drive home just how much Californians want access to health insurance.

The greatest barrier to getting it is all too often the cost, Altman said in her first interview with The Sacramento Bee, and nothing underscored that more than the record enrollment Covered California saw last year when new federal assistance in the American Rescue Plan slashed premiums for California enrollees by an average of 20%.

Enrollment in plans offered on California’s state-based marketplace surged to 1.8 million, according to Covered California records, an increase of more than 150,000 people.

Altman said she has to keep sharing the story that the financial help put in place under the American Rescue Plan is having an astounding impact for all Americans who rely on state and federal marketplaces to provide them with a lifeline when they or their family members are unexpectedly struck by illness and to get the preventative care that is so crucial to staying in good health. The federal subsidies were approved for only 2022 policies.

“Health care is core,” she said, “and being healthy is core to our ability to live happy and healthy lives and pursue the things that we want to pursue. It is also, within our society, a great equalizer if it’s used effectively and equitably in supporting people across our nation and in California.”

In other words, Altman said, Covered California’s work is not done when a consumer pays a premium.

“Our role as a marketplace does not end simply when people get covered,” she said. “It goes to what happens next. Is that health insurance providing the access that people need. Do they have the providers that they need? Are the providers providing high quality care that is actually delivering them better health outcomes? So this next phase of responsibility (is) not just access to coverage but access to quality, equitable care.”

A native Californian, Altman was the insurance commissioner for the state of Pennsylvania before she took the top job at Covered California. Altman takes the reins from Peter V. Lee, the founding leader of the marketplace since 2012.

She offered a glimpse into her key priorities during a question-and-answer session with The Bee. We asked what her three key priorities were as she started her tenure.

The top priority is always going to be consumer-centric? How can Covered California, better serve customers that we have today, better reach the customers that we can have tomorrow, and better serve them in navigating our health care system, that can be all too complex.

One example: How can we better assist Californians as they transition between types of coverage — whether that’s from Medi-Cal to private insurers, from COBRA to a Covered California insurer, or between plans within Covered California or other types of transitions.

What are the outreach tools and the infrastructure that we have to identify these people at the time when they need us and to help them through those processes?


Equity is built into our mission. It is something Covered California has always done. Are the providers providing high quality care that is actually delivering better health outcomes for all enrollees?

This next phase of responsibility is not just about access to coverage but access to quality, equitable care.

There are many things that we are doing through the equity lens, for example, our outreach to community-based organizations, our efforts to be embedded in different communities across California to provide customer service, our push to be known and understood across languages and across cultures, and our work to make sure that the providers that are in the network of the health plans that we contract with are diverse are culturally competent and are meeting the health care needs of all of our population.


Our job doesn’t stop with coverage. It goes to quality.

Over the next coming years, we will be monitoring our health plans’ performance for six key measures of quality. We will have our health plans putting financial accountability on the table (paying penalties) if they do not meet the goals of those quality measures.

We are talking about things like: How many children that they cover are getting immunizations? How many adults are getting colorectal screenings that save lives at the appropriate age? How are they doing in monitoring blood sugar levels and hypertension among their population and improving it? These are the things that we know are the drivers of morbidity and mortality.

We will, by the way, be collecting and reviewing those measures not just holistically but also stratified by demographic factors like race and ethnicity to really make sure we are understanding any disparities.

Our equity work and our quality work are both the same and much more than one another. So what I mean by that is, health care quality is equity. Delivering on health care quality will help us deliver equitable outcomes.


I come from a family who has worked in health care and is steeped in health care. My father’s father was a primary care physician who I remember well, doing house calls even into his 80s with his black leather doctor’s bag and his stethoscope. My mother’s father was an obstetrician-gynecologist who provided women’s health services in a very different era.

And both my parents have worked in health care and had long careers in health care.

The issues hit close to home for me both because of watching my family members and loved ones give their lives and commitment to improving the health care of others and also (because) I have seen too many people I love experiencing health challenges. I have always been driven to public service, I have never worked anywhere other than in public service.

Preventive Care May Be Free, but Follow-Up Diagnostic Tests Can Bring Big Bills

From access to care coordination, U.S. primary care lags far behind other  wealthy countries: report | Fierce Healthcare

Source: Kaiser Health News, by Michelle Andrews

When Cynthia Johnson learned she would owe $200 out-of-pocket for a diagnostic mammogram in Houston, she almost put off getting the test that told her she had breast cancer.

“I thought, ‘I really don’t have this to spend, and it’s probably nothing,’” said Johnson, who works in educational assessment at a university. But she decided to go forward with the test because she could put the copay on a credit card.

Johnson was 39 in 2018 when that mammogram confirmed that the lump she’d noticed in her left breast was cancer. Today, after a lumpectomy, chemotherapy, and radiation, she is disease-free.

Having to choose between paying rent and getting the testing they need can be a serious dilemma for some patients. Under the Affordable Care Act, many preventive services — such as breast and colorectal cancer screening — are covered at no cost. That means patients don’t have to pay the normal copayments, coinsurance, or deductible costs their plan requires. But if a screening returns an abnormal result and a health care provider orders more testing to figure out what’s wrong, patients may be on the hook for hundreds or even thousands of dollars for diagnostic services.

Many patient advocates and medical experts say no-cost coverage should be extended beyond an initial preventive test to imaging, biopsies, or other services necessary for diagnosing a problem.

“The billing distinction between screening and diagnostic testing is a technical one,” said Dr. A. Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design. “The federal government should clarify that commercial plans and Medicare should fully cover all the required steps to diagnose cancer or another problem, not just the first screening test.”

A study that examined more than 6 million commercial insurance claims for screening mammograms from 2010 to 2017 found that 16% required additional imaging or other procedures. Half the women who got further imaging and a biopsy paid $152 or more in out-of-pocket costs for follow-up tests in 2017, according to the study by Fendrick and several colleagues and published by JAMA Network Open.

People who needed testing after other preventive cancer screenings also racked up charges: half paid $155 or more for a biopsy after a suspicious result on a cervical cancer test; $100 was the average bill for a colonoscopy after a stool-based colorectal cancer test; and $424, on average, was charged for follow-up tests after a CT scan to check for lung cancer, according to additional research by Fendrick and others.

Van Vorhis of Apple Valley, Minnesota, did an at-home stool test to screen for colorectal cancer two years ago. When the test came back positive, the 65-year-old retired lawyer needed a follow-up colonoscopy to determine whether anything serious was wrong.

The colonoscopy was unremarkable: It found a few benign polyps, or clusters of cells, that the physician snipped out during the procedure. But Vorhis was floored by the $7,000 he owed under his individual health plan. His first colonoscopy several years earlier hadn’t cost him a cent.

He contacted his doctor to complain that he hadn’t been warned about the potential financial consequences of choosing a stool-based test to screen for cancer. If Vorhis had chosen to have a screening colonoscopy in the first place, he wouldn’t have owed anything because the test would have been considered preventive. But after a positive stool test, “to them it was clearly diagnostic, and there’s no freebie for a diagnostic test,” Vorhis said.

He filed an appeal with his insurer but lost.

In a breakthrough for patients and their advocates, people who are commercially insured and, like Vorhis, need a colonoscopy after a positive stool test or a so-called direct visualization test like a CT colonography will no longer face out-of-pocket costs. According to federal rules for health plan years starting after May 31, the follow-up test is considered an integral part of the preventive screening, and patients can’t be charged anything for it by their health plan.

The new rule may encourage more people to get colorectal cancer screenings, cancer experts said, since people can do a stool-based test at home.

Nine states already required similar coverage in the plans they regulate. Arkansas, California, Illinois, Indiana, Kentucky, Maine, Oregon, Rhode Island, and Texas don’t allow patients to be charged for follow-up colonoscopies after a positive stool-based test, according to Fight Colorectal Cancer, an advocacy group. New York recently passed a bill that is expected to be signed into law soon, said Molly McDonnell, the organization’s director of advocacy.

In recent years, advocates have also pushed to eliminate cost sharing for breast cancer diagnostic services. A federal bill that would require health plans to cover diagnostic imaging for breast cancer without patient cost sharing — just as they do for preventive screening for the disease — has bipartisan support but hasn’t made headway.

In the meantime, a handful of states — Arkansas, Colorado, Illinois, Louisiana, New York, and Texas — have moved ahead on this issue, according to tracking by Susan G. Komen, an advocacy organization for breast cancer patients that works to get these laws passed.

This year, an additional 10 states introduced legislation similar to the federal bill, according to Komen. In two of them — Georgia and Oklahoma — the measures passed.

These state laws apply only to state-regulated health plans, however. Most people are covered by employer-sponsored, self-funded plans that are regulated by the federal government.

“The primary pushback we get comes from insurers,” said Molly Guthrie, vice president of policy and advocacy at Komen. “Their argument is cost.” But, she said, there are significant cost savings if breast cancer is identified and treated in its early stages.

study that analyzed claims data after a breast cancer diagnosis in 2010 found that the average overall costs for people diagnosed at stage 1 or 2 were just more than $82,000 in the year after diagnosis. When breast cancer was diagnosed at stage 3, the average costs jumped to nearly $130,000. For people with a stage 4 diagnosis, costs in the year afterward exceeded $134,000. Disease stages are determined based on tumor size and spread, among other factors.

When asked to provide health plans’ perspective on eliminating cost sharing for follow-up testing after an abnormal result, a spokesperson for a health insurance trade group declined to elaborate.

“Health plans design their benefits to optimize affordability and access to quality care,” David Allen, a spokesperson for AHIP, said in a statement. “When patients are diagnosed with medical conditions, their treatment is covered based on the plan they choose.”

In addition to cancer screenings, dozens of preventive services are recommended by the U.S. Preventive Services Task Force and must be covered without charging patients under the Affordable Care Act if they meet age or other screening criteria.

But if health plans are required to cover diagnostic cancer testing without charging patients, will eliminating cost sharing for follow-up testing after other types of preventive screenings — for abdominal aortic aneurysms, for example — be far behind?

Bring it on, said Fendrick. The health system could absorb those costs, he said, if some low-value preventive care that isn’t recommended, such as cervical cancer screening in most women older than 65, were discontinued.

“That is a slippery slope that I really want to ski down,” he said.

Health Insurers Will Issue Roughly $1 Billion In Rebates This Year

Health insurers will pay $1 billion in rebates this year: analysis

Source: Healthcare Finance, by Jeff Lagasse

Due to the Medical Loss Ratio provision of the Affordable Care Act, health insurers will issue roughly $1 billion in rebates to customers in 2022, according to a new analysis from the Kaiser Family Foundation.

The MLR provision limits the amount of premium income that insurers can keep for administration, marketing and profits. Insurers that fail to meet the applicable MLR threshold are required to pay back excess profits or margins in the form of rebates to their enrollees.

The estimated $1 billion in rebates is across all commercial markets, but the expected rebate amounts vary by market segment. Insurers in the individual market estimate they will issue $603 million in rebates, small group market insurers will issue $275 million in rebates, and large group market insurers will issue $168 million in rebates later this year.

These rebates are greater than those issued in most prior years, but fall short of the record-high rebate amounts of $2.5 billion in 2020 and $2 billion in 2021. In most years, changes in the rebate totals have been driven primarily by fluctuations in the individual market. Rebates in the small group and large group market are generally smaller and more consistent over time.

Individual market insurers in 2021 had higher loss ratios, meaning they were likely less profitable, on average, than they had been in recent years. The average individual market loss ratio – without adjusting for quality improvement expenses or taxes – was 88%, meaning these insurers spent an average of 88% of their premium income in the form of health claims in 2021.

But rebates issued in 2022 are based on a three-year average of insurers’ experience in 2021, 2020 and 2019. Some insurers experiencing relatively high loss ratios in 2021 nonetheless expect to owe rebates this year, because those rebates reflect their more profitable stretches in the 2020 and 2019 plan years.

They’re the first rebates in years that do not include 2018 in their three-year averages. This is significant, because 2018 was an especially profitable year for many insurers. Many of them overshot their premiums amid uncertainty about ACA policymaking in 2017, including whether the law would be repealed and replaced, whether cost-sharing payments would be made, or whether the individual market would be enforced by the federal government.

The large profits and overhead seen in 2018 are part of why individual market rebates issued in 2019, 2020 and 2021 were so large, according to KFF.


In the individual and small group markets, insurers have to spend at least 80% of their premium income on healthcare claims and quality improvement efforts, leaving the remaining 20% for administration, marketing expenses and profit. The MLR threshold is higher for large group insurers, which must spend at least 85% of their premium income on healthcare claims.

The effects of the pandemic continue, KFF found. The rebates for this year include experience from 2020 and 2021, and in 2020 there were several factors driving down health spending and utilization. Hospitals and providers canceled elective care early in the pandemic and during spikes in COVID-19 cases to free up hospital capacity, preserve supplies and mitigate the spread of the virus. Many consumers also chose to forego routine care in 2020 due to social distancing requirements or similar concerns.

Since insurers had already set their 2020 premiums ahead of the pandemic, many turned out to be overpriced relative to the amount of care their enrollees were using. Some insurers offered premium holidays, and many temporarily waived certain out-of-pocket costs, which drove down their rebates.

Rebates or rebate notices are mailed out by the end of September, and the federal government will post a summary of the total amount owed by each issuer in each state later in the year.


KFF predicts that the higher loss ratios seen in 2021 may foreshadow steeper premium increases in 2023, since some insurers will likely aim for lower loss ratios to regain higher margins. Plus, higher rates of inflation in the rest of the economy may translate to increases in prices demanded by providers, which would drive premiums even higher.

Insurers are currently setting premiums for 2023 and have the difficult task of predicting the continued impact of the pandemic, amid further uncertainty about the future of American Rescue Plan Act subsidies in the individual market.

According to KFF, insurers setting premiums for the 2023 plan year will need to factor in several pandemic-related considerations, including but not limited to: potential pent-up demand for care, the negative impact of foregone care on the health of some enrollees, the rate of future COVID-19 hospitalizations and the need for more booster shots.

Private insurers may need to pick up the costs of vaccines and boosters next year.

As of April 5, the Department of Health and Human Services no longer adjudicates claims submitted for vaccine administration due to a lack of funds, according to the Health Resources & Services Administration.

If insurers overshoot their premiums amid that uncertainty, they’ll again be required to issue rebates to enrollees under the ACA, according to KFF.

AHIP Calls For Federal Agencies To Issue Extensive Guidance To Implement ACA ‘Family Glitch’ Rule

AHIP calls for federal agencies to issue extensive guidance to implement ACA  'family glitch' rule | Fierce Healthcare

Source: Fierce Healthcare, by Robert King

Insurers support a Biden administration rule to fix a “family glitch” in the Affordable Care Act but stress that plans must get quick guidance on the requirements they have to meet.

Payers and providers submitted comments Monday on a proposed rule from the Treasury Department and the IRS that would create a minimum value for family members of employees that can get ACA tax credits. Estimates have shown this glitch has prevented more than 5 million Americans from getting access to coverage.

Insurer groups were supportive of the rule issued in April.


“The approach proposed by Treasury and IRS would make affordable coverage options available to families without jeopardizing coverage through employer-sponsored group health plans,” said insurance group AHIP in comments.

The rule tackles a provision commonly known as the “family glitch” in the ACA, referring to a provision that enables a person to get tax credits that lower premiums if their employer requires that individuals spend more than 9.5% of their household income on premiums, an analysis from the Kaiser Family Foundation said.

However, the glitch is that the threshold only applies to the person’s individual coverage and not the premium required to also cover dependents. Even if someone meets the 9.5% threshold, the family won’t be able to get any assistance.


The Biden administration’s proposal would create a new threshold that determines whether a plan’s contribution doesn’t exceed 9.5% of a total household and family income.

AHIP was pleased that the rule’s new affordability threshold doesn’t undermine the employer-sponsored insurance market.

“Under the approach, an employee may have an affordable offer of employer-sponsored coverage while the employee’s spouse and dependents may not have an affordable offer of family coverage through the employer,” the group commented. “This crucial approach ensures employees cannot forego an affordable offer of employer-sponsored coverage to enroll with their family in subsidized marketplace coverage.”

But AHIP cautioned that additional guidance will be needed from federal agencies on how plans can properly implement the change.


“After finalizing the rule, Treasury and IRS should issue a Request for Information to better understand the recordkeeping and compliance needs of stakeholders who will be affected by the final rule,” the comments said. “It will be critical that Treasury and IRS issue guidance that clearly details how plan sponsors and administrators, as well as individual taxpayers, are to satisfy requirements that ensure proper eligibility calculations for [premium tax credits].”

The group also wanted the agencies to address minimum value calculations for family plans. The ACA requires plans to provide a minimum value of at least 60% of the total allowed costs of benefits expected to be used.

“It is our experience that most plans offered by employers do not feature different benefit designs for employees and for related family members,” AHIP said. “Therefore, we recommend the minimum value calculator continue to be based on a standard population that includes both employees and dependents to calculate a single, composite minimum value for employee and dependents unless the plan’s benefit design for employees is different from its design for related individuals.”

AHIP wasn’t the only group concerned over the calculation of minimum value standards.

The American Hospital Association (AHA) said in its comments that the IRS should keep its policy that employer health plans must provide “substantial coverage for inpatient hospitalizations and physician services.”

AHA also issued strong support for the proposed rule.

“We recognize that this regulation is just one piece of a much broader plan to increase access to affordable, comprehensive coverage through the marketplace,” the AHA said.

Healthcare Spending Could Drop $11.4B Next Year If ACA Premium Subsidies Expire, Research Finds

Health care spending would drop $11.4B without premium credit expansion |  BenefitsPRO

Source: Healthcare Dive, by Rebecca Pifer

Dive Brief:

  • * Healthcare spending could drop by more than $11.4 billion next year if enhanced premium tax credits enacted in the American Rescue Plan expire, new research finds.
  • * Hospital spending would decline by $3.8 billion, while spending on physician practice services would drop by $1.3 billion, according to a report from the Robert Wood Johnson Foundation and the Urban Institute published Wednesday. Prescription drug spending would decline by $3.4 billion and spending on other services outside of hospital and doctors’ offices would fall by $2.8 billion.
  • * Plummeting health services spending would happen due to lost credits potentially leaving more than 3 million people currently on Affordable Care Act plans without insurance, and therefore less likely to spend on care, researchers said.

Dive Insight:

The $1.9 trillion ARP legislation passed in March 2021 increased subsidies for coverage in the ACA marketplaces and expanded the number of people they’re available to. The more generous financial aid increased coverage affordability and enrollment, which reached a record high for 2022.

Those enhancements will expire in 2023 unless Congress extends them. The subsequent price hikes would hit about 13 million people across the U.S. and could lead to millions losing coverage, according to estimates.

The new research from the Urban Institute and the RWJF puts a price tag on the loss of provider revenue stemming from that drop in coverage.

Using an Urban Institute simulation model, researchers estimated healthcare services spending for the non-elderly, including uncompensated care provided to uninsured patients with and without the enhanced financial aid. The model excludes health insurance premium loads or administrative cost, as that spending doesn’t go to providers.

The research found that total spending on health services would reach almost $2.097 trillion next year if the enhanced ARP premium tax credits are extended and drop to roughly $2.086 trillion without them.

“The reason why we’re seeing this large decline in health spending is because uninsured people use less medical care,” Urban Institute senior fellow Matthew Buettgens said in a statement on the report.

Florida, Georgia, North Carolina, South Carolina and Texas — states that would see the greatest coverage losses if the subsidies expire — would have the biggest drop in spending, ranging from 1.3% to 1.9%.

California, Massachusetts, New York and Vermont would see virtually no change in spending, as they have state programs providing enhanced premium tax credits or cost sharing reductions before the ARP was passed that will remain in place.

The political fallout from failing to renew the subsidies would likely be severe, as news of spiking insurance premiums would hit voters right before the midterms.

President Joe Biden has pushed Congress to make the subsidies permanent. Though the effort has stalled in Congress, vulnerable Democrats in swing states are now pushing for leadership to fast-track legislation extending the subsidies, according to Politico.

For ACA Enrollees, How Much Premiums Rise Next Year is Mostly up to Congress

For ACA Enrollees, How Much Premiums Rise Next Year is Mostly up to Congress  | KFF

Source: Kaiser Family Foundation, by Cynthia Cox and Krutika Amin

Health insurers are now submitting to state regulators proposed 2023 premiums for plans offered on the Affordable Care Act (ACA) Marketplaces. Changes in these unsubsidized premiums attract a lot of attention, but what really matters most to the people buying coverage is how much they pay out of their own pockets. And the amount ACA Marketplace enrollees pay is largely determined by the size of their premium tax credit. Generally speaking, when unsubsidized premiums rise, so do the premium tax credits, meaning out-of-pocket premium payments hold mostly steady for people getting financial assistance.

For just over a year, ACA Marketplace enrollees have benefited from enhanced tax credits under the American Rescue Plan Act (ARPA), which Congress passed as temporary pandemic relief. The enhanced assistance lowers out-of-pocket premiums substantially, and millions of enrollees saw their premium payments cut in half by these extra subsidies. ACA Marketplace signups reached a record high of 14.5 million people in 2022, including nearly 13 million people who received tax credits to lower their premiums.

Soon, the vast majority of these nearly 13 million people will see their premium payments rise if the ARPA subsidies expire, as they are set to at the end of this year.

The ARPA subsidies were enacted temporarily for 2021 and 2022 as pandemic relief, but congressional Democrats are considering extending or making the expanded subsidies permanent as a way of building on the ACA, as President Biden had proposed during his 2020 campaign. If Congress does not extend the subsidies, out-of-pocket premium payments will return to their pre-ARPA levels, which would be seen as a significant premium increase to millions of subsidized enrollees. In the 33 states using, premium payments in 2022 would have been 53% higher on average if not for the ARPA extra subsidies. The same is true in the states operating their own exchanges. In New York, for example, premiums for tax credit-eligible consumers would be 58% higher if not for the ARPA. Such an increase in out-of-pocket premium payments would be the largest ever seen by the millions receiving a subsidy. Exactly how much of a premium increase enrollees would see depends on their income, age, the premiums where they live, and how the premiums charged by insurers change for next year.

For states, the timing of Congressional action on ARPA subsidies matters both for rate review and state enrollment systems. State-based exchanges – as well as the federal government, which operates – will need to reprogram their enrollment websites and train consumer support staff on policy changes ahead of open enrollment in November. States will start making these changes as soon as this month. Additionally, as insurers submit premiums for review, state insurance commissioners and other regulators must assess the reasonableness of 2023 rates, and some of that determination will depend on the future of ARPA subsidies. The non-partisan National Association of Insurance Commissioners (NAIC) wrote to Congress asking for clarity on the future of ARPA subsidies by July.

For insurers, the timing matters because 2023 premiums get locked in later this summer. Last summer, when insurers were setting their 2022 premiums, some said the ARPA had a slight downward effect on their premiums, based on the risk profile of enrollees. Insurers are now in the process of setting 2023 premiums and some might factor in an upward effect on premiums if they expect ARPA subsidies to expire. Premiums for 2023 are locked in by this August, so if Congress does not act before its August recess, whatever assumptions insurers make about the future of ARPA subsidies will be locked in to their 2023 premiums. Additionally, although this is not necessarily at the same scale of the uncertainty seen in 2017 surrounding the ACA repeal and replace debates (when many insurers explicitly said that uncertainty was driving their premiums up), it is possible that some insurers will price 2023 plans a bit higher than they otherwise would, simply because of uncertainty around the future of the ARPA’s enhanced subsidies. The NAIC letter to Congress warned that “uncertainty may lead to higher than necessary premiums.”

For enrollees, the timing matters both for knowing how much they will pay and for maintaining continuous coverageNearly all of the 13 million subsidized enrollees will see their out-of-pocket premium payments rise if the ARPA subsidies expire. But if the subsidies are renewed by Congress, but not until the end of the year right before subsidies are set to expire, there could still be a disruption if states and the federal government do not have enough lead time to update their enrollment websites to reflect the enhanced subsidies. In this scenario, the millions of enrollees who currently have access to $0 premium Marketplace plans might have to pay a premium in January – putting them at risk of losing coverage due to non-payment. Similarly, middle-income enrollees might temporarily lose access to advanced payments of the tax credit in the month of January, making it unaffordable for them to maintain coverage.

Congress’s action or inaction on ARPA subsidies will have a much greater influence over how much subsidized ACA Marketplace enrollees pay for their premiums than will market-driven factors that affect the unsubsidized premium. Even if unsubsidized premiums hold steady going into 2023, the expiration of ARPA subsidies would result in the steepest increase in out-of-pocket premium payments that most enrollees in this market have seen. This would essentially be a return to pre-pandemic normal, but the millions of new enrollees and others who have received temporary premium relief may not see it that way.

New Data Show Estimated Uninsured Rate In 2021 Recovers Slightly From Highs Of 2020

Uninsured rate in 2021 down from the highs of 2020

Source: Fierce Healthcare, by Robert King

An estimated 30 million people did not have insurance coverage last year, bringing the uninsured rate to 9.2%—only slightly below the major high of 9.7% from 2020, new federal data show.

The National Center for Health Statistics released its latest report Thursday on estimates for health insurance coverage last year. The data showed slight gains in insurance coverage from public programs.

The report showed that last year, among adults 18 to 64, there were 13.5% who were uninsured at the time of the interview while 21.7% had public coverage and 66.6% got private insurance.


Among children up to 17 years old, 4.1% were uninsured, 44.3% had coverage from a public program and 53.8% were in private coverage.

Even though the uninsured rate dipped slightly compared to 2020, there were minimal changes among certain age groups.

For instance, the percentage among adults 18 to 64 didn’t change that much from 2020 (13.9%) to last year at 13.5%. But there was a significant difference between the percentage of adults who were uninsured in 2019, 14.7%, but declined to 13.5% last year.

There was also a boost among adults that had public insurance coverage in 2021, with 21.7% getting such coverage last year compared with 20.5% in 2019.

The increase in public health coverage comes amid major moves by the federal government and Congress to increase affordability of coverage on the Affordable Care Act’s exchanges. Increased subsidies from the American Rescue Plan Act helped spur a record-breaking 14.5 million in sign-ups for the exchanges this year.

Other pandemic-related flexibilities included a boost to federal matching rates for Medicaid coverage and a requirement that states not disenroll anyone from their Medicaid rolls.

However, the eligibility redetermination freeze is expected to last until the end of the public health emergency, which could expire this summer. The enhanced subsidies are also expected to go away after this year, but there is an effort in Congress to extend them.


The center emphasized that the report only contains early release estimates that still could change. The estimates are based on data from the 2021 National Health Interview Survey, which is based on information collected from nearly 30,000 adults and 8,293 children.

Trump Era Rule That Expanded Duration Of Short-Term Health Plans In Democrats’ Crosshairs

Trump era rule that expanded duration of short-term health plans in  Democrats' crosshairs | Fierce Healthcare

Source: Fierce Healthcare, by Robert King

Democratic lawmakers and advocacy groups are making a push to convince the Biden administration to nix a controversial Trump-era rule that expanded the duration of short-term health plans.


A collection of more than 40 House Democrats wrote to Department Health and Human Services (HHS) Secretary Xavier Becerra earlier this week calling for the agency to pull the rule. The action comes after more than 20 advocacy groups wrote to Becerra back in January asking for the rule to be nixed or modified.

“Junk plans pose clear risks to consumers, undermine the strength of the Affordable Care Act and are incompatible with the goal of making affordable, high-quality health insurance accessible to all Americans,” the letter, led by Rep. Cindy Axne, D-Iowa, told Becerra.

Advocates say urgency has been rising to get the administration to reverse the rule, which was finalized in 2018 and lengthened the duration of short-term plans from three months to a year.

A major concern is the potential end of the COVID-19 public health emergency (PHE), which was extended until July. Once the PHE goes away, states will be able to disenroll ineligible Medicaid beneficiaries and extra COBRA subsidies will go away.

“The second that the PHE is allowed to end all of those people are suddenly uninsured and the worry is that if we don’t do something now a lot of those people continue to stay uninsured or will buy a short-term plan that doesn’t meet their needs,” said Caitlin Donovan, senior director of the National Patient Advocate Foundation, one of the groups pressing the administration to act.


Donovan said she was confident the rule will eventually be rescinded, as it has not been popular.

The Trump administration finalized the regulation in 2018 for short-term limited duration plans that can bypass requirements under the Affordable Care Act (ACA) to cover preexisting conditions and essential health benefits. The rule said that the 12-month plans can be renewed for up to 36 months.

HHS at the time said the plans were necessary to give consumers options as premiums on the ACA’s exchanges were too high. However, the insurance industry and consumer advocates charged the plans offer skimpy coverage and can deceive consumers that they are getting more robust benefits.

“Individuals that unwittingly purchase a short-term plan that are later diagnosed with a chronic or acute condition may find themselves seriously uninsured as short-term plans typically exclude coverage of key services such as prescription drugs and mental health services, among others,” the letter, led by the National Patient Advocate Foundation and more than 20 other groups, said.


The letter has proposed several changes to the initial 2018 rule, chief among them to restore the original three-month limit for the plans.

Other recommended changes include:

  • * Halting sales of short-term plans during the ACA open enrollment. Advocates pointed to studies that indicate the plans can be “aggressively and deceptively marketed to consumers.”
  • * Limit sales of plans via internet and phones to help clamp down on deceptive marketing tactics.
  • * Improve disclosure of the types of risks associated with short-term health plans, including by telling the consumer the plan is not comprehensive.

The Biden administration has been in favor of getting rid of the rule or making changes, referencing it in the latest Unified Agenda that outlines regulatory priorities for the coming year.

So far, HHS has not released any regulations on the issue, and the Centers for Medicare & Medicaid Services did not return a request for comment as of press time.

AHIP Warns Proposed ACA Exchange Rule Could Threaten Market’s Growing Stability

AHIP warns proposed ACA exchange rule could threaten market's growing  stability | Fierce HealthcareSource: Fierce Healthcare, by Paige Minemyer

AHIP, the top lobbying organization for commercial insurers, is warning the feds that provisions in its proposed rule governing the Affordable Care Act’s exchanges for 2023 could “undermine” the growing stability there.

For instance, the group says in comments (PDF) submitted late Thursday that potential changes to requirements for essential health benefits would limit the ability for insurers to manage costs, particularly for prescription drugs, and manage chronic illnesses.

In addition, AHIP said that a proposed requirement for insurers to offer standardized plan options on the exchanges would “stifle innovation” and includes provisions that would be hard for payers to roll out, such as common drug formulary designs.


Instead, AHIP suggests that the Centers for Medicare & Medicaid Services deploy an approach in which payers are required to offer one standardized silver plan option for 2023, and then gather enrollment data to see if the plan designs are meeting consumer needs.

“The continued stability and growth of the ACA marketplaces is also due in large part to policies that have promoted a stable regulatory environment, increased competition, and enabled issuers to offer innovative products that consumers want and need,” AHIP said. “However, we are concerned that some of the policies proposed in this Payment Notice may take large steps backward, undermining this hard-won stability and significantly limiting innovation and competition.”


CMS said earlier Thursday that the final tally for ACA open enrollment was 14.5 million, a record. The market had been improving for some time, luring big-name insurers such as UnitedHealthcare and Aetna back in, but the Biden administration’s temporary expansion of premium tax credits has led enrollment to skyrocket.

In the rule, CMS also proposes mandating network adequacy reviews for plans offered on the federal exchange,

AHIP said proposed network adequacy standards could make it harder for payers to design innovative plans, lead to higher premiums and place an undue burden on both payers and providers.

“If finalized, we recommend network adequacy standards be deferred to plan year 2024 to provide time to address these outstanding issues and allow issuers the time to change to their networks,” the group said.


The organization is urging CMS to extend the comment window on the rule to allow additional time for feedback on its proposals.

Last Updated 06/29/2022

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