Health Affairs’ January Issue
Bethesda, MD - On the eve of the expected debate over the fate of the Affordable Care Act (ACA), the January issue of Health Affairs, a variety issue, contains a number of studies that examine how the law has worked thus far. “The relative youth of ‘Obamacare’ limits what can be said about its potential long-term effects,” Health Affairs’ editor-in-chief, Alan Weil, observes in his editor’s letter. “It is more important than ever to have a solid base of evidence regarding the law’s accomplishments and shortcomings.”
In California, premium increases are lower than reported.
During the recent presidential election, the announced 22 percent increase in Marketplace premiums for 2017 received a great deal of media attention. Jon Gabel at NORC and coauthors examined publicly available 2014-16 enrollment data for California’s state exchange, Covered California. They found that the average purchased price for all plans was 11.6 percent less than the average offered price in 2014, and that this difference widened each year. The authors attributed much of this discrepancy to more enrollees buying lower-cost bronze and silver plans, and fewer buying gold and platinum plans—which had the largest premium increases in those years. They conclude that if consumers are given clear options, and aren’t overwhelmed by too many choices, they will buy lower-premium products and thus successfully moderate any cost growth. That conclusion is supported by the data from Covered California, the only state to make its Marketplace plan enrollment data publicly available.
A related study in the issue:
Market share affects insurer and provider negotiated prices.
Understanding the extent to which large insurers are able to negotiate lower prices from providers is essential for determining how insurer mergers may affect health care costs. To evaluate the association between insurer market power and health care prices, Eric Roberts and coauthors from Harvard Medical School analyzed over 15 million 2014 claims from a large, multipayer database of commercial health care claims for outpatient physician services. Their results indicate that insurers with substantial market shares pay rates that are 21 percent lower, on average, than the rates paid to the same providers by insurers with small market shares. Large insurers’ ability to negotiate lower prices was particularly evident in payments to large provider groups, suggesting that insurer mergers may help control price increases driven by provider consolidation. However, the authors stress that policy makers will need to develop and enforce mechanisms that ensure consumers benefit from any further insurer consolidation.
DATAWATCH: Many of the newly insured in 2014 were long-term uninsured.
One of the critical questions about ACA Marketplace enrollment has been whether the gains in insurance coverage come from those who had briefly lacked coverage or from the long-term uninsured. To answer that question, Sandra Decker and Brandy Lipton, both of the Agency for Healthcare Research and Quality (AHRQ), used data for 2013–14 from the National Health Interview Survey (NHIS), focusing on nonelderly adults most likely to be affected by ACA policy changes. According to the authors’ analysis, people who had been uninsured for more than three years accounted for more than half of the overall gain in coverage in 2014 (see the exhibit below). The authors note that this group of newly insured Americans might not be in the habit of using health care and recommend further studying the group’s health care utilization and ability to access appropriate providers.