Insurance Market Reform

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Applicability of All-Payer Claims Databases for Rate Review and Other Regulatory Functions

Jul 2014

All-payer claims databases (APCDs) collect and compile medical, pharmacy, and sometimes dental claims, eligibility, and provider files from public and private payers. APCDs are currently being used for a variety of functions, including population health analysis, comparative analysis of provider and facility quality, cost management for Medicaid and other public programs, support for provider payment reform initiatives, and consumer transparency tools. This issue brief explains the potential uses of APCDs for rate review and other regulatory functions. It includes descriptions of possible uses for APCDs and ranks the level of effort necessary to use an APCD for those purposes, along with the relative value of doing so.


Deciphering the Data: Health Insurance Rates and Rate Review

Jun 2014

Health insurers participating in the new Marketplaces are filing rates for 2015 during the next few months. Some states have already released data on proposed rates. There is substantial economic, policy, and political interest in the magnitude of proposed rate changes. This brief provides background for understanding the economic drivers of proposed rates, state and federal rate review authority, the effects of rate changes on Marketplace enrollees and federal spending on premium credits, and the economic and political dynamics of the rate review and approval process.


Average Exchange Premiums Rise Modestly in 2015 and Variation Increases

Jun 2014

In this new analysis, Avalere Health finds that average proposed premiums for individual market exchange plans will increase modestly in 2015, based on initial rate filings in nine states. Across the nine-state group, average monthly silver premiums will rise by 8 percent from $324 in 2014 to $350 in 2015. In particular, average monthly silver premiums will rise in eight of the states, ranging from a 2.5 percent increase in Rhode Island to a 16 percent average increase in Indiana. Oregon was the only state examined in which average premiums will decrease for 2015—falling 1.4 percent or $3 per month.


Growth and Variability in Health Plan Premiums in the Individual Insurance Market Before the Affordable Care Act

Jun 2014

Before we can evaluate the impact of the Affordable Care Act on health insurance premiums in the individual market, it is critical to understand the pricing trends of these premiums before the implementation of the law. Using rates of increase in the individual insurance market collected from state regulators, this issue brief documents trends in premium growth in the pre-ACA period. From 2008 to 2010, premiums grew by 10 percent or more per year. This growth was also highly variable across states, and even more variable across insurance plans within states. The study suggests that evaluating trends in premiums requires looking across a broad array of states and plans, and that policymakers must examine how present and future changes in premium rates compare with the more than 10 percent per year premium increases in the years preceding health reform.


Seeking Lower Prices Where Providers Are Consolidated: An Examination of Market and Policy Strategies

May 2014

Consolidation between and among hospitals and physicians can lead to improvements in efficiency and quality of care, but it also tends to raise prices for health care services. Health care purchasers and payers can counteract providers’ pricing power through various strategies, including limiting provider networks, providing tiered benefits and other point-of-service incentives to patients, and supporting the formation of physician organizations. In some cases, government regulation—like antitrust enforcement—may be necessary.


Will Premiums Skyrocket in 2015?

May 2014

While there may be reasons to believe that premiums will increase substantially in 2015, particularly in less competitive markets, there are even stronger reasons to believe that premium increases will be moderate, and in line with underlying cost growth. The dominant force behind the surprisingly low premiums in 2014 remains intact—the strong incentives for markets to be highly competitive, which forces insurers to set premiums aggressively to attain or retain market share. These incentives should be even stronger in 2015 with increased enrollment and a more stable risk pool


Drivers of 2015 Health Insurance Premium Changes

May 2014

The Affordable Care Act’s (ACA) 2014 open enrollment period for the individual health insurance market ended on March 31 and health insurers are already developing premium rates for the 2015 plan year. Insurers must submit their 2015 premiums to state and federal regulators this spring, with final approval decisions by the fall. Open enrollment for 2015 will begin November 15. This brief outlines factors underlying premium rate setting generally and then highlights the major drivers behind why 2015 premiums could differ from those in 2014. It focuses on the individual market, but considerations for the small group market are similar.


Why Not Just Eliminate the Employer Mandate?

May 2014

Employers of 50 or more workers are required to provide health insurance or pay a penalty. This requirement has been delayed until 2015 for employers with 100 and more workers and until 2016 for those with 50-99 workers. However, there are reports of changes in employer labor practices, such as reducing the hours of part-time workers and concerns about increasing workforce above 50 workers. This brief argues that the employer mandate should simply be eliminated. It would not reduce insurance coverage significantly, but it would eliminate the labor market distortions that have troubled employer groups and that could have negative effects on some workers. The penalties on employers do bring in some new revenues that would have to be replaced.


Insurance Cancellations in Context: Stability of Coverage in the Nongroup Market Prior To Health Reform

May 2014

Recent cancellations of nongroup health insurance plans generated much policy debate and raised concerns that the Affordable Care Act (ACA) may increase the number of uninsured Americans in the short term. This article provides evidence on the stability of nongroup coverage using US census data for the period 2008–11, before ACA provisions took effect. The findings suggest that the nongroup market was characterized by frequent disruptions in coverage before the ACA and that the effects of the recent cancellations are not necessarily out of the norm.


Risk Corridors and Budget Neutrality

Apr 2014

This set of Frequently Asked Questions addresses several questions about the risk corridor provision of the Affordable Care Act (ACA), including what HHS will do in the event that risk corridors collections are insufficient to fund risk corridors payment for a given year and how insufficient risk corridor payments will impact medical loss ratio calculations.

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