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Tuesday, May 27, 2014

More than 170,000 have gained coverage under private option; population continues to lean young

Posted By on Tue, May 27, 2014 at 5:42 PM

According to testimony today from the Arkansas Department of Human Services, 170,033 people through the end of April have been deemed eligible and gained coverage under the private option, the state's unique plan using Medicaid funds to purchase private health insurance for low-income Arkansans. This likely means that the policy has already made a significant reduction in the rate of uninsurance in the state. The private option has also made the Arkansas Health Insurance Marketplace as a whole dramatically younger, which could help lead to lower premiums in the future. Details below the jump (plus more private option notes from today's Public Health meeting — controversy over vision/dental benefits and early talk on HSAs).

To get a sense of how many people are enrolling, based on 2012 data, the total target population — uninsured people making less than 138 percent of the federal poverty line — is estimated to be around 208,000 people***. That means that just four months in to the private option policy, the number of people covered (170,033) represents a whopping 82 percent of the eligible target population. That does not necessarily mean that the private option has reached all of those uninsured folks, because it is possible that some of those who gained coverage under the private option were previously insured. We'll have to wait for additional data to know more, but there is reason for optimism that the private option may be having a substantial impact in reducing the number of uninsured adults in the state. Around 430,000 Arkansans aged 18-64 — about one in four — were estimated to be without insurance prior to the enactment of the Affordable Care Act's coverage provisions. Keep in mind that in addition to the 170,000 private option enrollees, another 40,000 who made too much money to qualify for the private option have gained coverage via the Arkansas Health Insurance Marketplace created by the ACA. Again, it's possible that some were previously insured. Keeping that caveat in mind, the total number of Arkansans who gained coverage via the ACA Marketplace, including the private option, represents about half of the total number of eligible uninsured adults in Arkansas before the ACA. 

DHS officals, testifying before the Joint Public Health meeting at the Capitol today, also released  updated demographic information on private option enrollees. 

*One key note: as soon as people are deemed eligible, they are covered under traditional Medicaid until they have completed the process and enrolled in a private plan. The 170,033 number and the data below (unless otherwise noted) is inclusive of those covered under Medicaid while they wait for the enrollment process to complete or covered by traditional Medicaid because they were screened as medically needy.  

The private option beneficiaries go into the same risk pool as other people on the Marketplace (see here for an explanation of the differences between private option enrollment and the rest of the Marketplace). Private option beneficiaries have been much younger than other enrollees on the Marketplace, as you can see on the chart below, which shows enrollment by age group for the PO and the non-PO Marketplace (note that only people 19-64 are eligible for the PO, whereas people below 19 are eligible for the Marketplace). 


The impact on the overall age in the Marketplace is significant: According to Arkansas Insurance Department officials, once private option enrollees are included, 39 percent of Marketplace enrollees are 34 or younger (as opposed to 30 percent before the inclusion of the private option pool). Arkansas has one of the youngest marketplaces in the nation, second only to the District of Columbia, and that is almost entirely due to the private option. 

Private option beneficiaries are leaning female 60-40:
Most private option beneficiaries are below the poverty line. About 81 percent make less than 100 percent of the federal poverty level ($11,670 for an individual or $23,850 for a family of four) and about 19 percent make between 100-138 percent of FPL (that's up to $16,104 for an individual or $32,913 for a family of four). Currently, beneficiaries below the poverty line do not have any cost sharing, but the state plans to implement cost sharing for people who make between 50 and 100 percent of FPL starting in 2015.  

Some more numbers for the private option: 

*Among those who have fully enrolled in the private option, 11 percent were deemed medically needy and routed to the traditional Medicaid program

*Among those enrolled in a private plan, 5 percent were broker assisted, 35 percent self-selected a plan, and 65 percent were auto-assigned a plan. 

One other point to make about the large private option enrollment: private option beneficiaries are making up a very large proportion of the total pool of people on the Marketplace (as noted above, that's making the Marketplace significantly younger, but it also simply represents a big chunk of the available customers). Thus far, 143,447 Arkansans have been covered by private plans on the Marketplace via the private option (18,561 have been routed to traditional Medicaid; another 8,000 have been deemed eligible and are covered under traditional Medicaid until they finish the enrollment process). Meanwhile, there were 43,446 non-private option enrollees in the Marketplace (these are folks who made too much to qualify for the private option and bought insurance, often with federal subsidies to help with the cost of the premium). That means that 77 percent of the Marketplace is made up of private option beneficiaries (a number that is likely to go up this year as enrollment in private plans via the private option continues). A major policy victory of the private option has been to stabilize the Marketplace in its early years, potentially leading to lower premiums, more carriers in the state and more choices for Arkansans shopping for individual health insurance. See here for more on the importance of the private option pool to the Marketplace. 


***Wonky note on the eligible target population: I used the Small Area Health Insurance Estimates (SAHIE) produced by the U.S. Census Bureau using 2012 data. Estimates of both eligible population and predicted number of enrollees vary. DHS often uses 225,000, arrived at via some tweaks to 2011 Urban Institute estimates. Optumas, the actuarial firm that DHS contracted with, predicted 250,000 newly eligible enrollees by 2015, which was inclusive of "crowdout" — people who were previously insured and moved to the private option. The SAHIE data on the eligible uninsured population is the most updated that I know of but does not allow me to exclude "woodwork" adults (parents who make less than 17 percent FPL) or 18 year olds, so the actual figure is a bit a lower than ~208,000. 

Also today at Public Health 

VISION AND DENTAL: Sen. Stephanie Flowers was extremely upset about the fact that some private option beneficiaries in the state had access to dental and vision benefits (typically with a 50-percent co-pay) while others did not. At issue was a clever gambit by Ambetter — the carrier offered Silver (or mid-level) plans in 29 counties this year which included dental and vision benefits as part of the comprehensive benefits package. These additional benefits, not mandated by federal law, made the plans more expensive; private option beneficiaries this year could pick any Silver plan with the private option fully covering the premium, leaving the government on the hook for higher costs (more than 8,000 chose Ambetter plans with these additional benefits through the end of March). Most have focused on the additional per-person costs because of Ambetter's maneuver, but Flowers was mad about equity. In 2014, Ambetter chose to sell in only three of the state's seven regions (they plan to sell statewide next year), which meant that people in many of the poorest regions of the state did not have the option of getting the vision/dental benefit as part of the private option this year, while beneficiaries in, say, Little Rock did. The solution that Flowers and Sen. Linda Chesterfield (and also, oddly, conservative Rep. Charlotte Douglas, an opponent of the private option) offered was to extend these benefits to more private option beneficiaries. Because this would lead to significantly higher costs, this approach is politically unlikely to say the least. In practice, starting next year the state is only going to allow private option beneficiaries to select among plans that offer exclusively the ten essential health benefits mandated by the law without any additional bells or whistles. 

HSAs AND MISSY IRVIN: Some discussion today of the Health Savings Accounts (HSAs), to be known as Healthcare Independence Accounts, which will be offered to some private option beneficiaries starting in 2015 (pending federal approval, which the state law mandates in order to continue the private option). State officials are still working on the details, but the gist seems to be this: beneficiaries and the government would both contribute to an HSA account and the savings accrued in that account could then be used to cover cost-sharing (state officials are also seeking a waiver for cost-sharing below the poverty line). Beneficiaries wouldn't be denied service if they didn't have enough money in their account to cover the co-pays, but they would be billed. Lots of questions remain about precisely how all of this would work in practice, but Sen. Missy Irvin was very happy with the direction things are going (and made sure to note, as always, her role in shaping the way HSAs were originally included in the private option law in 2013). 

Here's Irvin: 

I wish there were more people here to have this conversation in-depth, because I wrote the amendment to the bill to provide for the Health Independence Accounts. … I think the Health Independence Accounts are exactly the model we should be looking at, and we should use. … They’ll have a way to participate in the program versus just using a program without knowing what it’s costing the state of Arkansas. That’s what you have now in Medicaid. You have folks that are using a system — they have no idea how much they’re using. They have no idea how much it’s costing them. Whereas with Health Independence Accounts, they gain that independence, they gain that accountability, and they’re actually able to…be incentivized to make a better choice. I think that’s the exact road to go down. It’s good health care reform. …There was a lot of negotiation that occurred with the federal government the day that amendment was written to allow us to really experiment and discover how we can do that. That took a lot of work on [Medicaid Director] Andy Allison’s behalf and it should be recognized and appreciated. 

I bring this up because Irvin could play a key role in the future of the private option. She voted for the appropriation in 2013, then flipped to a no vote in 2014. Today, she sure sounded like someone who might be willing to go back to yes in 2015, particularly as the HSAs roll out for the next plan year. Currently one vote short in the Senate, the future of the private option could hang on what she decides. 

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