Arianrhod
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- Jul 24, 2015
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Since the major lament in this forum from the RWNJs is about "My money, MY MONEY, MY MONEEEEEEE!" one would think an article like this (less risk = less money spent) would be met with enthusiasm.
Nevertheless, I predict it will be either ignored or dismissed as a lie or, well, some other RW fantasy.
Cited in its entirety because the site is membership only:
Medscape: Medscape Access
ACA Risk Pools Less Risky in 2015, CMS Says
Robert Lowes
August 12, 2016
Mostly abandoned by the nation's largest insurer and threatened by big rate hikes from others, the individual insurance markets, or exchanges, under the Affordable Care Act (ACA) received some good news from the federal government. Spending per enrollee essentially remained the same from 2014 to 2015, decreasing by a mere 0.1%.
The Centers for Medicare & Medicaid Services (CMS), which announced the results yesterday, said they suggest that the ACA state-by-state risk pools are becoming less risky, or less costly to insure, owing to "a broader, healthier risk pool."
"These data are very encouraging for the long-term health and stability of the marketplace," the agency said in a news release. "They suggest that the individual market evolved as would have been expected in 2015, with moderate but real progress toward a broader risk pool as marketplace enrollment grew."
That interpretation appears to fly in the face of health insurers retreating from the ACA exchanges because they view the risk pools as having too many older, sicker enrollees to make a profit on. Exhibit number one here is UnitedHealthcare, which is pulling out of 31 of the 34 states where it had offered exchange plans after losing $475 million on them in 2015.
Other insurers remaining in the exchanges cite higher-than-expected costs for the risk pools as they seek permission from state regulators to increase their premiums next year. Requested rate increases top 10% in all but four states and exceed 30% in six, according to the healthcare consulting firm Leavitt Partners. In contrast, the National Business Group on Health estimates that large employers will see their healthcare costs go up 6% next year and will raise employee premiums on average by 5%.
State regulators will whittle down some of the rates proposed by insurers in the ACA exchanges, but if they whittle too much, more insurers are likely to walk away, said Austin Bordelon, a manager at Leavitt Partners.
Bordeon told Medscape Medical News that he was surprised by the cost findings that CMS released, which were expressed as per member per month (PMPM) paid claims.
"We have not seen the medical (cost) trend as flat as they have," he said. Using data from the National Association of Insurance Commissioners, Leavitt Partners puts the growth of incurred claims as opposed to paid claims at 10% in 2015. Even allowing that paid claims represent a more accurate cost measure, "we're still surprised," Bordelon said.
Enrollee Costs Rose More in the Broader Insurance Market
The CMS numbers are based on claims data that insurers submit to the agency through dedicated "EDGE" servers. Included are claims from ACA-compliant individual plans that private insurers offer outside of the exchanges. Their insurees are in the ACA risk pool but make up only a small portion of it, said Bordelon.
The agency adjusted the comparison of PMPM paid clams in 2014 and 2015 by eliminating the estimated effect of "cross-year" claims paid in 2015 for services rendered in 2014. There no were comparable claims in 2014 for prior year services because the exchanges debuted in 2014. Cross-year claims constituted an estimated 4% of total claims cost, according to CMS. In another tweak, CMS excluded a small number of insurers that submitted inaccurate claims data.
Although PMPM paid claims fell 0.1% across ACA exchanges as a whole, they tended to fall further in states with the most growth in ACA enrollment in 2015, expressed as the number of months that members were covered, according to CMS. PMPM paid claims decreased on average by 3% in 27 states where member months grew by 50% to 100%, and by 5% in 10 states with 100% growth. Across all exchanges, member months rose by 66%.
CMS said the exchanges outperformed the rest of the overall insurance market (including Medicare), where per-enrollee costs grew between 3% and 6% from 2014 to 2015. That's reflected, for example, in premiums for employer-based family coverage increasing by 4%.
Exchange risk pools ought to improve even more on account of ACA reforms taken in 2016, CMS said. These include reducing the number of enrollees who lose coverage or a premium subsidy because of computer foul-ups and tightening sometimes abused special enrollment periods.
The agency cautioned, however, that stronger risk pools do not necessarily translate into insurers making money as opposed to losing it. Many insurers in the exchanges underpriced their premiums in 2014, reflecting not only a desire to gain marketshare but also learning mistakes in a brand-new market, according to CMS. Exchange-plan premiums rose 2% in 2015, "which would have been sufficient, on average, to keep pace with claims costs." However, it wasn't enough to make up for premium lowballing in 2014 along with the partial phase-out of an ACA reinsurance program that helps insurers cover high-cost enrollees.
Bordelon agreed that insurers charged too little in the first 2 years of the exchanges. "Now they're catching up," he said, referring to the rate increases they want in 2017.
Leavitt Partners, he said, is digging into the CMS report on spending trends in the exchanges. "Methodologically, it make sense," he said. However, Leavitt is handicapped in digging too deep because it doesn't have access to the paid-claims data submitted to CMS through the EDGE servers, he said. "We'd love to get our hands on it."
Follow Robert Lowes on Twitter @LowesRobert
Medscape Medical News © 2016 WebMD, LLC
Send comments and news tips to [email protected].
Cite this article: ACA Risk Pools Less Risky in 2015, CMS Says. Medscape. Aug 12, 2016.
Nevertheless, I predict it will be either ignored or dismissed as a lie or, well, some other RW fantasy.
Cited in its entirety because the site is membership only:
Medscape: Medscape Access
ACA Risk Pools Less Risky in 2015, CMS Says
Robert Lowes
August 12, 2016
Mostly abandoned by the nation's largest insurer and threatened by big rate hikes from others, the individual insurance markets, or exchanges, under the Affordable Care Act (ACA) received some good news from the federal government. Spending per enrollee essentially remained the same from 2014 to 2015, decreasing by a mere 0.1%.
The Centers for Medicare & Medicaid Services (CMS), which announced the results yesterday, said they suggest that the ACA state-by-state risk pools are becoming less risky, or less costly to insure, owing to "a broader, healthier risk pool."
"These data are very encouraging for the long-term health and stability of the marketplace," the agency said in a news release. "They suggest that the individual market evolved as would have been expected in 2015, with moderate but real progress toward a broader risk pool as marketplace enrollment grew."
That interpretation appears to fly in the face of health insurers retreating from the ACA exchanges because they view the risk pools as having too many older, sicker enrollees to make a profit on. Exhibit number one here is UnitedHealthcare, which is pulling out of 31 of the 34 states where it had offered exchange plans after losing $475 million on them in 2015.
Other insurers remaining in the exchanges cite higher-than-expected costs for the risk pools as they seek permission from state regulators to increase their premiums next year. Requested rate increases top 10% in all but four states and exceed 30% in six, according to the healthcare consulting firm Leavitt Partners. In contrast, the National Business Group on Health estimates that large employers will see their healthcare costs go up 6% next year and will raise employee premiums on average by 5%.
State regulators will whittle down some of the rates proposed by insurers in the ACA exchanges, but if they whittle too much, more insurers are likely to walk away, said Austin Bordelon, a manager at Leavitt Partners.
Bordeon told Medscape Medical News that he was surprised by the cost findings that CMS released, which were expressed as per member per month (PMPM) paid claims.
"We have not seen the medical (cost) trend as flat as they have," he said. Using data from the National Association of Insurance Commissioners, Leavitt Partners puts the growth of incurred claims as opposed to paid claims at 10% in 2015. Even allowing that paid claims represent a more accurate cost measure, "we're still surprised," Bordelon said.
Enrollee Costs Rose More in the Broader Insurance Market
The CMS numbers are based on claims data that insurers submit to the agency through dedicated "EDGE" servers. Included are claims from ACA-compliant individual plans that private insurers offer outside of the exchanges. Their insurees are in the ACA risk pool but make up only a small portion of it, said Bordelon.
The agency adjusted the comparison of PMPM paid clams in 2014 and 2015 by eliminating the estimated effect of "cross-year" claims paid in 2015 for services rendered in 2014. There no were comparable claims in 2014 for prior year services because the exchanges debuted in 2014. Cross-year claims constituted an estimated 4% of total claims cost, according to CMS. In another tweak, CMS excluded a small number of insurers that submitted inaccurate claims data.
Although PMPM paid claims fell 0.1% across ACA exchanges as a whole, they tended to fall further in states with the most growth in ACA enrollment in 2015, expressed as the number of months that members were covered, according to CMS. PMPM paid claims decreased on average by 3% in 27 states where member months grew by 50% to 100%, and by 5% in 10 states with 100% growth. Across all exchanges, member months rose by 66%.
CMS said the exchanges outperformed the rest of the overall insurance market (including Medicare), where per-enrollee costs grew between 3% and 6% from 2014 to 2015. That's reflected, for example, in premiums for employer-based family coverage increasing by 4%.
Exchange risk pools ought to improve even more on account of ACA reforms taken in 2016, CMS said. These include reducing the number of enrollees who lose coverage or a premium subsidy because of computer foul-ups and tightening sometimes abused special enrollment periods.
The agency cautioned, however, that stronger risk pools do not necessarily translate into insurers making money as opposed to losing it. Many insurers in the exchanges underpriced their premiums in 2014, reflecting not only a desire to gain marketshare but also learning mistakes in a brand-new market, according to CMS. Exchange-plan premiums rose 2% in 2015, "which would have been sufficient, on average, to keep pace with claims costs." However, it wasn't enough to make up for premium lowballing in 2014 along with the partial phase-out of an ACA reinsurance program that helps insurers cover high-cost enrollees.
Bordelon agreed that insurers charged too little in the first 2 years of the exchanges. "Now they're catching up," he said, referring to the rate increases they want in 2017.
Leavitt Partners, he said, is digging into the CMS report on spending trends in the exchanges. "Methodologically, it make sense," he said. However, Leavitt is handicapped in digging too deep because it doesn't have access to the paid-claims data submitted to CMS through the EDGE servers, he said. "We'd love to get our hands on it."
Follow Robert Lowes on Twitter @LowesRobert
Medscape Medical News © 2016 WebMD, LLC
Send comments and news tips to [email protected].
Cite this article: ACA Risk Pools Less Risky in 2015, CMS Says. Medscape. Aug 12, 2016.
