Commonwealth brief addresses potential for abrupt changes in financial responsibility and gaps in health insurance coverage under ACA

Posted on May 31, 2011 | No Comments

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The Affordable Care Act (ACA) builds on existing sources of public and private health insurance, while creating new health insurance Exchanges and subsidies.  A potential disadvantage of maintaining multiple sources of health insurance is the likelihood of abrupt changes in coverage or financial responsibility when individual circumstances change.  The Commonwealth Fund brief, “Realizing Health Reform’s Potential: Maintaining Coverage, Affordability, and Shared Responsibility When Income and Employment Change,” describes four policy challenges related to such abrupt changes: 1) adjusting premium and cost-sharing subsidies when incomes change; 2) coordinating eligibility for premium credits, Medicaid and the Children’s Health Insurance Program (CHIP); 3) encouraging and facilitating continuous coverage; and 4) minimizing transitions between individual and small-business exchanges. The brief outlines several policy recommendations to reduce uncertainty, simplify coverage decisions, and minimize insurance transitions.  These policy change suggestions include extending coverage to the open enrollment period at the end of the year, generous treatment of income gains in correcting premium tax credits, and unifying the small-business and individual exchanges.

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The Commonwealth Fund Health Insurance Tracking Survey of U.S. Adults finds that one-quarter of adults ages 19 to 64 experienced a gap in their health insurance in 2011, with a majority remaining uninsured for one year or more. Losing or changing jobs was the primary reason people experienced a gap. Compared with adults who had continuous coverage, those who experienced gaps were less likely to have a regular doctor and less likely to be up to date with recommended preventive care tests, with rates declining as the length of the coverage gap increases. According to Commonwealth, early provisions of the Affordable Care Act (ACA) are already helping bridge gaps in coverage among young adults and people with preexisting conditions. Beginning in 2014, new affordable health insurance options through Medicaid and state insurance exchanges will enable adults and their families to remain insured even in the face of job changes and other life disruptions.
The Affordable Care Act (ACA) includes numerous consumer protections that took effect on September 23, 2010. This issue brief examines new state action on a subset of these “early market reforms.” The analysis finds that 49 states and the District of Columbia have passed new legislation, issued a new regulation, issued new subregulatory guidance, or are actively reviewing insurer policy forms for compliance with these protections. These findings suggest that states have required or encouraged compliance with the early market reforms, and that efforts to understand how states are responding cannot focus on legislative action alone. The findings also raise important questions regarding how states may implement the ACA’s broader 2014 market reforms, and suggest the need for continued tracking of state action.
In a report entitled, "A Decade of Coverage Losses: Implications for the Affordable Care Act," the Robert Wood Johnson Foundation (RWJF) and the Urban Institute analyze coverage trends among children, parents, and adults without dependent children as a guide to coverage changes that could be expected in coming years without the Affordable Care Act. The report uses the 2000 to 2010 Annual Social and Economic (ASEC) Supplement to the Current Population Surveys (CPS) to project such trends. The study provides overall trends and trends by income, using the ACA's modified-adjusted gross income (MAGI) to categorize individuals. The paper also explores the extent to which changes in income distribution contributed to the last decade's coverage patterns.
UC Berkeley, funded by grants from the Robert Wood Johnson Foundation and The California Endowment, recently released the brief, "The Promise of the Affordable Care Act, the Practical Realities of Implementation: Maintaining Health Coverage During Life Transitions," which discusses seamless health coverage under the Affordable Care Act for individuals and families who lose health insurance because of a work or life transition. While outreach and education are essential for enrollment, such efforts are not sufficient to assure that those eligible will enroll in programs during these transition periods. This policy paper addresses the question, "How can implementation of the Affordable Care Act build on institutional connections and develop widespread cultural knowledge of the availability of coverage during life transitions that precipitate the loss of private coverage?"
The Urban Institute's paper, "Using the Basic Health Program to Make Coverage More Affordable to Low-Income Households: A Promising Approach for Many States," discusses how proper implementation of Basic Health Programs (BHPs) under the Affordable Care Act (ACA) could create more affordable coverage for low-income households. By implementing a BHP to provide Medicaid-like coverage, modified to add cost-sharing typical of the Children's Health Insurance Program (CHIP), States could substantially reduce coverage costs and expand the number of insurance enrollments. Additionally, successful BHP execution would reduce the burden placed on the health insurance Exchanges and Medicaid. For more information on the Basic Health Program, click here.
A new study released by the National Bureau of Economic Research (NBER) compares care seeking behavior and health outcomes of individuals covered by insurance with those who are uniunsured, and found better self-reported physical and mental health among those with insurance. The study, "The Oregon Health Insurance Experiment: Evidence from the First Year," offered Oregon Medicaid on a randomly-assigned, lottery basis to an experimental group of uninsured individuals, while the control group received no coverage. Lower out of pocket medical costs were also noted among the group receiving coverage.
A new article released in the February 2011 issue of Health Affairs, co-authored by Professor Benjamin Sommers, MD, PhD, of the Harvard School of Public Health, and Professor Sara Rosenbaum, JD, Chair of the Department of Health Policy at the George Washington University School of Public Health and Health Services, examines the potential for gaps in health coverage for some Americans under the Affordable Care Act (ACA).
This update to the Medicaid Implementation and health insurance Exchange Briefs reviews a Notice of Proposed Rulemaking (NPRM) implementing the Medicaid and CHIP eligibility, enrollment simplification, and coordination provisions of the Affordable Care Act. Issued by the United States Department of Health and Human Services on August 17, 2011, the rule is comprehensive in scope; its public comment period ends October 31, 2011. The Medicaid NPRM is part of a group of three regulations, all of which are summarized at HealthReformGPS.org. Together the rules are designed to implement both the Medicaid eligibility expansions, the process of determining eligibility for premium tax credits and cost sharing assistance in the Exchange individual market, and standards for employers purchasing coverage in Exchanges. Collectively, the rules are designed to allow individuals and families to acquire and keep coverage and move more seamlessly among publicly-supported sources of health insurance as family income and circumstances change.
This brief provides an in-depth look at the outreach and enrollment provisions in the Patient Protection and Affordable Care Act affecting Medicaid and CHIP.