ACA Round-Up: Coverage Rates Stabilize After Dramatic Gains; Regulatory Developments

On May 16, 2017, the National Center for Health Statistics released a report, “Health Insurance Coverage: Early Release Of Estimates From The National Health Interview Survey, 2016.” The report confirms what earlier reports have shown: a dramatic drop in the number of uninsured affecting all ages, racial and ethnic groups, parts of the country, and the poor and near-poor as Affordable Care Act changes in Medicaid and private insurance coverage have been implemented, particularly after 2014. Overall, the percentage of adults age 18 to 64 who were uninsured dropped from 20.4 percent in 2013 to 12.4 percent in 2016.

In general, the report evidences few statistically significant changes in coverage from 2015 to 2016. After dramatic changes during 2014 and 2015, coverage has on the whole stabilized. There are a few exceptions, however, that are of interest.

First, there were significant decreases between 2015 and 2016 in the percentage of adults who were uninsured for more than a year (from 9.1 percent to 7.6 percent) and for at least part of a year (from 18.1 percent to 17 percent). Second, there was a significant increase in the percentage of persons under 64 enrolled in an exchange plan, from 3.4 percent (9.1 million) in the fourth quarter of 2015 to 4.3 percent (11.6 million) in the fourth quarter of 2016. The percentage of persons aged 18 to 64 enrolled in exchange plans remained stable from the first quarter of 2016 (4.7 percent or 9.2 million) through the fourth quarter of 2016 (4.8 percent or 9.4 million). These developments suggest that although progress in covering the uninsured has plateaued, gains that have been made are being consolidated and solidified.

The percent of poor children who were uninsured increased from 4.4 percent in 2015 to 6.5 percent in 2016, although the number and percentage of children enrolled in exchange plans increased from the fourth quarter of 2015 (1.9 percent or 1.4 million) to the fourth quarter of 2016 (3 percent or 2.2 million). Finally, the percentage of persons under age 65 enrolled in a high-deductible health plan (HDHP) continues to increase (from 36.7 percent in 2015 to 39.4 percent in 2016) as does the percentage enrolled in a HDHP with a health savings account (from 13.3 percent in 2015 to 15.5 percent in 2016).

Requirements For Health Savings Accounts

The IRS has recently announced the 2018 inflation-adjusted amounts for health savings accounts. The annual limit on contributions to health savings accounts for calendar year for 2018 will be $3,450 for individuals with self-only coverage and $6,900 for family coverage unless Congress increases these amounts. To benefit from tax subsidies, health savings accounts must be coupled with high-deductible health plans that have annual deductibles of at least $1,350 for single coverage and $2,700 for family coverage, with out-of-pocket maximums that do not exceed $6,650 for self-only coverage or $13,300 for family coverage.

Risk Adjustment And Reinsurance Attestation And Discrepancy Reporting

On May 11, 2017, CMS released a guide for the risk adjustment and reinsurance attestation and discrepancy reporting process for 2016. CMS also released a set of slides describing the process. All insurers participating using the EDGE server process, through which data are submitted for these programs, must review the 2016 data that they had submitted on the EDGE server as of May 1, 2017, the final date by which data were to be submitted for 2016. By May 22, 2017, insurers must either attest that the data they submitted are accurate or report discrepancies.

If an insurer discovers a discrepancy that could result in it paying a smaller charge or receiving a larger payment under these programs, CMS will take no action unless the discrepancy results from a processing or mathematical error by CMS or an incorrect application by CMS of a relevant methodology. If a discrepancy related to the risk adjustment program is the result of the insurer’s own error and results in a detriment to that insurer only and not to other insurers in the market, no changes will be made by CMS. If an error related to the risk adjustment program is the result of an insurer’s error and benefits the reporting insurer or harms other insurers, CMS will adjust transfers in order to balance the market.

Medical Loss Ratio Reporting

On May 9, 2017, the Centers for Medicare and Medicaid Services released an announcement setting out Medical Loss Ratio (MLR) and Risk Corridor Annual Reporting Procedures for the 2016 MLR Reporting Year. Insurers are required to file a MLR report for each market (large group, small group, and individual) and for each state in which they do business (except for expatriate plans). Insurers are also required to file a risk corridor report for each state in which they offer a qualified health plan.

MLR and risk corridor reporting forms for 2016 will become available on June 1, 2017, and must be submitted between June 30, 2017 and July 31, 2017. Forms will be submitted through the HCMS Health Insurance Oversight System (HIOS).

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