Risk Adjustment Under the Affordable Care Act: A Guide for Federal and State Regulators

Summarizes discussions from a conference about the consequences of the 2010 healthcare reform's risk adjustment provisions, design and implementation challenges, and the merits of various risk adjustment strategies. Recommends diagnostic risk measures

Connecticut: Baseline Report - State Level Field Network Study of the Implentation of the Affordable Care Act

This report is part of a series of 21 state and regional studies examining the rollout of the ACA. The national network -- with 36 states and 61 researchers -- is led by the Rockefeller Institute of Government, the public policy research arm of the State University of New York, the Brookings Institution, and the Fels Institute of Government at the University of Pennsylvania.Connecticut demonstrates how well even a smaller state can do in implementing health insurance reform through its own exchange. Broad political and industry support for a state-based exchange has resulted in one of the very best functioning exchanges in the country. Difficult or potentially contentious issues that Connecticut may face in coming years include: 1) high health care costs and the diminished level of price competition among hospitals; 2) whether additional insurers will enter the exchange and whether the new nonprofit insurance co-op will remain financially viable; 3) whether the SHOP exchange will achieve critical mass; and 4) the appropriate level of consumer representation on the exchange board

Who Will Be Uninsured After Health Insurance Reform?

Projects state-by-state compositions of the uninsured after reforms take effect including those eligible for Medicaid or exchanges but not enrolled, those exempt from the individual mandate due to a lack of affordable options, and undocumented immigrants

Estimating the Impact of the Medical Loss Ratio Rule: A State-by-State Analysis

Outlines the healthcare reform law's requirement that insurers spend a minimum ratio of 80 to 85 percent of premiums on medical care expenses or rebate the difference to policy holders. Estimates rebates in each state if it had been in effect in 2010

Insurers' Responses to Regulation of Medical Loss Ratios

The Affordable Care Act's medical loss ratio (MLR) rule requires health insurers to pay out at least 80 percent of premiums for medical claims and quality improvement, as opposed to administrative costs and profits. This issue brief examines whether insurers have reduced administrative costs and profit margins in response to the new MLR rule. In 2011, the first year under the rule, insurers reduced administrative costs nationally, with the greatest decrease -- over $785 million -- occurring in the large-group market. Small-group and individual markets decreased their administrative costs by about$200 million each. In the individual market, insurers passed these savings on to consumers by reducing their profits even more than administrative costs. But in the large- and smallgroup markets, lower administrative costs were offset by increased profits of a similar amount. Stronger measures may be needed if consumers are to benefit from reduced overhead costs in the group insurance markets

How Has the Affordable Care Act Affected Health Insurers' Financial Performance?

Starting in 2014, the Affordable Care Act transformed the market for individual health insurance by changing how insurance is sold and by subsidizing coverage for millions of new purchasers. Insurers, who had no previous experience under these market conditions, competed actively but faced uncertainty in how to price their products. This issue brief uses newly available data to understand how health insurers fared financially during the ACA's first year of full reforms. Overall, health insurers' financial performance began to show some strain in 2014, but the ACA's reinsurance program substantially buffered the negative effects for most insurers. Although a quarter of insurers did substantially worse than others, experience under the new market rules could improve the accuracy of pricing decisions in subsequent years

Distinguishing the “Truly National” From the “Truly Local”: Customary Allocation, Commercial Activity, and Collective Action

This Essay makes two claims about different methods of defining the expanse and limits of the Commerce Clause. My first claim is that approaches that privilege traditional subjects of state regulation are unworkable and undesirable. These approaches are unworkable in light of the frequency with which the federal government and the states regulate the same subject matter in our world of largely overlapping federal and state legislative jurisdiction. The approaches are undesirable because the question of customary allocation is unrelated to the principal reason why Congress possesses the power to regulate interstate commerce: solving collective action problems involving multiple states. These problems are evident in the way that some federal judges invoked regulatory custom in litigation over the constitutionality of the minimum coverage provision in the Patient Protection and Affordable Care Act. The areas of health insurance and health care are not of exclusive state concern, and it is impossible to lose—or to win—a competition requiring skillful lawyers or judges to describe them as more state than federal, or more federal than state. Nor is it most important what the answer is. More promising are the approaches that view congressional authority as turning on either commercial activity or collective action problems facing the states. My second claim is that these two approaches have advantages and disadvantages, and that the choice between them exemplifies the more general tension between applying rules and applying their background justifications. I have previously defended a collective action approach to Article I, Section 8. My primary purpose in this Essay is to clarify the jurisprudential stakes in adopting one method or the other and to identify the problems that advocates of each approach must address

Comparing Individual Health Coverage On and Off the Affordable Care Act's Insurance Exchanges

The new health insurance exchanges are the core of the Affordable Care Act's (ACA) reforms, but how the law improves the nonsubsidized portion of the individual market is also important. This issue brief compares products sold on and off the exchanges to gain insight into how the ACA's market reforms are functioning. Initial concerns that insurers might seek to enroll lower-risk customers outside the exchanges have not been realized. Instead, more-generous benefit plans, which appeal to people with health problems, constitute a greater portion of plans sold off-exchange than those sold on-exchange. Although insurers that sell mostly on the exchanges incur an additional fee, they still devote a greater portion of their premium dollars to medical care. Their projected administrative costs and profit margins are lower than are those of insurers selling only off the exchanges

The Federal Medical Loss Ratio Rule: Implications for Consumers in Year Two

For the past two years, the Affordable Care Act has required health insurers to pay out a minimum percentage of premiums in the form of medical claims or quality improvement expenses—known as a medical loss ratio (MLR). Insurers with MLRs below the minimum must rebate the difference to consumers. This issue brief finds that total rebates for 2012 were $513 million, half the amount paid out in 2011, indicating greater compliance with the MLR rule. Spending on quality improvement remained low, at less than 1 percent of premiums. Insurers continued to reduce their administrative and sales costs, such as brokers' fees, without increasing profit margins, for a total reduction in overhead of$1.4 billion. In the first two years under this regulation, total consumer benefits related to the medical loss ratio—both rebates and reduced overhead—amounted to more than $3 billion

The Federal Medical Loss Ratio Rule: Implications for Consumers in Year 3

For the past three years, the Affordable Care Act has required health insurers to pay out a minimum percentage of premiums in medical claims or quality improvement expenses—known as a medical loss ratio (MLR). Insurers with MLRs below the minimum must rebate the difference to consumers. This issue brief finds that total rebates for 2013 were $325 million, less than one-third the amount paid out in 2011, indicating much greater compliance with the MLR rule. Insurers' spending on quality improvement remained low, at less than 1 percent of premiums. Insurers' administrative and sales costs, such as brokers' fees, and profit margins have reduced slightly but remain fairly steady. In the first three years under this regulation, total consumer benefits related to the medical loss ratio—both rebates and reduced overhead—amounted to over$5 billion. This was achieved without a great exodus of insurers from the market