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Assessing the Affordable Care Act in NH
Published Friday, August 18, 2017

Halfway into 2017, a new survey by the Gallup-Sharecare Well-Being Index found 2 million fewer people had health insurance compared with 2016. And, well before the latest effort to repeal the Affordable Care Act, some insurers announced plans to stop offering plans in parts of the U.S., suggesting the coverage gains under the law are starting to unravel.

So far, NH has bucked that trend. In NH, 53,024 people signed up for plans under the ACA’s individual marketplace for 2017. By April, some people had withdrawn or failed to keep up with their payments, decreasing enrollment to 48,237.

But that figure still shows growth from 2016, when 53,005 enrolled during the late-2015 enrollment period, and 47,976 still had coverage as of April 2016, according to healthinsurance.org, which tracks state enrollments. In addition, another 43,434 NH residents have coverage this year thanks to Medicaid’s expansion via NH’s premium assistance program, for which the state receives millions in federal dollars. Enrollment there is also up from 2016 when 41,714 were covered through the Medicaid program, which now covers low-income adults in NH through the ACA marketplace.

“Whether the Affordable Care Act was a success or failure is really a function of what you think the goals are. If you assess the law based on the changes in health insurance coverage, and you believe more coverage is better, I think you have to say the Affordable Care Act was a success,” says Steve Norton, executive director of the NH Center for Public Policy Studies in Concord.

After a rough start in 2014, with only one carrier offering plans for the NH marketplace, the state in 2017 has competition with four carriers and a robust set of offerings in 2017—32 plans in all—from which enrollees could choose. Small businesses have taken advantage of the federal law’s provisions, signing up for the ACA’s small group SHOP plans with a total of 763 people enrolled as of April 2017, representing the employees and families of 138 small businesses, according to healthinsurance.org.

New Hampshire’s uninsured rate fell from 11 percent in 2013, prior to the ACA, to 6 percent as of 2016, though most Granite Staters, about 60 percent, still receive coverage through their employers.

“Just with the Medicaid expansion population, that’s $400 million per year [in federal funding] that’s come to the state that wasn’t coming to the state before. So there are very significant economic consequences to those changes, and they obviously had a big impact largely in the provider networks,” Norton says.

Steve Ahnen, president of the NH Hospital Association, says hospitals still face financial challenges but having fewer uninsured patients clearly helps. “The tremendous gains we’ve made to help people get coverage is really important because we know when people have coverage, they have the ability to get the type of care that everyone thinks should be provided, which is routine preventative care, which is much more cost effective.”

“There’s the example of the diabetic patient who didn’t have insurance,” he says. “One of our hospitals said they used to see this patient in the emergency department at least once a month. Often they would be admitted because of a crisis related to their condition. [Without insurance] they weren’t able to access the insulin and other things they needed to manage their condition,” Ahnen says.

The hospital association has documented reduced emergency department use (down 43 percent), and reduced in-patient admissions (down 46 percent) between 2013 and 2016 among patients who are uninsured.

Rising Premium Costs

“If the goal was to lower health care premiums across the board, you have to say the Affordable Care Act was a failure. There’s not a lot of evidence to suggest the changes toward accountable care organizations and the restructuring of the health care market have had much of an impact (on costs) yet,” Norton says. While average premium costs dropped in 2015 as more insurers entered the ACA marketplace in NH, that trend has since reversed.

In 2017, Anthem’s offerings on the ACA’s individual marketplace reflected an average increase of almost 14 percent and Harvard Pilgrim was around 11 percent—a jump to double digits from single digits the year before. Minuteman Health came in around 4.2 percent and Ambetter, new to the NH market in 2016, had an average rate increase of 1.4 percent for 2017. While new rates for 2018 have not been set, increases as large as 43 percent have been discussed.

This is largely a function of uncertainty in the market since the last election. Even absent a full repeal, potential changes to the existing coverage mandate and cost-sharing subsidies cast an immediate cloud over the future of the ACA. As of August, the NH Insurance Department told carriers to calculate rates for 2018 on the assumption that roughly $8 billion in federal cost sharing payments under the ACA will no longer be paid. This money is distributed to carriers to help reduce the deductibles and co-pays for many low-income enrollees. But pressure on leaders in Washington D.C. could change that. Without some action, rising premiums will cost the government more to subsidize low- and moderate-income enrollees. Those who pay the full price on the ACA marketplace may drop the increasingly unaffordable coverage if they’re healthy, leaving the sick behind and further undermining the system.

The NH Insurance Department sought to shore up the NH marketplace by setting up a system for risk adjustment payments to insurers who end up with high-cost patients. The department hoped to combine available federal funding with an assessment on all NH insurers, essentially recreating a high-risk pool. 

Plans for that assessment were rejected by state lawmakers this summer, and the department was asked to develop an alternative that doesn’t require an assessment on insurers. Without some plan for a high-risk pool, premiums on the individual marketplace could become unaffordable. Whether, or how, all this is addressed will have a direct impact on the next enrollment period that starts Nov. 1.

Positive Outcomes

There have been positive outcomes from the ACA in NH. Lucy Hodder, director of health law and policy programs at the University of NH School of Law, argues the ACA’s rules requiring a broad base of essential health benefits was a positive development. “That’s allowed for not just coverage but the opportunity to create integrated delivery methods and bring substance use and mental health under the primary care umbrella.” For a state struggling in the midst of a major opioid epidemic, the access to insurance to cover substance abuse and mental health treatment has been nothing less than transformative, she says.

NH has generally ranked high on overall health, with a Gallup Sharecare Well-Being Index placing the Granite State 14th in the nation in 2013 based on measures that range broadly from job satisfaction and community connections to obesity rates. But the latest index ranked NH 22nd in 2016. An aging population and the ongoing opioid epidemic may be affecting those figures. Still, Hodder notes, a review of Medicare health trackers and state claims data show genuine improvements in caring for patients with chronic conditions.

“Where there’s been a real effort by the providers to engage in integrated, collaborative care models, there are reductions in costs associated with the at-risk patients,” she says.

The ACA also now plays a major role in the state economy. “Health care is now rivaling manufacturing for being the biggest business in the state,” Norton says. In addition, insurers contribute to a growing share of gross state product, increasing $1.5 billion between 2010 and 2014, Norton reports.

That doesn’t mean hospitals are sitting pretty, Ahnen says. More people may have health insurance through the ACA, but that doesn’t mean they can all pay their bills. High deductibles mean more bad debt for the hospitals as patients discover they are unable to meet the costs before their insurance coverage kicks in.

Federal reimbursement rates through Medicaid and Medicare don’t cover actual costs and leave gaps that hospitals have to fill. On balance, though, the ACA has been good for most hospitals, he says.

“I think on balance it’s been an important program that has helped make sure that people have access to care, that’s helped to stabilize hospitals in some of the rural communities. That’s an incredibly important thing,” Ahnen says.

But hospitals continue to look for ways to economize, and the latest trend involves mergers and affiliations—some across state lines. New Hampshire’s hospitals (and insurers) also currently kick in toward the state’s share for the Medicaid expansion, but that system was recently challenged as improper by the federal government. State lawmakers will be required to develop an alternative in the next legislative session starting in January.

Meanwhile everyone is waiting to see what happens in Washington and whether the problems facing the ACA’s individual marketplace can be addressed in time for the 2018 enrollment period. “Our view is let’s try to find a way to work together to fix those [issues]," adding he does not want to see the progress made undone.

Hodder also argues that implementing another major shift in the nation's health care system right now poses a real risk to efforts to reduce the underlying costs, namely the pharmaceutical expenses and per unit costs charged by hospitals and providers. “We’re a small state. I think we have good tools to tackle some of our ongoing problems around cost,” she says. “I think we all agree that cost, quality and better patient outcomes are what we’re trying to achieve, and we still have work to get there. But a complete policy shift at this time could really set us back.”

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