The insurance marketplaces created under the Affordable Care Act face some similar challenges that public insurance programs have faced as they’ve gotten off the ground.
Steps that were taken to stabilize Medicare Advantage and Medicare Part D could be a starting point to stabilize the ACA insurance exchanges, a policy brief released Tuesday by the Robert Wood Johnson Foundation suggests.
The report comes a day after Aetna announced it would not offer policies in most exchange markets in 2017 where it has offered plans this year, becoming the latest major insurer to do so. Scrutiny has increased around the exchanges since major insurers including UnitedHealth and Humana have announced they would pull back from from the exchanges for 2017.
Many stakeholders say the Obamacare exchanges still aren’t stable, despite initial expectations that they would be after three years. Looking to Medicare policies that have successfully improved and sustained competition in the program could be beneficial for the exchanges, the brief argues.
“The history of health insurance markets teaches us that, without certain safeguards and incentives, there are likely to be periods of instability and uncertainty, particularly in the early years of a program,” the brief reads.
Specifically, the brief suggests Congress could take steps aimed at increasing insurer participation in the exchanges, but it would be five years before insurers that exited the exchanges could re-enter them, under the law. One suggestion offered is for Congress to enact more generous tax credits and cost-sharing reductions to help make health plans more affordable for enrollees.
“Doing so would enhance the value of those plans for consumers, and would likely entice more people to enroll and maintain coverage, including those who are relatively healthy,” the report says. “This, in turn, would likely encourage more insurers to participate in the marketplace.”
Implementing a “fallback plan” could also help fill a potential void in areas of the country that are left with few or no competing insurance companies, the authors suggest. A fallback may be similar to a public option, which was debated but ultimately not included in the ACA text.
With several major insurers pulling out of the federal exchanges, some counties have been left with little to no competition on their exchanges. Aetna’s announcement that it would withdraw from some states, including Arizona, means at least one county in Arizona will have no insurers participating in the federal exchange next year, according to The Associated Press.
While the ACA didn’t account for such a situation, Congress did consider it when lawmakers crafted Medicare Part D, including a fallback plan in case some insurers decided not to participate in the program, though the plan ultimately wasn’t necessary, according to the RWJF report.
The report suggests that other than a public option, a fallback plan could be similar to the Federal Employees Health Benefits Plan’s national service benefit plan or to leverage Medicare’s infrastructure.
“Regardless of the approach, the design of a fallback plan would need to address issues such as identifying provider networks, assessing the impact on competition, and maintaining incentives for other carriers to enter down the road,” the report says.
The Affordable Care Act included provisions such as risk adjustment, reinsurance and risk sharing, aimed at helping insurers adapt to the exchanges. Congress could restructure those programs, either making some permanent like reinsurance and the risk corridor program are under Medicare Part D, the report suggests.
The authors also suggest officials take steps to continue growing enrollment on Affordable Care Act plans, such as growing consumer assistance or automatically prompting consumers to switch to a lower-cost plan during the annual insurance renewal period.
The policies used in the Medicare programs offer “lessons and strategies” that could be applied to the marketplace, the report suggests, but says that none provide a “silver bullet” solution of the ACA markets.
“But these policies, on their own or in combination with others, could help private insurers compete more effectively in the ACA marketplaces and provide enrollees in all regions with adequate access to affordable plan choices,” the brief says.