Much hype has been written about the ACA’s Healthcare Marketplace and the user’s experience. Does the reality measure up to the positive press coverage? Dark Daily takes a look

One major element of the Affordable Care Act (ACA) was to radically alter the health insurance industry while increasing the number of Americans with health coverage. As a consequence, both medical laboratories and anatomic pathology groups have experienced significant changes in how payers contract for, and reimburse, lab testing services.

These changes in payer contracting and reimbursement are just one way that the ACA is altering the landscape of healthcare in America. From C-suite executives of the nation’s largest health systems, to working-class families seeking coverage on the so-called “Health Insurance Marketplace,” everyone has been affected.

According to data from the U.S. Department of Health & Human Services, to date, approximately 20 million people have taken advantage of the provisions included in the ACA. However, a recent New York Times article pointed out that the reality of the consumer experience—how people actually use the ACA plans—differs somewhat from early reports. The whole thing’s turning out to be more complex than originally predicted.

Much hype has been written about the ACA. Pathologists and clinical laboratory managers should want to better understand the “real” experience for healthcare consumers after they (and providers) have endured six years of change associated with this federal law.

Marketplace Plan Premiums on the Rise Despite Slowing Medical Spending

According to a report by The Commonwealth Fund, 61% of adults found it “very or somewhat easy” to afford plans offered on the Health Insurance Marketplace (AKA Health Exchanges) as of 2014.

Data from the Kaiser Family Foundation, which sampled 14 cities across the United States, shows that, since that time, premiums for the lowest-cost Silver rated plans have increased on average 5% per year. These same cities are forecasted to see increases averaging 11% in 2017.

However, the actual impact increasing premiums has had on affordability to consumers is difficult to determine. The same study points out that approximately 80% of enrollees for these lower-tier plans receive government subsidies to assist paying for health coverage.

The graphic above illustrates how many adults with incomes under 250% of the poverty level, and who had coverage purchased in the Federal Marketplace, paid monthly premiums that were comparable to employer-based coverage premiums during April-June of 2014. (Image copyright: The Commonwealth Fund/Source: The Commonwealth Fund Affordable Care Act Tracking Survey, April–June 2014.)

The graphic above illustrates how many adults with incomes under 250% of the poverty level, and who had coverage purchased in the Federal Marketplace, paid monthly premiums that were comparable to employer-based coverage premiums during April-June of 2014. (Image copyright: The Commonwealth Fund/Source: The Commonwealth Fund Affordable Care Act Tracking Survey, April–June 2014.)

Further complicating the matter, the data shows that enrollees who are willing to shop for better plans during the annual enrollment/re-enrollment period will experience smaller premium increases than those who renew existing plans. In 9 out of 14 cities, the insurers with the two lowest-cost Silver plans for 2016 will not be offering the two lowest-cost Silver plans in 2017.

Yet, despite increased premiums, a study from The Urban Institute projects that healthcare spending between 2014 and 2019 will remain approximately $2.6 trillion according to the 2010 ACA baseline forecast. Spending forecasts predict increases of 5% to 6% annually until 2019.

In coverage of the study, the Huffington Post pointed out, “Historical patterns don’t quite account for the fact that growth hasn’t reverted to the levels before Obamacare and before the Great Recession, when annual increases could reach into the double digits.”

Marketplace Plans Shift Financial Burden Leaving Patients Avoiding Treatment

Despite affordable plans, there may be a problem associated with decreased spending. Individuals purchasing Marketplace plans face greater out-of-pocket costs for healthcare when compared to traditional employer plans. Another study from The Urban Institute highlights that, with tax credits considered, consumers in 2016 who earn between 200% and 500% of the federal poverty level will spend between 10.8% and 14.5% of their annual income on out-of-pocket medical expenses.

Cost of living varies greatly across the United States. As The Washington Examiner noted in 2015, this added expense may lead many consumers who have health coverage to simply fail to use it. The Examiner reported on a study from Health Affairs that compared out-of-pocket prescription costs for Marketplace plans and typical employer-sponsored plans. Study authors found, “Out-of-pocket expenses for medications in a typical Silver plan are twice as high as they are in the average employer-sponsored plan, resulting in fewer prescriptions filled and refilled and in higher spending on other medical services.”

Narrow Network Marketplace Plans Creating Confusion Amongst Plan Buyers

Lastly, costs aside, many Marketplace plan patients find they have fewer choices in where they receive care. This is a consequence to the health insurance companies establishing narrow networks, a phenomenon familiar to most medical laboratory executives and pathologists who are often excluded as providers from these narrow networks.

A report by Daniel Polsky, PhD, and Janet Weiner, MPH, through the Robert Wood Johnson Foundation (RWJF) found that 41% of Marketplace Silver plans were narrow network offerings. These plans offer consumers access to fewer than 25% of area physicians.

Additionally, many Marketplace plans lack access to high-cost, high-end specialty care. A 2015 analysis of provider networks for Marketplace plans by Avalere Health found that networks include:

• 42% fewer oncology and cardiology specialists;

• 32% fewer mental health and primary care providers; and

• 24% fewer hospitals.

For example, The New York Times found that none of the networks for plans in the 2015 New York health exchange included Memorial Sloan Kettering Cancer Center.

Surprise expenses for patients are another complication of narrow networks. As outlined by Modern Healthcare, a hospital or health facility may be within the network, but specialized services—such as anesthesia or anatomic pathology—might not. After a procedure is completed, the patient could find an unexpected bill in the mail, sent by the hospital-based physician who is out of network. While future requirements might help to identify plans by network coverage, consumers will most likely still be sorting through pages of providers to avoid similar surprises.

Studies and the media show that the ACA is reducing the number of uninsured Americans. However, it would appear that the usefulness of the coverage for consumers is still in question. Answering whether the ACA is working is complex. Yet many consumers, healthcare professionals, and insurance providers remain hopeful that goals will be met as plans and requirements mature.

In the meantime, pathologists working within hospitals—but who are not in-network—are dealing with the unpleasant issues that arise when consumers get a bill for inpatient pathology professional services that they did not expect.

—Jon Stone

Related Information:

Early Analysis of 14 Major Cities Finds Benchmark Silver Plan Premiums in ACA Marketplaces Estimated to Rise 10% on Average in 2017

Analysis of 2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces

We’re Spending Less on Healthcare than We Thought We Would Before Obamacare

The Widespread Slowdown in Health Spending Growth Implications for Future Spending Projections and the Cost of the Affordable Care Act

Sorry, We Don’t Take Obamacare

Most People with ACA Marketplace Health Insurance Say They Can Afford Premiums; Lower Income Adults Report Costs Similar to Employer Coverage

Are Americans Finding Affordable Coverage in the Health Insurance Marketplaces?

Five Health Issues Presidential Candidates Aren’t Talking About—But Should

How Much Do Marketplace and Other Non-Group Enrollees Spend on Healthcare Relative to Their Incomes?

Drug Prices Spike Under Obamacare

Out-Of-Pocket Prescription Costs Under a Typical Silver Plan Are Twice as High as They Are in the Average Employer Plan

State Variation in Narrow Networks on the ACA Marketplaces

Exchange Plans Include 34% Fewer Providers than the Average for Commercial Plans

Almost Half of Obamacare Plans on Federal Marketplace Lack Out-of-Network Coverage

Network Squeeze: Controversies Continue Over Narrow Health Plans

Obamacare Health Plans: Enough Doctor Choice?

Public Health Insurance Exchange Enrollees; Insights from the 2016 Survey of US Health Care Consumers