Spring Studies Carry Implications for Affordable Care Act

Several studies released this spring have implications — whether obvious or implicit — for the Affordable Care Act.

Here’s a quick rundown of the studies “Road to Reform” recommends keeping an eye on.

Center Forward Study on Health Insurance Premiums

Obamacare critics and opponents each can spin the findings of a report by research organization Center Forward on premium rates under the ACA. According to the report, the ACA could raise premiums for some consumers by as much as 40% — but many others will see their overall costs drop as a result of the subsidies provided under the law. The consulting firm Milliman surveyed six states for the report.

Premiums would increase most significantly for young, healthy men who use state health insurance exchanges to purchase individual, high-deductible plans that provide minimal benefits, according to the report. However, the cost of the premium increase likely would be offset by subsidies for certain exchange users made available by the ACA, the report found.

In addition, the rates are likely to increase only in states that currently have little regulation of health insurance plans. For example, consumers in Florida and Ohio — where there are fewer regulations on what plans must cover — could see premiums increase by as much as 50%.

The report also noted that some consumers could save more money by forgoing insurance and paying the penalty under the ACA’s individual insurance mandate, particularly those whose incomes make them eligible for only modest subsidies and young, healthy beneficiaries.

The results here are twofold. First, although premiums are likely to increase significantly for young, healthy men with high-deductible plans, findings that suggest many of them will receive government subsidies should help quiet Obamacare critics who have been predicting this problem for months. In addition, the finding that premiums would increase most in states with less health plan regulation helps push the blame away from the Obama administration.

However, the notion that young adults could save money by forgoing insurance and paying the penalty under the individual mandate leaves a bit of room for criticism. After all, young, healthy individuals — who should help keep down health care costs for the overall pool of enrollees — are a crucial part of the new state health insurance exchanges.

Oregon Medicaid Study

One of the biggest studies of the spring sparked the widest divide among health care wonks. In the first ever randomized, controlled trial to study the effect of having insurance through Medicaid, researchers found that the program did not result in significant health improvements among beneficiaries in Oregon, when compared with uninsured residents.

A Medicaid enrollment process by lottery in Oregon presented researchers with a unique scenario. In 2008, 89,824 state residents entered the lottery to gain coverage; ultimately, about 10,000 enrolled in Medicaid.

About two years after the lottery was conducted, researchers at the Harvard School of Public Health and Massachusetts Institute of Technology obtained data from 6,387 adults who were randomly selected to be able to apply for Medicaid coverage and 5,842 adults who were not selected. Researchers compared the two groups’ health care use and outcomes.

The study’s major findings include that Medicaid beneficiaries used more health care services — such as physician visits and medical tests — and spent more on health care than those who remained uninsured. Findings also show that Medicaid beneficiaries were less likely to declare bankruptcy because of health care expenditures, reported less depression and overall had better health-related quality of life.

However, Medicaid beneficiaries did not see significant improvements in their hypertension, cholesterol, diabetes or other overall health measures, compared with those who were uninsured.

Many observers have weighed in on the implications of the study, and a deep gulf has emerged between those who think the findings confirm the mission of the ACA to expand Medicaid and those who think the results are proof that the program is ineffective.

Avik Roy at Forbes‘ “The Apothecary” writes, “The result calls into question the $450 billion a year we spend on Medicaid, and the fact that Obamacare throws 11 million more Americans into this broken program.”

However, some of the findings make a “pretty compelling case for Medicaid expansion,” Michael Cannon argues at “Cato at Liberty,” especially those noting “less depression, more access to physicians and pharmaceuticals, and a near-elimination of catastrophic, life-changing medical expenditures.”

Meanwhile, Ashish Jha of The Health Care Blog writes that the study implications are mixed. He writes that the vast majority of analyses falling clearly on one side of the debate or the other “are reflex, rather than reflection.” Jha continues, “The study seems to serve as a Rorschach test of sorts, confirming people’s biases about whether Medicaid is ‘good’ or ‘bad.'”

RAND Study on Medicaid Expansion

The results of a study published recently in the journal Health Affairs can be viewed as a big win for ACA defenders.

Researchers from the RAND Corporation examined the 14 states thought to be the least likely to support the Medicaid expansion. If those states do not expand Medicaid, the study found that a total of 3.6 million fewer low-income residents would be insured, resulting in an additional $1 billion in state-funded uncompensated care in 2016. It also found that states would forfeit a total of $8.4 billion in annual federal payments.

In addition, the study found that if the states do not participate in the Medicaid expansion, there would be a slowdown in the projected reduction in mortality rates. If the states participated in the expansion, mortality rates would be reduced by 90,000 lives per year. However, if those 14 states opt out, the reduction in mortality rates would decline to 71,000 lives per year, according to the study.

According to Reuters, the findings suggest that the effects of not participating in the expansion are larger than even the federal government expected. For example, the latest estimate from the Congressional Budget Office indicated that three million fewer low-income U.S. residents will be eligible for Medicaid coverage following a U.S. Supreme Court ruling against an ACA provision that would have allowed the federal government to withhold existing Medicaid funding if the states failed to comply with the expansion.

RAND researcher and the study’s lead author Carter Price said, “Our analysis shows it’s in the best economic interests of states to expand Medicaid under the terms of the [ACA].”

Price noted that states that do not participate in the expansion still will be “subject to the taxes, fees and other revenue provisions” of the ACA “without reaping the benefit.” He added, “Choosing to not expand Medicaid may turn out to be the more-costly path for state and local governments.”

Other Notable Studies

Two additional analyses released this spring also are worth a look.

Brookings Institute study on integrated care: One of the main goals of the ACA is to shift away from fee-for-service care in favor of a more integrated approach. A report from the Brookings Institute finds that federal government could save $300 billion over a decade and as much as $1 trillion over two decades by using integrated care models.

Levitt Partners’ count of ACOs: For those looking to gauge the success of accountable care organizations — the new care model promoted by the ACA — Levitt Partners’ David Muhlestein published in the Health Affairs blog an actual count of ACOs operating in the U.S.

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