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Politicians and members of the press are keenly interested in premium rates for Affordable Care Act Marketplace plans next year. Lawmakers want to use insurance prices as a cudgel on the campaign trail and the media knows that talk of premium spikes will attract attention.

That’s why reporters were interested in the announced enrollment statistics for Blue Cross and Blue Shield of North Carolina on Friday. The resulting coverage noted that BCBSNC enrollees were older and sicker than the company expected. In the race to make political hay out of these numbers there are a few points to keep in mind.

First, approximately 91 percent of ACA plan enrollees in the state receive a subsidy to purchase coverage. For this population premiums are capped as a percent of income. If, for example, you earn 150 percent of the federal poverty level then you will need to pay 4 percent of your household income for an ACA plan regardless of how premiums behave. Unless your income changes, you will pay the same rate next year.

Second, an older risk pool is not a major driver of premiums. Insurance companies certainly need younger and healthier enrollees to balance out payments for customers who use a lot of medical services. Still, as Kaiser Family Foundation has pointed out, even if insurers miss the mark substantially, this less healthy risk pool will only have a 1 or 2 percent impact on premiums. The primary drivers of premiums continue to be underlying medical costs and negotiated payment rates to providers.

Third, insurance companies have an interest in talking up their bad risk and steep medical costs. Insurance companies are, after all, companies. They want to set rates as high as the market will allow yet they also have to justify premium hikes to regulators. So, if they begin preparing the public for large premium increases the companies can then blame older and sicker enrollees for the requested boost in rates. Insurers also use the poor risk pool when negotiating with hospitals to explain cuts in payments for certain services. This is not to impute ill will to the insurance companies. It’s just how the game is played.

The risk pool mix, premium increases, and changing medical costs are all critical policy issues. We must restrain the rise in health care costs because, in the end, we all pay for our unnecessarily overpriced system. But when you hear that ACA Marketplace premiums will increase next year keep this context in mind.

While millions of dollars have been spent to tie incumbent U.S. Senator Kay Hagan to her support of the Affordable Care Act, there are now signs that Republican strategists may be moving away from making the health care law the singular issue of the 2014 campaign.

Think Progress reports it’s becoming increasingly difficult for some critics to keep up the drumbeat against the ACA:

‘Republicans called a House hearing on Wednesday with health insurance companies in an effort to embarrass the White House with revelations about double digit premium increases and claims that one-third of federal exchange enrollees still haven’t paid their health insurance premiums. Instead, the insurance leaders calmly explained that premiums for next year were still being calculated and that more than 80 percent of enrollees have in fact sent in their first-month checks.

One insurance company CEO even observed that while President Obama’s claim that if you like your health insurance plan you can keep it did not apply to everyone, the promise held true for “99 percent of our customers.” As The Hill observed, “Republicans were visibly exasperated as insurers failed to confirm certain assumptions about ObamaCare” and many simply exited the hearing.’

During Thursday’s confirmation hearing for Sylvia Mathews Burwell to head the U.S. Department of Health and Human Services, Senator Richard Burr avoided further attacks of the health care law, instead offering glowing remarks for President Obama’s HHS nominee. The New York Times reports:

‘Senator Richard M. Burr, Republican of North Carolina, said he intended to vote for Ms. Burwell because she had “a portfolio of experience that would make her a tremendous asset” to the Department of Health and Human Services.’

Political science professor David McLennan of William Peace University also sees the continued ACA attack losing some of its luster as the public becomes more comfortable with the law and the impact on their own lives.

“The question is: Will the Republicans continue that line of attack against Kay Hagan or try to find some other issues?  I think if they continue the Obamacare attack, it’s not going to be particularly effective.”

For a preview of McLennan’s weekend radio interview with NC Policy Watch’s Chris Fitzsimon, click below:

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Americans now appear to be evenly split in their opinion of the Affordable Care Act. A recent Christian Science Monitor/TIPP poll finds 47 percent of American adults support the law and 47 percent oppose it. But it’s worth noting public support has jumped seven percent from late March to late April, according to that poll.

As we reported last week nearly 360,000 people have enrolled in health insurance plans through the federal Marketplace established by the Affordable Care Act in North Carolina. According to the federal data, 91 percent of these enrollees will receive financial help to pay their premiums.

Although impressive, this top line number does not tell the full story.

The fact sheets released by Health & Human Services also show that 74 percent of North Carolinians purchasing coverage through the Marketplace chose a Silver plan. As many people now know, insurance plans were listed on the federal website according to metal levels. These metal levels correspond to different cost sharing requirements. So an insurance policy that pays about 60 percent of costs is rated “Bronze,” and a plan that pays out 70 percent of costs is ranked as a “Silver” policy.

For individuals and families earning less than 250 percent of federal poverty level, about $58,000 for a family of four, Silver plans provide additional financial assistance by capping deductibles and co-insurance. That means the federal government will not only help with premiums, it will also ensure that families are not left with financially catastrophic deductibles.

The high rate of enrollment in Silver plans should be some comfort to physicians and hospitals that worried about patients facing unaffordable deductibles.

North Carolina’s robust enrollment figures, and the demographics of the enrollees, are good news for the stability of the state’s insurance market. Navigators, health insurance agents and brokers, providers and insurance companies all played a major part in driving consumers to the Affordable Care Act Marketplace. The state’s largest insurer, Blue Cross and Blue Shield of North Carolina, had a lot at stake.

BCBSNC was the only company to offer plans in every county. Weak enrollment would have meant a small pool of customers for the insurance company. With a modest customer base a few sick enrollees could drive up premiums for everyone. A large number of enrollees, on the other hand, means more stable and predictable costs for the company and should moderate premium hikes when new rates are released later this year.

There is also a good age mix among enrollees through the Marketplace in North Carolina. Insurers and analysts often draw arbitrary lines when setting age targets for enrollment. But, generally, younger people use fewer health services so insurance companies need them to offset the older folks to create a balanced pool of customers. Oftentimes analysts look at the percentage of enrollees younger than 35.

In North Carolina, 35 percent of enrollees are younger than 35. Also, 54 percent of enrollees are under the age of 45, what some may consider roughly middle aged.

So what is the bottom line from these figures? Obamacare will not, as critics charged, collapse under its own weight or create what some in the insurance industry call a “death spiral.” In fact, more insurance companies may see the success we’ve had in North Carolina and get into the market.

Also, it is critical to remember that those calling for the repeal of health reform are trying to transport us back to the bad old days when pregnancy was a pre-existing condition and insurance companies could deny coverage to uninsured customers for a broad range of reasons.

Instead of attempting to take coverage from 360,000 North Carolinians legislators should work to improve a law that is already working in our state.

 

In case you missed it over the weekend, Raleigh’s News & Observer hit the nail on the head Sunday morning with this lead editorial entitled “The Affordable Care Act surpasses goals in NC”. Today’s Fitzsimon File “Monday Numbers” edition provides further confirmation. This is from the editorial:

“To hear the Republican candidates for the U.S. Senate in North Carolina tell it, “Obamacare” is about the worst thing that ever happened to the people of America and certainly North Carolina. They’ll repeal and replace it, they say, or certainly repeal it, and leave consumers to the wonderful world of the free market….

But here’s the problem with the Republican rant. It has been outrun by Obamacare’s successes. Read More

Health-Reform-SBHere’s this morning’s most important and thus far under-reported news story in North Carolina: the huge spike in enrollment numbers in health insurance as the result of the Affordable Care Act.

This is from a story (buried on the business page, for some reason) in Raleigh’s News & Observer:

“North Carolina enrollments for health insurance surged to 357,000 as tens of thousands of residents signed up for subsidized coverage in the final weeks of eligibility, the U.S. Department of Health and Human Services said Thursday.

The late rush of insurance enrollments under the Affordable Care Act elevates North Carolina to the fifth-highest slot in the nation, surpassing most expectations for the law’s first year of enrollment, particularly in a Republican-controlled state that did not run its own insurance exchange.

Enrollments here represent a third of the state population eligible for health insurance, and are expected to take a significant chunk out of North Carolina’s uninsured population, which was 17 percent in 2012. Almost all of North Carolina’s enrollments came with federal subsidies for the applicants, suggesting that many of those signing up had been unable to afford coverage in the past.”

Moreover, another 74,000 have been obtained coverage under Medicaid. As Chris Fitzsimon notes this morning in Friday Follies, despite all of the imperfections and all of the relentless opposition and innumerable obstructions thrown at the ACA by the ideologues on the right, President Obama and the other architects of health care reform have fashioned a remarkable achievement — they have dramatically improved the lives of millions of Americans (including more than 430,000 North Carolinians) in a profound and irreversible way.

No wonder conservative politicians are getting more and more concerned about the political implications of their ongoing and increasingly futile efforts to oppose and repeal the ACA.

Read more here: http://www.newsobserver.com/2014/05/01/3825943/nc-enrollments-for-subsidized.html?sp=/99/104/#storylink=cpy