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Regulation and Compliance > State Regulation

3 ways politics affected PPACA plan demand

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Whether you love the Patient Protection and Affordable Care Act (PPACA) exchange system, hate it, or are simply covering your eyes and ears and thinking about warm cocoa until it goes away, it may turn out to be a feast for economists.

Health care economists often use the start of a government health program, or a change in an existing program, to get information about how various big and subtle program choices affect people’s behavior.

In Washington state, a team of four University of Washington economists — Anirban Basu, Norma Coe, David Grembowski and Larry Kessler — has tried to measure how political polarization might affect consumer interest in Washington state’s state-based Washington Healthplanfinder exchange, in a paper published behind a paywall at the National Bureau of Economic Research.

Washington state had a reputation for setting up a PPACA exchange enrollment system that worked reasonably well during the first open enrollment season, which lasted from Oct. 1, 2013, through mid-April 2014. The exchange enrolled a total of about 164,000 residents in private qualified health plan (QHP) coverage.

The economists studied the effects of politics on the market in late 2013, by mailing questionnaires to 40,000 resident households with at least one member ages 18 to 64. The economists received about 4,200 responses.

To find out what the economists learned from analyzing the survey data, read on.

U.S. Supreme Court

1. Whether consumers said they thought the Supreme Court was right to uphold PPACA or not had little correlation with how likely they were to plan to buy coverage through a public exchange.

The economists developed a collection of seven similar models, or sets of equations, to try to estimate the effect of six variables on the likelihood that a Washington state resident would express an interest in buying health coverage from the Washington state exchange.

The first model included one of the six variables. The second, two of the six variables, and so on.

The economists looked to see whether adding any particular variable had an obvious effect on interest in using the public exchange system.

For residents as a whole, views on the government shutdown had only a little impact, and views on the Supreme Court ruling on PPACA had no noticeable impact.

Angry man

2. Consumers who blamed Democrats for the budget fight that led to the government shutdown in 2013 were noticeably more likely to hate the idea of being exchange coverage.

When researchers controlled for all of the other obvious variables they could think of, such as age and reports of worries over medical bills, they found that anger at Democrats over the shutdown had a big effect on the inclination to buy exchange coverage.

Uninsured Washington state residents who blamed only the Republicans were about 3.6 times as likely as the state’s insured residents to want to buy coverage from the Washington state exchange.

The uninsured residents who blamed only the Democrats were about as likely as insured people to say they would buy exchange coverage.

In other words: After the economists held all other factors equal, anger at the Democrats reduced the likelihood that the uninsured people surveyed would want to shop for exchange coverage by about two-thirds.

Sylvia Burwell

3. The economists focused only on consumers in Washington state, but they think the problem could be worse in states in which PPACA-opposing state governments have turned responsibility for the exchange over to HHS.

In states in which political polarization lasts longer than it does in Washington state, or is more severe, marketers may have to come up with special bipartisan outreach programs to persuade uninsured, moderate-income Republicans who are eligible for PPACA subsidies to consider applying for exchange coverage, the economists say.

 Image: HHS Secretary Sylvia Mathews Burwell

See also: Washington state slashes 2015 PPACA exchange plan rates


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