The first Patient Protection and Affordable Care Act (PPACA) public exchange coverage has been in effect for almost a year, and the exchanges have gotten through one-third of their second annual open enrollment period.
But, even though PPACA World has been in place since Jan. 1, the exchange program picture is wavier than ever.
The enrollment numbers look better, but are confusing; the nature of the exchange plan customer base is still evolving; and it’s still not clear what the rules will be.
The new $1.1 trillion temporary government spending authorization bill that Congress passed over the weekend includes a provision that requires the U.S. Department of Health and Human Services (HHS) to use money from profitable health insurers — and only cash from profitable health insurers — to buffer insurers against poor individual health insurance underwriting performance.
The law prohibits HHS from using other funding sources to help insurers if a high percentage of health insurers have weak individual major medical underwriting results.
Steve Zaharuk, an analyst at Moody’s Investors Service, says the change could change the playing field for new nonprofit, member-owned “CO-OP” plans, and other plans that assumed the risk corridors program would give them the flexibility to price coverage aggressively.
For a look at other factors making the true exchange picture hard to see, read on.
1. The PPACA “3 R’s” risk-management programs are up against a tough fourth “R”
The risk corridors program is one of three major PPACA risk-management programs. The others are a temporary reinsurance program and a permanent risk-adjustment program.
HHS has known for months that it could face tough limits on how it will pay for the risk corridors program, and it has already talked about how it plans to proceed if it has to rely entirely on contributions from health insurers’ to fund the program.
But new spending bill risk corridors funding restriction may be a sign of the reality that the PPACA 3 R’s programs will coming up against another force that starts with the letter R: Republicans.
Republicans will control the Senate as well as the House, and they repeatedly vowed to do what they can to repeal PPACA, block implementation of PPACA programs, and prune the programs they can’t repeal.
Republicans have also won resounding victories at the state level. In Vermont, for example, Democrat Peter Shumlin returned as governor. But he was unable to win a majority of the vote, and he has ended plans to set up a government-run “single-payer” health care system.
Traditionally, however, health insurers and hospital companies have had strong relationships with the Republicans as well as with the Democrats.
Securities analysts have been assuming stability in the PPACA Medicaid expansion and public exchange programs as reasons for optimism about publicly traded hospital and health insurance companies.