Investigators from the U.S. Governmental Accountability Office (GAO) took a close look at the Affordable Care Act public exchange system, at the request of Democratic congressional leaders.
Democratic congressional leaders asked for the GAO investigation out of concern that the administration of President Donald Trump might be trashing the exchange system
GAO investigated hard, gathered data, and talked to people from 23 different stakeholder groups, and found something interesting: Many unexpected things are happening at the ACA public exchange system.
In some ways, in spite of all of the administration’s moves to kneecap some ACA subsidy programs, such as the ACA cost-sharing reduction program and, briefly, the ACA risk-adjustment program, Trumps HealthCare.gov system might be working better than Trump’s HealthCare.gov.
Brokers, business groups, benefit plan administrators and insurers have been organizing the old, pre-Internet version of health insurance programs for decades.
In the 1990s, America’s Health Insurance Plans (AHIP) proposed setting up health insurance purchasing coalitions as an alternative to proposals calling for the federal government to offer all Americans a government-run “public option plan.”
Democrats in Congress added their version of the AHIP proposal to the legislation that created the ACA. The goal was to give consumers a way to shop for plans, on an apples-to-apples basis, through state-run, web-based supermarkets for health insurance.
The exchange system also administers the ACA premium tax credit subsidy system.
The Centers for Medicare and Medicaid Services (CMS) and its parent, the U.S. Department of Health and Human Services (HHS), formed HealthCare.gov to provide ACA exchange services for residents of states that were unable or unwilling to provide the services themselves.
Today, 11 states and the District of Columbia have their own, locally run ACA public exchange programs.
HealthCare.gov handles enrollment and account administration for the residents of 39 states.
What the GAO Found
Here are five things GAO investigators discovered about how the public exchange system has been working:
1. HealthCare.gov seems to be much healthier.
On Oct. 1, 2013, when the ACA public exchange first opened for business, some states were unable to get their exchange enrollment systems to do anything much.
The HealthCare.gov became famous glitches.
The Trump administration’s first ACA open enrollment period was the enrollment period for 2018 coverage, which ran from Nov. 1, 2017, through Dec. 15, 2017.
During the 2018 open enrollment period, HealthCare.gov seemed to work much better than it worked the year before, according to GAO data.
Investigators found, for example, that HealthCare.gov up time increased to about 98% of the time during the 2018 open enrollment period, from 90% for the 2017 open enrollment period.
The amount of HealthCare.gov system downtime fell to 22.5 hours, from 61 hours.
The amount of time managers had to turn on the “waiting room system,” because the site was overloaded, fell to 2 hours, from 56 hours.
The average HealthCare.gov call center wait time fell to 5 minutes, 38 seconds, from 9 minutes, 34 seconds.
2. HealthCare.gov sales of gold plans did great.
The total number of people who enrolled in coverage through HealthCare.gov fell to 8.7 million in 2018, from 9.2 million in 2017.
But sales of “gold plans” — plans that cover about 80% of the actuarial value of the ACA essential health benefits package, or standard benefits package — increased to about 528,000 for 2018, from about 304,000 for 2017.
The share of HealthCare.gov exchange plan enrollees with gold coverage increased to 6%, from 3%.
That’s partly because most exchange plan users use the ACA advance premium tax credit program to reduce what they pay out of pocket each month for exchange plan coverage.
This year, after taking subsidies into account, the average amount people paid out of pocket for coverage fell to $88, from $101, for silver coverage, even though the list price of silver coverage increased to $614, from $424.
But the after-subsidy price of gold coverage fell even more sharply: to $207 per month, from $340 per month.
Even for people who have to pay the full premium out of their own pockets, the relative value of gold plans may now look better than the relative value of silver plans, because gold plan prices increased less than silver plan prices.
The average full monthly cost of HealthCare.gov plans soared to $614, from $424, for silver plans, and to $628, from $509, for gold plans.
The average 2018 gold plan price is about 20% higher than average for 2017, but that average 2018 gold plan price is now just $14 per month more than the average price for HealthCare.gov silver plans.
Although overall HealthCare.gov enrollment is down this year, the HHS exchange system did well with Latino consumers, Asian consumers, and consumers who already had HealthCare.gov coverage in 2017.
Here’s what happened to enrollment for those groups between 2017 and 2018:
Latino consumers: Enrollment increased to 1 million, from about 956,000.
Asian consumers: Enrollment increased to about 630,000, from about 600,000.
Returning customers: The number of enrollees keeping their HealthCare.gov coverage in place increased to 6.3 million, from 6.2 million, as the number of new enrollees fell to 2.5 million, from 3 million.
4. HealthCare.gov managers got 2018 enrollment to 95% of the 2017 level despite cutting advertising and marketing spending to just 10% of the 2017 level.
The GAO report includes an appendix breaking down what HealthCare.gov managers spent on various forms of promotion, including television ads, radio ads, social media and email blasts.
Managers cut overall promotional spending to $10 million, from $100 million.
They zeroed out expenditures on TV ads, radio ads, digital audio, billboards, and postal mail.
The budget for TV advertising, for example, fell to $0, from $26.6 million in 2017.
The decrease in spending amounts to a spending cut of about $9.80 per 2017 HealthCare.gov enrollee.
HealthCare.gov charges insurers a user fee of 3.5% of premiums per enrollee, or about $14 per HealthCare.gov enrollee per month, or . That implies that the promotional spending cut might have amounted to about 6% of the user fee revenue.
5. ID Number Conflict
One lingering question about the ACA public exchange system has been why the nonprofit navigators, or exchange plan ombudsmen, seemed to have such a bitter rivalry with licensed insurance agents and brokers.
The GAO investigators found one of the reasons: HealthCare.gov managers let exchange users’ helpers put just one enrollment assister identification number on each HealthCare.gov application.
That meant that, if both a navigator and an agent helped the same individual, only the last helper to touch the application, and the helper ID number field, had a chance to get credit for the enrollment.
HealthCare.gov managers are now basing navigator grants on the navigators’ enrollment numbers.
“Beginning with the 2019 open enrollment period, HHS officials plan to allow applications to include identification numbers from multiple consumer assisters, such as navigators, agents and brokers, to reflect the fact that consumers may seek assistance with enrollment from multiple entities,” GAO investigators say.
A full copy of the GAO report is available here.
— Read GAO Airs 3 Bags of ACA Exchange Dirty Laundry, on ThinkAdvisor.