Despite Concerted Effort to roll back ACA in Washington, New York’s Individual Market Largely Held Its ground in 2017
But Signs of “Wear and Tear” Suggest Need for State Action to Put Market on Sounder Footing
NEW YORK, NEW YORK October 8, 2018—Despite concerted efforts by Congress and the Trump administration to roll back key provisions of the Affordable Care Act (ACA), New York State’s individual health insurance market largely held its ground in 2017 in terms of enrollment, the cost of coverage, and the relative health of its enrollees. But the individual market is still sicker and more costly than that of most other states, according to a UHF report released today.
The HealthWatch brief, “2019 Shaping Up as a Watershed Year for New York’s Individual Market as Federal Challenges and Uncertainty Continue,” uses federal risk adjustment figures, rate filings, enrollment reports, and other data to track changes in the market. It also surveys actions taken by other states to bolster their individual markets.
The authors found that 37 states had healthier individual market risk pools than New York in 2017, and 31 states had lower premiums—a modest improvement over 2016 when 43 states had lower average individual market premiums. While enrollment in New York’s ACA marketplace dipped only slightly from 2016 to 2017, enrollment in off-marketplace individual coverage—an important component in overall individual market stability—dropped by 24,000 between 2016 and 2017, and by another 33,000 from 2017 to 2018.
“New York successfully implemented the ACA and has worked vigorously to defend it and the coverage gains it brought,” said Peter Newell, UHF Health Insurance Project Director and co-author of the report. “Bringing the same sense of urgency to tackling individual market challenges is important now. Actions taken by other states to stabilize their markets provide useful lessons.”
The report summarizes three strategies implemented or under consideration by other states to stabilize their individual markets:
1) Reinsurance programs: Federal matching funds are available for reinsurance programs, which reduce premiums by offsetting some of a health plan’s costs for sicker individuals, thereby helping to retain or attract new enrollment. A handful of states have adopted reinsurance programs, including Maryland, which expects 2019 premiums to decrease by 30 percent in 2019 as a result.
2) Implementing a state individual coverage mandate: Since Congress repealed the ACA’s individual coverage mandate penalty as of 2019, the District of Columbia, Vermont, and New Jersey have enacted state mandate penalties to help ensure that healthier individuals continue to purchase coverage. New Jersey earmarked funds from its state mandate to support a new reinsurance program. In New York, about 280,000 tax returns containing individual responsibility payments were filed in 2016, amounting to a total of $202 million.
3) Providing additional premium subsidies: Massachusetts, which served as a model for the ACA, still has its individual mandate in place. It also provides a state subsidy on top of the ACA premium tax credits to make coverage more affordable.
“As New York gears up for a new open enrollment period in a few weeks, important national elections could tip the balance of power in Congress, so it’s almost certain that New York policymakers will be dealing with continuing uncertainty ahead,” said Chad Shearer, UHF vice-president for policy and director of the Medicaid Institute. “But if policymakers, regulators, health plans, and consumers put the same cooperation and effort into stabilizing the individual market as they did into getting it up and running, I’m confident we are up to the task, come what may.
The report was written by Peter Newell and Mandy Miller, with the support of the New York Community Trust and TD Charitable Trust. It is an update to an October 2017 UHF HealthWatch brief, "As 2018 Open Enrollment Begins, Trump Administration Adds New Challenges for New York's Individual Market."
The new report can be downloaded here.
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