The Essential Scan: Top Findings in Health Policy Research | Edition 79

What’s the latest in health policy research? The Essential Scan aims to help keep you informed on the latest research and what it means for policymakers. It is produced by the USC-Brookings Schaeffer Initiative for Health Policy, a collaboration between the Brookings Institution and the USC Schaeffer Center for Health Policy & Economics. To sign up to receive the Essential Scan straight to your inbox, sign up here.

March 23rd marks the 10th anniversary of the passage of the Affordable Care Act (ACA), a landmark law that resulted in the largest expansion of insurance coverage since the creation of the Medicare and Medicaid programs. This week’s Essential Scan highlights review articles focused on ways in which the ACA has changed the landscape in health insurance and healthcare in the United States.

The ACA’s Individual Mandate in Retrospect: What Did It Do, and Where Do We Go From Here?

Article by: Matthew Fiedler

An important provision of the ACA was the individual mandate, which required Americans to obtain health insurance or pay a tax penalty (unless they qualified for an exemption). Tax legislation enacted in 2017 eliminated the mandate penalty effective January 2019. A new article reviews research on the effectiveness of the individual mandate. While estimates vary across the eight cited studies, Fiedler concludes that the balance of evidence suggests the mandate meaningfully increased insurance coverage, but its effect appears to be smaller than previous predictions using pre-ACA evidence. Fiedler outlines a range of policy options to increase insurance coverage, which include increasing the generosity of Marketplace subsidies and encouraging more states to expand Medicaid. He closes by arguing that policymakers aiming for truly universal coverage can follow one of two paths: (1) embrace policies with a very large fiscal cost, like Medicare-for-All; or (2) embrace policies that would automatically enroll uninsured people into coverage and collect a premium for that coverage via the tax system, an approach that has much in common with the ACA’s individual mandate. Full review here.

How Have ACA Insurance Expansions Affected Health Outcomes? Findings from the Literature.

Article by: Aparna Soni. Laura R. Wherry, and Kosali I. Simon

A key goal of the ACA was to improve health outcomes by expanding insurance coverage to millions of previously uninsured or underinsured Americans. A new review summarizes findings from 43 quasi-experimental studies, which found evidence of improvements for certain health outcomes, including early-stage cancer diagnosis and cardiovascular health. There is evidence the dependent coverage provision improved young adults’ perceptions of their overall, physical, and mental health and reduced disease-related mortality among young adults by 6.1 percent. Medicaid expansion appears to have reduced mortality for near-elderly adults and several studies documented increases in early-stage cancer diagnosis, but the findings for self-reported physical and mental health were mixed. The researchers also highlight challenges of conducting research on the ACA’s impact on health outcomes, including the reliance on outcome data predominantly drawn from self-reports and data sets with objective health information often do not contain information on individual characteristics. As policymakers debate healthcare reform and potential changes to the ACA, this article updates the literature on the ACA’s impacts on health outcomes. Full review here.

Transforming Medicare’s Payment Systems: Progress Shaped by the ACA

Article by: Michael E. Chernew, Patrick H. Conway, and Austin B. Frakt

To move beyond the established fee-for-service payment model, the ACA included provisions that allowed for changes to the way Medicare and Medicaid pay for providers. Specifically, this has been done through alternative payment models (APMs) and the Center for Medicare and Medicaid Innovation (CMMI). CMMI provides flexibility to HHS to approve new payment and delivery models, expand their scope, and increase their duration without additional legislation, as long as they do not compromise quality or increase spending. A new article evaluates these reforms and their effects on spending and quality. CMMI operates roughly 40 different APMs, which target both Medicare and Medicaid patients. The authors found that population-based payment models reduce spending while maintaining or improving quality of care. Savings from episode-based payment models were more varied, suggesting the impact of these models may depend on the details of the specific episode. Another class of APMs, site-based payment models, also varied and evidence of their savings have not been established, although certain quality metrics have shown improvements such as the rate of hospital-acquired infections. Studies evaluating pay for performance models did not discover any savings associated with these programs. The authors provide a series of suggestions for implementing value-based payment in the future. They conclude that the payment reforms instituted by the ACA have been modestly successful and policymakers should improve upon models that seem to work, aligning public and private-payer programs when feasible and discontinue programs that do not generate savings or quality improvement. Full review here.

The ACA’s Effect on the Individual Insurance Market

Article by: Sabrina Corlette, Linda J. Blumberg, and Kevin Lucia

A key element of the ACA’s plan to expand insurance coverage was implementing changes in the individual insurance market to allow people with preexisting health conditions to obtain adequate and affordable coverage. In this review the authors find the structure of the ACA’s financial subsidies have kept enrollment stable in the Marketplace, which has helped to maintain participation from insurance companies. Insurers’ revenues currently meet or exceed the cost of covering their enrollees, and the subsidy structure has shown that managed competition can drive down premiums and promote consumer choice. Individuals who do not quality for premium subsidies often face steep prices in the Marketplace— premium increases in 2018 led to an estimated 1.2 million unsubsidized individuals dropping their coverage. The authors also found that market and political uncertainty from 2015 to 2018 led many insurers to exit the market or reduce their service areas. Many insurers have moved to narrow-network plans, after finding that consumers were willing to trade a broad provider network for lower premiums. The authors suggested ways to encourage competition and improve consumer choice, such as reinsurance, and linking insurer participation in Marketplaces to contracts for other state programs. They also indicate that developing a “public option” for underserved areas or entire states could ensure that enrollees had additional coverage choices. Overall, the authors find that the ACA Marketplaces have remained resilient, despite efforts from the Trump administration to undermine them. The authors conclude with a warning, “A stable, functioning individual market is important as a mechanism to reduce the number of uninsured people and as a safety-net for millions of people going through career and life transitions.” Full review here.

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The Essential Scan is produced by the USC-Brookings Schaeffer Initiative for Health Policy, a collaboration between the Brookings Institution and the USC Schaeffer Center for Health Policy & Economics.