Americans’ Experiences with ACA Marketplace Coverage in 2016: Affordability and Access to Care Sara R. Collins, Ph.D. Vice President, Health Care Coverage and Access The Commonwealth Fund Alliance for Health Reform Briefing July 15, 2016

The number of uninsured Americans has fallen by 20 million since 2010. Exhibit 1. Introduction The number of uninsured Americans has fallen by 20 million since 2010. Fewer people are exposed to the full cost of health care. CMS estimates of U.S. health spending show slow-down in growth in consumer out-of-pocket costs and an actual decline in out-of-pocket costs for hospital care, 2013-14. Commonwealth Fund surveys and the federal NHIS find nationwide declines in Americans’ reports of: cost-related problems getting needed care, problems paying medical bills. Commonwealth Fund Local Scorecard finds declines in cost-related problems getting needed care in 111 of 306 communities, 2013-14. But future gains on these indicators will depend on the affordability of health insurance and health care. The last few years have brought significant change to the insurance coverage of Americans. The number of uninsured people has fallen by 20 million since 2010. This means that fewer people are exposed to the full cost of health care, and we are seeing the early effects of this change in both federal and non-governmental survey data. CMS’s estimates of U.S. health spending from late last year, show slow-down in growth in consumer out-of-pocket costs and an actual decline in out-of-pocket costs for hospital care, 2013-14. Commonwealth Fund surveys and the federal NHIS find nationwide declines in Americans’ reports of: cost-related problems getting needed care, problems paying medical bills. New Commonwealth Fund Local Scorecard, which is based on federal data, finds declines in cost-related problems getting needed care in 111 of 306 communities, 2013-14. But future gains on these indicators will depend on the affordability of health insurance and health care.

Exhibit 2. Cost Is the Most Important Factor in Plan Selection Among Marketplace Enrollees What was the most important factor in your decision about which plan to select? After three open enrollment periods it is very clear that marketplace enrollees are highly price senstitive. In the Commonwealth Fund Affordable Care Act Tracking Survey, cost was the most important factor in plan selection in OE3 among people newly enrolling and those who switched plans But doctors in the network was also important. Adults ages 19–64 who have had a private plan through the marketplace for two months or less or changed plans since Note: Segments may not sum to 100 percent because of rounding. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Adults ages 19–64 who changed marketplace plans* Exhibit 3. Consumers Cite Costs, Choice of Providers as Factors When Switching Plans What are the reasons you changed plans? Percent In the survey 46 percent of people who had had a plan since before Jan 2016 have switched plans since enrolling Of those 40 percent did so to get a lower premium. But more choice of doctors was also a factor Adults ages 19–64 who changed marketplace plans* * 46 percent of adults ages 19–64 who have had marketplace coverage since before January 2016 switched plans since enrolling. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Percent of adults ages 19–64 with single policies Exhibit 4. Low-Income Adults with Marketplace Coverage Paid Monthly Premiums Comparable to Low-Income Adults with Employer Coverage Percent of adults ages 19–64 with single policies 60% 57% 75 50 25 100 66% 39% Paid less than $125 All adults Adults with incomes below 250% FPL Adults with incomes 250% FPL or more So what are marketplace enrollees paying for their coverage and how does it compare to what people pay in employer plans? We asked people in the survey with both marketplace and employer coverage what they pay per month for their premiums. We find that because of the premium tax credits, premium costs for people with marketplace plans were comparable to those with employer plans among adults with low and moderate incomes. If you look at the second set of bars, 66 percent of marketplace enrollees with incomes under 250% of poverty, (about 30,000 for an individual, 60k for a family of 4) ) paid 125 a month or nothing for individual coverage. A similar share of people enrolled in employer plans reported paying that much. But people with higher incomes paid more, and more than those in employer plans. This is because the amount of the tax credits falls as income rises, where most people in employer plans receive a premium contribution from their employer that is not linked to their income. Notes: FPL refers to federal poverty level. 250% of FPL is $29,425 for an individual or $60,625 for a family of four. Segments may not sum to subtotals because of rounding. Bars may not sum to 100 percent because of rounding. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Exhibit 5. Low-Income Adults with Marketplace Coverage Less Likely to Report Premium Increases Than Adults with Higher Incomes Over the time you have had a health plan through the marketplace, has the amount you have had to pay in premiums increased, decreased, or stayed about the same? Percent Premium tax credits are also protecting low and moderate income enrollees from premium increases. Tax credits are = to the difference between the share of income an enrollee is required to pay and the premium of the second lowest cost silver plan, otherwise known as the benchmark plan. This means that most of a premium increase is absorbed by the tax credit, particularly if people stay in or switch to the benchmark plan. Fewer than half of marketplace enrollees with incomes under 250% of poverty reported a premium increase over the time they have had their plan compared to 64% of higher income enrollees. Adults ages 19–64 who have had marketplace coverage since before January 2016 Notes: FPL refers to federal poverty level. 250% of FPL is $29,425 for an individual or $60,625 for a family of four. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Exhibit 6. Half of Adults in Marketplace Plans View Their Premiums as Affordable How easy or difficult is it for you to afford the premium costs for your health insurance? Percent who found it somewhat or very easy Very easy Somewhat easy 79 75 62 49 48 49 About half of marketplace enrollees view their premiums as easy to afford. This is less than adults in employer plans. But the differences grow with income reflecting the phase out of the tax credits and the fact that the people in employer plans are much more likely to have higher incomes, above 400% [51% of 19-64 year old adults in employer plans had incomes of 400 percent of poverty or higher, compared to just 19 percent of those in marketplace plans. ] Total Incomes below 250% FPL Incomes 250% FPL or more Adults ages 19–64 who pay all or some of premium and are aware of their premium amount Notes: FPL refers to federal poverty level. 250% of FPL is $29,425 for an individual or $60,625 for a family of four. Segments may not sum to subtotals because of rounding. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Adults ages 19–64 who have deductibles of $1,000 or more Exhibit 7. Low-Income Adults with Marketplace Coverage Less Likely to Have High Deductibles Than Adults with Higher Incomes Percent Like premium tax credits, we also find that the law’s cost sharing reductions have been effective at lowering deductibles for people with lower incomes. The ACA requires insures who sell plans in the marketplaces to offer silver level plans that come with these reductions for people with incomes under 250 percent of poverty. These reductions increase the cost-protection of plans, by lowering deductibles , copays, and out of pocket limits. The effect is clear: among marketplace enrollees with incomes under 250 percent of poverty, 30 percent had deductibles of $1000 or more compared to 68 percent of those with higher incomes. The cost sharing reductions also have made deductibles in marketplace plans similar to those in employer plans among lower and moderate income enrollees. Total Incomes below 250% FPL Incomes 250% FPL or more Adults ages 19–64 who have deductibles of $1,000 or more Notes: FPL refers to federal poverty level. 250% of FPL is $29,425 for an individual or $60,625 for a family of four. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Individual Deductible Level Services Covered Before the Deductible Exhibit 8. More than Half of Healthcare.gov Enrollees had Deductibles of $1,000 or less; 8 of 10 had Pre-Deductible Coverage for at Least Some Services Beyond Preventive Care Individual Deductible Level Services Covered Before the Deductible New data released by HHS this week for 2016 Healthcare.gov enrollees finds that 56% had individual deductibles of $1,000 or less. But in considering deductibles it is also important to look at what services are covered in a plan before someone has to meet their deductible. By law no one has to meet their deductible before receiving a preventive care service. The HHS analysis also finds that 80 percent of 2016 enrollees have pre-deductible coverage for services beyond preventive care, including prescription drugs, primary care visits, specialist visits, mental health and substance use disorder outpatient care. In work that we have done using healthcare.gov’s cost calculator, pre-deductible coverage makes a big difference in someone’s potential out of pocket costs. In 2017, insurers have the option to offer standard plans that include pre-deductible coverage for 8 services [pcp visits, urgent care, specialist visits, MH/substance use disorder outpatient visits, generic drugs, preferred drugs, non preferred brand drugs, specialty drugs - tho all have copays and coinsurance. That are lower in CSR plans] 8.4 million consumers with effectuated enrollment at the end of March 2016 through the 38 states using Healthcare.gov as their enrollment platform Note: Segments may not sum to 100 percent because of rounding. Data: U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, Data Brief: 2016 Median Marketplace Deductible $850, with Seven Health services Covered Before the Deductible on Average (CMS, July 12, 2016).

Exhibit 9. Three of Five Adults with Marketplace or Medicaid Coverage Who Had Used Their Plan Said They Would Not Have Been Able to Access or Afford This Care Before Prior to getting your Medicaid or health coverage through the marketplace, would you have been able to access and/or afford this care? Percent who answered “no” The cost sharing in marketplace plans does not appear to be inhibiting access to care. About 70 ;percent of people enrolled in marketplace plans had used their plans by the spring of this year Of those half said they would not have been able to access or afford this care before getting their new plan. Adults ages 19–64 who are currently enrolled in marketplace coverage or have had Medicaid for less than three years and have used their new health insurance plan* * 72% of adults ages 19 to 64 who are currently enrolled in marketplace coverage or with Medicaid for less than three years reported they had used their coverage to visit a doctor, hospital, or other health care provider, or to pay for prescription drugs. Source: The Commonwealth Fund Affordable Care Act Tracking Survey, Feb.–April 2016.

Exhibit 10. Four of Five Adults with New Marketplace Coverage Are Satisfied with the Doctors in Their Plans Since you switched/gained your insurance, how satisfied are you with the doctors covered by your new insurance? Very satisfied Does your current insurance include all, some, or none of the doctors that you wanted or do you not know which doctors are included on your plan? Percent who were somewhat or very satisfied Somewhat satisfied 78 80 76 Despite the proliferation of narrow network plans in the marketplaces, we find that most enrollees who enrolled this year or switched plans are satisfied with the doctors covered by their plans. About two-thirds reported that some or all of the doctors they wanted were covered by their plan. Adults ages 19–64 who have had a private plan through the marketplace for two months or less or changed plans since enrolling or switched from Medicaid to marketplace Note: Segments may not sum to 100 percent because of rounding. Data: The Commonwealth Fund Affordable Care Act Tracking Survey, February–April 2016. Source: M. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016.

Exhibit 10. Looking Ahead Kaiser Family Foundation analysis of preliminary rate requests in 14 large cities finds a weighted average increase of 10 percent. Most marketplace enrollees won’t pay large increases in 2017. Premium requests are subject to review by state regulators; 84 percent of enrollees receive premium tax credits; More than 40 percent switch plans during open enrollment; In 2016, premiums rose only 4% on average for those with tax credits. Cautionary notes for policy makers. As income rises, enrollees pay higher premiums, out of pocket costs; Affordability concerns are the most oft-cited reason for not enrolling; House v. Burwell case puts cost sharing reductions at risk. Policy adjustments will be needed to ensure consumers can afford both the insurance and health care they need over time. Looking forward to the 2017 open enrollment period, which begins Nov 1. Preliminary 2017 insurer rate requests suggest that premium increases will be higher in 2017 than in 2016. KFF finds in 14 large markets a weighted average increase of 10 percent for second lowest cost silver plan, or benchmark . But Most marketplace enrollees won’t pay large increases in 2017. This is because Premium requests are subject to review by state regulators and that process is underway; 84 percent of enrollees receive premium tax credits and the tax credits will absorb much of the increase, especially if people remain in or switch to the benchmark plan. More than 40 percent switch plans during open enrollment; In 2016, premiums rose only 4% on average for those with tax credits. But there are cautionary notes in our survey findings for policy makers. As income rises, enrollees pay higher premiums, out of pocket costs; Affordability concerns are the most oft-cited reason people give for either not shopping for coverage or not enrolling; House v. Burwell case, which has challenged the way in which the administration is financing cost sharing reductions, could significantly increase out of pocket costs for low/moderate income people if the House prevails. Policy adjustments will be needed to ensure consumers can afford both the insurance and health care they need over time. Cost-sharing reduction payments have been instrumental in lowering out-of-pocket costs for lower income enrollees

Survey Methodology Conducted by SSRS from February 2, 2016 to April 5, 2016. 15-minute telephone interviews in English and Spanish, among a random, nationally representative sample of 4,802 adults ages 19 to 64, living in the United States; 1,496 interviews were on landlines and 3,306 on cellular phones. Sample was designed to increase likelihood of surveying respondents eligible for new coverage options under the ACA in the following ways: SSRS re-contacted households reached through their omnibus survey of adults who were uninsured, had individual coverage, had a marketplace plan, or had public insurance. Stratified Random Digit Dial sample Data weighted to the U.S. 19-to-64 adult population by age, gender, race/ethnicity, household size, geographic area, and population density and to correct for stratified sample design, the use of re-contacted respondents, overlapping landline and cellular phone sample frames, and disproportionate nonresponse that might bias results. Overall margin of sampling error of +/-2.0 percentage points at the 95 percent confidence level.

Resources and Acknowledgments M. Z. Gunja, S. R. Collins, M. M. Doty, and S. Beutel, Americans’ Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016. http://www.commonwealthfund.org/publications/issue-briefs/2016/jul/affordability-and-network-satisfaction D.C. Radley, D. McCarthy, S.L. Hayes, Rising to the Challenge: The Commonwealth Fund Scorecard on Local Health System Performance, 2016, The Commonwealth Fund, July 2016. S. R. Collins, M. Gunja, M. M. Doty, and S. Beutel, Americans' Experiences with ACA Marketplace and Medicaid Coverage: Access to Care and Satisfaction, The Commonwealth Fund, May 2016. http://www.commonwealthfund.org/publications/issue-briefs/2016/may/aca-tracking-survey-access-to-care-and-satisfaction M. J. McCue and M. A. Hall, Promoting Value for Consumers: Comparing Individual Health Insurance Markets Inside and Outside the ACA’s Exchanges, The Commonwealth Fund, June 2016. http://www.commonwealthfund.org/publications/issue-briefs/2016/june/insurance-exchanges-promote-value J. Gabel, M. Green, A. Call et al., Changes in Consumer Cost-Sharing for Health Plans Sold in the ACA's Insurance Marketplaces, 2015 to 2016, The Commonwealth Fund, May 2016. http://www.commonwealthfund.org/publications/issue-briefs/2016/may/cost-sharing-increases S. R. Collins, M. Gunja, and S. Beutel, How Will the Affordable Care Act's Cost-Sharing Reductions Affect Consumers' Out-of-Pocket Costs in 2016? The Commonwealth Fund, March 2016. http://www.commonwealthfund.org/publications/issue-briefs/2016/mar/cost-sharing-reductions Munira Gunja Senior Research Associate Health Care Coverage and Access Michelle Doty Vice President Survey Research and Evaluation Sophie Beutel Program Associate Health Care Coverage and Access