By Wendy Biddle, J.D.
The report could serve as a guideline for federal changes needed to improve affordability and accessibility of health insurance.
States operating their own health insurance marketplaces cover a significant number of consumers without access to employment-based health insurance or public programs. Marketplaces were weakened by federal actions under the Trump administration, but the new administration has opportunities to enact and advocate policies that improve state-based markets to guarantee that they continue to serve as a coverage safety net, reports The Commonwealth Fund in a new issue brief released February 17, 2021.
The goal of the Commonwealth Fund’s report was to identify federal policies to support state-based health insurance marketplaces. Through their own analysis and interviews with officials from 17 state-based marketplaces, they were able to conclude that the previous administration hindered state-based marketplaces by implementing burdensome requirements and generating consumer confusion. According to the report, officials said the need to routinely reassure people that the marketplaces remained a coverage option, despite federal policies and rhetoric, was costing them valuable money, money that could be spent elsewhere.
Two policies were viewed as problematic: the expansion of the non-ACA compliant insurance plans and the public charge rule. State-based market officials are concerned that non-ACA-compliant products are often deceptively marketed as cheaper alternatives to ACA-compliant plans, requiring officials to continually communicate the dangers of seeking off-marketplace coverage that can leave enrollees with significant medical bills if they seek care.
Changes to public charge determinations have suppressed enrollment, according to state-based market directors. The Trump administration added Medicaid to the list of publicly provided benefits considered in evaluating whether immigrants would be considered a "public charge" when seeking approval for permanent residency. This designation can prevent people with certain immigration statuses from becoming U.S. citizens. Officials reported that this regulation had a chilling effect on marketplace enrollment even though marketplace enrollees were not directly impacted by the new rules. To combat this confusion, directors and officials have had to dedicate resources to counteract the misinformation campaign. "No matter how much money you invest in this, people are still afraid, so they’d rather take the risk of dying than the risk of not getting their citizenship," stated one director in the report.
One of the primary barriers to marketplace coverage is affordability, and federal initiatives could help reduce premiums and cost-sharing. Enhanced federal subsidies would reduce the cost barriers, subsidies like tax credits and cost-sharing reductions, according to the report. Another way to reduce the costs to states is to reestablish the federal reinsurance program that expired in 2016.
State-based markets are an important resource for people who do not have access to affordable insurance through their jobs, but federal policy changes are needed to clear an easier pathway to coverage. In addition, the federal government should reinvest in advertising and outreach for the federally facilitated marketplace.
For those without affordable insurance through their employer, the ACA is critical. But the report highlighted that the federal government should change its policies related to the "family glitch" loophole that does not consider the cost of coverage for an employee’s family, as well as improving financing options for employees without traditional group health insurance.
The Commonwealth Fund hopes that the report and the insight of the directors and officials interviewed for the report can serve as a roadmap for the federal government to make healthcare more accessible and affordable through its state-based marketplaces.
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