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What US Health Insurers' Data Show for ACA "Repealers"

Etti G. Baranoff, PhD; Dalit Baranoff, PhD; Thomas W. Sager, PhD; and Bo Shi, PhD
Analysis of the rich data of US health insurers-pivotal players in the healthcare system-reveals continuing reductions in employer-provided group health insurance and increases in Medicaid members and utilizations following the Affordable Care Act.
The changes in the healthcare landscape that the ACA introduced, together with other macro-level factors outlined in the prior section, set our expectations for the trends in utilization among the covered subpopulations. The 2008 financial crisis, the aging of the US population, and the beginning of the exchanges as alternatives for sources of coverage are among the factors, which may work in conjunction with, or in opposition to, ACA-only factors to affect trends. 

In this section, we examine the actual trends using US health insurers’ own annual statement data that is filed with the National Association of Insurance Commissioners (NAIC). We disaggregated and tabulated the data by covered subpopulation and type of utilization. The data include all insurers that report to the NAIC as health insurers; HMOs are included, but not self-insured plans that are administered by the health insurers as third-party administrators. The data also do not include insurers that report to the NAIC as life insurers, some of whom provide health insurance among their lines. Following are the step-by-step examinations we conducted.

Data Mining Methodology

First, for each year from 2006 to 2014, we sorted every insurer’s members (insureds) into the following subpopulations: working individuals in group comprehensive coverage, insured under individual comprehensive coverage, federal employees (ie, Federal Employees Health Benefits Program), Medicare recipients, and Medicaid insureds. Next, we totaled healthcare utilizations in the following 3 categories for each subpopulation: encounters with physicians and nonphysicians, admissions to hospitals, and days in the hospitals. In the Table, we show the membership totals of each of the 5 subpopulations.

Trends in the Number of Insureds, by Subpopulation, for the US Health Insurance Industry, 2006-2014

A quick review of the Table and Figure 2 (which corresponds to the Table) shows that the growth in Medicaid membership is as expected. For group health insurance, the trend clearly shows that the membership is on a decline. We also see an increase in individual health insurance, especially from 2013 to 2014, when the state insurance exchanges began. Both Medicare and Medicaid members tripled since 2005, while group insurance members declined by 35%. Figure 2 overlays trends in the number of insureds in our 5 subpopulations, as indicated in the Table.

Trends in Healthcare Utilization, by Subpopulation of Insureds, for the US Health Insurance Industry: Encounters With Providers

In line with Figure 2, Figure 3 (A and B) represents the changes in the usage of the medical delivery system as measured by the number of encounters with physicians and nonphysicians. The trend is similar to the growth and decline in members. The substantial increase in use by the Medicaid population began before the ACA in 2010 and the 2008 financial crisis. We see a decline in encounters for group insurance plans and an indication of growth in individual coverage since 2013, the beginning of the exchanges. Independently of the ACA, the increase in the aging population and the retirement of baby boomers contribute to the growth in encounters for the Medicare population.

Trends in Healthcare Utilization, by Subpopulation of Insureds, for the US Health Insurance Industry: Inpatient Admissions and Duration of Hospitalization

Figure 4 (A and B) shows that utilization of hospital admissions and duration of hospitalization by the subpopulation covered by comprehensive group plans is in decline. The Medicaid population has shown a dramatic growth in the use of these utilization factors. The results found by Brandt et al4 in “Methodological Effects on the Measurement of Repeat Hospitalizations” are supported by the trend in admissions for the Medicare population.

Findings

Generally, Figures 2-4 show that discernible trends in utilization were in place before the ACA. Moreover, the trends are substantially different among the 5 covered subpopulations that we identified. Particularly striking are 2 trends: 1) a decline in utilization, as well as in the number of covered members, for individuals covered by employer group health insurance; and 2) a strong increase in utilization for individuals covered by Medicaid and Medicare—especially Medicaid.

In addition, the following trends are less striking, but still notable: 1) growth in individual health insurance from 2013 to 2014 with the creation of the exchanges; and 2) federal employee coverage and individual comprehensive coverage also show increases in utilization and number of individuals covered, but these trends are modest in comparison with the dramatic changes for employer group insurance coverage and Medicaid and Medicare.

Conclusions

In seeking possible explanations for the trends we found, we must look beyond the ACA, as these trends were in evidence before the ACA was enacted. The ACA may or may not have enhanced the trends, but other factors were also in play, one surely being the Great Recession during the late 2000s, which reduced employment and cut off former employees from access to group insurance. In addition, the Great Recession led to the failure of businesses and consequent cancellation of group coverage plans; however, the recovery of employment in 2010 did not lead to a reversal of the downward trend in group coverage or utilization.

It can be hypothesized that the mandates and requirements of the ACA, as well as its offer of exchanges as alternatives to employer insurance, may have encouraged many employers to cancel their group insurance plans after 2010. It would be speculative, and perhaps pejorative, to suggest that the reduction of employer involvement in healthcare was an intended consequence of ACA. Nonetheless, employer group coverage has declined, for whatever reasons—intended or not—in spite of an increase in employment since 2010. For insureds covered by employer group insurance, the decline in utilization, such as encounters with providers, admission to hospitals, and days in the hospital, may also be attributed to the move from richer health insurance plans to more deductibles, coinsurance, and greater out-of-pocket expenses. Being in a bronze plan, as opposed to a “Cadillac” (rich) plan, can lower the use of the healthcare system, as well. Further details are provided in eAppendix 1.

In addition, the steady aging of the population, as the large baby boomer generation retires from the work force and joins the Medicare ranks, surely adds to the growth of utilization in this subpopulation. Steady advances in medical science and technology may also play a role in utilization growth, as illnesses that were formerly neglected or treated poorly become amenable to effective treatment.   

Acknowledgments

Our discussion of employers’ group health insurance and eAppendix 1 have benefited from discussions with Hannah Clinger, a vice president with Willis and Willis.

Author Affiliations: Department of Finance, Insurance and Real Estate, School of Business, Virginia Commonwealth University (EGB), Richmond, VA; Baranoff Insurance Research (DB), Silver Spring, MD; Department of Information, Risk, and Operations Management, The University of Texas at Austin (TWS), Austin, TX; School of Business and Public Affairs, Morehead State University (BS), Morehead, KY. 

Source of Funding: None.

Author Disclosures: The authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (DB, EB); acquisition of data (EB, TWS); analysis and interpretation of data (DB, EB, BS, TWS); drafting of the manuscript (DB, EB, TWS); critical revision of the manuscript for important intellectual content (DB, EB, BS, TWS).

Send Correspondence to: Etti G. Baranoff, FLMI, Department of Finance, Insurance and Real Estate, School of Business, Virginia Commonwealth University, Snead Hall, 301 West Main St, Ste B4167, Richmond, VA 23284-4000. E-mail: ebaranof@vcu.edu.
REFERENCES

1. Salber P, Selecky CE. Update on the impact of the Affordable Care Act on consumers.  Am J Account Care. 2014;2(3):36-41.

2. Robinson J, Price A, Goldman Z. The redesign of consumer cost sharing for specialty drugs at the California health insurance exchange. Am J Manag Care. 2016;22(suppl 4):S87-S91.

3. Joszt L. Top ACA news: Medicaid expansion, plan satisfaction, and more. The American Journal of Managed Care website. http://www.ajmc.com/newsroom/top-aca-news-medicaid-expansion-plan-satisfaction-and-more#sthash.6T9coZDE.dpuf. Published August 25, 2015. Accessed August 25, 2016.

4. Brandt S, Ding N, Dickinson B. Methodological effects on the measurement of repeat hospitalizations. Am J Account Care. 2015;3(1):68-79.
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