COVID-19 Has Negative Impact on Stalling ACA Marketplaces

Insurance gains and affordability

First, the Affordable Care Act marketplaces have taken a hit in enrollment and cost.

The Affordable Care Act was designed for moments like this when an economic downturn and rising unemployment would force individuals off of their employer-sponsored health plans. The marketplaces are meant to fill coverage gaps for those who are ineligible for Medicaid and lost their employer-sponsored health plan.

“The economic collapse triggered by the coronavirus pandemic is the first recession in which these provisions have been in place to stem job-related coverage losses,” Commonwealth Fund researchers noted.

However, even before the pandemic, the Affordable Care Act had stopped living up to its goals of increased coverage and affordability in some states.

Between 2014 and 2016, the insurance industry saw significant coverage gains. After 2016, however, only five states saw continued improvement. Twenty-three states saw no change and uninsurance in 22 states worsened.

Healthcare cost barriers progressed along the same trend. In 15 states, the number of adults declining care due to healthcare costs after 2016 increased, while 14 states saw improvement in overcoming cost barriers. The majority of states (21 states) experienced no change in healthcare costs as a barrier to care after 2016.

As part of its aim to increase healthcare coverage, the Affordable Care Act was supposed to improve racial and ethnic coverage inequities. However, the Commonwealth Fund’s scorecard found that while the law successfully decreased inequities in its first two years, developments have stalled since then.

The researchers offered four causes for this decline.

Twelve states have still not adopted Medicaid expansion under the Affordable Care Act. These states had some of the highest uninsurance rates in 2018.

Second, individual health insurance market premiums are determined on an income gradient. They become more expensive at higher incomes.

Third, actions by the Administration such as the public charge rule have stunted enrollment growth.

Fourth, barring undocumented immigrants from receiving subsidized coverage under the Affordable Care Act led to low enrollment.

“As of September 2020, more than 35 million people in the United States are estimated to be uninsured,” stated the researchers. “The question is how many people who have lost job-based coverage will enroll in marketplace plans during the open enrollment period that begins on November 1.”

Healthcare prices

The pandemic underscored that healthcare prices drive healthcare spending and lead to higher premiums.

Furthermore, private payers may be expending far more than public programs, as the prices they negotiate with providers are much higher than Medicare reimbursement levels. Private payers reimburse hospitals at around 247 percent of the Medicare reimbursement rate.

Ways to bring down healthcare prices include insurer rate regulation and market domination by non-profit payers that can more successfully negotiate prices.

The pandemic has also illuminated that the US under-invests in primary care services. This fact was true before the pandemic when only six percent of Medicare beneficiaries’ medical spending went towards primary care services. However, the pandemic-induced shutdown has further stunted primary care and could result in long-term negative effects on population health.

Health outcomes

Health outcomes began to decline after 2014 and the researchers expected the coronavirus pandemic to exacerbate this trend.

Suicide and substance abuse-related deaths were on the rise before the pandemic, particularly in light of the opioid epidemic. Economic crises, such as the one that has resulted from the pandemic, can lead to higher rates of mental health conditions and overdoses.

The Affordable Care Act’s optional Medicaid expansion can play a major role in connecting the uninsured with substance abuse care and mental health specialists.

In addition to higher healthcare prices and underinvestment in primary care services, and a decline in healthcare outcomes, Americans have a lower life expectancy in 2020 than they did in 2014 when the Affordable Care Act went into effect.

The life expectancy stabilized somewhat between 2012 and 2013 as well as between 2016 and 2017, but even then some states experienced slight increases. The Black community in particular is at-risk for a range of life-threatening conditions, many of which are also COVID-19 risk factors.

In life expectancy as in other areas of healthcare, the coronavirus pandemic has underscored health inequities that drive health disparities deeper with greater cost to minority communities.

States are also managing the public health crisis with under-resourced public health systems because they were not investing in these systems prior to the pandemic. Between the opioid pandemic, disease prevention, wellness promotion, and the COVID-19 emergency response, these public health systems have been pushed to their limits.

While the Scorecard painted a broad picture of the healthcare system’s current status and recent past, the researchers called for more up-to-date analysis.

“We have amassed the most recent federal data as a baseline, but they are egregiously lagged,” the researchers stated. "Timely data are needed in the critical areas of insurance coverage, racial and ethnic inequity in access and care, causes of mortality and life expectancy, provider performance during the pandemic, and more. And this information is needed quickly.”