Eligibility, enrollment, and affordability are at risk for millions of Americans who now rely on the Marketplace for health insurance.

On Mar. 10, HHS proposed the Administration’s first major healthcare rule with a companion press release and fact sheet. In them, the agency articulates how the rule will save money and prevent fraud, waste, and abuse.

There is no question that all undermine affordable healthcare and that all stakeholder groups contribute to high costs, even consumers. But among its policy positions, HHS communicates contradictory ideas: that the current ACA Marketplace is stable — yet artificially inflated, open to adverse risk selection, and no longer in need of cost- and access-friendly premium policies.

Health Affairs has a slightly different conclusion, noting in its two-part analysis: “The proposed rule is significant and would, if finalized, restrict marketplace eligibility, enrollment, and affordability . . . or erode the value of marketplace coverage.”

“HHS acknowledges as much,” the analysis adds, detailing each of the areas impacted and how up to 2 million people — mostly in Southern states — could lose coverage if the Marketplace’s advance premium tax credits (APTC) and enhanced subsidies are cut, beginning with the next plan year.

Affordability

Health Affairs notes that HHS — along with just about everyone else — “assumes that Congress will not extend the enhanced premium tax credits that expire at the end of 2025. As a result, most marketplace enrollees will see increased premiums.

Further increases could come from premium adjustment methodologies, reinstated from the first Trump Administration, which would raise premiums another 4.5% for subsidized benchmark plans. The new rule also proposed to raise maximum out-of-pocket costs (MOOP) by 15% to $10,600 (individuals) and $21,200 for families.

Enrollment

The Biden-Harris Administration extended the Marketplace Open Enrollment Period (OEP) to roughly 75 days — from November 1 to January 15 — and created a monthly Special Enrollment Period (SEP) for people at or below 150 percent of the federal poverty level.

The new HHS proposed rule would:

• again limit the annual OEP to 45 days from November 1 through December 15 and extend this federal requirement to state-based exchanges
• eliminate the monthly SEP for eligible low-income Americans — including those transitioning from Medicaid or CHIP — and impose SEP income verification requirements for at least 75% of new enrollees

Any kind of administrative change can adversely affect enrollment. This was one of the primary concerns of the Medicaid unwinding through 2024. HHS’s proposed Marketplace rule raises similar worries.

Eligibility and administrative burdens

HHS has already significantly reduced Marketplace and Medicaid consumer navigator funding from a Biden Administration annual high of $100 million to $10 million. If finalized, the HHS proposed rule could:

• eliminate Marketplace eligibility for Deferred Action for Childhood Arrivals recipients. These are the “Dreamers,” or undocumented immigrants who were brought to the United States as children
• prohibit gender-affirming care as a Marketplace essential health benefit
• deny guaranteed issue to enrollees with past-due premiums

In addition to the above, new/reinstated administrative requirements could also negatively impact eligibility, enrollment and affordability including:

• New upfront cost for auto-re-enrollment. $0 premium plans with no coverage changes would incur a $5 monthly premium at re-enrollment until enrollees confirm their eligibility.
• Loss of coverage due to premium underpayment. Marketplace premium payments are based on income, which can be difficult to estimate accurately for self-employed and gig workers. Those who underpay their premiums by even a small amount could lose coverage if they do not re-verify income and within a tighter time frame. Citing fraud concerns, HHS notes that this action would reduce federal APTC spending by $820 million in 2026.
• Loss of coverage due to premium tax credit reconciliation. Consumers who don’t meet reconciliation requirements could also lose coverage, even though administrative errors and IRS delays could wrongly classify them as non-compliant.

HHS estimates that these measures could save $1.16–$1.86 billion annually, but this would come at the expense of consumers. Hundreds of thousands could lose their APTC eligibility and become uninsured. Health Affairs notes that these changes are likely to impact young, healthy consumers disproportionately — worsening the insurance risk pool and likely driving premiums higher.

Timing

Components of the HHS rule would take effect with differing deadlines, many of which would be unrealistic and unfair per Health Affairs. For example, the elimination of the monthly SEP for low-income consumers would be effective with the final rule versus the end of the 2025 plan year, when enhanced premium subsidies could very likely expire.

We’ll all know a lot more after 30 days, when the comment period ends and HHS works to finalize the rule.

Aetna’s Medicare CMO outlines the potential of Medicare Advantage “to keep people happy, healthy and at home.”

Is our healthcare system well-equipped to support healthy aging? There are many ways to answer the question, from access and affordability to disease and mortality rates to Star Ratings. Answering well would require volumes.

How does the role of supplemental benefits and Special Needs Plans in the aging-care healthcare ecosystem of the country’s fourth-largest MA plan? We interviewed Dr. Ali Khan, Chief Medical Officer of Medicare at Aetna, a CVS Health company. Khan is also a practicing physician providing primary care for older adults on Chicago’s west side at Oak Street Health, also a part of CVS Health.

The ”whole ecosystem” of aging care

HealthLeaders asked Khan about one aging care model — patient-centered medical homes for seniors, with care coordinated by geriatricians — and how Medicare was performing in this respect and what it could do better.

“This is the active talk track for a lot of my day. I wish we had enough geriatricians and gerontologists to staff that kind of work,” says Khan.

“But any great clinician is thinking about more than just a patient’s lab numbers. They’re thinking: ‘What about the whole ecosystem of care, of health, and how do we put that together?” Khan said. “Is the patient trying to get to a doctor’s appointment? Do they have security challenges?’”

Khan adds: “Our goal from a Medicare Advantage perspective is to fill in those gaps, the missing pieces in a member’s day-to-day life — the places where their clinical teams are so busy taking care of patients, that they need a secondary player like us to come in and connect those dots.”

Khan provides a few examples of how Medicare Advantage “can unlock private sector innovation beyond traditional Medicare.” These include fitness benefits and social isolation support.

“We are making sure that every Aetna member has access to Silver Sneakers across 1,500 locations” says Khan. Silver Sneakers is a fitness benefit that expands behind exercise classes to include online/digital app education and support.

“We also know that 33% of older adults feel lonely. It’s the biggest health risk factor in our time. As a result, we spend a lot of time on social care connectivity programs.”

Khan also cited Aetna’s Resources for Living® Program, which connects members and/or their caregivers with community services and resources.

“Resources for Living helps members figure out how they want to live their lives and navigate related resources with an omni-channel approach [e.g., interaction via digital apps, phone, email, traditional mail]. Being able to offer these core services through our supplemental benefits program becomes really powerful.”

How supplemental benefits support aging care

Supplemental benefits are a key differentiator of Medicare Advantage. They represent extra benefits — dental, vision, and hearing, as well as SDOH services like transportation and in-home services — that original Medicare does not offer.

Khan noted that Aetna members “are excited about supplemental benefits and what they provide.” This includes care innovation.

“Over the past 10 years, there has been great innovation across all health plans to support people with food insecurity, to give them access to healthy meals — whether that's right after hospitalization or on a more regular basis.”

In addition to Silver Sneakers and Resources for Living, Khan cited the Aetna/CVS Health Extra Benefits Card, which provides a monthly allowance toward every day expenses like food, transportation, even durable medical equipment.

“Members make those decisions, and that helps give them autonomy.”

In addition to autonomy, supplemental benefits must deliver “real clinical impact” and support healthy aging while offering “a proactive journey for members.”  Here Khan applauds the power of proven programs outside of Aetna. One example is Capable, a Johns Hopkins University School of Nursing program that launched in 2009 and sends teams of nurses and carpenters into patient homes to identify needs and make repairs in real time.

“Capable was profoundly useful in reducing medical costs and improving quality of life for patients with low incomes,” says Khan. “So today at Aetna, we’re asking: How do we do that same kind of work? We don't have any carpenters in homes yet, but how are we proactive? How do we prevent problems before they start?’”

Khan asks these questions from personal experience, specifically his grandfather who had been a professor.

“We didn't catch my grandfather’s hearing loss. Two years later when his dementia became very abruptly noticeable, we realized that my grandmother had been covering for him for a long time. The biggest thing that his team said is that if we'd caught his hearing loss earlier, it probably would have enabled him to stay more socially connected.”

How Special Needs Plans support aging care

Supplemental benefits in Medicare Advantage help address the needs of specific members, including those enrolled in Special Needs Plans (SNPs). These plans cover those who are chronically ill (C-SNPs) and those who are dually eligible for Medicare and Medicaid (D-SNPs).

Two examples at Aetna include fall prevention services, which are a standard plan benefit for D-SNP members, and in-home supports for C-SNP members with congestive heart failure. The latter includes wireless scales that do not require member WiFi but can provide remote monitoring data on weight and fluids without a hospital or office visit.

These aren't just nice-to-have benefits. They can make a real difference,” says Khan.

“The shift is toward keeping people healthy at home,” says Khan. “That’s true across the board, but it gets really interesting within different cohorts of patients across different generations, even people who are potentially in their last year of life.”

How Aetna’s CVS connections support aging care

Aetna is not the only partner in these efforts. As a CVS Health company, it collaborates with the pharmacy-clinic retailer and its other companies. They are Signify Health, a technology and services company with a network of 10,000 clinicians who support in-home care in 50 states, and Oak Street Health, a network of comprehensive primary-care centers for older adults.

Khan details how all four companies work together.

“Now, Aetna can leverage reminders from CVS pharmacists right at point of care. Or identify high fall risk based on Signify Health’s home health assessments. Or deliver high-value primary care through provider networks like Oak Street.”

“We're here to shift care from reactive to proactive,” says Khan, adding that “the potential of Medicare Advantage is to show how benefit and resource coordination come together to keep people happy, healthy and at home.”

The Aetna Medicare CMO concludes: “The more we are doing to provide common sense benefits and ensure members understand what they're eligible for, the more we're connecting the dots. That's the work we're here to do.”

What's next when policy can't fix what policy created?

Last December, CMS announced that it would terminate the Medicare Advantage Value-Based Insurance Design (MA VBID) model due to “substantial and unmitigable costs to the Medicare Trust Funds.” 

How substantial? More than $2 billion annually in both 2021 and 2022. Why these spikes? That is a more complicated question, as are others on whether VBID can succeed more broadly and what that will require.

What is VBID?

First conceptualized in 2005 by the University of Michigan Center for VBID (UM VBID Center), Value-Based Insurance Design “is built on the principle of lowering or removing financial barriers to essential, high-value clinical services.” In its response to CMS’s termination of the model, the Center added that VBID “aims to lower out-of-pocket costs for high-value services while discouraging spending on low-value care.”

Low-value care includes services “that provide little or no benefit to patients, have potential to cause harm, incur unnecessary cost to patients, or waste limited healthcare resources.” High-value services include the increased use of preventive and essential chronic care.

But there is also a fine line between low and high value. For example, PSA screening for prostate cancer saves lives (high value) but becomes low-value for older men (age 70+). This per the Task Force on Low-Value Care, which in 2017 included this screening in its Top Five List of low-value services:

• Vitamin D screening tests
• Diagnostic tests before low-risk surgery
• Imaging within six weeks of low-back pain onset
• Branded drugs when identical generics are available

From January 2012-May 2019, waste from low-value care — a/k/a “overtreatment" — totaled $12.8-28.6 billion.

VBID: Outcomes versus cost in MA

It’s not unusual for CMS and its Innovation Center (CMMI) to retire models. In fact, it’s required if models do not generate savings or improve outcomes with cost neutrality for Medicare within a specified time.

Launched in 2017, the MA VBID model sought to enhance healthcare access for chronically ill and underserved populations by reducing cost-sharing and offering supplemental benefits. These benefits are often associated with the social drivers of health (SDOH), such as lack of access to healthy food or transportation to medical appointments. The model also sought to increase health improvement activities (e.g., preventive screenings, care management and/or disease management (CM/DM)

The MA VBID model did improve outcomes, specifically patient adherence to cholesterol and diabetes medication, as well as breast cancer screening.

It also cost Medicare an additional $2.3 billion in 2021 and another $2.2 billion in 2022.

This spike — after three-plus years of relative cost neutrality, if not savings — was a bridge too far, for CMS. Its press release terminating VBID, the agency noted that its excess costs “were unprecedented in CMS Innovation Center models” and that “no viable policy modifications” could address them.

How bad does a model have to be to earn those assessments? Or is there simply a limit to

what a model can and cannot achieve if cost and quality expectations are not realistic? Are the conclusions different for VBID when applied to Medicare Advantage versus other programs and populations?

Let’s assess.

VBID: A glass half full or half empty?

In a Health Affairs post-mortem, UM personnel — including VBID Center director Dr. A. Mark Fendrick — note that CMS’s termination of the MA model “should be interpreted as an assessment of the specific design of this program as opposed to a conclusion about the general cost (or potential) of VBID as a concept.”

The article adds that a “robust evidence base demonstrates that V-BID interventions increase adherence to high-value services, reduce disparities, improve patient outcomes, and in some instances decrease expenditures.” The article concludes that “the primary goals of V-BID programs in general, and the MA-VBID model specifically, are to increase access to care, enhance equity, and ultimately improve the health of Medicare beneficiaries – not to save money.”

VBID wasn’t required to save money for the Medicare program. But costing it $4.5 billion in two years is another matter.

The problem is that at least some of the problems that plagued the VBID MA model plague the MA program in general — namely risk code and rebate finagling. Per Health Affairs:

• Substantially higher risk scores increased CMS payments to MA plans for VBID enrollees. Higher scores help if more patients who need more care are identified. They hurt if they represent upcoding, an MA plan practice that inflates patient risk scores artificially to bilk money from Medicare.
• Higher rebates increased these payments further. Every year, MA plans submit bids for how they will cover the expected costs of providing Medicare Part A and B services. Bids below benchmarks earn plans a percentage of money back based on their Star Ratings (rebates). Higher rebates under MA VBID were thus attributed to higher quality care.

Such is the paradox of value in healthcare and why few to no models can improve cost and quality unilaterally.

In Part II of this series, HealthLeaders will explore what the high cost of VBID in Medicare Advantage means for the model — and for value-based care — in general.

KFF webinar explores the future of a Marketplace whose enrollment has soared but has few friends in the Trump Administration.

“It’s definitely been an interesting several months!” This declaration from Larry Levitt, EVP of Kaiser Family Foundation, was an apt kickoff for KFF”s webinar: “What’s Next for the Affordable Care Act?” That question was active throughout the 2024 election cycle and was explored on Feb. 10 in an online panel that included:

• Brian Blase, President-Paragon Health Institute
• Cynthia Cox, VP-KFF
• Sarah Lueck, VP Health Policy-Center on Budget and Policy Priorities

The panel began with a look back at the Marketplace and where it’s been

The Affordable Care Act — then and now

At first, the ACA was “broadly unpopular”. This includes the Marketplace, where Americans who do not qualify for Medicare, Medicaid — or who do not have employer-sponsored health insurance — can purchase and be guaranteed coverage despite pre-existing conditions.

In the Exchange’s early years and as recently as 2020, premiums were higher and many large insurers had exited.

“Enrollment was 11-12 million each year until the subsidies passed, leading to a Marketplace that has doubled in size during the past four years,” notes Cox of KFF.

Marketplace enrollment now exceeds 24 million people — “fueled largely,” says Cox, by subsidies that are set to expire at the end of 2025 unless Congress extends them.

The American Rescue Plan Act of 2021 (COVID relief) enacted temporary and enhanced  premium subsidies (EPS), the latter extended by the Inflation Reduction Act of 2022. Per KFF, these subsidies “increase the amount of financial help available to those already eligible for assistance under the ACA and . . . expand subsidies to middle-income people (with incomes over four times the poverty level.”

More coverage, more care — What’s not to love?

The benefits of these subsidies — broadly and in the everyday lives of millions of Americans — are clear. The panel noted that the average subsidy under is $770 per year with many Marketplace enrollees enjoying a $0 or near $0 premium.

“Through the combination of EPS and COVID protections, the uninsured rate has reached record lows,” notes Cox, adding: “The point of this whole exercise is to make sure people have coverage. Claims data shows that this coverage is translating to access to healthcare.”

Lueck (Center on Budget and Policy Priorities) concurred: “If Congress allows Marketplace subsidies to expire, premiums will increase significantly and some will lose eligibility altogether.

Here Blase — who also served as Special Assistant to the President for Economic Policy during the first Trump Administration — raised several objections. These included the subsidies’ costs to the government and the impact on employer-sponsored coverage.

These subsidies are very expensive. The panel cited a Congressional Budget Office (CBO) projected price tag of $335 billion over the next 10 years if the subsidies continue.

“If they are made permanent, I think you’ll see more small businesses dropping coverage [and directing their employees toward the Marketplace . . .T]hey’ll view the subsidies as a permanent change in government policy that gives them less incentive to offer coverage.”

This was, in fact, a proposal of Trump’s 2020 budget during his first term.

But there are two levels of Marketplace funding . . .

A tale of two subsidies

those for people who earn up to 150% of the Federal Poverty Level (FPL) and those who earn up to 400% FPL (again expanded premium subsidies, or EPS). Cox argues that even the latter group is at risk if the enhanced subsidies expire.

“Four hundred percent of FPL is a good income, but it’s not enough to afford full coverage. Before the subsidies, this group spent 20% of their income on premiums, plus their other healthcare costs. Now, they’re paying more like 8% of income.”

Cos adds: “This is a significant savings. If EPS expires, this group would face a very significant increase in premium and would probably drop their coverage.”

KFF reports that premium payments “for the vast majority of marketplace enrollees would increase with the CBO adding that 3.8 million more people would be uninsured annually.

More questions than answers

How to fix this dilemma — one marked by “philosophical differences” (Blase) that often pit the health of the American consumer against the health of the Marketplace:

1. Is the markeplace broke on largest successful?
2. If the Marketplace is broke, how will future reforms succeed where past attempts have failed? 
3. Are continued subsidies part of the problem or part of the solution?
    

Part 2 of this series will examine these questions and the responses of the KFF panel.