New data show health exchanges expand competition

By Kelly Kennedy, USA TODAY 5:10 p.m. EDT May 30, 2013


Story Highlights

  • About 90% of Americans will be able to pick from five or more insurers
  • Early results show premiums lower than expected

WASHINGTON — New data collected by the Department of Health and Human Services show that about 90% of Americans buying individual insurance from state health insurance exchanges will have at least five companies to choose from when the exchanges start operations Oct. 1, according to a memorandum released by the White House Thursday.

In many states, the memorandum said, only one or two insurers have controlled the market for individual insurance policies, the type that people without employer-supplied health insurance have to buy.

The data are not surprising, said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, because insurers are doing all they can to provide a variety of plans at lower costs. In the states that have released plans and prices, such as Oregon and California, he said there are plenty of choices.

“I think that’s what we’re going to see across the country,” he said. “Competition is a good thing.”

According to the HHS statistics, which could change as states review the plans for approval, about 120 insurers have applied to operate plans through the exchanges. HHS found that 65% of new insurance entrants will be in states where one company dominates the market now.

The HHS examined data from 19 states with a federally run exchange and from other state marketplaces that have publicly released insurer information, the memo said. “Together, these states represent an estimated 80% of the 7 million people” the Congressional Budget Office said will buy insurance through the exchanges next year.

In the past, the insurance market has been essentially static as new customers tended to move into the market through their employers, rather than the individual market. Those with pre-existing conditions were often excluded from buying new plans.

As part of the 2010 health care law, the 7 million new customers give insurers an incentive to compete for that market, the memo said. Customers will easily be able to do a side-by-side comparison of costs and benefits in the online health exchanges.

Seventeen states and the District of Columbia have received HHS approval to create their own exchanges, and 15 states will work with HHS to run a marketplace, while the 19 remaining states will operate exchanges created for them by the federal government. Many states, particularly those with Republican legislatures and governors opposed to President Obama’s health care law, did not create exchanges.

States operating federally created exchanges will work with HHS to to ensure that insurers follow state and federal laws. Those states’ insurance commissioners will operate as they have in the past, Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, told USA TODAY in March.

Before the entry of new insurers into state markets this year, HHS statistics show, most states’ insurance markets were dominated by either one or two companies. In 2012, HHS found the following:

• In 11 states, the largest two insurers covered 85% or more of the individual market.

• In 29 states, one insurer covered more than 50% of enrollees in the individual market.

• In 45 states and the District of Columbia, two insurers covered more than half of enrollees.

Beginning in October, individuals will be able to do a side-by-side comparison of plans either through online state or federal exchanges. Insurers will not be able to charge more for or exclude those who have pre-existing conditions.

Insurers have submitted proposed pricing and plans, and, in the states that have released that data, there is a large variety of pricing. California’s premiums came in 50% lower than what had been projected, and in Washington and Oregon, people will pay less for premiums on the individual market than they did before the law, also called the Affordable Care Act.

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CDC: 1 in 5 Adults Used Emergency Department in 2011

John Commins, for HealthLeaders Media , May 31, 2013

The federal agency’s findings, other data, and practical experience suggest that hospitals should brace for a pronounced increase in ED use in 2014 when the ranks of the insured are expected to expand, says a board member of the American College of Emergency Physicians.



One in five adults visited the emergency room at least once in 2011 and 7% reported two or more visits for the year, the Centers for Disease Control and Prevention reports.

The CDC’s 36th annual Health, United States, 2012 report also found that in the decade from 2001 to 2011 both children and adults on Medicaid were more likely than the uninsured and people with private insurance to have at least one emergency room visit in the past year.

Andrew I. Bern, MD, an emergency physician in Florida and a board member with the American College of Emergency Physicians, says much of the CDC report “absolutely validates” what his organization has long been saying.

 “The data is debunking the myth that only the uninsured go to the ED,” Bern says. “We’ve been saying that for a while but it has not been carried well by the media.”

Bern says the CDC data, other reports, and practical experience suggest that hospitals should brace for a pronounced increase in ED use in 2014 when the ranks of the insured are expected to expand by about 30 million people under the Patient Protection and Affordable Care Act.

“If you look at the Massachusetts, which is the basis for the Affordable Care Act, they found their volume of ED visits increased about 9% a year. When Canada instituted similar sorts of coverage their visits went up as well,” Bern says. “Wherever this has been attempted to provide universal coverage or near-universal coverage utilization increases unless you provide an infrastructure alternative, such as increasing the primary care physician access.”

Bern says it’s becoming apparent that sufficient ED alternatives will not be in place in many parts of the U.S. in 2014 when the ranks of the insured expand.

“You have alternative sites of care being developed but there is not good information on what impact that will have,” he says. “Those alternative sites of care include the retail clinics run by nurse practitioners, urgent care centers, and free-standing emergency departments that are popping up in different states. These may ultimately provide different sites of care when people are looking for care urgently but there is no consistent basis. If a patient wants to be sure that they are not going to be turned away the only sure bet they have is the emergency physicians who are under federal law to treat everybody regardless of their ability to pay.”

The CDC report also noted that:

  • In 2009–2010, cold symptoms were the most common reason for emergency room visits by children (27%) and injuries were the most common reason for visits by adults (14%.)
  • Between 2000 and 2010, 35% of emergency room visits included an x-ray, and the use of CT or MRI scans increased from 5% to 17% of visits.
  • In 2009–2010, 81% of ED visits were discharged for follow-up care, 16% ended with the patient being admitted to the hospital, 2% ended with the patient leaving without completing the visit, and less than 1% ended in the patient’s death.
  • In 2009–2010, 59% of ED visits (excluding hospital admissions) included at least one drug prescribed at discharge.
  • During 2001-2011, the percentage of persons with at least one ED visit in the past year was stable at 20-22%, and the percentage of persons reporting two or more visits was stable at 7-8%.

Bern says the CDC findings are consistent with a RAND Corporation study commissioned by the Emergency Physician Action Fund which shows that emergency physicians are key decision makers for nearly half of all hospital admissions.

RAND found that hospital admissions from the ED increased 17% over seven years, accounting for nearly all the growth in hospital admissions between 2003 and 2009, offset by a 10% drop in admissions from primary care physicians and clinical referrals. Nearly all of the increase was from “non-elective” admissions from the ED—a rate 3.8 times the rate of population growth.

Hospital inpatient care is a key driver of healthcare costs, accounting for 31% of the nation’s healthcare expenses. Because of that, the role emergency physicians play in deciding who to admit to the hospital is critical to hospital cost savings, since the average cost of an inpatient stay ($9,200) is roughly 10 times the average cost of a comprehensive emergency visit ($922), RAND said.

“When you look at the overall $2.7 trillion healthcare system and that 31% of that expense is in the hospital and we are integrally involved in 50% of those admissions decisions it points to the value of the emergency physicians in the entire system,” he says.

“The things we are proposing in terms of costs savings and integration are important points and our role in the entire healthcare context is one that is very very important to the bulk of that.”

John Commins is a senior editor with HealthLeaders Media.

Young adults protected from emergency room costs under Affordable Care Act: Study

By Ryan Jaslow /

CBS News / May 29, 2013, 6:13 PM

The Affordable Care Act has provided financial protections for young adults facing medical emergencies, according to a new study.

President Barack Obama signed the law in March 2010, and one of its provisions that kicked in that September allowed young adults between the ages of 19 and 25 to stay on their parents’ private health insurance plans. The extra coverage stops when they turn 26 years old.

Researchers from the nonprofit research organization, the RAND Corporation in Washington D.C., examined more than 480,000 emergency room visits that took place between 2009 and 2011 at nearly 400 U.S. hospitals, to find out whether the ACA had any impact on their coverage.

They were only looking at serious injuries and illnesses that would likely cause a person to seek care in the emergency room whether or not they had insurance. Uninsured patients sometimes visit the ER as their primary care provider for even minor ailments.

The researchers compared the coverage rates in young adults to a comparison group of adults ages 26 to 31 who were not affected by the new law. They found in 2011, more than 22,000 emergency visits involved young adults who were newly insured because of the provision. That represented at 3 percent increase in health insurance coverage rates among young adults in need of emergency care.

The study was published May 29 in the New England Journal of Medicine.

“The change allowing young people to remain on their parents’ medical insurance is protecting young adults and their families from the significant financial risk posed by emergency medical care. Hospitals are benefiting, too, because they are treating fewer uninsured young people for emergency ailments,”” lead author Andrew Mulcahy, a health policy researcher at RAND, said in a press release. “Because we looked at only the most-serious emergency cases to rule out the influence of insurance on the decision to seek health care, we probably underestimate the full financial benefits that the new rules have provided to young adults who need urgent medical care.”

Research in September 2011, one year after the young adult provision had been implemented, found the number of uninsured adults between 19-25 dropped from 10 million from 2010 to 9.1 million in the first three months of 2011, a sharp drop for a short time period.

A more recent study RAND cites estimated the provision led to an added 3.1 million insured young adults.

The ACA’s mandate to cover all uninsured Americans begins in 2014. has more information on the Affordable Care Act for young adults.

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