News Release

Early 2017 Financial Data Indicate Stabilizing Individual Insurance Market

Published: Jul 10, 2017

Insurer financial data through the first quarter of 2017 suggest the individual market has been stabilizing and insurers in this market are regaining profitability, finds a new analysis from the Kaiser Family Foundation.

The analysis tracks insurer financial performance, starting before the launch of Affordable Care Act marketplaces, through two indicators: Medical loss ratios (the share of health premiums paid out as claims) and average gross margin per member per month (the average amount by which premium income exceeds claims costs per enrollee in a given month).

Large premium increases, typically granted by state regulators, in 2017 contributed to the improved financial performance, as insurers adjusted for a sicker-than-expected risk pool, the analysis finds. However, data on hospitalizations suggest that the risk pool was not getting progressively sicker as of 2017, supporting the notion that the large increases were necessary as a one-time market correction. Slow growth in claims for medical expenses also played a role in insurers’ financial improvements, according to the analysis.

Although the analysis finds the market is stabilizing, ongoing uncertainty over payment of cost-sharing subsidies to insurers and enforcement of the individual mandate could lead insurers to leave the market or charge higher premiums in 2018.

How Would Proposed Changes to Medicaid and Marketplace Coverage Affect Real People?

Published: Jul 10, 2017

The Better Care Reconciliation Act of 2017 (BCRA), as amended on June 26, 2017, would make significant reductions in Medicaid and changes to coverage in the nongroup market. The BCRA would phase out the enhanced federal funding for the Medicaid expansion and would limit federal Medicaid funding through a per capita cap or a block grant. If these changes are enacted, it is expected that many of the 32 states (including DC) that have implemented the Affordable Care Act (ACA) Medicaid expansion would eliminate coverage for expansion adults. Moreover, states would likely cut Medicaid eligibility, benefits, and/or provider payments to respond to federal funding reductions created by caps. For people who purchase nongroup coverage in the marketplaces, the BCRA would increase premiums for older people and lead to higher deductibles and out-of-pocket costs for many enrollees. It also would make it easier for states to waive plan requirements to cover essential health benefits, which would make coverage for high cost services such as mental health, substance use, and maternity care more expensive or unavailable through the marketplaces. We recently spoke with people covered by Medicaid and marketplace plans in several states. Their stories provide examples of how the changes in the bill would affect real people:

Without Medicaid expansion, Tracy would lose his Medicaid coverage and access to services supporting his substance use recovery. Tracy is a 38-year-old full-time student pursuing a teaching degree in Albuquerque, New Mexico. Tracy lives on a very tight budget and cuts back on expenses where he can, sometimes going without a phone to save money. Tracy enrolled in Medicaid in 2015, when he was completing a recovery program for substance use. Before he got Medicaid, Tracy was uninsured. Tracy says that Medicaid provides him access to professional help for his recovery, enabling him to pursue his goal of becoming a teacher. With Medicaid, he is not afraid to go to the doctor and face high medical costs. Under BCRA, Tracy would likely lose his Medicaid coverage. Although he would be eligible for tax credits to purchase coverage in the marketplace with a modest premium, the plan would have a very high deductible, likely around $7,000. Because of his limited budget, Tracy does not think he would be able to afford even a small premium, much less a deductible representing nearly half of his income. Having to pay for health care services until he met the plan’s deductible would make it difficult for him to access needed health services, including the services that he receives to support his recovery.

Figure 1: Tracy, 38, Albuquerque, New Mexico

Cuts to Medicaid could leave Jackie and her three children without financial protection from high medical costs. Jackie is a 51-year-old mom of three teenagers who works part-time in a warehouse in Kansas City, Kansas. For the previous 16 years, she was a stay-at-home mom, while her husband worked and they lived a middle-class lifestyle. About a year ago, her husband became unemployed, and they are now divorcing. Today, she faces major financial stress as she tries to support her family on her own. She and her children enrolled in Medicaid about a year ago. Jackie never expected to be in a situation where she would need Medicaid, but is thankful it is there to provide financial protection for her family. Under the BCRA, reduced federal Medicaid funding could result in reductions in Medicaid eligibility and/or benefits. Jackie has absolutely no idea what she would do without Medicaid because she could not afford the premium or deductible for a private plan, even with tax credits available under the BCRA.

Figure 2: Jackie, 51, Kansas City, Kansas

Cuts to Medicaid would leave Melodie and her daughter reliant on the emergency room for care. Melodie is a 23-year-old who works full time as a customer service representative in Richmond, Virginia. She lives with her daughter and is expecting her second child later this year. Melodie works overnight hours so that her mother can watch her daughter while she is working. Even with full-time work, she struggles to pay her bills every month. She and her daughter both enrolled in Medicaid after a period of being uninsured. She says that Medicaid enables her and her daughter to get the physical and mental health services they need. She is getting care for depression and anxiety as well as prenatal care. Her daughter receives behavioral health services for ADHD in addition to her well-child care and other physical services. Under the BCRA, reduced federal Medicaid funding could result in reductions in Medicaid eligibility and/or benefits. Melodie says that, without Medicaid, she would not be able to afford the premium for a private plan, and would have to put off care and rely on the emergency room for everything.

Figure 3: Melodie, 23, Richmond, Virginia

The elimination of cost sharing subsidies will mean higher out-of-pocket costs for Lori and her husband forcing them to forgo needed care. Lori, 43, lives with her husband and four children between ages 2 and 13. She works part-time and her husband works full-time, but neither has access to health insurance through their jobs. She and her husband purchase coverage through the marketplace, while their children are covered by Medicaid. They pay a $286 monthly premium after receiving a tax credit and have a $500 deductible. Under the BCRA, while Lori and her husband’s premium for a silver plan will remain about the same, they would likely see their deductible skyrocket to about $7,000 because of the elimination of the cost sharing subsidies. Lori says having health insurance is a priority for her and her husband, but the increased out-of-pocket costs will make it more difficult to afford the medications her husband needs to manage high cholesterol and attention deficit disorder. Proposed cuts to Medicaid funding could also affect her children’s coverage.

Figure 4: Lori, 43, Richmond, Virginia

Coverage for maternity services could become more expensive or unavailable for Brandon and his wife. Brandon is a 32-year old independent government contractor who lives with his wife and young son in Kansas City, Kansas. He and his wife are expecting their second baby later this year. Because he is self-employed, Brandon purchases health coverage for his family through the marketplace. Their silver plan covers maternity services, although some costs are subject to the plan’s deductible. Brandon and his wife live in a state that did not require coverage of maternity care pre-ACA. If their state were to obtain a waiver to redefine the essential health benefits, their access to maternity coverage would be limited and they might have to pay hundreds of dollars more a month for a plan that covers maternity care. Brandon says they already put unexpected medical expenses on their credit cards. Having to pay a higher premium or to pay out of pocket for maternity care would likely lead to more credit card debt for his family.

Figure 5: Brandon, 32, Kansas City, Kansas

Changes to the structure of the premium tax credits under the BCRA would reduce Noelle’s monthly premium. Noelle is a 33-year old single adult who recently moved to Virginia where she is currently looking for work. Until she finds a new job, her income from a rental property is below the poverty level but above Medicaid eligibility because Virginia did not adopt the expansion for adults. Her boyfriend pays the premium for Noelle to purchase coverage through the marketplace. However, because her income is below the poverty level, she does not qualify for a tax credit to lower her monthly premium. Under the BCRA, Noelle would qualify for a tax credit that would reduce her monthly premium contribution to just over 2% of her income, resulting in savings of about $200 per month. Although Noelle is happy with her current coverage, she would like to pay less until she can find a new job.

Figure 6: Noelle, 33, Richmond, Virginia

Medicaid’s Role in Ohio

Published: Jul 7, 2017

Medicaid in Ohio

  • Nearly 3 million people in Ohio are covered by Medicaid (21% of the total population). While four in five (79%) of enrollees are children and adults, more than one-half (59%) of the state’s Medicaid spending is for the elderly and people with disabilities.
  • 345,300 (17%) of Ohio’s Medicare enrollees are also covered by Medicaid, which accounts for over two-fifths (41%) of Medicaid spending.
  • 40% of all children in Ohio are covered by Medicaid, including 46% of children with special health care needs.
  • 59% of nursing home residents in Ohio are covered by Medicaid and 39% of Medicaid long-term care spending in Ohio is for nursing home care. Medicare beneficiaries rely on Medicaid for assistance with services not covered by Medicare, particularly long-term care.
  • 88% of Medicaid enrollees in Ohio are in managed care. Since Ohio has already transitioned most enrollees to managed care, it would not be able to recoup much of the one-time savings that some states experience during that transition.
  • Ohio has a below average per capita income and therefore a relatively high federal Medicaid matching assistance percentage (FMAP) at 62.3%. For every $1 spent by the state, the federal government matches $1.65. Almost three quarters (72%) of all federal funds Ohio receives are for Medicaid. In Calendar Year 2017, the federal match rate for the Medicaid expansion population is 95%.

What is at Risk under a Per Capita Cap?

  • Capping Medicaid funding would reduce the federal assistance for Ohio to maintain its current Medicaid program.
    • Under the Better Care Reconciliation Act of 2017 (BCRA), to maintain its current Medicaid program, Ohio would have to make up $20.5 billion in loss of federal funds between 2020-2029, including $10.8 billion for the phase-out of the enhanced match for the ACA expansion and $9.7 billion for the per enrollee cap on all groups.
    • If Ohio dropped the Medicaid expansion in response to the loss of enhanced federal financing, the state would forgo an additional $32.8 billion over the 2020-2029 period, and by 2029, 858,000 Ohioans estimated to be covered in the expansion group would lose Medicaid coverage.
  • Capping federal Medicaid funding could put Medicaid programs designed to improve quality of life and access to new therapies and long-term care for people with disabilities at risk. 14% of Ohio’s non-institutionalized population reported a disability, compared to a U.S. average of 13%.
  • Reducing federal funds through a per capita cap or block grant would limit Ohio’s ability to respond to public health crises such as the opioid epidemic, HIV, or Zika.
    • Ohio had the third highest opioid death rate in the country in 2015 (24.7 deaths per 100,000 population).
    • Two-thirds (66.5%) of people in Ohio are overweight or obese and more than one-third (35%) report poor mental health status. Ohio’s population faces many health challenges, ranking 40th in overall health status.

What Are the Implications for Medicare of the American Health Care Act and the Better Care Reconciliation Act?

Published: Jul 6, 2017
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Issue Brief

An important question in the debate over proposals to repeal and replace the Affordable Care Act (ACA) is what might happen to the law’s many provisions affecting the Medicare program. The American Health Care Act (AHCA), which was passed by the House of Representative on May 4, 2017, and the Better Care Reconciliation Act (BCRA), released by Senate Republicans on June 22, 2017, would leave most ACA changes to Medicare intact, including the benefit improvements (no-cost preventive services and closing the Part D coverage gap), reductions to payments to health care providers and Medicare Advantage plans, the Independent Payment Advisory Board, and the Center for Medicare and Medicaid Innovation.

However, both bills would repeal the Medicare payroll surtax on high-income earners that was added by the ACA, effective January 2023. That provision, which took effect in 2013, provides additional revenue for the Part A trust fund, which pays for hospital, skilled nursing facility, home health and hospice benefits. The Part A trust fund is financed primarily through a 2.9 percent tax on earnings paid by employers and employees (1.45 percent each). The ACA increased the payroll tax for a minority of taxpayers with relatively high incomes—those earning more than $200,000/individual and $250,000/couple—by 0.9 percentage points.

In addition to repealing the ACA’s Medicare payroll surtax, both bills would repeal virtually all other tax and revenue provisions in the ACA, including the annual fee paid by branded prescription drug manufacturers, which would decrease revenue to the Part B trust fund. The bills would also reinstate the tax deduction for employers who receive Part D Retiree Drug Subsidy (RDS) payments, which would increase Medicare Part D spending.

According to the Congressional Budget Office, the provision in the AHCA and the BCRA to repeal the Medicare payroll surtax would reduce revenue for Part A benefits by $58.6 billion between 2017 and 2026. Proposed changes to the ACA’s marketplace coverage provisions and to Medicaid financing in both bills would also increase the number of uninsured, putting additional strain on the nation’s hospitals to provide uncompensated care. As a result, Medicare’s “disproportionate share hospital” (DSH) payments would increase, leading to higher Part A spending between 2018 and 2026 of more than $40 billion, according to CBO.

Altogether, changes to Part A spending and financing in the AHCA and BCRA would weaken Medicare’s financial status by depleting the Part A trust fund two years earlier than under current law, moving up the projected insolvency date from 2028 to 2026, according to Medicare’s actuaries (Figure 1).

Figure 1: Repealing the Medicare payroll tax on high-income earners, plus other provisions affecting Medicare spending and financing, would deplete the Part A trust fund in 2026, 2 years earlier than under current law

Reducing the flow of revenues to the Part A trust fund by repealing the payroll surtax paid by high-income earners and increasing Part A spending due to higher DSH payments has direct implications for the ability of Medicare to pay for Part A benefits on behalf of Medicare beneficiaries. When spending on Part A benefits exceeds revenues, and assets in the Part A trust fund account are fully depleted, Medicare will not have sufficient funds to pay all Part A benefits (although the Medicare program will not cease to operate).

In addition to the impact on Medicare’s solvency in the short term, repealing the high-income earner payroll surtax and other proposed changes affecting Part A spending and revenues would also worsen the program’s long-run financial status, increasing the 75-year shortfall in the Part A trust fund from 0.73 percent of taxable payroll to 1.18 percent, according to Medicare’s actuaries.

The projected date for depletion of the Medicare Part A trust fund has varied over time as a result of changes in policy and the economy affecting both revenues and spending (Figure 2). In the past, looming insolvency has prompted policymakers to debate and pass legislation that reduced Medicare spending, thereby improving the financial status of the Part A trust fund. For example, during the mid-1990s, when the Medicare actuaries were projecting trust fund insolvency by 2001, Congress enacted the Balanced Budget Act (BBA) of 1997, which reduced Medicare spending and extended the solvency of the Part A trust fund by an additional seven years. With the enactment of the ACA in 2010, Part A trust fund solvency was extended by several years as a result of the law’s provisions to increase the Medicare payroll tax on high-income earners and reduce provider and plan payments (Figure 3).

Figure 2: The projected depletion of the Medicare Part A trust fund has varied over time as a result of changes in policy and the economy affecting both revenues and spending
Figure 3: The Medicare Hospital Insurance trust fund gained additional years of solvency with enactment of the ACA

Whether the Part A trust fund remains solvent for an additional 11 years, as projected under current law, or 9 more years, under proposed changes affecting Medicare Part A spending and financing in the AHCA and BCRA, Medicare faces long-term financial pressure associated with higher health care costs and an aging population. Even if the payroll surtax on high earners is retained, the Part A trust fund is likely to need additional revenue to finance care for an aging population, unless policymakers choose instead to reduce Part A spending by cutting benefits, restricting eligibility, or reducing payments to providers and plans. By cutting taxes on high-income earners and thereby reducing revenue to the Medicare Part A trust fund, the AHCA and BCRA would increase pressure on policymakers to take some type of action sooner rather than later.

Section 1332 State Innovation Waivers: Current Status and Potential Changes

Authors: Jennifer Tolbert and Karen Pollitz
Published: Jul 6, 2017

Issue Brief

Section 1332 of the Affordable Care Act (ACA) authorizes states to waive key requirements under the law in order to experiment with different health coverage models. As Republicans in Congress debate repeal and replacement of the ACA, renewed attention is being paid to these waivers as a mechanism for giving states flexibility to restructure their health care markets. The waiver authority is generally broad, though certain process and outcome standards must be satisfied. State interest in 1332 waivers to date has been limited; however, changes to the statutory waiver requirements included in the Senate Better Care Reconciliation Act of 2017 (BCRA) or other signals from the Trump administration could spark increased state action. This brief describes current 1332 waiver activity and raises questions regarding the future of these waivers, particularly in the context of proposed changes under discussion.

What Does Section 1332 Allow?

Beginning in 2017, states can request 5-year waivers of certain ACA provisions through Section 1332. States may seeks waivers of requirements related to the essential health benefits (EHBs) and metal tiers of coverage (bronze, silver, gold, and platinum) along with the associated limits on cost sharing for covered benefits. They may alter the premium tax credits and cost-sharing reductions, including requesting an aggregate payment of what residents would otherwise have received in premium tax credits and cost-sharing reductions. States may also modify or replace the marketplaces and change or eliminate the individual and/or employer mandates (See Appendix A for more detail on these provisions).

The ACA includes guardrails limiting how 1332 waivers can be used by states. The current statutory language requires that state waiver applications must demonstrate that the innovation plan will:

  • Provide coverage that is at least as comprehensive in covered benefits;
  • Provide coverage that is at least as affordable (taking into account premiums and excessive cost sharing);
  • Provide coverage to at least a comparable number of state residents; and
  • Not increase the federal deficit.

Additionally, while states can submit ACA innovation waivers in conjunction with Medicaid waivers (under Sec. 1115 of the Social Security Act), innovation waivers cannot be used to change Medicaid program requirements.

In 2012, the Department of Health and Human Services (HHS) issued final regulations outlining the procedures for state innovation waiver applications. In 2015, HHS and the Treasury Department issued guidance on how they would interpret the law’s requirements for waivers to provide for comparable coverage, comprehensiveness, affordability, and budget neutrality. Unlike regulations and statutes, guidance is not legally-binding, and therefore, can be more easily changed by subsequent administrations.1  On his first day in office, President Trump issued an executive order suggesting that states would be given increased flexibility with regard to ACA implementation.

The 2015 guidance offered a fairly strict interpretation of the statutory guardrails for 1332 waivers. It emphasized the need to protect access to care and affordability for vulnerable populations, including the poor, the elderly, and those with high health needs and risks, noting that impacts on these populations would be considered in assessing whether any waiver met the statutory guidelines. The guidance also specified that coverage and affordability would be measured annually as well as over the life of the waiver and that comprehensiveness of coverage would evaluate coverage under all ten essential health benefit (EHB) categories and under any one EHB category. In calculating deficit neutrality, states cannot use savings from a separate 1115 waiver to offset spending under a 1332 waiver, and any changes in the cost of Medicaid that might result from a waiver would also be measured. Finally, with respect to waiver administration, the guidance noted that to the extent waiver programs envision new methods for determining eligibility for or delivering subsidies, states would need to build their own systems and could not rely on IRS or HHS to customize operations of healthcare.gov or the federal tax system to accommodate individual state programs.

State Innovation Waiver Activity

To date, 1332 waiver activity has been somewhat limited.  Six states (Alaska, California, Hawaii, Iowa, Minnesota, and Vermont) have submitted waiver applications, and only Hawaii’s waiver has been approved.  Waivers submitted by Hawaii and Vermont are fairly narrow in scope focusing on maintaining existing coverage requirements or enrollment procedures in the small group market. California’s proposal, which sought to expand coverage options for undocumented immigrants by allowing them to purchase coverage through the state’s marketplace without premium subsidies, was withdrawn following the November election. More notable are the waiver applications submitted by Alaska, Iowa, and Minnesota. Although they take different approaches, all three states are seeking to stabilize fragile individual markets. The Alaska waiver proposal is currently under review, but has received initial support from both the Obama and Trump administrations. Minnesota passed legislation to implement a market stabilization approach similar to Alaska’s, and submitted its waiver application at the end of May. Iowa’s waiver proposal includes a reinsurance program similar to the program adopted in Alaska, but also proposes broader changes to the individual market. Both Iowa and Minnesota have requested expedited review by the Trump administration to implement the proposed changes for 2018.

Below is a description of submitted waivers (Table 1).

Table 1:  Submitted 1332 Waivers
StateDescriptionStatus
AlaskaAllow federal pass through funding to partially finance the state’s reinsurance program. The waiver requests that funds the federal government would have paid in premium tax credits and cost sharing reductions to eligible marketplace enrollees had the reinsurance program not been in place be provided directly to the state to be used to finance the program.Under review
CaliforniaAllow undocumented immigrants to purchase coverage through the state’s marketplace, Covered California, without premium subsidies.Withdrawn
HawaiiRetain the employer coverage provisions currently in place through the state’s Prepaid Health Care Act, which was enacted in 1974. The law requires employers to provide more generous coverage than is required under the ACA. The state also sought to waive the requirement that the small business tax credits only be available through the SHOP.Approved

12/30/16

IowaCreate a Proposed Stopgap Measure plan that would be the only plan offered in the marketplace; replace advanced premium tax credits with flat premium subsidies based on age and income and eliminate cost-sharing subsidies; and establish a reinsurance program. Federal pass through funds would finance the new premium subsidies and the reinsurance program.Submitted

6/12/17

MinnesotaCreate a new state reinsurance program to be funded with a combination of federal pass through funds and state appropriations. The waiver requests that funds the federal government would have paid in premium tax credits and cost sharing reductions to eligible marketplace enrollees had the reinsurance program not been in place be provided directly to the state to be used to finance the program.Submitted

5/30/17

VermontContinue to allow small employers to enroll directly with health insurance carriers rather than through an online SHOP web portal. The state had adopted the direct enrollment approach for small businesses after the SHOP portal developed by the state failed to launch in 2014. Recent guidance from CMS delaying the required implementation of the SHOP portal until 2019 puts off for now the need for Vermont’s waiver.On hold

Looking Ahead

Many uncertainties remain over the future of 1332 waivers—whether the waiver authority will be changed legislatively, how the Trump administration will interpret the requirements, as well as how states will seek to use 1332 waivers to redesign their health coverage systems.  Questions include:

How would the BCRA change 1332 waiver authority?

The BCRA would make several consequential changes to the requirements for 1332 waivers and the process for submitting and approving state waiver applications. While the BCRA does not change the ACA provisions that states may seek to waive, it eliminates three of the four current law requirements that states must meet in order to receive approval.  These include the requirements that the waivers cover as many people, provide coverage that is at least as comprehensive and provide coverage that is at least as affordable. In place of these requirements, states would need only to include in their waiver applications a description of how the proposal would provide alternative ways to address these issues. At the same time, the BCRA would remove the Secretary’s discretion to deny waivers. Instead, the Secretary would be required to approve any waiver as long as it did not increase the federal deficit. The BCRA would also require the Secretary to establish an expedited review process and would extend the waiver period from five years to eight years and permit unlimited renewals.

These changes, if adopted, would have far-reaching consequences. Given the increased flexibility afforded states and the continued ability to receive pass through funding of any federal payments that would have been paid to state residents if the waiver had not been in place, it is expected more states would seeks waivers than under current law. The Congressional Budget Office (CBO) estimates that by 2026 about half the population would be in states receiving waivers and most states receiving waivers would use the waiver authority to reduce the scope of the EHBs. The impact of these waivers would vary from state to state, and would depend on many factors, including how the EHBs are redefined, whether pass through funds are used to lower premiums or cost sharing, and whether other measures are put in place to improve market stability. The CBO projects that, in general, premiums would be lower and out-of-pocket costs would be higher in states adopting waivers due to the narrowing of the scope of EHBs. While the CBO estimates little impact overall on the number of people with health insurance, it notes that some states may adopt policies that reduce the number of people with insurance. This situation would result if states provided more assistance to those who would have purchased coverage in the absence of any subsidies or if states reduced subsidies then used pass through funds for purposes unrelated to health coverage.

Earlier this year, the American Health Care Act (AHCA), passed by the House of Representatives on May 4, 2017, included a provision granting additional waiver authority to states to opt out of ACA market reforms, including the requirement to provide the ten EHBs and the prohibition on insurers charging people based on pre-existing conditions. While the requirement to cover EHBs can be waived under current 1332 authority, waiving the community rating provision is not permitted. Notably, the BCRA does not allow waivers of community rating. The House provision would have created a new waiver authority separate from the 1332 waiver authority and without the statutory conditions that now have to be met.

how Will the current administration interpret 1332 waiver authority?

Even if statutory changes to 1332 waivers are ultimately not adopted, the Trump administration can interpret 1332 waiver authority in ways that differ from the Obama administration. Although the nonbinding 2015 guidance remains in place, the administration can issue new guidance signaling a new direction in how 1332 waivers will be evaluated. Prior to the latest legislative developments, in March 2017, Secretary Price issued a letter to states reiterating the law’s key requirements for 1332 waivers and offering states assistance in the development and implementation of innovation programs.  The March letter especially encouraged states to design proposals that include high-risk pools or state-operated reinsurance programs as a strategy to lower health insurance premiums and promote market stability, and specifically highlighted the reinsurance program established in Alaska as a potential model for other states.

Notably, the March 2017 HHS letter reiterated the current statutory guardrails for 1332 waivers, but did not signal how the administration would interpret those guardrails. A more accommodating approach to assessing whether waivers meet the statutory requirements could provide states with more flexibility to make changes using the 1332 authority. As an example, the ACA requirement to maintain coverage for a comparable number of state residents, could be achieved if some residents with high-cost conditions lose coverage at the same time a larger, offsetting number of lower-cost residents gain coverage.

The Iowa waiver may pose a unique challenge for the Administration. Although Iowa is using the Section 1332 waiver process, it notes several times in the application that it is seeking “emergency regulatory relief” to respond to the current market situation. Citing the Trump administration’s executive order, the state requests an expedited review of the proposal and an exemption from compliance with the process requirements related to submission of 1332 waiver applications, including required data and analysis showing the 10-year budget impact and public process requirements, among others. While the BCRA would establish an expedited review process, current regulations do not provide for such a process. How the administration responds to this request may signal whether it views 1332 waivers as an appropriate mechanism for responding to the urgent situation a number of states are facing.

How will states use 1332 waivers in the future?

Few states have, to date, signaled an interest in using 1332 waivers to make broader changes to their health care markets. In response to a letter from Republican leaders in the House of Representatives sent to governors and insurance commissioners last December requesting their views on changes to the ACA broadly, and plans related to 1332 waivers specifically, only seven respondents out of 35 indicated they are or would consider pursuing a 1332 waiver.  Among these seven states, Kentucky, Minnesota, and Oklahoma, have authorizing legislation supporting the development of a 1332 waiver.2  However, recent insurer exits from several state marketplaces along with ongoing uncertainty over the future of the marketplaces may compel more states to turn to 1332 waivers to stabilize these markets.

The Alaska approach to stabilizing its individual insurance market may serve as a model to other states. The 1332 waiver proposal requests federal pass through funding to finance the state’s Alaska Reinsurance Program (ARP), established in 2017 in response to expected premium increases of 42% by the state’s single marketplace insurer. Due to lower premium increases (the actual premium increase in 2017 was 7%), the state estimates future savings to the federal government in reduced advanced premium tax credit payments (APTC). It proposes to use the federal savings, paid to the state in the form of pass through funding, to finance in part the ARP.

Following announcement of the Alaska waiver proposal, the Minnesota legislature enacted legislation to establish a reinsurance program, the Minnesota Premium Security Plan (MPSP), using Section 1332 authority. In its waiver proposal, Minnesota requests federal pass through funding from APTC savings to finance the reinsurance program. The state targets $271 million in funding for the MPSP in 2018 and anticipates a 20% reduction in average premiums.

In contrast to Alaska and Minnesota, which would continue to deliver coverage and subsidies as outlined in the ACA, Iowa is seeking to alter several ACA requirements in more substantive ways. Facing the possibility of having no insurers participate in the marketplace in 2018, the state proposes several changes to the insurance marketplace, including:

  • Creating a single Proposed Stopgap Measure (PSM) plan that would be the only plan offered by insurers in the marketplace; the PSM would provide coverage similar to that offered under the standard silver marketplace plan today;
  • Replacing the existing APTCs with flat premium subsidies based on age and income and eliminating the cost-sharing reductions; and
  • Establishing a reinsurance program to protect insurers from high-cost cases.

The state is requesting federal pass through funding equal to what the federal government would have paid in APTCs and cost-sharing reductions in 2018. It estimates the cost of the premium subsidies to be $220 million, leaving $80 million to fund the reinsurance program.

Looking further down the road, task forces in Minnesota and Oklahoma have issued reports providing recommendations for using 1332 waivers to develop alternative approaches to ACA coverage requirements. The Minnesota Task Force recommends broadening the state’s Basic Health Program, MinnesotaCare, to serve as a public option in the state’s marketplace. The Oklahoma 1332 Waiver Task Force report envisions using waiver authority to achieve greater state control over the determination of essential health benefits, health plan design, and enrollment procedures as well as changes to the eligibility for and structure of premium subsidies. Beyond these specific proposals, states might seek waivers to deliver coverage through products or programs, such as short term, non-renewable policies, or health sharing ministries that are not subject to ACA requirements on insurers to guarantee issue coverage, community rate premiums, and cover pre-existing conditions. While these types of sweeping changes would still need to meet the conditions for 1332 waivers laid out in current law, a looser interpretation of these guardrails may permit approval of some of these changes.

As discussed above, passage of the BCRA would likely lead to more states developing waiver proposals. In addition, under the BCRA, states with submitted waivers under consideration as of the date of enactment could choose to have their waivers evaluated under the new BCRA rules. However, aside from the expectation that more states would seek to use 1332 waivers to redefine the EHBs, it is difficult to anticipate what other changes they might pursue.

Will states be granted more flexibility to use 1332 and 1115 waivers in combination?

The 2015 guidance from the Obama administration clearly stated that while a state could submit a coordinated 1332 and 1115 waiver application, the two waivers would be evaluated independently. However, the Trump administration could relax these standards and permit the waivers to be considered in concert. Joint review of 1332 and 1115 waivers would likely provide states with enhanced flexibility around deficit neutrality, allowing savings in one program to offset spending on another. The extent to which states may be interested in developing combined 1332 and 1115 “super waivers” remains to be seen. However, a recent letter from Secretary Price to state Governors signaling support for using 1115 waivers to “align Medicaid and private insurance policies for non-disabled adults” may encourage states to pursue combined waivers to achieve broader changes in their health coverage systems. Passage of the BCRA may further encourage states to consider developing combined waivers.

Appendix

Appendix 1: Descriptions of ACA Provisions That May Be Waived under Section 1332 Authority
ACA ProvisionDescription
Individual MandateRequirement for individuals to have minimum essential health insurance coverage or pay a tax penalty.
Large employer mandateRequirement for firms with more than 50 employees to provide affordable health benefits to full time workers and their dependents or pay a tax penalty.
Qualified health plan (QHP) standardsIncludes requirements that health plans offered through the exchange must cover 10 essential health benefits, limit annual cost sharing for covered benefits, and be offered with a variety of cost sharing levels that correspond to metal tiers (bronze, silver, gold, platinum).  These standards include other cost sharing rules (including requirement for non-network emergency services to be covered at in-network coinsurance levels), and the option for states to prohibit abortion coverage under QHPs offered through the Exchange.
Standards for health insurance exchangesIncludes requirements for the establishment of state exchanges that operate web sites displaying plan choices, provide navigator and call center assistance, offer annual open enrollment periods, determine eligibility for financial assistance, and certify that QHPs meet requirements for network adequacy, fair marketing practices, and other standards.
QHP cost sharing subsidiesRequirement that insurers offering exchange plans offer enhanced silver plans, with lower deductibles and other cost sharing, for eligible enrollees with income up to 250% of the poverty level.
QHP premium subsidiesRequirement to provide sliding scale premium tax credits for eligible QHP enrollees with income between 100% and 400% of the poverty level.  The tax credit amount is based on the cost of the second lowest cost silver plan in the Exchange.  Subsidies are only payable for QHP coverage enrolled through an Exchange. The ACA premium tax credit provisions also require that eligible individuals must be citizens or lawfully present residents of the US and cannot be eligible for other minimum essential coverage.
Subsidy pass throughAllows states to request to have premium tax credit and cost-sharing subsidies, that residents would otherwise have received, instead provided in an aggregate amount to be used to implement the state waiver.

Endnotes

  1. US Government Accountability Office, “Regulatory Guidance Processes: Agencies Could Benefit from Stronger Internal Control Practices,” September 23, 2015, available at http://www.gao.gov/assets/680/672687.pdf ↩︎
  2. National Conference of State Legislatures, Innovation Waivers: State Options and Legislation Related to the ACA Health Law, April 3, 2017.  Available at http://www.ncsl.org/research/health/state-roles-using-1332-health-waivers.aspx. ↩︎

Medicaid’s Role in Kentucky

Published: Jul 5, 2017

Medicaid in Kentucky

  • More than 1.2 million people in Kentucky are covered by Medicaid (22% of the total population). While seven in ten (74%) enrollees are children and adults, more than half (53%) of the state’s Medicaid spending is for the elderly and people with disabilities.
  • 194,100 (25%) of Kentucky’s Medicare enrollees are also covered by Medicaid, accounting for nearly one-third (31%) of Medicaid spending.
  • 40% of all children in Kentucky are covered by Medicaid, including 52% of children with special health care needs.
  • 19,149 nursing home residents in Kentucky (67% of total nursing home residents) are covered by Medicaid and 49% of Medicaid long-term care spending in Kentucky is for nursing home care. Medicare beneficiaries rely on Medicaid for assistance with services not covered by Medicare, particularly long-term care.
  • Nearly one-half (49%) of people in Kentucky live in rural areas, which is higher than the national average of 19%. People who live in rural areas are more likely to be covered by Medicaid.
  • 91% of Medicaid enrollees in Kentucky are in managed care. Since Kentucky has already transitioned most enrollees to managed care, it would not be able to recoup the one-time savings that some states experience during that transition.
  • Kentucky has a low per capita income and therefore a relatively high federal Medicaid matching assistance percentage (FMAP) at 70.5%. For every $1 spent by the state, the Federal government matches $2.39. Nearly two-thirds (64%) of all federal funds Kentucky receives are for Medicaid. In Calendar Year 2017, the federal match rate for the Medicaid expansion population is 95%.

What is at Risk under a Per Capita Cap?

  • Capping Medicaid funding would reduce the federal assistance for Kentucky to maintain its current Medicaid program.
    • Under the Better Care Reconciliation Act of 2017 (BCRA), to maintain its current Medicaid program, Kentucky would have to make up $11.6 billion in loss of federal funds between 2020-2029, including $6.6 billion for the phase-out of the enhanced match for the ACA expansion and $5 billion for the per enrollee cap on all groups.
    • If Kentucky dropped the Medicaid expansion in response to the loss of enhanced federal financing, the state would forgo an additional $29.9 billion over the 2020-2029 period, and by 2029, 557,000 Kentuckians estimated to be covered in the expansion group would lose Medicaid coverage.
  • Capping federal Medicaid funding could put Medicaid programs designed to improve quality of life and access to new therapies and long-term care for people with disabilities at risk. 17% of Kentucky’s non-institutionalized population reported a disability, the fourth highest state reported percentage compared to a U.S. average of 13%.
  • Reducing federal funds through a per capita cap or block grant would limit Kentucky’s ability to respond to public health crises such as the opioid epidemic, HIV, or Zika.
    • Kentucky ranks 6th for the highest rate of opioid deaths at 21 deaths per 100,000 population in 2015.
    • Kentucky ranks 45th in overall health status. In addition, 23% of Kentucky’s population live in a health professional shortage area for primary care and have limited access to the services they need while 12% of adults report not seeing a doctor due to cost.
Poll Finding

Data Note: Modestly Strong but Malleable Support for Single-Payer Health Care

Authors: Liz Hamel, Bryan Wu, and Mollyann Brodie
Published: Jul 5, 2017

Findings

As Congress continues to negotiate a repeal and replacement of the Affordable Care Act (ACA), some observers have suggested that if Republicans are unable to pass a replacement plan, it will create momentum for Democrats to push the country towards a single-payer health care system. This section of the latest Kaiser Health Tracking poll finds that while there has been a modest increase in the public’s level of support for single-payer in recent years, a substantial share of the public remains opposed to such a plan, and opinions are quite malleable when presented with the types of arguments that would be likely to arise during a national debate.

The June Kaiser Health Tracking poll finds that a slim majority of the public (53 percent) now favors a single-payer health plan in which all Americans would get their insurance from a single government plan, while just over four in ten (43 percent) are opposed. This is somewhat higher than the level of support found in a variety of Kaiser polls with slight variations in question wording dating back to 1998. From 1998 through 2004,  roughly four in ten supported a national health plan, while about half were opposed. In polling from 2008-2009, the period leading up to passage of the ACA, the public was more evenly divided, with about half in favor of a single-payer plan and half opposed.

Figure 1: Modest Increase in Support for Single Payer Health Care in 2017

Independents May Be Driving Slight Shift in Overall Attitudes

Not surprisingly, there are partisan divisions in how the public feels about single-payer health care, with a majority of Democrats (64 percent) and just over half independents (55 percent) in favor and a majority of Republicans (67 percent) opposed. However, the recent increase in support for single-payer has largely been driven by an increase among independents. Among this group, on average in 2008-2009, 42 percent said they would favor a single-payer plan, a share that has increased to a majority (55 percent) in the most recent tracking poll.

Figure 2: Increase in Support for Single-Payer Driven by Independents

“Medicare-for-all” vs. “Single-Payer”

Language often matters in framing questions about health policy. For example, the February 2016 Kaiser Health Tracking Poll found that when terms were tested on their own, outside the definition of a national health plan that would cover all Americans, the public was more likely to react favorably to the term “Medicare-for-all” (64 percent favorable) than “single-payer health insurance system” (44 percent favorable). However, the current poll finds that when the plan is defined as one in which all Americans would get their insurance from a single government plan, support is similar when the plan was referred to as “Medicare-for-all” (57 percent in favor) as when it was referred to as “single payer” (53 percent).

Figure 3: Majority Favors National Health Plan Regardless of a “Single-Payer” or “Medicare-for-All” Label

Support for Single-Payer is Malleable When Given Opposing Arguments

The poll finds the public’s attitudes on single-payer are quite malleable

While a slim majority favors the idea of a national health plan at the outset, a prolonged national debate over making such a dramatic change to the U.S. health care system would likely result in the public being exposed to multiple messages for and against such a plan. The poll finds the public’s attitudes on single-payer are quite malleable, and some people could be convinced to change their position after hearing typical pro and con arguments that might come up in a national debate. For example, when those who initially say they favor a single-payer or Medicare-for-all plan are asked how they would feel if they heard that such a plan would give the government too much control over health care, about four in ten (21 percent of the public overall) say they would change their mind and would now oppose the plan, pushing total opposition up to 62 percent. Similarly, when this group is told such a plan would require many Americans to pay more in taxes or that it would eliminate or replace the Affordable Care Act, total opposition increases to 60 percent and 53 percent, respectively.

Figure 4: Arguments Against Single Payer Plan Sway Some Initial Supporters

Figure 5: Arguments in Favor of Single Payer Plan Sway Some Initial Opponents

On the other side, when those who initially oppose a single-payer or Medicare-for-all plan are asked how they would feel if they heard such a plan would reduce health insurance administrative costs, four in ten (17 percent of the public overall) change their position and say they would now favor the plan, bringing total support to 72 percent. Similarly, when this group is told such a plan would ensure that all Americans have health insurance as a basic right or that it would reduce the role of private health insurance companies in health care, total support increases to 71 percent and 65 percent, respectively.

Methodology

This Kaiser Health Tracking Poll was designed and analyzed by public opinion researchers at the Kaiser Family Foundation (KFF). The survey was conducted June 14-19, 2017, among a nationally representative random digit dial telephone sample of 1,208 adults ages 18 and older, living in the United States, including Alaska and Hawaii (note: persons without a telephone could not be included in the random selection process). Computer-assisted telephone interviews conducted by landline (427) and cell phone (781, including 483 who had no landline telephone) were carried out in English and Spanish by SSRS of Glen Mills, PA. Both the random digit dial landline and cell phone samples were provided by Marketing Systems Group (MSG) of Horsham, PA. For the landline sample, respondents were selected by asking for the youngest adult male or female currently at home based on a random rotation. If no one of that gender was available, interviewers asked to speak with the youngest adult of the opposite gender. For the cell phone sample, interviews were conducted with the adult who answered the phone. KFF paid for all costs associated with the survey.

 

The combined landline and cell phone sample was weighted to balance the sample demographics to match estimates for the national population using data from the Census Bureau’s 2015 American Community Survey (ACS) on sex, age, education, race, Hispanic origin, and region along with data from the 2010 Census on population density. The sample was also weighted to match current patterns of telephone use using data from the July-December 2016 National Health Interview Survey. The weight takes into account the fact that respondents with both a landline and cell phone have a higher probability of selection in the combined sample and also adjusts for the household size for the landline sample. All statistical tests of significance account for the effect of weighting.

 

The margin of sampling error including the design effect for the full sample is plus or minus 3 percentage points. Numbers of respondents and margins of sampling error for key subgroups are shown in the table below. For results based on other subgroups, the margin of sampling error may be higher. Sample sizes and margins of sampling error for other subgroups are available by request. Note that sampling error is only one of many potential sources of error in this or any other public opinion poll. Kaiser Family Foundation public opinion and survey research is a charter member of the Transparency Initiative of the American Association for Public Opinion Research.

GroupN (unweighted)M.O.S.E.
Total1208±3 percentage points
Party Identification
   Democrats385±6 percentage points
   Republicans311±7 percentage points
   Independents407±6 percentage points
Trump Approval
   Approve of President Trump487±5 percentage points
   Disapprove of President Trump672±4 percentage points
Half Sample
   Sample A597±5 percentage points
   Sample B611±5 percentage points

Association Health Plans for Small Groups and Self-Employed Individuals under the Better Care Reconciliation Act

Authors: Karen Pollitz and Gary Claxton
Published: Jun 30, 2017

The Senate Better Care Reconciliation Act (BCRA), a proposal to repeal and replace the Affordable Care Act (ACA), includes a provision to create new association health plan options for small employers and self-employed individuals.  These so-called “small business health plans” (SBHPs) would be considered part of the large group market, which has different rules than the small group market.  In particular, the ACA requirement that premiums cannot vary based on health status does not apply in the large group market.  Neither does the requirement for policies to cover ten categories of essential health benefits.  If enacted, this provision would considerably disrupt the small group market because small employers could seek lower rates or less comprehensive coverage in an SBHP when their employees are healthy, but theoretically move back to regular small group market plans if an employee becomes ill or if the group wants more comprehensive benefits.  This type of adverse selection could result in significant premium increases and instability in the small group market.  The provision could disrupt the non-group market in a similar manner because it would permit self-employed individuals (in states that choose to regulate very small groups of one as small employers) to join SBHPs when they are healthy or want few benefits, but move back to regular non-group coverage if their health or circumstances change.

Background

Under the BCRA, new association health plan options would be available to small employers and to the self-employed in certain states.  The bill amends the federal Employee Retirement Income Security Act of 1974 (ERISA) to establish the following rules, standards, and definitions for small business health plans:

Large group market rules apply.  A SBHP is defined as a fully insured group health plan, sponsored by a certified entity, and offered by a health insurer in the large group market.  Several key requirements for small group market insurers do not apply in the large group market.  Insurers in the small group market cannot consider the health or claims of a small group’s employees, and must cover the 10 categories of essential health benefits (though states could waive that requirement under the BCRA).  These rules do not apply in the large group market.  The BCRA sets no standards for SBHPs in terms of what benefits must be covered or how premiums would be set for small firms that want to participate.  For example, the insurer covering the SBHP could medically screen small firms applying, and charge relatively low rates for healthy groups but very high rates for groups with sick employees.  In addition, the insurer could consider a group’s health and claims at renewal and give them considerably higher rate increases than other groups.  The same practices could apply to self-employed individuals.  Small businesses could join and enroll in SBHPs, as could self-employed individuals with no other participating employees (i.e., groups of one) in states that choose to regulate such arrangements as small group health insurance.

Federally regulated.  The sponsor of a SBHP must be certified by the Secretary of Labor.  Federal certification is deemed approved after 90 days unless the Secretary denies the application for cause.  To do business in a state, a certified SBHP must provide written notice of its certification to the insurance regulator in every state in which it will operate.  The federal government also has enforcement authority over the business practices of SBHPs.  The bill includes broad preemption language stating that federal standards “shall supersede any and all State laws insofar as they may now or hereafter preclude a health insurance issuer from offering health insurance coverage in connection with a [certified] small business health plan.”  This appears to prohibit a state from requiring that a SBHP be regulated as small group coverage and may preempt other state insurance rules, as well.  The Secretary is required to coordinate with the State in which a particular SBHP is domiciled regarding the exercise of federal authority to certify a SBHP and enforce federal standards.  The Secretary is also required to ensure that only one domicile state will be recognized with respect to any particular SBHP. The bill does not provide that the rules of the domicile state will supersede the laws of other states.

Nondiscrimination standards.  The entity that sponsors a SBHP must be organized for a purpose other than providing health benefits, although it appears that providing health benefits could be the primary purpose of the organization.  For example, a sponsoring entity could be a bona fide trade association, organized primarily for professional or industry-related purposes.  Or it could adopt broadly inclusive membership standards to permit virtually any small group or individual to join.  In addition, the sponsor of the SBHP is prohibited from conditioning membership on the size of its member groups.  The bill does not prohibit a sponsoring entity from conditioning membership on the health status of small businesses; a nondiscrimination provision in the bill states that a requirement not to discriminate against employers and eligible employees is satisfied if the SBHP makes information about all coverage options readily available to any eligible small employer.

Under the BCRA, the SBHP provisions become effective 1 year after the date of enactment and the Secretary of Labor is required to issue implementing regulations no later than 6 months after the date of enactment.

Effects on Small Employers, Self-Employed Persons, and Traditional Markets

The establishment of small business health plans could affect the way health insurance operates for small employers, and could affect the entire small group health insurance market, in several ways:

Premium instability for small businesses and self-employed individuals – Because SBHPs would be able to set premiums for small firm and self-employed members  based on health and risk status, it could be possible for SBHP members to obtain lower premiums for coverage as long as their workers and their family members are healthy.  However, in the event a covered individual becomes seriously ill or injured, nothing under federal law would prevent the SBHP insurer from raising the premium for that small employer or self-employed individual, even to unaffordable levels.  The affected small employer or self-employed person might then try to seek coverage in the traditional small group market or non-group market, where health status rating is prohibited, though as discussed below, premiums there could also become unaffordable.

Increased premiums in traditional small group and non-group markets – Selection of coverage options, based on which market rules are most advantageous at the time, is sometimes called adverse selection.  The asymmetry of rules applied to SBHPs and the traditional small group market would tend to segment small employers based on risk, steering more expensive groups to the traditional market and driving up community rated premiums.  This could lead to premiums in the traditional small group market becoming much higher for employers who need to seek coverage there.  Eventually, the impact of selection could force insurers to stop offering traditional small group coverage because they could not predict the risk of potential enrollees.  The SBHPs would also be open to self-employed individuals in states that permit very small groups of one to buy small group coverage, as 14 states did prior to the ACA.  In 2014, one in five marketplace consumers was a small business owner or self-employed.  As a result, adverse selection from SBHPs could also affect premiums in the individual market.

Lack of clear regulatory authority – The BCRA requires that SBHPs must be fully insured group health plans, suggesting that states would continue to have regulatory authority over the insurance product itself, for example, to apply and enforce state standards related to risk based capital and solvency.  However, preemption language in the bill is broad, and does not specify which state laws could still be enforced, including for example, laws relating to qualifications of SBHP sponsoring entities, or the covered benefits or rating practices under such plans.  At a minimum, it seems legal challenges could arise if states would try to regulate SBHPs more closely.  In the past, in response to federal proposals to create new small group insurance arrangements that would not be subject to all state small group market regulation, the National Association of Insurance Commissioners, the American Academy of Actuaries, and others have raised concerns that market fragmentation and harm to small businesses and consumers could result.

Discussion

The Senate SBHP proposal sets up competing and unequal regulatory regimes for small group health insurance that could undermine the traditional market.  It also would potentially increase non-group premiums because healthy self-employed people could leave that market while people with health problems would not qualify for SBHP rates.  In addition, small groups and the self-employed could choose less comprehensive policies while they are healthy, but move to more comprehensive plans if their health changed (if they remain available).  Such adverse selection could drive up the cost of coverage in these markets, making health insurance less affordable for sick individuals and small groups who would have to rely on them, and potentially not available at all.

Poll Finding

Kaiser Health Tracking Poll – June 2017: Women’s Health

Authors: Ashley Kirzinger, Bianca DiJulio, Liz Hamel, Bryan Wu, and Mollyann Brodie
Published: Jun 30, 2017

Findings

The Affordable Care Act (ACA) requires employers to cover the full cost of prescription birth control as part of their health insurance plans. This section of the June Kaiser Health Tracking Poll finds that a majority of the public (68 percent) support the requirement for private health insurance plans to cover the full cost of birth control. This includes a majority of Democrats (81 percent) and independents (68 percent), as well as 54 percent of Republicans.

Figure 1: Majorities Across Parties Support ACA’s Requirement for Birth Control Coverage

Exemptions to Birth Control Requirement for Religious or Moral Reasons

In 2014, the Supreme Court of the United States issued their decision in Hobby Lobby v. Burwell which established that “closely held” for-profit corporations could be exempt from the birth control requirement if their owners had religious objections. Recently, there has been a suggestion that the Trump administration could expand this exemption to include a broader group of employers who object to birth control for either religious or moral reasons. Overall, larger shares of the public oppose rather than support allowing employers to get an exemption from covering the full cost of prescription birth control for either religious (53 percent vs. 42 percent) or moral (55 percent vs. 38 percent) reasons. There is no difference in attitudes depending on whether the exemption is for “religious” or “moral” reasons.

Figure 2: Public Opposes Allowing Employers to Get Exemption from Birth Control Coverage for Religious or Moral Objections

There are strong partisan differences on this issue. A majority of Democrats oppose allowing employers to get exemptions for religious reasons (65 percent) and moral reasons (76 percent). On the other hand, more than half of Republicans support allowing employers to get an exemption if they object to birth control for religious reasons (54 percent) or moral reasons (58 percent). Independents are more divided than partisans but lean toward opposition with about half opposing exemptions to the requirement for religious (52 percent) or moral (55 percent) reasons.

Figure 3: Parties Divided on Religious and Moral Exemptions for Mandated Birth Control Coverage

Public Divided on Who Covers Birth Control Costs if Employer Gets Exemption

If an employer receives an exemption from covering the cost of prescription birth control due to either religious or moral reasons, the public is divided on who should be responsible for picking up those costs with similar shares saying it is the responsibility of the insurance company (40 percent) as say it is the responsibility of the woman herself (39 percent). Fewer (16 percent) say it is the government’s responsibility.

Figure 4: Public Divided on Whether the Insurance Company or the Woman Herself Should Pay for Birth Control Coverage if Employer Objects

Differences by Gender Dependent on Party Identification

Majorities of female Democrats and female independents say that if an employer gets an exemption from covering the cost of birth control it should be the responsibility of the insurance company to pay (57 percent and 54 percent, respectively) while six in ten female Republicans (62 percent) say it should be the responsibility of the woman herself. Among men, a majority of male Republicans (65 percent) say it is the responsibility of the woman herself, while male Democrats and male independents are more divided. Half of male independents say it is the responsibility of the woman herself while half of male Democrats (48 percent) say it is the responsibility of the insurance company.

Table 1: Perceptions of Responsibility Driven by Gender, Party Identification
Percent who say if a woman works for a company that does not pay for birth control coverage, the following should be  responsible to pay: MaleFemale
DemIndRepDemIndRep
The insurance company48%32%25%57%54%24%
The woman herself255065143162
The government22148251310
None of these/Someone else (vol.)/Don’t know/Refused552424

Methodology

This Kaiser Health Tracking Poll was designed and analyzed by public opinion researchers at the Kaiser Family Foundation (KFF). The survey was conducted June 14-19, 2017, among a nationally representative random digit dial telephone sample of 1,208 adults ages 18 and older, living in the United States, including Alaska and Hawaii (note: persons without a telephone could not be included in the random selection process). Computer-assisted telephone interviews conducted by landline (427) and cell phone (781, including 483 who had no landline telephone) were carried out in English and Spanish by SSRS of Glen Mills, PA. Both the random digit dial landline and cell phone samples were provided by Marketing Systems Group (MSG) of Horsham, PA. For the landline sample, respondents were selected by asking for the youngest adult male or female currently at home based on a random rotation. If no one of that gender was available, interviewers asked to speak with the youngest adult of the opposite gender. For the cell phone sample, interviews were conducted with the adult who answered the phone. KFF paid for all costs associated with the survey.

The combined landline and cell phone sample was weighted to balance the sample demographics to match estimates for the national population using data from the Census Bureau’s 2015 American Community Survey (ACS) on sex, age, education, race, Hispanic origin, and region along with data from the 2010 Census on population density. The sample was also weighted to match current patterns of telephone use using data from the July-December 2016 National Health Interview Survey. The weight takes into account the fact that respondents with both a landline and cell phone have a higher probability of selection in the combined sample and also adjusts for the household size for the landline sample. All statistical tests of significance account for the effect of weighting.

The margin of sampling error including the design effect for the full sample is plus or minus 3 percentage points. Numbers of respondents and margins of sampling error for key subgroups are shown in the table below. For results based on other subgroups, the margin of sampling error may be higher. Sample sizes and margins of sampling error for other subgroups are available by request. Note that sampling error is only one of many potential sources of error in this or any other public opinion poll. Kaiser Family Foundation public opinion and survey research is a charter member of the Transparency Initiative of the American Association for Public Opinion Research.

GroupN (unweighted)M.O.S.E.
Total1208±3 percentage points
Party Identification
   Democrats385±6 percentage points
   Republicans311±7 percentage points
   Independents407±6 percentage points
Trump Approval
   Approve of President Trump487±5 percentage points
   Disapprove of President Trump672±4 percentage points
Half Sample
   Sample A597±5 percentage points
   Sample B611±5 percentage points