The early story of the Affordable Care Act can be challenging to generalize sometimes because so much of it depends on decisions made at the state level — both before and during implementation of the ACA. Did states defer to a federal-run exchange, or did they set up their own? In the states that built their own insurance marketplaces, did the Web site actually work? Did they expand Medicaid programs to low-income adults? Did they temporarily let people keep their old health plans?
Those decisions made across 50 states and the District of Columbia came with measurable consequences, according to new research from the Brookings Institution, published as part of the twice-annual Brookings Papers on Economic Activity. The paper examines coverage levels, insurance premiums and insurers' costs in the individual health insurance market during the first two quarters of the coverage expansion that took effect in January, and it tries to answer whether healthier people are signing up for coverage as hoped.
In the five states most resistant to Obamacare implementation — Alabama, Missouri, Oklahoma, Texas and Wyoming — those purchasing their own health insurance were $245 worse off on an annual basis when compared to enrollees in all other states' individual markets, according to findings from Yale University health economist Amanda Kowalski. These "direct enforcement" states, as Kowalski labels them, saw smaller coverage increases over this time. Even though premiums in these states started out lower, they almost caught up by the end of the second quarter of 2014. And though the average cost per enrollee started much lower in direct enforcement states, the costs exceeded all other states by the end of the second quarter.
The results indicate that these states saw a sicker mix of enrollees under the ACA, Kowalwski writes. This could reflect that these Obamacare-resistant states didn't have a particularly strong effort to sign people up for coverage.
Interestingly, states that tried setting up their own exchanges and struggled to do so had bigger problem, the analysis finds. Kowalski here looks at trends in the six glitchy states — Hawaii, Maryland, Massachusetts, Minnesota, Nevada and Oregon — compared to states that built better-functioning exchanges. She finds that average costs per enrollee in the well-functioning exchanges increased in the second quarter of 2014, though the increase was below trend. This suggests those states were able to pull in healthier enrollees. Meanwhile, the glitchy exchange states saw much larger cost increases, so getting healthier people into the insurance pool was a struggle.
Enrollees in states that took a more "passive" approach to the law — refusing the main elements of the coverage expansion without ceding direct enforcement to the federal government — were $330 better off annually compared to those in the six states experiencing the worst technical problems. Meanwhile, Kowalski calculates that enrollees in states with successful exchanges were $423 better off than those in the "passive" states, meaning the cost of a struggling state-run exchange amounted to a $750 difference per participant.
Then there's the decision by the Obama administration, following outcry over the cancellation of health plans, allowing states to decide whether people could temporarily keep their old health plans that don't comply with ACA. There's evidence suggesting that individual enrollees in states that allowed people to keep their plans were $18 per month worse off, Kowalski writes, but she said further analysis is needed.
Kowalski said she expects these trends to continue through 2014, but implementation of the ACA is continuously evolving. The glitchy exchange states have had time to repair or replace their technology, so you'd imagine that the enrollment experience will be better this coming year. And if the changing politics of the ACA mean states eventually take a greater role in overseeing the law, then these differences may shrink.