By Erin Mershon, CQ Roll Call

August 18, 2016 -- Latinos and people with incomes below the federal poverty level are among the populations most likely to lack health insurance coverage six years after the 2010 health overhaul, according to a Commonwealth Fund study released Thursday.

About a third of the country's remaining uninsured adults would qualify for Medicaid if their states had expanded it, the study also found.

The report paints a picture of the 24 million adults who still lack coverage, after about 20 million have gained it either through Medicaid expansion or through the insurance exchanges set up under the law. About 40 percent are Latino and a similar share have incomes below the federal poverty level. A full 88 percent have incomes below 138 percent of the poverty level, the figure used to determine eligibility for Medicaid expansion in the 32 states, including the District of Columbia, that implemented it.

The estimates underscore that affordability remains a challenge for the Obama administration as it looks to cement its signature legislative accomplishment. Republicans and other critics have railed against the proposed premium hikes for plans sold on the exchanges that in some states are in the double digits.

Awareness is also a problem. About 38 percent of the remaining uninsured have never heard of the exchanges, compared with just 21 percent in the overall population. Of those who had heard of the marketplaces, most—about 64 percent—said they couldn't find a plan they could afford.

About 15 percent of the remaining uninsured are undocumented immigrants and thus unable to sign up for coverage because the law doesn't allow it, the report notes.

A separate study from the Kaiser Family Foundation, also released Thursday, painted a rosier picture of enrollment efforts specifically in California, where the foundation conducted a four-year tracking study on about 2,000 people who were uninsured before the health law took effect. About 72 percent of the state's previously uninsured citizens have now gained coverage, Kaiser found.

Like Commonwealth, Kaiser found that about 47 percent of the remaining uninsured reported cost as the number one reason they do not have coverage. It also found that Latinos were disproportionately likely to lack coverage.

By Erin Mershon, CQ Roll Call

August 16, 2016 -- The big health insurer Aetna Inc. announced late Monday it will largely withdraw from state marketplaces set up under the Affordable Care Act, citing financial losses it attributes in part to a controversial premium stabilization program the law established.

Aetna's exodus from 11 state-based exchanges comes after a more dramatic 30-state withdrawal by UnitedHealth, the nation's largest health insurer. The departures will reduce the market competition that authors of the health law envisioned to keep premiums low and care affordable.

The decisions moreover underscore just how volatile the individual insurance market remains, three years after the exchanges were launched. Major health plans including Anthem Inc. and Humana Inc. have said that they, too, expect losses but have not said they plan to withdraw. Other insurers such as Cigna Corp. and Medicaid-focused plans like Molina Healthcare and Centene Corp. have said they are profiting from that part of their business. Earlier this year, even Aetna said it saw participation as a good investment.

"We will continue to evaluate our participation in individual public exchanges while gaining additional insight from the counties where we will maintain our presence, and may expand our footprint in the future should there be meaningful exchange-related policy improvements," Aetna Chief Executive Officer Mark T. Bertolini said Monday.

Bertolini said Aetna lost $200 million in market for the second quarter of 2016, bringing total losses since January 2014 to $430 million. The losses were attributable to imbalance in risk pools, in which health plans try to balance younger, healthy enrollees who are less expensive to cover with older, sicker ones. Executives said people on the exchanges were sicker and in need of more care than they expected.

But they also blasted the Obama administration's risk adjustment formula, which redistributes funds from plans with low-cost enrollees to those with higher costs. A broad coalition of insurers, including nonprofit co-op plans created by the health law and other smaller and newer insurers, have cited the risk adjustment program as a major deterrent to new market entrants. Many of the co-ops also cited the risk adjustment formula as a major reason for their financial losses.

Federal health officials have said they plan to overhaul the risk adjustment program as soon as next year.

Kevin Counihan, chief executive officer of the HealthCare.gov federal marketplace, said in a statement that Aetna's exit "does not change the fundamental fact that the health insurance marketplace will continue to bring quality coverage to millions of Americans next year."

"It’s no surprise that companies are adapting at different rates to a market where they compete for business on cost and quality rather than by denying coverage to people with preexisting conditions," he said.

Aetna is battling the Obama administration's antitrust officials over its attempt to buy Humana. The Justice Department blocked the deal last month, and Aetna is suing to proceed with the merger in a case that will be heard in December.

Congressional Republicans, who have blasted the administration for problems with competition and affordability on the exchanges, said Aetna's exit is a sign the law is collapsing.

"Aetna’s exit isn’t the beginning and it won’t be the end, but it is another unmistakable sign of Obamacare’s slow-motion death spiral," said Sen. Ben Sasse (R-Neb.). With "rotten choices and costs, Obamacare’s collapse is crushing American families."

By Erin Mershon, CQ Roll Call

August 17, 2016 -- Aetna is pushing back on reports that it linked its participation in the exchanges established by the 2010 health law to the Obama administration's review of its merger with Humana.

The company had threatened in a July letter to the Department of Justice (DOJ) that if the administration blocked the $37 billion proposed merger, Aetna would have to withdraw from some exchanges to "steward its financial health"—rather than expanding to five additional states, as it had planned. The letter was first reported by the Huffington Post. Aetna's announced exit from exchanges in 11 states follows a major exodus by UnitedHealth Group, the nation's largest insurer, from more than 30 of the state exchanges established by the health law.

"If the DOJ sues to [block] the transaction, we will immediately take action to reduce our 2017 exchange footprint," CEO Mark Bertolini wrote in the July letter. The DOJ sued to block the Aetna–Humana deal, as well as a rival $48 billion insurance merger between Anthem and Cigna, earlier this month. The two cases will be tried separately starting later this year.

But the company said in a statement to CQ Roll Call Wednesday that executives made their decision to withdraw based on financial losses Aetna incurred in the second quarter of this year, not on the DOJ's decision to block the deal.

"That deterioration [in profits], and not the DOJ challenge to our Humana transaction, is ultimately what drove us to announce the narrowing of our public exchange presence for the 2017 plan year," spokesman T.J. Crawford said.

Encouraging insurers to participate on the exchanges is a major goal for the Obama administration, as competition among insurers is the main mechanism designed to keep premiums and other coverage costs in check. United and Aetna both cited millions in financial losses to justify their departures from the individual market.

Fellow insurance giant Anthem Inc. also had linked its exchange participation with its own merger approval, albeit in a more positive way. Executives said on an earnings call earlier this month that acquiring Cigna Corp. would enable the company to "continue its commitment to the public exchanges" set up by the health law. As yet, neither Anthem nor Cigna has publicly announced major plans to withdraw from the exchanges in 2017, despite reporting some financial losses.

Aetna's Crawford added that the July letter was written in response to a request from DOJ. It explains that the DOJ's decision to block the deal would have a negative financial impact on many different segments of its business.

"We indicated that there would indeed be an impact, which should not come as a surprise given a loss of deal synergies coupled with a potential break-up fee would raise further questions about sustaining a position in a business where we have yet to break even," he said.

If the merger is ultimately blocked after the trial, the company would follow through with the plans to withdraw that it outlined in the letter, he said.

By Erin Mershon, CQ Roll Call

August 19, 2016 -- Nearly 36 percent of the country could have just one or no insurers participating in the local health insurance marketplace, according to a new Avalere analysis released Friday.

In 2016, only 4 percent of the regions used for setting payment rates had one or fewer participating carriers.

More than half of the country would have two or fewer insurers to choose from, the report notes. Just 33 percent had two or fewer participants on the exchanges in 2016, which were created under the Affordable Care Act.

The figures present a difficult situation for the president's signature legislative achievement, which relies partially on market competition among insurers to keep premiums low and health care affordable. Insurance companies like UnitedHealth Group Inc., and Aetna Inc. have announced major withdrawals from many of the counties in which they currently offer plans, citing financial losses they say are unsustainable. Elsewhere, some smaller and nonprofit co-op plans have announced their intention to close or been forced to do so by regulators.

"Lower-than-expected enrollment, a high-cost population, and troubled risk mitigation programs have led to decreased plan participation for 2017," said Dan Mendelson, president of the Avalere consulting firm, in a statement. "Congress and the Administration can choose to stabilize these markets and re-establish competition—but only through a consensus process that brings in a broader swath of the uninsured."

The situation is worst in seven states where Avalere found that every region in the state would have only one participating insurer. Those include Alaska, Alabama, Kansas, North Carolina, Oklahoma, South Carolina and Wyoming. Currently only one county in the United States—Pinal County, Arizona—has no insurance companies planning to participate.

Avalere's analysis assumes no new plans will enter the markets where other plans withdraw, which is not guaranteed. It specifically does not take into account some plans' announcements that they will expand their participation, which have not yet been finalized. More plans could also decide to withdraw before participation agreements are finalized next month.

In the meantime, the Obama administration and state regulators can work to encourage insurance companies to enter new areas or offer new products.

In Arizona, for example, the administration is "working collaboratively with the Arizona Department of Insurance," according to Ben Wakana, a spokesman for the Department of Health and Human Services. Wakana said the agency remains "confident that all Arizona residents will have access to coverage next year."

It is not clear how individuals who rely on the health law's subsidies—for which consumers are eligible only if they purchase coverage on an exchange—could obtain coverage if they reside in an area where there are no plans offered on the exchange. The Obama administration didn't comment on the issue when asked earlier this week.

By Marissa Evans, CQ Roll Call

August 17, 2016 -- As Alabama lawmakers weigh how to plug an $85 million hole in the state’s Medicaid program, advocates are preparing for their worst-case scenario, including cuts to prescription drug benefits and prosthetics for beneficiaries.

While Gov. Robert Bentley, R-Ala., called lawmakers back to the legislature on Monday to address legislation that would create a statewide lottery, more pressing is the question of how the Yellowhammer State will provide more funding for the joint federal–state health insurance program for the poor and disabled. Though the lottery will create an estimated $225 million a year by fiscal year 2018, lawmakers and advocates say that it will not help with Medicaid’s funding crisis for fiscal year 2017. The legislature is also considering using part of its BP legal settlement from a 2010 oil spill to bridge the funding gap.

"This call is designed for the Alabama Legislature to address adequate support of essential state services including children, the elderly, people with mental illness and support for men and women in law enforcement," Bentley said of the special session in a news release.

The special session comes months after state lawmakers left Montgomery after a brutal budget showdown in May. Bentley, trying to protect the Medicaid program, vetoed the legislature's budget. But lawmakers overrode his veto on April 5, putting into effect a $1.8 billion budget for the state’s general fund. The $85 million shortfall for Medicaid has put pressure on the agency to dial back services while trying to serve more than 1 million poor Alabamians who rely on the care.

Prescription drug benefits, outpatient dialysis, eyeglasses for adult beneficiaries, prosthetics, funding for case managers, and reducing payments to providers are all on the chopping block.

Alex Smith, director of policy and advocacy for AIDS Alabama, said in an interview that 3,000 Alabamians receive HIV medication through Medicaid and cutting the drug benefit would be devastating for patients. He said the state would likely have to institute a waiting list for the medication, something that officials have not had to do in almost a decade. Implementing a waiting list would mean thousands of people going without their medication, which could be deadly.

"These people would be at the mercy of the legislature to hopefully find funding for that gap," Smith said.

The state is also scrounging for funds to fulfill requirements for a previously approved federal waiver.

The Centers for Medicare and Medicaid Services, or CMS, approved a waiver Feb. 9 allowing Alabama to create 11 regional care organizations to provide primary care, behavioral health services and specialty care. Those providers will run the state’s managed care program and be paid a fixed monthly fee per patient. The state can start the program at any time but the agreement says that Alabama Medicaid has to maintain services, not cut them. If all went as previously expected, the state could receive as much as $748 million in federal Medicaid matching payments but those funds are now in jeopardy with the state’s budget woes.

Push for Expansion

Jim Carnes, policy director for Alabama Arise, an advocacy group in the state, said in an interview that the organization is pushing for Medicaid expansion to be considered, too.

Under the 2010 health care overhaul, people with incomes up to 138 percent of the federal poverty line can become eligible for Medicaid under expanded eligibility. If states choose to accept the expansion funds, the cost for people who gain eligibility is fully covered by the federal government until 2017, when states must start chipping in. By 2020, the law requires states to cover 10 percent of the cost. Thirty-one states and the District of Columbia are participating in the expansion already

While Alabama officials that control the state have been die-hard health law opponents over the years, the state’s budget problems have persuaded some Republicans to give Medicaid expansion a closer look.

"It’s fair to say that the tone and atmosphere around [Medicaid expansion] has changed a little bit," Carnes said, adding that some former fierce opponents appear to be softening their resistance.

Bentley has one potential way to expand Medicaid, Carnes said. The legislature has not given the governor full-on authority to broaden Medicaid through executive powers but he could take a similar approach to how Alaska Gov. Bill Walker, an Independent, expanded Medicaid in September. Alabama law would allow Bentley to initiate Medicaid expansion as long as the legislature is not in session. The state's Legislative Council, which considers these types of issues when the legislature has adjourned, could then approve, deny or simply not object to Bentley's proposal. If the council chooses to not object, then the proposal would be approved. It's unclear at the moment if Bentley will go this route when the legislature leaves Aug. 24.

"We’re not interested in getting [the legislature] to say yes," Carnes said. "We have supporters on that committee and some who might be willing to step aside and then there are hold-out objectors. If [Bentley] does it in the off-season, then we feel like there's more room to develop a favorable outcome."