Will Americans Keep the Consumer Driven Health Plans they had following Health Reform in 2014

On January 1, 2014, the 2010 Patient Protection and Affordable Care Act (ACA) will enforce explicit criteria for what a Qualified Health Plan (QHP) is.  QHPs are considered by ACA to be adequate coverage to be eligible to receive a tax credit for a health insurance purchase in a state or federal health insurance exchange. One must be enrolled in a QHP to order to avoid an insurance mandate penalty / tax administered by the Department of Treasury / Internal Revenue Service (IRS).  To examine the effect of QHP regulations on health insurance demand, we use the ARCOLA micro-simulation model.  ARCOLA was developed originally under contract from HHS and designed specifically to gauge the effect of CDHP demand different health reform scenarios.  The methods and results of the model have been published in the peer-reviewed literature for nearly a decade.  This analysis was completed in several steps.  First, we estimate what proportion of plans, available in the existing marketplace, would not be considered QHP eligible because of their out of pocket restrictions.

To complete the simulation we extracted existing health plan benefit design and premiums using ehealthinsurance.com.  Our data was generated from data snapshots from all 50 states and the health plan choices offered s displayed from the ehealthinsurnace.com web site from dates June 1, 2013 through June 20, 2013.   We obtained data on health plan premiums, coinsurance and deductibles, as well as out of pocket maximum.

Once we extracted the plan data with these search criteria we identified the health plan with the largest OOP expense without QHP threshold restrictions as pre-ACA law.  We then identified the plans with the highest OOP expense with QHP restrictions in force as part of ACA law. The QHP threshold was identified on IRS regulation specify the OOP maximum for a qualified HDHP with a Health Savings Account.  

We use these plan designs in a health insurance micro-simulation model to identify the impact of the QHP out of pocket cost limitations on the number of uninsured resulting from health reform as well as the federal cost of health reform from 2013 through 2022.   Our health insurance demand model for micro-simulation contains an array of health plan choices including: Health Maintenance Organization (HMO), three Preferred Provider Organizations (PPOs) that correspond to silver, gold and platinum ACA metallic categories. As bronze categories we include a narrow network PPO and High Deductible health plan.  We find the QHP restrictions will have a negative impact on the full potential of the insurance market.  While QHP restrictions are likely to limit the major thrust of new insurance contracts being generated by the ACA there is an impact nonetheless.  QHP restrictions will result from in as much nearly 5% less insured by 2015.  However, it is a modest impact.  Furthermore, QHP regulations may be modest enough to offset the more comprehensive coverage and provide long run welfare gains from better access to insurance reimbursed care.