Download Year One Evaluation Report

Year One Evaluation Report of
the Health Insurance
Marketplace in West Virginia
2014
THOMAS K. BIAS, PHD
M. PAULA FITZGERALD, PHD
TAMI GURLEY-CALVEZ, PHD
EMILY VASILE, MPAFF
PARUL AGARWAL, MPH
LOUISE MOORE, RN
-REPORT DRAFT FOR REVIEW PURPOSES ONLY-
The views expressed in this report are the views
of the authors and do not necessarily represent
the views of the Offices of the Insurance
Commissioner, West Virginia University, or the
state of West Virginia.
Suggested Citation: TK Bias, MP Fitzgerald, T
Gurley-Calvez, E Vasile, P Agarwal, L Moore. Year
One Evaluation of the Health Insurance
Marketplace in West Virginia. Morgantown, WV:
WVU Health Research Center, 2014.
The Health Research Center (HRC) at West
Virginia University (WVU) has proven experience
conducting rigorous health outcome evaluation,
including evaluations of the Center for Disease
Control’s (CDC) Community Transformation
Grant (CTG) and the Communities Putting
Prevention to Work (CPPW) programs.
http://publichealth.hsc.wvu.edu/hrc/
This report was funded by the WV Offices of the Insurance Commissioner.
The authors would like to acknowledge the following individuals for their contributions to the report:
Cecil Pollard, Adam Baus, Karen Johnson, Joshua Dorsey, Jaime Whitt, Steve Davis, Danielle Davidov,
Susan Crayne, Angy El-Khatib, and Andrew Denny.
We also want to give special thanks to the following individuals for their reviews of a draft version of this
report:
Douglas Myers, Kimberly Rauscher, Elizabeth Lukanen (SHADAC), Michael Walsh, Dan Elswick, John
Deskins, Christiadi, Joseph Barker, and Sara Georgi.
-REPORT DRAFT FOR REVIEW PURPOSES ONLY-
Frequently Used Terms
Affordable Care Act (ACA): the Affordable Care Act is a federal statute aimed at increasing the
affordability and quality of health insurance while reducing the number of uninsured individuals. Enacted
by President Barack Obama in March 2010, the law uses a system of mandates, subsidies, and other
regulatory mechanisms in order to provide affordable health insurance options.
COBRA: the Consolidated Omnibus Budget Reconciliation Act allows workers who lose health insurance
due to a major life event, such as job loss, transition period between jobs, or divorce, the option to
continue coverage under their group health plan for a limited period of time. Follow this link for more
information: http://www.dol.gov/dol/topic/health-plans/cobra.htm.
Enrollment Assisters: includes In-Person Assisters (IPAs), Navigators, Consumer Assistance Counselors
(CACs), or anyone trained to assist consumers in purchasing health insurance plans via the Marketplace.
Experian: a credit reporting agency that provides the identity verification component of the Health
Insurance Marketplace enrollment process.
Federally Facilitated Marketplace (FFM): type of Health Insurance Marketplace in which the federal
government and the Department of Health and Human Services oversee all aspects of marketplace
activity.
Healthcare.gov: federal web portal for purchasing Qualified Health Plans (QHPs) and determining
eligibility for subsidies.
Health Insurance Marketplace (Marketplace): method by which consumers purchase QHPs and determine
eligibility for Medicaid coverage and subsidies. Also identified as “Exchanges.”
Health Literacy: the degree to which an individual can comprehend terms, definitions, and other
information associated with health and health services.
Health Resources Services Administration (HRSA): the primary federal agency for improving access to
healthcare services for people who are uninsured, isolated, or medically vulnerable.
In-Person Assisters (IPAs): individuals who have received formal training to provide guidance and support
to consumers enrolling in QHPs using the Marketplace.
inROADS: West Virginia’s on-line system for determining possible eligibility for state benefits. Allows users
to apply and review these for health and social services. See https://www.wvinroads.org/selfservice/.
Medicaid Expansion: The ACA expanded Medicaid coverage for most low-income adults to 138% of the
federal poverty level (FPL). Following the June 2012 Supreme Court decision making this expansion
1
-REPORT DRAFT FOR REVIEW PURPOSES ONLY-
optional, states face a decision about whether to adopt the Medicaid expansion. West Virginia decided to
expand Medicaid. See http://kff.org/health-reform/state-indicator/state-activity-around-expandingmedicaid-under-the-affordable-care-act/.
Modified Adjusted Gross Income (MAGI): an individual’s adjusted gross income with the addition of
specific deductions, such as student loan interest, tuition and fees deduction, and IRA contributions.
Navigator: all states are required by the ACA to establish a navigator program to help individuals and small
employers with the application and enrollment processes, including educating the public to raise
awareness about the Marketplace and providing referrals to other consumer assistance resources. The
Centers for Medicare & Medicaid Services (CMS) awarded $67 million in Navigator Cooperative
Agreements to entities to serve in the 34 Federally Facilitated and State Parternship Marketplaces.
Offices of the Insurance Commissioner (OIC): agency that oversees the state's insurance industry and
provides consumers with information regarding all types of insurance. Learn more about West Virginia’s
Office of the Insurance Commissioner here: http://www.wvinsurance.gov/.
Open Enrollment: period in which consumers can apply for and purchase health insurance plans through
the online Marketplace. The first open enrollment period lasted from October 1, 2013 to March 31, 2014.
The next open enrollment period is scheduled to begin on November 15, 2014 and end on January 15,
2015.
Qualified Health Plan (QHP): an insurance plan that is certified by the Health Insurance Marketplace,
provides essential health benefits, follows established limits on cost sharing (like deductibles, copayments,
and out-of-pocket maximum amounts), and meets other requirements. A qualified health plan will have a
certification by each Marketplace in which it is sold (healthcare.gov).
ServQual: the most tested and validated generalized measure of service quality as perceived by consumers
using the service.1
State-based Marketplace (SBM): type of Health Insurance Marketplace in which the state oversees all
operational functions, including consumer assistance, education, and website maintenance.
State Partnership Marketplace (SPM): type of Health Insurance Marketplace in which the state and
federal government share marketplace responsibilities. These are typically established in states that wish
to set up their own marketplace in the future but are not yet ready.
WebQual: a validated general measure for evaluating consumer-oriented websites developed by
Loiacono, Watson, and Goodhue.2
1
2
See Parasuraman, Berry, and Zeithaml 1991. NEED FULL NAMES, TITLE, ADDITIONAL PUBLICATION INFO.
Provide title and publication info for Loiacono, Watson, and Goodhue. (2007).
2
Chapter One: Marketplace Background,
Evaluation Plan, and Data Sources
Introduction and History of the Marketplace in West Virginia
The Patient Protection and Affordable Care Act (ACA) of 2010 established several key clauses,
including mandates that:

all individuals have some minimum essential health coverage with few exceptions;

all states establish a health insurance marketplace (Marketplace) no later than January
1, 2014, or the federal government would establish and operate a Marketplace for those
states opting not to create their own; and

states would expand the Medicaid population to 138% of the federal poverty level (FPL),
which became optional after the June 2012 Supreme Court decision National Federation
of Independent Business (NFIB) v. Sebelius.
The focus of this report is the Marketplace clause of the ACA as implemented in West Virginia.
This report highlights awareness and interest among West Virginia residents likely to gain subsidies and
coverage on the Marketplace. Additionally, this report considers implications for West Virginia’s
economy and assesses baseline health of West Virginians. Future reports will include evaluation of the
impact of SHOP plans on small businesses and employers within the state as well as future healthcare
provider access.
Prior to the passage of the ACA, the state of West Virginia was already considering elements of a
Health Benefit Exchange. West Virginia participated in the State Health Access Program (SHAP) grant,
which was issued by the Health Resources and Services Administration in September of 2009. The SHAP
grant was designed to develop a subsidized coverage program for the working uninsured in the state.
Funding provided resources to (a) develop a health insurance exchange, (b) link working uninsured with
4
patient-centered medical homes through the “WV Connect” pilot project, and (c) create a centralized
portal for WV Connect healthcare centers.3
State leaders held a series of six stakeholder meetings between November 2010 and January
2011 to assess public opinion about establishing a state exchange versus allowing the federal
government to do so for West Virginia. Public forums were held across the state. Additionally, a formal
request for comment on Exchange-related provisions was issued. Stakeholders included consumers,
consumer advocate groups, businesses, insurance industry carriers, insurance agents, providers, and
state agency representatives. The feedback collected at these meetings indicated strong support among
stakeholders for the development of a state-run exchange in order to allow state autonomy and
regulatory authority to meet the unique needs of the state’s individuals, families, and markets.4
In March 2011, the West Virginia Legislature passed Senate Bill 408, which created a new article
in the West Virginia Code, 33-16G, to establish a Marketplace. The bill authorized the establishment of
the Exchange administered by the West Virginia Offices of the Insurance Commissioner (WV OIC) with
an autonomous board. However, after exploring options for a State-based Marketplace, concerns over
the costs and sustainability of such an arrangement led state leaders to a Partnership Marketplace.
State Partnership Marketplace
On February 15, 2013, Governor Earl Ray Tomblin submitted a blueprint to Health and Human
Services (HHS) Secretary Sebelius for West Virginia to establish a State Partnership Marketplace (SPM)
with plan management and In-Person Assister (IPA) oversight responsibilities. These roles in executing
the Marketplace in West Virginia are described in greater detail below.
Plan Management
The WV OIC reviews all insurance policy forms and rates for individual and small group health
plans prior to such plans entering the consumer market, and it is the primary authority for reviewing and
recommending Qualified Health Plans (QHPs) for certification.
In April 2013, the WV OIC released a Qualified Health Plan Submission Guide to provide
guidance to health insurance issuers regarding the certification standards for individual and Small
Business Health Options Program (SHOP) Qualified Health Plans (QHPs) offered through the
3
“State Health Access Program (SHAP) Grant Summary: West Virginia,” State Health Access Data Assistance
Center, updated July 21, 2010, accessed April 16, 2014,
http://www.shadac.org/files/shadac/SHAP_GrantSummary_WV.pdf.
4 Samples 2012. NEED FULL NAME, TITLE, PUBLICATION INFO, PAGE NUMBERS (IF APPLICABLE)
5
Marketplace.5 Highmark Blue Cross Blue Shield and Carelink/Coventry Health Care were selected as
QHPs, although the latter withdrew from the Marketplace in September 2013. Aetna acquired
Carelink/Coventry in May 2013, and the decision to withdraw was credited to Aetna’s overall company
strategy.6 Highmark Blue Cross Blue Shield offers 11 insurance plans and an additional two multi-state
plans offered by Highmark Blue Cross Blue Shield. QHPs are grouped into five categories (Catastrophic,
Bronze, Silver, Gold, and Platinum) based on shared cost for healthcare with higher premiums
associated with lower out-of-pocket costs. Highmark did not offer Platinum coverage options in West
Virginia. This will be discussed further in Chapter Four.
Consumer Assistance
Many Marketplace users are required to perform new behaviors (using an exchange to select an
insurance plan) and to make decisions that require both financial and health literacy. Both aspects of
this situation are likely to create significant barriers that increase the need for person-to-person
interaction.7 In light of these concerns, OIC developed, manages, and maintains a $4.5 million contract
for In-Person-Assistance with Maximus (2013), a consulting firm. This contract allows for approximately
60 individuals to provide in-person assistance at each of the 55 West Virginia Department of Health and
Human Resources (DHHR) offices throughout the state.
The federal government, specifically the Centers for Medicare & Medicaid Services (CMS),
administers the state’s Navigator program. Three organizations were awarded a total of $600,000 to
conduct outreach and enrollment activities. Additionally, the Health Resources and Services
Administration (HRSA) awarded over $3.75 million to 25 health centers throughout the state (FY 2013’14).8 An overview of the main consumer assistance entities in West Virginia is described in Exhibit 1.
5
“Qualified Health Plan Submission Guide,” West Virginia Offices of the Insurance Commissioner, April 2013,
accessed January 15, 2014, http://bewv.wvinsurance.gov/Portals/2/pdf/QHP%20Submission%20Guide_4-1013.pdf.
6
THIS URL IS BROKEN, SO I DON’T HAVE ENOUGH INFO TO COMPLETE THIS CITATION. IN GENERAL, CITE
NEWSPAPERS AS FOLLOWS: AUTHOR (IF KNOWN), “HEADLINE,” NEWSPAPER NAME IN ITALICS, DATE OF
PUBLICATION, URL. ACCESS DATE ISN’T NECESSARY IN MOST CASES, BUT YOU MIGHT KEEP IT HERE BECAUSE OF
THE BROKEN URL. “Coventry/Carelink won't join health insurance Marketplace,” Charleston Gazette, DATE?,
accessed September 13, 2013, http://www.wvgazette.com/News/politics/201309100084.
7
Walsh, Fitzgerald, Gurley-Calvez, and Pellillo 2011. NEED FULL NAME OF FIRST PERSON (Use et al. for rest),
TITLE, COMPLETE PUBLICATION INFO, PAGE NUMBERS (IF APPLICABLE)
8
“West Virginia: Health Center Outreach and Enrollment Assistance,” Health Resources and Services
Administration, accessed April 8, 2014,
http://www.hrsa.gov/about/news/2013tables/outreachandenrollment/wv.html.
6
Exhibit 1 Overview of Consumer Assistance in West Virginia
Overview of Consumer Assistance
Agencies/Providers in WV9
Entity
Maximus
Award Amount / Source
$4.5 million / IPA Awardee
Location(s)
55 State DHHR Offices
Advanced Patient Advocacy, LLC
$276,617 / CMS Navigator
Sub-Grantee Partners Include:
● Raleigh General Hospital
● HCA St. Francis and Pleasant
Valley Hospital
● Thomas Memorial Hospital
● Princeton Community Hospital
● Pavilion
National Healthy Start Association
$191,667 / CMS Navigator
TSG Consulting, LLC.
$174,091 / CMS Navigator
WV Health Centers
$3,783,858 / HRSA
Service Area: Preston, Randolph,
Upshur, Barbour, Taylor, Harrison,
Marion, Monongalia counties
Sub-Grantees/Partner Organizations:
• WV Farm Bureau
• Partners in Health Network
27 WV health centers
Medicaid Expansion in West Virginia
In addition to deciding whether to operate their own insurance exchange, partner with the
federal government, or adopt a federally run Marketplace, states are faced with the decision of whether
or not to expand Medicaid. In May of 2013, West Virginia Governor Earl Ray Tomblin announced the
decision to expand Medicaid in West Virginia to cover individuals up to 138% of the federal poverty level
(FPL). State Department of Health and Human Resources (DHHR) numbers estimate a total of 98,700
members in the expansion pool alone.10 Newly eligible individuals covered under the expansion will be
enrolled into managed care, including access to behavioral health, personal care, pediatric dentistry, and
non-emergency medical transportation. Members covered by Medicaid will pay sliding scale copays for
services depending on income levels.11
9
“Navigator Grant Recipients,” Centers for Medicare & Medicaid Services, accessed April 8, 2014,
http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/navigator-list10-18-2013.pdf.
10
“WV Medicaid Expansion Count by County,” West Virginia Department of Health and Human Resources, March
15, 2014, accessed April 16, 2014,
http://www.dhhr.wv.gov/bms/Documents/WVMedicaidExpansionCountCounty20140315.pdf.
11
Nancy Atkins, “Enroll West Virginia,” West Virginia Department of Health and Human Resources, DATE?,
accessed April 16, 2014,
http://www.dhhr.wv.gov/bms/Documents/WVMedicaidExpansionCountCounty20140315.pdf.
THE URL AND ACCESS DATE FOR THIS CITATION ARE THE SAME AS THE CITATION ABOVE. IS THAT CORRECT?
7
West Virginia Evaluation Goals and Context
With the intention of better understanding the health, economics, and consumer marketing
quality and outcomes of the state partnership model in West Virginia, the state sought to conduct a
rigorous evaluation. Evaluation activities were planned prior to the release of planned federal quality
initiatives, including the quality rating system as mandated by Section 1311(c)(3) of the ACA.12
The evaluation team, led by West Virginia University’s Health Research Center (HRC), developed
a five-year comprehensive work plan to evaluate the health, economics, and marketing effects of the
Marketplace in West Virginia.13 During this process, the team gathered and reviewed other state-level
Marketplace evaluation plans for the purposes of understanding what themes and measures other
states included in their respective evaluation plans. This aided in the development of a plan that will
help to facilitate more meaningful cross-state comparisons in the future. State-level evaluation plans in
various stages of development were found using general internet searches, collegial sharing of
information with other state evaluators, and a review of information found on the “Federal Health
Reform: State Implementation Entities, Reports, and Research” page of the National Council of State
Legislatures website.14 The primary evaluation measures that were consistently included in state
evaluation plans reviewed for this report reflect the primary goals of the ACA: (a) increase the number
of Americans with health insurance coverage, (b) lower the cost (trend) of healthcare, and (c) improve
the quality of and access to healthcare for all Americans.
Exhibit 2, compiled by Karen Johnson, shows a cross-state comparison of common evaluation
themes. The data contained in this table are based on a high-level review of other Marketplace
evaluations discoverable through the public means discussed above.
12
For more details on the QR system, see: “Health Insurance Marketplace Quality Initiatives,” Centers for
Medicare & Medicaid Services, last modified June 10, 2014, http://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/QualityInitiativesGenInfo/Health-Insurance-Marketplace-Quality-Initiatives.html.
13
For more details about the evaluation plan and key research questions, see: “Evaluation of the WV Health
Benefit Exchange,” Health Research Center, http://publichealth.hsc.wvu.edu/hrc/Research/CurrentResearch/Evaluation-of-the-WV-Health-Benefit-Exchange.
14
Updated August 2013, accessed November 4, 2013, http://www.ncsl.org/research/health/stateimplementation-entities-to-implement-the-aca.aspx.
8
Exhibit 2 Cross-state Comparison of Planned Evaluation Themes
WV
AR
Partner Partner
Coverage
1
x
Coverage overview
x
2
x
Marketplace coverage overview
x
x
Employer-sponsored insurance by employer size
x
x
Uninsured and underinsured levels
x
x
Choice (# coverage options)
Churn/transitions/gaps
x
Affordability
x
Premium costs
x
Out-of-pocket (copay, deductible, coinsurance)
x
costs
x
Small business affordability/# receiving tax credit
Type of Marketplace
x
# paying penalty/# exempt from penalty
x
Minimum or "meaningful" coverage
Subsidy levels
Financial burden/affordability measure
x
Socioeconomic demographics of enrollees
Comparison to non-marketplace enrollees
Marketplace efficiency (admin cost as % of
premiums)
Access & Quality
x
Health outcomes
x
x
Health status/population health
x
Use of services (provider visits, ER,
x
hospitalizations, etc.)
x
Quality of healthcare (HEDIS)
x
x
x
Behavior/lifestyle changes
x
Chronic condition changes
Participant understanding of coverage and care
x
options
Barriers to care
x
Safety net care impacts
Economic Impact
Impact analysis3
Return on investment
Effects of risk pool on market
Basic trends/changes in insurance industry
Cross-state border opportunities/markets
Reinsurance market changes
x
x
x
x
x
x
CA
State
x
x
x
x
CO
State
MA
State
RI
State
VT
State
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
9
Overall healthcare cost trends/changes
Marketing/Consumer Assessments
Awareness
x
x
Timeliness of determinations
Satisfaction - marketplace, coverage,
agent/navigator
x
Reasons for termination
x
x
x
x
x
x
x
x
1
ACA impact on insurance coverage status, includes non-marketplace sources of coverage (i.e., employers, public
programs, military, etc.)
2
Focused on data derived from marketplace usage (i.e., numbers of users accessing and purchasing, type of coverage
purchased, subsidy eligibility, etc.)
3
Direct and indirect impacts on employment, business volume, and tax collections
Evaluation Data Sources
The team aggregated all research questions and data sources into a central database to ensure
thorough, accurate, and timely data collection. The sections below identify significant points of data
collection, including the primary and secondary sources used to inform this report. The data described
below are presented in greater depth throughout this report. An overview of the team’s evaluation data
components and timeline for collection through May of 2014 is shown in Exhibit 3. All primary survey
numerical data were double entered to ensure quality. WVU’s Institutional Review Board reviewed and
approved all primary study data collection.
Exhibit 3 Summary of West Virginia Insurance Exchange Evaluation Data Collection
2013
May
Jun
Jul
Aug
Sep
2014
Oct
Nov
Dec
Jan
Feb
Mar
Apr
Ongoing Monitoring of State
and Lower-level Surveillance
Data
Monitoring of State Clinical
Data and De-identified
Health Outcomes
Consumer and IPA Feedback
Focus Groups
Statewide Survey of West
Virginia Residents
(“Population Survey”)
Exit Surveys
10
May
Primary Data
Monitoring of State Clinical Data and De-identified Health Outcomes
To assess baseline population health, we worked with WVU School of Public Health’s Office of
Health Services Research (OHSR) to collect data from the electronic medical records (EMRs) of 24
federally qualified health centers (FQHCs) and nine free clinics in West Virginia. These data will allow the
evaluation team to monitor health outcome, service use, and other clinical data before and after
Marketplace plans go into effect. These specific 33 clinics were selected because they had the most
extensive patient records, including insurance status for FQHC patients. Baseline data collected included
insurance status, visits by month, frequency of visits per patient, medications prescribed, chronic
disease rates, BMI status by category, and standard demographic information. Additionally, a panel
composed of patients diagnosed with Essential Hypertension (high blood pressure) was developed to
track changes in a specific patient population over time.15 Analysis of the data collected is presented in
Chapter Five.
Consumer Assister Interviews and Focus Groups
A series of focus groups were held with various consumer assisters throughout the state. Prior
to enlisting IPAs in focus groups, evaluation team members attended two consumer assister trainings in
February 2014 to recruit participants and disseminate a brief survey. Assisters returned 14 surveys and
were recruited to participate in focus groups held in two locations. Focus group questions assessed
major concerns among consumers who worked with assisters, assisters’ assessments of consumer
confusion around insurance, availability of resources for assisters, and consumers’ reasons for leaving
without purchasing insurance. Analysis and key findings of these focus groups are presented in Chapter
Three.
Population Survey
A mail survey was sent to 6,000 West Virginia residents prior to the first year of open
enrollment. The team oversampled the uninsured population in the state. Pre-survey post cards were
sent prior to sending the surveys to alert residents to expect the survey through the mail, as is
15
The patient panel was chosen based on any active patient with a clinical diagnosis of essential hypertension
between July 1, 2010 and June 30, 2011, and, as of that time period, at least one office visit during the past 2
years.
11
consistent with best practices in survey research.16 The survey questions were based on a thorough
literature review and discussion amongst an interdisciplinary team, including researchers from health
policy, health economics, and marketing. Most questions were grounded in literature, yet created de
novo after this review. Several questions related to health and chronic diseases were modified from the
Behavioral Risk Factor Surveillance System (BRFSS), and some insurance questions were modified from
the Medical Expenditure Panel Survey (MEPS). Demographic questions were modified from the United
States Bureau of the Census American Community Survey (ACS). Surveys were mailed in July 2013 and
collected through August 2013. Questions were designed to assess consumer awareness and
perceptions of the marketplace prior to open enrollment, specifically relating to affordability of
insurance and consumer satisfaction and value of current health insurance. Questions raised included
those about consumer health, access to care, use of healthcare services, and standard demographic
components. An open-ended portion at the end of the survey created space for respondents to provide
comments about the Marketplace in West Virginia.
A total of 1,198 surveys were received with representation from all 55 counties in West Virginia.
A total of 458 comments are included in the analysis presented throughout this report with full results
detailed as Appendices A-C.
Emergency Department Utilization Survey
A self-administered, paper survey based on a convenience sampling technique was conducted in
the Emergency Department (ED) of WVU’s Ruby Memorial Hospital from August through December
2013 to collect baseline information about individuals visiting the ED. Student researchers collected
completed surveys from respondents between 10 a.m. and 7 p.m., Tuesday through Friday. Off-hour
surveys were collected in a lock box. The survey included questions such as reasons for ED visits, usual
source of care, insurance status, frequency of ED visits in last 12 months, frequency of ED visits in last 12
months due to unaffordability, reference to ED by medical care provider, and type of medical care
provider. Some ER use questions were modified from the National Health Interview Survey (NHIS) and
the Primary Care Brief Assessment Tool (PCAT). Summary results are presented in Appendix G. A total of
185 responses were received, and all data were double entered to ensure quality.
16
Dillman 2000. NEED FULL NAME, TITLE, PUBLICATION INFO, PAGE NUMBER (IF APPLICABLE)
12
Exit Survey
A phone exit survey was designed to learn about Marketplace consumers in West Virginia. Cover
letters and postcards were included in welcome packets sent to newly enrolled Highmark customers
who purchased Qualified Health Plan (QHP) coverage on Healthcare.gov and made their first payment,
thereby effectuating coverage. The materials provided in the welcome packets included a 1-800 number
for consumers to call to take the survey. Consumers were guided through a series of questions aimed at
assessing level of coverage, plan selection, overall satisfaction, subsidy eligibility, and perceptions of
quality and affordability of marketplace plans. Additionally, a series of health-related questions similar
to those used in the population survey were asked, along with demographic questions. A total of 340
responses were received through June 5, 2014. Because the survey information was distributed by
Highmark, we currently have no accurate estimate of the response rate. The survey is provided as
Appendix F.
Maximus Customer Satisfaction Surveys
As part of their contract with the OIC, Maximus IPAs provided and collected a paper-based
customer satisfaction survey in person for consumers who utilized their services during open
enrollment. The evaluation team entered the data from these surveys monthly and provided technical
assistance to OIC regarding survey design. Questions asked about overall experience with IPAs, including
IPA knowledge and professionalism and the amount of time spent with the customer. The survey also
asked if the consumer enrolled in health insurance during the visit. The survey is provided as Appendix
D, and detailed results as Appendix E.
Secondary Data Collection
State and Lower-level Surveillance Data
Nationally developed and aggregated health and economics data sources were consulted for
national, state, county, or census track data. These data are collected on a regular, consistent, and
ongoing basis, ideal for state-to-state and region-to-region comparisons of insurance status, healthcare
access, and economic outcomes. A list of secondary data sources consulted is presented in Exhibit 4.
13
Exhibit 4 List of Secondary Data Sources Consulted
US Current Population Survey (CPS) - https://www.census.gov/cps/
American Community Survey (ACS) - https://www.census.gov/acs/www/
Behavioral Risk Factor Surveillance System (BRFSS) - http://www.cdc.gov/brfss/
Youth Risk Behavior Survey (YRBS) - http://www.cdc.gov/HealthyYouth/yrbs/index.htm
Medical Expenditure Panel Survey (MEPS) - http://meps.ahrq.gov/mepsweb/
Consumer Assessment of Healthcare Providers and Systems (CAHPS) - https://cahps.ahrq.gov/
Healthcare Cost and Utilization Project (HCUP) - http://www.ahrq.gov/research/data/hcup/index.html
America’s Health Insurance Plans Survey (AHIP) - https://www.ahip.org/AHIPResearch/
Small Area Health Insurance Estimate (SAHIE) - http://www.census.gov/did/www/sahie/
CMS Monthly Enrollment Reports (Released in ASPE Issue Briefs) - http://www.aspe.hhs.gov/
Behavioral Risk Factor Surveillance System (BRFSS)
BRFSS is a nationwide survey collaboratively administered by the Centers for Disease Control
and Prevention (CDC) and US states, and is given to individuals 18 years and above. Information is
available both at the state and county levels. The information is collected through a telephone survey
and broadly includes details about individuals’ demographic and socioeconomic characteristics,
preventive and lifestyle practices, chronic conditions, and healthcare coverage. For generalization of
results at the national level, weighting methodologies are used. For the purposes of this report, data for
West Virginia were used to provide baseline information about health insurance coverage; prevalence of
chronic conditions, such as heart disease, asthma, diabetes, arthritis, mental health problems, and BMI;
and general health status and lifestyle practices, such as smoking status and physical activity.
American Community Survey (ACS)
This nationwide survey is an element of the US Census Bureau Decennial Program and provides
data every year both at national and state levels. It broadly collects information about individuals’
demographic characteristics, including age, sex, race, healthcare coverage, work, income, and living
status. For the purpose of this report, data were collected from online search features provided by
American FactFinder. The search features allow for collecting data for ACS one-year, three-year and fiveyear estimates. The latest year available for data collection is 2012. Results reported herein are health
insurance coverage status by age, gender, and race for West Virginia. The results provide a baseline
estimate for future year comparisons and are presented in Chapter Five.
Small Area Health Insurance Estimates (SAHIE)
SAHIE is an element of the US Census Bureau Decennial Program and collects data about
healthcare coverage at the state and county levels. The survey provides health insurance information by
combining data from various sources, such as the ACS, Medicaid, Children’s Health Insurance Program
14
(CHIP), and Census data. The latest data are available for 2012 and provide estimates on insured and
uninsured at the state and county levels. The data can be further classified on the basis of age, race,
gender, and income level. Data for the report were collected from an interactive data visualization and
mapping tool to provide estimates at the county level. These estimates are presented in Chapter Five.
Area Health Resource File (AHRF)
The AHRF provides data at the state and county levels on more than 6,000 variables, including
information about healthcare providers and institutions, healthcare services use and expenditures,
health status, and demographic and socioeconomic characteristics. Important elements of data can be
accessed through interactive web tools, such as Health Resources Comparison Tools (HRCT) and AHRF
map tools. Using these interactive web tools, data for the number of primary care physicians per
100,000 of the population were collected at the county level for the purposes of this report. State- and
national-level estimates for other types of providers and mortality rates specific to the chronic
conditions were also collected. The results are presented in Chapter Five.
Healthcare Cost and Utilization Project (HCUP)
This project includes a large number of databases administered by the Agency for Healthcare
Research and Quality (AHRQ). HCUP databases include the Nationwide Inpatient Sample (NIS), Kid’s
Inpatient Database (KID), Nationwide Emergency Department Sample (NEDS), State Inpatient Database
(SID), State Ambulatory Surgery Databases (SASD), and State Emergency Department Databases (SEDS).
HCUP databases provide information about all patients and the inpatient care they receive,
including healthcare expenditures and use, access to care, demographic characteristics, healthcare
coverage, and diagnoses and procedures. They also include information about inpatient hospital stays,
such as primary and secondary diagnoses and procedures, admission and discharge status from the
hospital, demographic characteristics, expected payment source, total charges due to hospital stay, and
length of hospital stay.
Access to these data is available at a cost; however, AHRQ maintains an interactive web tool,
HCUPnet, that enables access to health estimates. Estimates were collected from this web tool about
state-specific hospital stays, chronic conditions, length of stay, discharges, and costs based on health
insurance status. Of the state-specific databases, West Virginia participates in the SID only. Therefore,
for the purposes of this report, estimates are based on SID.
15
Consumer Assessment of Healthcare Providers and Systems (CAHPS)
These surveys of consumers of healthcare services are again administered by AHRQ to assess
the quality of healthcare given by healthcare providers. Data from these surveys are publicly available
and can be accessed after completing certain formalities and signing a data user agreement. Under the
CAHPS database, data from two surveys are available: (1) CAHPS health plan survey and (2) CAHPS
clinician and group survey.
The CAHPS health plan survey of adults and children enrolled in different healthcare plans aims
to collect information about consumers’ experiences with healthcare plans and services. It includes four
different types of surveys: (1) Adult commercial survey, (2) Child commercial survey, (3) Adult Medicaid
survey, and (4) Child Medicaid survey. The CAHPS clinician and group survey is conducted on both adults
and children and includes three types of surveys: (1) 12-month survey that reports patient’s healthcare
experience in past 12 months, (2) Expanded 12-month survey with Patient Centered Medical Home, and
(3) Visit survey that covers patients’ experiences with recent visits to healthcare providers. While the
clinician and group survey includes information based on US Census region, it does not provide statespecific information about patients’ experiences. State-specific information is available for CAHPS health
plan survey. For the purposes of this report, estimates are provided for the 2011 Adult Commercial
surveys. The results from these surveys are provided in in Chapter Five and Appendix J.
16
Chapter Four: Economic Theories of
Decision Making and Baseline Data
Introduction
The Marketplace has many potential ties to the state economy. Compared to the preMarketplace economy, the Marketplace might alter factors such as the number of individuals who have
insurance coverage, the types of plans consumers choose, Medicaid take-up rates, risk pooling, health
insurance premiums, market share of insurance carriers, the cost of health services, and employment
decisions. Few of these questions can be answered with data so early into implementation.17
Therefore, in this section we focus on baseline data and how the Marketplace enrollment
numbers presented in Chapter Three might affect key economic outcomes. This chapter also explores
factors that might affect current enrollment and enrollment over time. Premium calculations are used to
illustrate how Marketplace plans differ for families of similar characteristics based on age and income.
We present a discussion of decision making to explain likely enrollment patterns. This section concludes
with a discussion of how the West Virginia workforce and economic projections might affect
Marketplace operations in the near future.
Exchange Enrollment and Insurance Coverage
Model of Consumer Behavior
Consider an uninsured person faced with the decision of whether to seek health insurance. Their
decision might be based on a number of factors, but for simplicity this section will focus on four major
factors: (1) expected health expenditures/potential loss, (2) price of insurance (including premiums and
expected out-of-pocket expenses), (3) preferences and beliefs about health insurance, and (4) the cost
of enrollment.
Taking the first factor, expected health expenditures/potential loss, insurance will be more
attractive to individuals with higher expected health expenditures and those with higher potential
17
Appendix K describes national predictions and early trends relating to ACA goals.
17
losses. Expected health expenditures are the probability of needing a health service times the cost of
that service.18 For example, this might be calculated as in Exhibit 22.
Exhibit 5 Example of Expected Health Expenditures Calculation
Office visits
Probability of
illness or injury
X
X
Cost of visit
Cost of
treatment
Probability of
specialist
services
X
Expected
health
expenditures
Cost of
services
In practice, individuals are likely to focus on past use and the experiences of friends and
neighbors to generate these expectations.19 Based on the above model, expected health expenditures
will be higher for those with greater health risk (e.g., older individuals, those with chronic conditions,
those who have higher-risk hobbies) and for those who believe that major health events (e.g., accidents,
cancer, stroke) are more common. Note that it is the person’s expectations that matter, and these might
not align with published research statistics.
Potential loss is the amount of financial damage that a household could sustain due to medical
bills. This potential loss is higher for households that have more assets and consistent streams of
income; households with few assets and little income would be unable to pay, and these medical bills
would likely be discharged as bad debt. These factors can work in opposite directions, as healthy, highincome individuals might have low expected health costs but considerable assets to protect against loss.
Likewise, an unhealthy, low-income individual might have high expected expenditures but little risk of
financial loss.
The second factor, price of insurance, includes insurance premiums and expected out-of-pocket
expenses for deductibles, co-pays, and co-insurance. The probability of obtaining health insurance is
lower the higher the price of coverage. However, considering all the cost elements requires complex
calculations and sophisticated predictions about future health service use. It is likely that a person will
18
For simplicity, the model does not consider that cost of service might vary depending on insurance carrier and
provider.
19
For example, see D. Kahneman, J. L. Knetsch, and R. H. Thaler, “The Endowment Effect, Loss Aversion, and Status
Quo Bias,” Journal of Economic Perspectives 5 (1991): 193–206, for information on status quo bias, and David
Rothschild and Justin Wolfers, “Forecasting Elections: Voter Intentions versus Expectations” (working paper, 2013)
for recent evidence on how individuals aggregate information in their social networks.
18
look for a way to make the decision easier, perhaps unconsciously, by focusing on one factor such as the
premium. One would expect the more complicated elements of co-pays for rare events (e.g., emergency
department visits) and co-insurance rates to have a smaller impact on decision making than the more
transparent elements, such as monthly premiums and plan deductibles. Thus, in this model, the
probability of insurance coverage decreases as premiums and deductibles rise.
Preferences and beliefs about insurance include overall perceptions of the healthcare system,
the effectiveness of medical treatment, and attitudes about the role government entities play in
healthcare. These preferences and beliefs can increase or decrease the likelihood of enrollment for each
individual.
Finally, we consider the costs of enrollment, which include the non-monetary costs of time and
emotional stress, as well as costs such as travel to assister appointments. Even in the absence of
monthly premiums, obtaining insurance required action on the part of the individual. Their desire to
have insurance must outweigh status quo bias, or the general tendency to avoid change. Further, the
individual must become knowledgeable about where to enroll and what information they need to apply,
and then complete the enrollment process. The more costly the enrollment process, the less likely a
person is to enroll. For example, advertising might increase awareness of the Healthcare.gov portal, but
difficulties providing information, such as income, dependent Social Security numbers, or provider
networks, might make the enrollment process much more burdensome for consumers. The more
complex and time consuming the enrollment process, the less likely someone is to have health
insurance. For each person, implementation of the Marketplace might increase or reduce the costs of
enrollment from the previous environment.
To summarize, higher expected health expenditures and greater possibility of financial loss
increase the probability of insurance. Higher prices for insurance and higher costs of enrollment reduce
the probability of coverage. Personal preferences about insurance, healthcare, the Marketplace, and the
government can increase or decrease the probability of insurance. See Exhibit 23 for a summary of these
ideas.
19
Exhibit 6 Model of Health Insurance Enrollment
•Lower financial
risk, less likely to
have insurance
Health
Spending
Price of
Insurance
•Lower price,
more likely to
have insurance
Preferences
and Beliefs
•Can increase or
decrease
likelihood of
insurance
Probability of
Insurance
Enrollment
Costs
•Lower
enrollment costs,
more likely to
have insurance
Compared to the pre-ACA environment, the Marketplace might affect enrollment in several
ways. First, the Marketplace might reduce health insurance enrollment costs. By serving as the entry
point for the currently uninsured, the Marketplace offers information on Medicaid eligibility and general
information on insurance and what is required to enroll. Having a centralized Marketplace for shopping
for plans reduces the cost of gathering information about potential options. For evaluation purposes,
the key question is whether the Marketplace changes information costs from what was available in the
pre-ACA marketplace (e.g., contacting an agent or insurance company directly). In addition, federal
insurance subsidies are only available on the Marketplace, creating a close link between price and
Marketplace enrollment for West Virginians between 139% and 400% of the federal poverty level. The
Marketplace might also be tied to personal preferences, as it is tied both to the federal and state
governments in West Virginia and is part of the federal Affordable Care Act. In the context of Exhibit 24,
the Marketplace might alter the time, information, and enrollment costs “pulling” individuals away from
enrollment.
20
Exhibit 7 Non-monetary or Indirect Enrollment Costs Lower the Probability of Insurance Coverage
Time costs of
information and
enrollment, travel costs,
emotional costs (e.g.,
frustration)
Expected benefit of
enrollment including
subsidies
The model above is useful for thinking about who the likely Marketplace enrollees will be, and
their expectations can be compared to enrollment trends for 2014. For simplicity, potential Marketplace
enrollees are divided into three categories of individuals who were uninsured at the time of open
enrollment: (1) the Medicaid eligible (under 139% of the federal poverty line), (2) the subsidy eligible
(household income between 139% and 400% of the federal poverty line), and (3) those above the
income cut-off for subsidies (greater than 400% of the federal poverty line).
The Medicaid eligible population consists of those who were already eligible for Medicaid but
not enrolled and those newly eligible for Medicaid due to the ACA expansion. Based on the first factor in
the model, we would expect those with greater healthcare needs to be more likely to enroll. Although
Medicaid eligibility rules changed in 2014 (eligibility is now based on modified adjusted gross income)
and the asset test was eliminated, it is unlikely that many new enrollees are seeking Medicaid coverage
to protect large asset holdings. In terms of the second factor, price of insurance, Medicaid generally has
negligible cost sharing, if any, and price is not a significant deterrent to enrollment. Personal preferences
could be associated with higher or lower probabilities of enrolling depending on the person. Finally, the
cost of enrolling in Medicaid would be lower if the Marketplace reduces the time it takes to search for
information or find a source of help for enrollment.
21
The state of West Virginia undertook a large effort to reduce Medicaid enrollment costs by
offering auto enrollment. Newly eligible adults were identified using data from applications for the
Children’s Health Insurance Program (CHIP) and child Medicaid enrollment. These individuals received a
letter in the mail notifying them of their eligibility and were only required to “check the box” in order to
enroll in Medicaid.
Marketplace enrollment is expected to be higher for those in the subsidy population with more
health service needs, and again, this population is not expected to have large enough asset holdings to
significantly increase the probability of coverage. Price of insurance will vary significantly within this
population: premiums can range from between 2 and 9.5% of income, and cost sharing through copays,
deductibles, and coinsurance can be 6% (100 to 150% FPL), 13% (151-200% FPL), 27% (201-250% FPL),
and 30% (251-400% FPL). In this case, one would expect those with greater subsidies and cost-sharing
assistance to be more likely to enroll. The cost of enrolling in a plan is likely lower for the subsidy-eligible
population than what they would have faced prior to the Marketplace. Advertising would have
increased knowledge of the Marketplace. Further, the Marketplace is the only place to access subsidies,
and it serves as a tool for comparing plans. As with the Medicaid option, however, lack of access to or
experience with the internet might make Marketplace enrollment more costly because individuals must
seek assistance navigating the website.
Those above the cut-off for subsidies are also expected to be more likely to enroll the greater
their health service needs, and this population is more likely to enroll to protect accumulated assets.
The attractiveness of Marketplace prices for this group will depend on their age and health status. Older
individuals with chronic conditions would have faced steep prices prior to ACA coverage rules, but
healthy younger individuals with higher incomes likely face higher prices on the Marketplace than what
they could have purchased prior to the 2014 ACA provisions. The Marketplace might reduce enrollment
costs by providing a convenient portal for purchasing insurance to this population that is more likely to
have internet access and experience. However, there is not a strong incentive for these individuals to
purchase through the Marketplace because they are not receiving a subsidy. In this case, the way that
information is collected and shared across federal agencies and the limited plan options available on the
Marketplace might push the non-subsidy population to purchase directly from insurance carriers.
Prior to Marketplace operations, West Virginians were surveyed and asked whether they were
likely to purchase a plan on the Marketplace (see Chapter One for more information about the survey).
The above model generates several key predictions about whether an individual would say that they
22
were likely to purchase a Marketplace plan. These predictions are tested using responses from the
survey.
Specifically the model predicts:
Factor
Direction of Effect on Enrollment
How Measured in Data
Good health
↓ Lower expected health costs
decrease the likelihood of
insurance coverage
Health reported to be good or
excellent
High asset levels
↔ Higher asset levels increase
the probability of coverage, but
are also correlated with
incentives to purchase plans off
the Marketplace
Income
Lower price of insurance and
cost sharing
↑ Lower prices increase the
probability of plan purchase;
subsidies are greater for older
enrollees; already insured
individuals are likely to have at
least partially subsidized
insurance
Qualify for Medicaid
↔ Personal preferences could
go in either direction
Liberal political identification
↑ Internet access and
experience reduces the cost of
enrolling
Respondent reports access to
the internet
Personal preferences
Internet access
Qualify for subsidy
Age
Insured
Conservative political
identification
Results
Key Findings: Subsidy eligibility was the largest factor in explaining whether someone planned to
purchase a plan on the Marketplace. Those who believed the Marketplace was good for West Virginia
were also more likely to report that they planned to purchase a Marketplace plan. Currently having
insurance, being in the highest income category ($75,000+), and being in good health reduced the
probability that someone planned to purchase a plan on the Marketplace.
DISCUSSION: Main results from a linear regression are presented in Exhibit 8 and suggest that eligibility
for a subsidy was the dominant factor in determining whether an individual planned to purchase a
23
Marketplace plan.20 Those who thought they would qualify for a subsidy were 23 percentage points
(150%) more likely to plan to enroll through the Marketplace. Respondents who believed the
Marketplace was good for West Virginia also reported being more likely to enroll through the
Marketplace by 5 percentage points (33%). The likelihood of purchasing a Marketplace plan was lower
for those with insurance, those in the highest income category, and those in good health (compared to
those with average, below average, or poor health). Current insurance coverage reduced the likelihood
of purchasing a Marketplace plan by 15 percentage points (100%). High income and good health
reduced the likelihood of a Marketplace purchase by 9 percentage points (60%) and 4 percentage points
(27%), respectively.
Exhibit 8 Factors Affecting Plans to Purchase a Marketplace Insurance Plan
Subsidy eligible (+23)
Believe Exchange is
good for WV (+5)
Currently Insured (-15)
Income of $75,000 or
more (-9)
Good health (-4)
Enrollment versus Coverage
Key Findings: Selecting a Marketplace plan does not necessarily mean that the individual has health
insurance coverage. Experiences with Marketplace plans are likely to affect enrollment for 2015.
20
Significance levels are based on robust standard error calculations. The regression model also included controls
for other income categories, age categories, liberal and conservative political identification, an indicator for access
to the internet, and a constant. We fail to reject the null of a zero coefficient for variables not included in Exhibit 8.
Results are similar for a probit model.
24
DISCUSSION: As noted in Chapter Three, CMS reports 19,856 individuals have selected a Marketplace
plan in West Virginia, and 21,019 individuals were determined eligible for Medicaid/CHIP.21 However,
these numbers are likely to be an upper bound for individuals actually covered by a Marketplace plan
because maintaining coverage requires continued action on the part of the enrollee. Specifically, the
enrollee must continue to pay plan premiums to remain covered. Estimates suggest about 80-90% of
those enrolled through the Marketplace make their first payment, and it is too soon to know how many
will make payments in subsequent months.22 Those who let their coverage lapse, or failed to sign-up in
the open enrollment period, can still become covered during the year if they have a qualifying life event
or a complex situation (e.g., change marital status, have a baby, lose employer insurance coverage, etc.).
Others might become insured outside of the Marketplace through a new employer or new eligibility for
Medicaid or Medicare coverage.
Another factor that could affect premium payments and future enrollments is the experience
that a Marketplace enrollee has with their plan. Marketplace plans represent a service purchased from
the private market. However, health insurance is likely to be one of the most complex services an
individual purchases, and many previously uninsured (and currently insured, for that matter) individuals
are unlikely to fully understand the implications of copays, deductibles, coinsurance, and provider
networks. As Marketplace enrollees use their plans, they will learn about the more complicated aspects
of their insurance coverage, and this might affect their willingness to pay for a future plan. Those who
have high expenses and clearly see the value of their coverage are more likely to repurchase, whereas
those who use few services and never reach their deductible might be more reluctant to repurchase.
A related issue is the enrollee’s insurance reference point. Marketplace plans have significantly
higher cost sharing than Medicaid plans and, depending on income, more cost sharing than many
employer plans. If enrollees are expecting coverage similar to Medicaid, they might be startled by the
amount of money they are expected to pay out-of-pocket for services.
Baseline Data
This section includes a description of key metrics that are likely to be monitored as ACA
implementation unfolds. As more data become available, researchers will begin to tackle the difficult
21
Department of Health and Human Services, Health Insurance Marketplace: Summary Enrollment Report for the
Initial Annual Open Enrollment Period, ASPE Issue Brief (Washington, D.C., 2014).
22
Ibid.
25
question of whether some or all of the observed changes in baseline data were caused by ACA
components, including the Marketplaces, subsidies, the individual mandate, and Medicaid expansion.
Exhibit 9 Dashboard of Key Baseline Statistics
Non-Employer Private
Insurance
Uninsured
Medicaid Insured
WV: 15%
WV: 17%
US: 15%
US: 16%
Healthcare Spending per
Person
Medicaid Spending per
Member
WV: $7,667
WV: $6,099
US: $6,815
US: $5,563
Full-time/Part-time
Employment
Labor Force Participation
Rate
WV: 72%, 6%
WV: 14.2
US: 76%, 10%
US: 20.7
Average Annual Growth in
Healthcare Spending
Percent below the Federal
Poverty Line
Percent Greater Than 400%
of the Federal Poverty Line
Active Physicians per
100,000 People
WV: 6.2%
WV: 21%
WV: 27%
WV: 256
US: 5.3%
US: 20%
US: 33%
US: 264
WV: 2%
US: 5%
Employer Insurance
WV: 47%
US: 48%
Average per Person
Monthly Premium in
Individual Market
Average Monthly Single
Premium per Enrolled
Employee
WV: $333
WV: $490
US: $215
US: $449
Population Age 65+
Bankruptcy Filings per
1,000 People
WV: 30%
US: 28%
WV: 1.98
US: 3.39
Data sources: Kaiser Family Foundation, State Health Facts; US Courts; US Census Bureau; Association of American
Medical Colleges. Data are from 2012.
Key Findings: Baseline rates of insurance for non-group private insurance were less than half the
national average in West Virginia. Average monthly premiums in the individual market were
substantially higher in West Virginia (55%), consistent with the substantially lower rate of nonemployer private insurance in the state. West Virginia health spending per person and health
insurance premiums were higher than the national average. West Virginia had lower employment and
labor force participation rates and an older average population. Bankruptcy filings were substantially
lower in West Virginia. Healthcare spending grew faster in West Virginia.
DISCUSSION: Beginning with the first row of Exhibit 9, prior to 2014, West Virginia had the same rate of
uninsured as the national average. West Virginia had a slightly higher rate of Medicaid coverage and
slightly lower rates of employer coverage. Baseline rates of insurance for non-employer private
insurance were less than half the national average in West Virginia. This might prove to be an interesting
metric to follow over time, as this is the population targeted by Marketplace plans. Moving to the
second row of Exhibit 9, average healthcare spending per person and Medicaid spending per enrollee
26
were 12.5% and 9.6% higher in West Virginia, respectively. Average monthly premiums in the individual
market were substantially higher in West Virginia (55%), consistent with the substantially lower rate of
non-employer private insurance in the state. Premiums for employees were also higher (9%), but more
in-line with higher healthcare spending in West Virginia.
Exhibit 9, row 3 highlights some important differences between the West Virginia labor force
and national averages. Full-time employment was 4 percentage points (5.3%) lower in West Virginia,
and part-time employment was 60% lower. Lower employment rates among those in the labor force
indicate higher levels of unemployment. Additionally, the labor force participation rate (the percentage
of the population in the labor force) is 31% lower in West Virginia than the national average. This
indicates that a substantial number of the state’s citizens are not participating in the labor force. Some
possible reasons include being too young or too old to work, having a disability that prevents work, or
choosing not to work (note the unemployed are counted as part of the labor force). West Virginia also
has an aging population with a larger percentage in the 65 and older age category. The final entry on
row 3 indicates that bankruptcy filings, sometimes caused by unpayable medical bills, are substantially
lower in West Virginia.
The final row of Exhibit 9 addresses changes in healthcare spending, poverty rates, and
physician supply. Healthcare spending increased 17% faster in West Virginia than the national average,
indicating that the difference in West Virginia and US health spending per person is likely to widen. West
Virginia had a similar portion of individuals living below the poverty line (21% in West Virginia and 20%
nationally); however, the state had far fewer high-income households (greater than 400% of the federal
poverty line). The number of physicians per 100,000 people was about 3% lower in West Virginia than
the national average.
Premium Calculations
Key Findings: Based on results from the Kaiser Family Foundation subsidy calculator, total health
insurance premiums increase with age and are equivalent across income groups. Once a household is
in the subsidy range, net premiums are equalized across age groups. Younger households in the 138400% FPL income range are less likely to receive a subsidy.
DISCUSSION: Insurance premiums and subsidies for different family types and income levels are
considered below. Specifically, information is presented for a single adult, a household with two adults,
and a household with one adult and two children. Income groups include $10,000, $35,000, $50,000,
and $75,000. For each household type and income categories, annual subsidies and premiums were
27
calculated by age (25, 35, 45, and 60).23 Federal subsidies are available for households between 138400% FPL for premium amounts greater than a specified percentage of income (3.3 to 9.5% depending
on income level).
Households with income of $10,000
All family types with an annual income of $10,000 fell below the 138% FLP threshold for
expanded Medicaid. Households with a single adult were at 86% FPL, households with two adults were
at 64% FPL, and those with one adult and two children were at 42% FPL. All individuals in these
households were eligible for Medicaid coverage with little or no cost sharing.
Single Adult Households
Results for single adults highlight the key features of Marketplace premiums and subsidies.
Exhibit 10 includes information on the total premiums, broken down by the individual’s out-of-pocket
payment and the subsidy amount. First note that total premiums by age are equivalent across income
groups, as income is not a factor used to determine insurance premiums. For all income groups, annual
premiums increase with age from $2,474 for a 25-year-old to $6,687 for a 60-year-old. Second, once a
household is in the subsidy range, net premiums are equalized across age groups because subsidies are
designed to limit premiums to a percentage of income (9.5% in this case). Specifically, for a 45-year-old
with an annual income of $35,000, the annual premium is $3,558 and the individual receives a $233
subsidy, so that the net premium is $3,325. For a 60-year-old with the same annual income, the annual
premium is $6,687, with a subsidy of $3,362 and a net premium of $3,325. Additionally, note that
younger households in the 138-400% FPL income range are less likely to receive a subsidy because
premiums are rated by age and subsidies are structured to limit premiums to a specified percentage of
income.
23
Premiums and subsidies were calculated using the Kaiser Family Foundation subsidy calculator available at
http://kff.org/interactive/subsidy-calculator/. Calculations are based on non-smokers with no employer coverage
in Monongalia County, West Virginia.
28
Exhibit 10 Net Premiums and Subsidies for Single Adult Households
Income: $50,000 and $75,000 (435% &
653% FPL)
Income: $35,000 (305 % FPL)
$8,000
$8,000
$6,000
$6,000
$4,000
Net
Premium
$2,000
Subsidy
Net
Premium
$4,000
Subsidy
$2,000
$0
$0
25
35 Age 45
25
60
35
Age
45
60
Two Adult Households
These patterns are even more pronounced in results for two adult households. Total premiums
increase even more substantially by age, as they are now based on risk for two individuals rather than
one. For all income groups, annual premiums increase with age from $4,948 for two 25-year-old
individuals to $13,375 for two 60-year-old individuals. Households with annual incomes of $35,000 and
$50,000 are in the full subsidy range. Net premiums are $2,519 or 7.2% of income for households
earning $35,000 and $4,750 or 9.5% of income for households earning $50,000. As indicated in the last
panel of Exhibit 11, two person households earning $75,000 do not qualify for any subsidies.
Exhibit 11 Net Premiums and Subsidies for Two Adult Households
Income: $35,000 (226% FPL)
Income: $50,000 (322% FPL)
15000
15000
10000
10000
Net
Premium
Subsidy
Net Premium
5000
Subsidy
0
25
35
45
Age
60
5000
0
25
35
Age
45
60
29
Income: $75,000 (484% FPL)
15000
10000
Net
Premiu
m
5000
0
25
35 Age 45
60
One Adult, Two Child Households
Premiums are not generally as high for one adult, two child households as they are for two
adults because premiums are much lower for children than for older adults. For all income groups,
annual premiums increase with age from $5,603 for a 25-year-old with two children to $9,817 for a 60year-old supporting two children. Once again, households with annual incomes of $35,000 and $50,000
are in the full subsidy range. Net premiums are $1,870 or 5.3% of income for households earning
$35,000 and $4,112 or 8.2% of income for households earning $50,000. As indicated in the last panel of
Exhibit 12, households earning $75,000 only qualify for a subsidy with a 60-year-old adult (9.5% of
income).
Exhibit 12 Net Premiums and Subsidies for Two Adult Households
Income: $35,000 (179% FPL)
Income: $50,000 (256% FPL)
15000
15000
Net
Premium
10000
Net
Premium
10000
5000
5000
Subsidy
0
25
35
45
Subsidy
0
25
60
35
Age
45
60
Age
Income: $75,000 (384% FPL)
12000
10000
8000
6000
4000
2000
0
Net Premium
Subsidy
25
35
Age
45
60
30
West Virginia Economic Outlook and Work Force Trends
Economic Forecasts and Insurance Markets
Key Findings: Recent economic forecasts for West Virginia indicate job growth concentration in areas
unlikely to provide full-time, year-round work with insurance benefits. Population decline and aging
of the existing population will continue to put financial pressure on public insurance and provide
challenges for maintaining robust non-employer risk pools.
DISCUSSION: The Bureau of Business and Economic Research at West Virginia University has been
producing state and regional economic forecasts in West Virginia for decades. According to their most
recent forecasts, employment is expected to increase 1% per year, but most of this growth will be in
construction (2.3%) and service jobs (2.1%).24 These industries are less likely to offer full-time, yearround employment, decreasing the probability that these jobs will come with offers of employersponsored insurance. The West Virginia population is forecasted to decline as deaths outnumber births
and because of out-migration from the state. In general, the state’s population is likely to continue to
become older on average, increasing the enrollment in Medicare and increasing the need for Medicaid
long-term care. An aging population also creates challenges for maintaining attractive premiums in the
private marketplace, as older individuals have higher expected health costs.
West Virginia Employment and Wages
Key Findings: Occupations and industry employment in West Virginia align closely with national
averages, although West Virginians are generally more likely to be employed in healthcare,
construction, and mining, and less likely to be employed in business and financial operations and
computer and mathematical occupations. Average annualized wages are about ten thousand dollars
lower than the national average in West Virginia. West Virginians make more than the national
average in the mining industry, but far less in the information, financial, professional, and business
services industries. Employment in West Virginia is less volatile than national trends; employment did
not rise as quickly in 2006-2007 and did not fall as sharply in 2009-2010 following the most recent
recession. West Virginia employment in the health services industry has increased steadily since 2006,
but at a slower rate than national employment in the industry. Wage differences are smaller in the
24
Brian Lego et al., West Virginia Economic Outlook 2014 (Morgantown, WV: Bureau of Business and Economic
Research, 2013).
31
health services industry, where West Virginians earn about five thousand dollars less than the
national average per year.
DISCUSSION: This section contains data and discussion of baseline employment and wage numbers for
West Virginia compared to national averages from 2006 through the second quarter of 2013. We begin
with a general discussion of employment and wages, and then discuss trends by occupation and industry
with a focus on the health services industry.
Exhibit 13 Employment in All Industries, West Virginia and United States
105
103
100
98
95
2006
2007
2008
2009
Source: Work Force, West Virginia
and Bureau of Labor Statistics
2010
2011
2012
2013
Exhibit 13 illustrates changes in employment from the first quarter of 2006 to the second quarter of
2013 for West Virginia and the United States. Over this time period, employment in West Virginia was
less volatile than national employment numbers. West Virginia employment did not rise as quickly in
2006-2007 and did not fall as sharply in 2009-2010, following the most recent recession.
Annualized Average Wages, All Industries, West Virginia and United States
32
55,000
50,000
45,000
40,000
35,000
30,000
25,000
20,000
2006
2007
2008
Source: Work Force, West Virginia
and Bureau of Labor Statistics
2009
2010
2011
2012
2013
As illustrated in Exhibit X, average annual wages in West Virginia are well below the national
average. West Virginians earn about ten thousand dollars a year less than the national average, which
ranged from about $41,000 to about $49,000. Interestingly, West Virginia trends in wage growth are
similar to the national average, and the gap remained roughly the same over the time period.
Employment Share by Occupation, West Virginia
vs. United States, 2013
Occupation
Occupation
Code
WV
US
43
Office and Administrative Support
15.9
16.2
41
Sales and Related
9.9
10.6
35
Food Preparation and Serving Related
9.2
9.0
29
Healthcare Practitioners and Technical
7.7
5.8
53
Transportation and Material Moving
7.6
6.8
47
Construction and Extraction
7.0
3.8
33
25
Education, Training, and Library
6.1
6.3
51
Production
5.6
6.6
49
Installation, Maintenance, and Repair
4.9
3.9
11
Management
4.6
4.9
39
Personal Care and Service
3.6
3.0
31
Healthcare Support
3.2
3.0
37
Building and Grounds Cleaning and Maintenance
3.1
3.2
13
Business and Financial Operations
2.9
5.0
33
Protective Service
2.4
2.5
21
Community and Social Service
1.3
1.4
15
Computer and Mathematical
1.3
2.8
17
Architecture and Engineering
1.1
1.8
19
Life, Physical, and Social Science
0.9
0.9
23
Legal
0.9
0.8
27
Arts, Design, Entertainment, Sports, and Media
0.7
1.3
45
Farming, Fishing, and Forestry
0.2
0.3
Source: Bureau of Labor Statistics
According to the occupational data (Exhibit X), West Virginia and the United States generally
share similar occupational distributions: nine of the top ten occupations in 2013 were the same for West
Virginia and the United States. While West Virginia included construction and extraction occupations
among the top 10, the United States included business and financial operation occupations instead. For
both the state and the nation, since at least 2009, office and administrative support, sales, and food
preparation and related occupations were the top three occupations.
Notably, however, West Virginia has a higher concentration of health-related jobs than the
United States. The healthcare practitioners and technical occupation is ranked fourth in the state and
accounts for 7.6% of total occupations. In the United States, this occupation is ranked seventh and
accounts for 5.8%. Moreover, all health-related occupations combined (healthcare practitioners and
technical, personal care and service, and healthcare support occupations) account for 14.5% of all
occupations in West Virginia, well above the 11.8% share in the United States.
34