2014

Year One Evaluation Report of the Health Insurance Marketplace in West Virginia

THOMAS K. BIAS, PHDM. PAULA FITZGERALD, PHDTAMI GURLEY-CALVEZ, PHD

EMILY VASILE, MPAFFPARUL 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 sState 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 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 HHealth IInsurance MMarketplace enrollment process.

Federally Facilitated Marketplace (FFM): type of Hhealth Iinsurance Mmarketplace in which the federal government and the Department of Health and Human Services oversees 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 Qualified Health Plans (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): HRSA is the primary fFederal agency for improving access to health care 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 Qualified Health PlansQHPs using the health insurance mMarketplace.

inROADS: West Virginia’s on-line system for determining possible eligibility for sState benefits. Allows users to apply and review these for health and social services. See https://www.wvinroads.org/selfservice/.

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-REPORT DRAFT FOR REVIEW PURPOSES ONLY-

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 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-expanding-medicaid-under-the-affordable-care-act/.

Modified Adjusted Gross Income (MAGI): Modified Adjusted Gross Income refers to 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 public educationeducating the public to raise awareness about the Marketplace and provide 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 FFM and SPM Marketplaces.

Offices of the Insurance Commissioner (OIC): agency which 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 Mmarketplace. The first open enrollment period lasted from October 1st, 2013 to March 31st, 2014. The next open enrollment period is scheduled to begin on November 15th, 2014 and end on January 15th, 2015.

Qualifiedty 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 (see Parasuraman, Berry and Zeithaml 1991).1

State-basede Base Marketplace (SBM): type of Hhealth Iinsurance Mmarketplace in which the state oversees all operational functions, including consumer assistance, education, and website maintenance.

State Partnership Marketplace (SPM): type of Hhealth Iinsurance Mmarketplace 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 evaluation evaluating consumer-oriented websites developed by Loiacono, Watson, and Goodhue.2 (2007).

1 See Parasuraman, Berry, and Zeithaml 1991. NEED FULL NAMES, TITLE, ADDITIONAL PUBLICATION INFO.2 Provide title and publication info for Loiacono, Watson, and Goodhue. (2007).

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Chapter One: Marketplace Background, Evaluation Plan, and& Data Sources

Introduction and History of the Marketplace in West VirginiaThe 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) gGrant,

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: (a1) develop a health insurance exchange, (b2) link working uninsured

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with patient-centered medical homes through the “WV Connect” pilot project, and (c3) create a

centralized portal for WV Connect health care 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

(Samples 2012).

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 bBoard. However, after exploring options for a State-bBased 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 ManagementThe 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. Accessed: 4/16/2014.4 Samples 2012. NEED FULL NAME, TITLE, PUBLICATION INFO, PAGE NUMBERS (IF APPLICABLE)

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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 health care 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 which that require both financial and health literacy. Both

aspects of this situation are likely to create significant barriers which that increase the need for person-

to-person interaction.7 (Walsh, Fitzgerald, Gurley-Calvez and Pellillo 2011). 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_4-10-13.pdf. Accessed: 1/15/2014. 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, - Politics - The Charleston Gazette - West Virginia News and Sports, http://www.wvgazette.com/News/politics/201309100084. Accessed: 9/13/2013.7 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. Accessed 4/8/2014.

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Exhibit 1 Overview of Consumer Assistance in West Virginia

Overview of Consumer Assistance Agencies/ Providers in WV9

Entity Award Amount / Source Location(s)Maximus $4.5 million / IPA Awardee 55 State DHHR OfficesAdvanced 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 Service Area: Preston, Randolph, Upshur, Barbour, Taylor, Harrison, Marion, Monongalia counties

TSG Consulting, LLC. $174,091 / CMS Navigator

Sub-Grantees/Partner Organizations:• WV Farm Bureau• Partners in Health Network

WV Health Centers $3,783,858 / HRSA 27 WV health centers

Medicaid Expansion in West VirginiaIn 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% percent 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 oin income levels.11

9 “Navigator Grant Recipients,” Centers for Medicare and & Medicaid Services, accessed April 8, 2014, http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/navigator-list-10-18-2013.pdf. . Accessed: 4/8/2014. 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. Accessed 4/16/2014.11 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? WV DHHR, Enroll WV Presentation by Nancy Atkins, http://www.dhhr.wv.gov/bms/Documents/WVMedicaidExpansionCountCounty20140315.pdf

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West Virginia Evaluation Goals and ContextWith the intention of better understanding the health, economics, and consumer marketing

quality and outcomes of the state partnership model in the stateWest Virginia, West Virginiathe 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: (a1) increase the number

of Americans with health insurance coverage, (b2) lower the cost (trend) of healthcare, and (c3) improve

the quality of and access to healthcare for all Americans.

Exhibit 2 Cross-state Comparison of Planned Evaluation Themes, compiled by Karen Johnson,

shows a cross-state comparison of common evaluation themes compiled by Karen Johnson. 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 Mmore details on the QR system , seecan be found here: “Health Insurance Marketplace Quality Initiatives,” Centers for Medicare & Medicaid Services, last modified June 10, 2014, http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Health-Insurance-Marketplace-Quality-Initiatives.html . 13 For mMore details about the evaluation plan and key research questions, see can be found the HRC’s web site: “Evaluation of the WV Health Benefit Exchange,” Health Research Center, http://publichealth.hsc.wvu.edu/hrc/Research/Current-Research/Evaluation-of-the-WV-Health-Benefit-Exchange. 14 Updated August 2013, accessed November 4, 2013, Available: http://www.ncsl.org/research/health/state-implementation-entities-to-implement-the-aca.aspx. Accessed: 11/04/2013.

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Exhibit 2 Cross- sState Comparison of Planned Evaluation Themes

WV AR CA CO MA RI VTType of Marketplace Partner Partner State State State State State

CoverageCoverage overview1 x x x x x x

Marketplace coverage overview2 x x x x x x xEmployer-sponsored insurance by employer size x x x x x x

Uninsured and underinsured levels x x x x xChoice (# coverage options) x x

Churn/transitions/gGaps x x x x xAffordability

Premium cCosts x x x x x x xOut-of-pocket (copay, deductible, coinsurance)

costsx x x x x

Small business affordability/# receiving tax credit x x x x x

# paying penalty/# exempt from penalty x x x x xMinimum or "meaningful" coverage x x

Subsidy levels x x x xFinancial burden/affordability measure x x x x x x

Socioeconomic demographics of enrollees x xComparison to non-marketplace enrollees x xMarketplace efficiency (admin cost as % of

premiums)x

Access & QualityHealth outcomes x x x x

Health status/population health x x x xUse of services (provider visits, ER,

hospitalizations, etc.)x

xx x x x

Quality of health care (HEDIS) x x x xBehavior/lifestyle changes x x xChronic condition changes x x

Participant understanding of coverage and care options

x x

Barriers to care x x xSafety net care impacts x x

Economic ImpactImpact aAnalysis3 x x x

Return on investment x xEffects of risk pool on market x x x

Basic trends/changes in insurance industry x x x x xCross-state border opportunities/markets x x

Reinsurance market changes x xOverall health care cost trends/changes x x x

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Marketing/Consumer AssessmentsAwareness x x x

Timeliness of determinations xSatisfaction - marketplace, coverage,

agent/navigator x x xReasons for termination x

1 ACA impact on insurance coverage status, - includes non-marketplace sources of coveragee (, 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 SourcesThe 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 areis 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 wereas 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 2014

May

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Ongoing Monitoring of State and Lower-level Surveillance Data

Monitoring of State Clinical Data and De-identified Health Outcomes

Consumer and IPA Ffeedback Focus Groups

Statewide Survey of West Virginia Residents (“Population Survey”)

Exit Surveys

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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. Theseis data will allow

the evaluation team to monitor health outcome, service utilizationuse, 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 was developed to track changes in a specific

patient population over time. 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 areis presented in Chapter

TwoThree.

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

consistent with best practices in survey research.16 (Dillman 2000). The survey questions were based on

15 The Ppatient panel was chosen based on any active patient with a clinical diagnosis of essential hypertension during between July 1, 2010 and June 30, 2011, 7/1/2010 to 6/30/2011 and, as of that time period, at least one office visit during the past 2 years as of this time period. 16 Dillman 2000. NEED FULL NAME, TITLE, PUBLICATION INFO, PAGE NUMBER (IF APPLICABLE)

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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, utilization use of health care 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-based survey based on a convenience sampling technique was

conducted in the Emergency Department (ED) of WVU’s Ruby Memorial Hhospital from August through

December 2013 for collectingto collect baseline information about the individuals visiting the ED.

Student researchers collected completed surveys from respondents between 10 a.m. and 7 p.m.-7pm,

Tuesday through Friday-Fri. 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 utilization 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.

Exit Survey

A phone exit survey was designed to learn about Marketplace consumers in West Virginia. Cover

letters and post cards were included in welcome packets sent to newly enrolled Highmark customers

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who purchased Qqualified Hhealth Pplan (QHP) coverage on Hhealthcare.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 surveys. 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 forto 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 areis collected on a regular, consistent, and

ongoing basis, are 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.

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.htmMedical 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.htmlAmerica’s Health Insurance Plans Survey (AHIP) - https://www.ahip.org/AHIPResearch/

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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 nationwide survey 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 report

purpose’sthe purposes of this report, data for West Virginia were utilized used to provide baseline

information about the 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, and race, health care 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 to collectfor collecting data for ACS one-year, three-

year and five- year 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 health

care 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

(CHIP), and Census data. The latest data areis available for 2012 and provide s 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. It provides health insurance information by combining data from various

sources such as the ACS, Medicaid, Children’s Health Insurance Program (CHIP), and Census data. Data

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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 utilization 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. Utilizing Using these interactive web tools, for report purposes data were

collected at county level 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 the patients and the inpatient care they receive,

including . These databases include information on the health care expenditures and utilizationuse,

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.,

length of stay in a hospital, and costs and charges associated with it. They 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). Of the state specific databases WV participates in the SID

only. Therefore, for the purposes of this report, estimates are based on SID.

15

HCUP databases provide information about all the patients and the inpatient care they receive.

It includes information about inpatient hospital stays such as primary and secondary diagnoses and

procedures, admission and discharge status from the hospital, demographic characteristics of the

patient, expected payment source, total charges due to hospital stay, and length of stay in the hospital.

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.

Consumer Assessment of Healthcare Providers and Systems (CAHPS)

These surveys of consumers of healthcare services are again administered by AHRQ on

consumers of healthcare services to assess the quality of healthcare provided 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 is conducted onof adults and children enrolled in different

healthcare plans aims . The goal is 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

the recent visits to healthcare providers. While the clinician and group survey includes information

based on US Census region, it does not provide state- specific 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 of the report.

16

Chapter Four: Economic Theories of

Decision Making and Baseline Data

IntroductionThe Marketplace has many potential ties to the state economy. Compared to the pre-

Marketplace economy, the Marketplace might alter factors including 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 Appendix K describes national predictions and early trends relating to ACA goals.

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 CoverageModel 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

In practice, individuals are likely to focus on past utilization 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; as households with few assets and little income would be unable to pay, and these medical bills

are would likely to be discharged as bad debt. These factors can work in opposite directions, as a

healthy, high- income 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 utilizationuse. It is likely that a

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, D.,J. L. Knetsch, J. L., &and R. H. Thaler, “R. H. (1991). The Eendowment Eeffect, Lloss Aaversion, and Sstatus Qquo Bbias,”. Journal of Economic Perspectives, 5 (1991):, 193–206,. for information on status quo bias, and David Rothschild, David, and Justin Wolfers. (2013)., “ Forecasting Elections: Voter Intentions versus Expectations”. (Wworking pPaper, 2013). for recent evidence on how individuals aggregate information in their social networks.

18

Office visits X

Cost of visit

Probability of illness or injury

XCost of

treatment

Probability of specialist services

XCost of services

Expected health

expenditures

person will 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 including 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 Hhealthcare.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

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% percent and 400 percent% 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

Health Spending

Lower financial risk, less likely to have insurance

Price of Insurance

Lower price, more likely to have insurance

Preferences and Beliefs

Can increase or decrease likelihood of insurance

Enrollment Costs

Lower enrollment costs, more likely to have insurance

Probability of Insurance

Exhibit 7 Non-monetary or Indirect Enrollment Costs Lower the Probability of Insurance Coverage

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 percent % of the federal poverty line), (2) the

subsidy eligible (household income between 139% percent and 400 percent% of the federal poverty

line), and (3) those above the income cut-off for subsidies (greater than 400 percent% 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 toof 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 ( to a system where eligibility is now based on

modified adjusted gross income) (modified adjusted gross income or MAGI) 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

21

Time costs of information and

enrollment, travel costs, emotional costs (e.g.,

frustration)Expected benefit of

enrollment including subsidies

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.

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: as premiums can range from between 2 and 9.5% percent of income, and cost -sharing

through copays, deductibles, and coinsurance can be 6% percent (100 to 150% percent FPL), 13%

percent (151-200% percent FPL), 27% percent (201-250 percent % FPL), and 30% percent (251-400

percent% 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 with 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 for to this population that is more likely

to have internet access and experience by providing a convenient portal for purchasing insurance.

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

22

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 (see Chapter One for more

information about the survey) 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 were likely to purchase a

Marketplace plan. These predictions are tested using responses from the survey.

Specifically the model predicts:

Factor Direction of Eeffect on Eenrollment

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 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

Qualify for subsidy

Age

Insured

Personal preferences ↔ Personal preferences could go in either direction

Liberal political identification

Conservative political identification

Internet access ↑ Internet access and experience reduces the cost of enrolling

Respondent reports access to the internet

23

ResultsKey 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

Marketplace plan.20 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 Marketplace plan. Those who

thought they would qualify for a subsidy were 23 percentage points (150 %percent) 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

%percent). 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 %percent). High income and good health reduced the

likelihood of a Marketplace purchase by 9 percentage points (60 %percent) and 4 percentage points (27

%percent), respectively.

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

Exhibit 8 Factors Affecting Plans to Purchase a Marketplace Insurance Plan

Enrollment versus CoverageKey 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.

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%

percent 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.

21 Department of Health and Human Services, . 2014. Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period,. ASPE Issue Brief. (Washington, D.C., 2014).22 Ibid.US DHHS. 2014. Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period. ASPE Issue Brief. Washington, D.C.

25

Subsidy eligible (+23)Believe Exchange is

good for W V (+5)

Currently Insured (-15)Income of $75,000 or

more (-9)Good health (-4)

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

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.

26

Exhibit 9: Dashboard of Key Baseline Statistics

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 non-

employer 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 were 12.5% percent and 9.6% percent higher in West Virginia, respectively. Average monthly

premiums in the individual market were substantially higher in West Virginia (55%), consistent with the

27

UninsuredWV: 15%US: 15%

Medicaid InsuredWV: 17%US: 16%

Non-Employer Private InsuranceWV: 2%US: 5%

Employer InsuranceWV: 47%US: 48%

Healthcare Spending per Person

WV: $7,667US: $6,815

Medicaid Spending per Member

WV: $6,099US: $5,563

Average per Person Monthly Premium in

Individual MarketWV: $333US: $215

Average Monthly Single Premium per Enrolled

EmployeeWV: $490US: $449

Full-time/Part-time EmploymentWV: 72%, 6%US: 76%, 10%

Labor Force Participation Rate

WV: 14.2US: 20.7

Population Age 65+WV: 30%US: 28%

Bankruptcy Filings per 1,000 People

WV: 1.98US: 3.39

Average Annual Growth in Healthcare Spending

WV: 6.2%US: 5.3%

Percent below the Federal Poverty Line

WV: 21%US: 20%

Percent Greater Than 400% of the Federal Poverty Line

WV: 27%US: 33%

Active Physicians per 100,000 People

WV: 256US: 264

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 %percent) lower in West

Virginia, and part-time employment was 60% percent 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% percent 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 by 17% percent 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%

percent lower in West Virginia than the national average.

Premium CalculationsKey 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 138-

400% 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

28

calculated by age (25, 35, 45, and 60).23 Federal subsidies are available for households between 138-

400% FPL for premium amounts greater than a specified percentage of income (3.3 percent to 9.5%

percent depending on income level).

Households with income of $10,000 of income

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 breaks this into the components that the individual pays out-of-pocket 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% percent 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.

29

Exhibit 10 Net Premiums and Subsidies for Single Adult Households

25 35 45 60$0

$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000

Income: $35,000 (305 % FPL)

Net Pre-miumSubsidy

Age 25 35 45 60

$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000

Income: $50,000 and $75,000 (435% & 653% FPL)

Net Pre-mium

Subsidy

Age

Two Adult HouseholdsThese 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% percent of income for

households earning $35,000 and $4,750 or 9.5% percent 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

25 35 45 600

5000

10000

15000

Income: $35,000 (226% FPL)

Net PremiumSubsidy

Age 25 35 45 60

0

5000

10000

15000

Income: $50,000 (322% FPL)

Net Premium

Subsidy

Age

30

25 35 45 600

2000400060008000

10000120001400016000

Income: $75,000 (484% FPL)

Net Pre-miumSubsidy

Age

One Adult, Two Child HouseholdsPremiums 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 60-

year- 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% percent of income for households

earning $35,000 and $4,112 or 8.2% percent 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% percent of income).

Exhibit 12 Net Premiums and Subsidies for Two Adult Households

25 35 45 600

2000400060008000

1000012000

Income: $35,000 (179% FPL)

Net Pre-mium

Subsidy

Age

25 35 45 600

2000400060008000

1000012000

Income: $50,000 (256% FPL)

Net Pre-miumSubsidy

Age

25 35 45 600

2000400060008000

1000012000

Income: $75,000 (384% FPL)

Net PremiumSubsidy

Age

31

West Virginia Economic Outlook and Work Force TrendsEconomic Forecasts and Insurance MarketsKey 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, employment is expected to increase 1 percent per year,

but most of this growth will be in construction (2.3 percent) and service jobs (2.1 percent) . These

industries are less likely to offer full-time, year-round employment, decreasing the probability of that

these jobs will come with offers of employer- sponsored 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 health care,

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

24 Brian Lego et al., Lego, Brian, Christiadi, Tess Meinert, Jose Sartarelli, Eric Bowen, Patrick Manzi, John Deskins, and Jane Ruseki. 2013. West Virginia Economic Outlook 2014 (Morgantown, WV: . Bureau of Business and Economic Research, 2013).. Morgantown, WV.

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the 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 .Virginiaa and United States

2006

2007

2008

2009

2010

2011

2012

2013

95

98

100

103

105

Source: Work Force, West Virginia and Bureau of Labor Statistics

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 .Virginiaa and United States

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2006

2007

2008

2009

2010

2011

2012

2013

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

Source: Work Force, West Virginia and Bureau of Labor Statistics

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 Code

Occupation WV.Va U.S.

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

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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

ExamineAccording to the occupational the data by occupation (Exhibit X), we find that 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, . Both have the same nine types of occupations among their top ten occupations in 2013. They both have oOffice and aAdministrative sSupport, sSales, and fFood pPreparation and rRelated occupations were as the top three occupations since at least 2009. The difference is that while West Virginia has Construction and Extraction occupations in the top 10, the US has Business and Financial Operation occupations instead.

Notably, however, Looking at more detail, however, shows that West Virginia has a higher concentration of health-related jobs than the United States. The hHealthcare pPractitioners and tTechnical occupation is ranked fourth in the state and accounts for 7.6% percent of total occupations. In the United States, this occupation is ranked seventh and accounts for 5.8 %percent. Moreover, looking at all health-related occupations, which includes Healthcare Practitioners and Technical, Personal Care and Service, and Healthcare Support occupations, shows that the state has even more of them than the US. These all health-related occupations combined (healthcare practitioners and

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technical, personal care and service, and healthcare support occupations) account for 14.5% percent of all occupations in West Virginia, well above the 11.8% percent share in the United States.

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