Urban Institute: Rate hikes if KvB plaintiffs win to spike even more than I had figured

So, for the past few weeks I've been shouting from the rooftops about the other fallout of the King plaintiffs winning: Massive rate hikes next year, which would likely cause a roughly 50% rate hike across 34 states for millions of people.

I based that on the assumption that 2016 rates would already be going up 10-12% on average anyway, plus an additional 35-47%, for a total increase of around 50%. I based this on:

• 100 x 1.10 x 1.35 = 148.5 (48.5% increase)
• 100 x 1.12 x 1.47 = 164.64 (64.6% increase)

I decided to be err on the low side of this range, figuring that even a 50% rate hike would be more than enough to make the point.

However, according to a new article by the Urban Institute (the source of the earlier 35% increase estimate...the RAND Corporation was the source of the 47% estimate), it looks like it could be even higher:

55%

How much Obamacare premiums are projected to rise in the effected states if the Supreme Court rules for the plaintiffs. Even if you bought a plan under Obamacare but don’t receive a subsidy, you could end up paying more for health insurance. The Urban Institute says that if the Supreme Court dismantles the financial assistance available for Americans who enroll through the federal marketplace, many people will be forced to give up their insurance. And a disproportionate number of those who remain, the Urban Institute predicts, will be those who most desperately need health insurance—in other words, the very sick. As a result, insurers will need to raise all premiums in order to pay the medical bills of the sick people who remain in the insurance pool. Ultimately, the Urban Institute estimates, 70% of enrollees will leave the pool. (Remember that 87% of enrollees receive subsidies.) In an earlier analysis, the Rand Corporation predicted that premiums could rise 47%.

As they explain in the actual June report itself:

In order for the typical person to keep the same insurance coverage they would have had otherwise, even if they would not have been eligible for tax credits in any case, they would have to pay a premium that is 55 percent higher.1 The premium increase for those who would have had a tax credit would be much larger.

1. In our first brief, we estimated that the average nongroup premium would be 35 percent higher under a finding for the plaintiffs. This first estimate took changes in the expected age and smoking status of the enrollees into account and it took into account that many would shift from more comprehensive coverage (e.g., silver, gold, platinum) down to less comprehensive (bronze) plans as premiums rose. In our second brief, we held the characteristics of those who would enroll and the type of coverage they would choose constant, calculating a 55 percent premium increase for the median individual/family ineligible for tax credits to purchase the same coverage they would have otherwise post a decision for the plaintiffs. The brief showed this difference in dollars as opposed to the percentage difference shown here.

Here's the scary part: I'm not entirely sure from the wording whether that 55% average increase estimate includes the "normal" 2016 increase or not. If it does, then that'd be bad enough, of course...but if it doesn't, then it could actually mean something like 10-12% plus 55%...which could mean as much as a 65-70% hike in all!

In any event, I should also note that the Urban Institute's estimate of the total number of people losing their policies (8.2 million) is a bit lower than my estimate (8.5 million), but they also estimate it differently.

My estimate is simply: Around 6.5 million losing their coverage due to tax credit loss plus another 2 million or so losing coverage due to the massive premium hike.

Their estimate is: Around 6.2 million of those who lose their tax credits, plus another 1.2 million via massive premium hikes, plus another 300,000 losing employer-sponsored insurance and an additional 445,000 losing coverage via Medicaid/CHIP.

Their reasoning for these last two numbers is as follows:

300,000

The number of employees projected to lose their employer-subsidized health insurance if the Supreme Court rules for the plaintiffs. Another section of the Affordable Care Act is built on the tax credit: The employer mandate. As of this year, large employers have to provide health insurance benefits or pay a fine. The thing is, large employers owe the penalty only if a) they do not provide quality health insurance to 95% of their full-time employees, and b) at least one of their full-time employees buys a plan on the marketplace and receives a subsidy. Which means that if a state has no subsidies, it has no employer mandate.

As a result, a Urban Institute and Robert Wood Johnson Foundation report predicted that if there were no employer mandate, some employers would stop offering health insurance. As of June 2015, the Urban Institute projects that 300,000 employees will lose their health coverage if the Supreme Court strikes down subsidies in 34 states. (In a separate analysis, the Rand Corporation expects that 300,000 people would lose their employer-subsidized insurance without an employer mandate, but predicts that nearly all of those people would find coverage elsewhere.)

As for the Medicaid/CHIP issue:

"some will lose their Medicaid coverage as states give up more federal funding."

I'm pretty sure this refers to situations like the one here in Michigan which I wrote about earlier today.