The Colorado Lode: CO the only state planning to spread CSR load across ALL plans so far
2018 MIDTERM ELECTION
Time: D H M S
About a month ago, Colorado was among the first states to release their approved 2018 individual market rate hikes. At the time, the average unsubsidized rate increases assuming CSR payments are guaranteed for all of 2018 averaged around 26.7% statewide.
As for CSR payments not being made, however, the press release accompanying the rate tables was more vague; it stated that they would be "up to" 14 points higher, but didn't clarify whether that would apply to every individual plan or only the Silver policies, which is how most other states appear to be handling it. I assumed the "no-CSR" average would be roughly 32.9% if the load is only dumped on Silver plans, but 40.7% if spread across all metal levels.
More recently, Louise Norris (who lives in Colorado herself) gave me the bad news: That "up to 14 points" is being spread across everything:
The rate filings are available in SERFF and the SERFF filing numbers are on the Colorado Division of Insurance statement about the approved rates. Some of the filings clearly indicate that a factor in the overall increase is the expected lack of enforcement of the individual mandate (or at least a perception that it won’t be enforced) which insurers expect will lead to fewer people enrolling, and a less healthy risk pool than there would be if the individual mandate were being strongly enforced.
But all of the approved rates assume cost-sharing reduction (CSR) payments will continue to be made to insurers; if CSR funding is eliminated, rates would be substantially higher: the Colorado Division of Insurance estimates (based on the alternate filings that insurers submitted) that premiums would have to be an additional 14 percent higher in 2018 if CSR funding were to be eliminated. The Colorado Division of Insurance confirmed that the supplemental rates that insurers filed to account for the elimination of CSR funding are not available on SERFF, as they are hoping that they will not have to be used. But unlike other states where insurers have loaded the additional premiums only on silver plans, Colorado insurers submitted supplemental filings that spread the cost of CSR across plans at all metal levels. The largest additional average increase that any Colorado insurer filed was 14 percent; the other filings were for smaller average increases.
This isn't quite as bad as it could have been; the prior wording made it sound like a full 14 points would be added to every policy, but it looks like that's the high end; "other average increases are smaller", though I don't know by how much. I'm going to split the difference between a 6.2 point and 14 point bump and assume around an even 10 points tacked on to every plan if CSRs aren't paid.
As of early September, the Trump Administration had not committed to funding CSRs for 2018, and although Congress was considering appropriating the money, the situation had not yet been resolved. But Colorado Insurance Commissioner, Marguerite Salazar, noted that “recent signs point to more and more bi-partisan support of the CSRs, so I believed it was important to use the CSR-funded premiums in our review… I simply cannot ask my fellow Coloradans to pay even higher premiums for something that at this point almost everyone agrees should be fixed.” For the time being, the month-to-month funding of CSRs continues to create uncertainty in the insurance markets, but the rates that have been approved in Colorado are based on the assumption that funding will be forthcoming for 2018.
I appreciate Ms. Salazar's position and reasoning here, but I really wish she'd done what most other states are doing and told the carriers to go the full Silver Switcharoo route...or at the very least, Silver Load. As such, if they use the higher rates, all unsubsidized enrollees both on and off the exchange will be hit...assuming CSR payments aren't made, that is.