Arkansas: APPROVED 2019 ACA rate hikes: 4.1%, but would have DROPPED by ~1% w/out #ACASabotage

2019 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

With the deadline for submitting 2019 rate filings having passed a week or so ago, the approved rates from the various state insurance regulators have been popping up left and right. Today I took a look at the Arkansas Insurance Dept. website and sure enough, they've posted the approved filings for all 4 carriers on the individual market (as well as the small group market).

On the one hand, the statewide average rate increase hasn't changed much from the preliminary average; it dropped 0.4 points from 4.5% to 4.1%...and some of that change is simply because I had misestimated the actual enrollment/market share for a couple of the carriers.

On the other hand, in Arkansas, at least, it appears that the carriers don't think the repeal of the individual mandate and/or the Trump Administration's expansion of short-term and association health plans will have nearly as big of an adverse selection impact as other estimates/projections have...including my own.

The Urban Institute projected an 18.8 percentage point impact from these actions in Arkansas. I took a more cautious approach and only assumed 2/3 of that (around 12.5 points), which, if accurate, would have meant around an 8% premium drop statewide in a scenario where the mandate wasn't repealed and short-term plans weren't expanded.

However, the one-page summaries of the Arkansas rate filings (see below) make it pretty clear that the carriers think the sabotage impact will be smaller still. The breakouts at the bottom of all 4 summaries indicate that mandate repeal, #ShortAssPlans and other morbidity/risk pool shift factors only accounted for single digit increases.

Therefore, I'm reducing my "sabotage impact" estimate for Arkansas from 12.5 points to just 5 points, suggesting an alternate universe average reduction of around 0.9%. This translates into the average unsubsidized enrollee paying around $25/month extra, or $305 for all of 2019.