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Charles Gaba's blog

You may have noticed that I recently set up a GoFundMe account as an alternate method of letting people help keep going as we enter the 4th Open Enrollment Period.

Until now I've exclusively used PayPal for donations, but decided to add GoFundMe as well to see how that works out.

In addition to my general gratitude, I should also note that anyone who makes a donation is added to the official ACA Signups mailing list. Once a week* I send out a weekly digest including a wrap-up of the past week, along with special bulletins when there's a major ACA-related development.

*(well, nearly every week...occasionally I'm a bit late...)

NOTE: Scroll down for updates as more states are added to average.

After I posted my "I'm Calling It!" post last week re. the 2017 requested rate hikes for the ACA-compliant individual market, I noted that since I originally crunched the numbers for some states as far back as April, the situation in some states has likely changed somewhat due to carriers dropping out, joining in or re-submitting their rate request filings.

Since it would take 10x as much time as it does now (which is already a lot) to recreate the tables and graphs every time there's a change, I've been holding off on doing so until I've accounted for several states...which is what I'm doing here.

I actually included most of this as an update to my last post, but given how important this is, I figured I should write it up as a separate entry.

A few people have asked whether or not the "25% average hikes" I've estimated which have been cited by pretty much every outlet under the sun also apply to job-based coverage.

NO! Absolutely not!

That 25% weighted national average only applies to the roughly 18 million people enrolled in ACA-compliant individual policies...and even then, roughly half of those folks are mostly protected from the hikes thanks to the federal tax credits. So we're really talking about roughly 9 million people who have to pay the full 25% average increases.

When I decided to once again launch my Annual Rate Hike Estimate project this summer, I knew that this year, the rate increases for the individual market were likely to be significantly higher than in years past. Coming as they are in an election year, as a Democrat and ACA supporter, I obviously took no joy in reporting this truth.

However, a) The data is the data; it would be dishonest of me to try and ignore reality; and b) I knew that if I didn't report the rate increases as accurately as possible, Donald Trump and his Republican Party would flat-out lie about them.

Trump on his ACA replacement plan: "You will be making your own deals and they will be greater than you ever thought possible"

— Betsy Woodruff (@woodruffbets) September 24, 2016

Pretty incredible in new WaPo/ABC poll: On health care, voters favor candidate who can't even describe his plan.

— Dan Diamond (@ddiamond) September 25, 2016

UPDATE: OK, as Diamond notes, this is technically good news, although it's still pretty depressing:

Good news (?): The Post published wrong poll results + fixed 20 minutes ago. Here's corrected data on health care. 

— Dan Diamond (@ddiamond) September 25, 2016

A couple of weeks ago the final approved rates for Maryland's individual market were released; when plugging these into my table, my estimate of the statewide weighted average was 24.8%.

Thanks to the heads up from Louise Norris, however, I now have hard numbers from the Maryland Dept. of Insurance. I was close, but the actual weighted average is slightly higher. In addition, they've provided the small group averages as well:

The Maryland Insurance Administration Approves Premium Rates for 2017 Small Group and Individual Markets
Open Enrollment Begins Nov. 1 in the individual market; Consumers Encouraged to Shop Rates

Lots of healthcare reporters, pundits, executives, providers and politicians are likely issuing a huge sigh of relief at this moment, because after month after month of various insurance carriers announcing that they're dropping off the ACA exchange in certain counties only, state-wide or even dropping out of the individual market entirely (or that they're going out of business altogether, as in the case of four more co-ops), today was the deadline for carriers to officially commit to participating in the 2017 Open Enrollment Period starting on November 1st.

Today (Friday, Sept. 23) happens to be the deadline for insurance carriers to sign agreements with the federal government for participating in the exchange this Open Enrollment period (I'm not sure if today's deadline also applies to the state-based exchanges or not; they might be different). Until today, it looked as though there were going to be 3 carriers offering individual policies on the Nebraska exchange:

The figures compared 2016 and 2017 rates for Blue Cross Blue Shield of Nebraska, Aetna Health Inc. and Medica, the three companies that will offer policies to Nebraskans on the exchange when open enrollment starts Nov. 1.

However, as commenter M E noted, it looks like BCBSNE decided to wait until literally the last minute (last hour, anyway) to change their minds:

A couple of days ago, I noted that the latest development in House v. Burwell (the lawsuit brought by former Republican House Speaker John Boehner on behalf of the GOP caucus in the House of Representatives) could, in a worst-case scenario, end up resulting in millions of exchange-based policies being terminated with little notice. Basically, the HHS Dept. has included an "escape hatch" for exchange carriers in the event that the Supreme Court eventually rules in favor of the GOP House when it comes to Cost Sharing Reduction (CSR) financial assistance, although a final ruling wouldn't be likely to happen for at least another year or so.

Today, Michael Cannon of the Cato Institute has posted his own entry about the HvB "escape hatch" development, and while it obviously has an extremely anti-ACA spin, his conclusion is pretty much the same as mine (he assumes all 11 million enrollees would be kicked off their plans, while various state/federal laws could mean a much smaller percentage...but it would be pretty devastating no matter what).

Back in March, Bruce Japsen and Andrew Sprung noted that regardless of the financial woes many carriers are having on the individual market under the ACA, many of those same carriers are raking in big bucks in other divisions...particularly managed Medicare and Medicaid:

A snapshot of health insurers’ Medicaid windfall under the ACA could be seen in the earnings reports of Wellcare Health Plans (WCG) and Centene CNC +0.20% (CNC), which both beat Wall Street’s fourth quarter 2015 earnings expectations. These companies are an important measure of whether health insurers can find financial success providing Medicaid coverage to poor Americans under the health law President Obama signed six years ago even as the other key part of the legislation has growing pains.

Larger plans like Aetna AET +1.51% (AET), Anthem ANTM +1.31% (ANTM) and UnitedHealth Group UNH +1.08% (UNH) are also doing well in the Medicaid business, but their overall profit margins have been somewhat negatively impacted due to the private coverage on the exchanges.

Back in June, the two carriers which will be participating in the North Carolina individual market next year (BCBS and Cigna) requested average rate hikes of 18.8% and 7% respectively. Since then, however, Aetna has dropped out of the indy market, which no doubt is a big part of the reason both of them have resubmitted higher rate requests:

Proposed rate changes for 2017 revised upwards

For the two carriers that are expected to participate in the exchange in 2017, the proposed average rate hikes for 2017 are:

  • Blue Cross Blue Shield of North Carolina: 18.8 percent 24.3 percent (new rates were filed in late August)
  • Cigna: 7 percent (based on current off-exchange plans) 15 percent (new rates were filed)

Aetna had proposed an average rate increase of 24.5 percent, but that is no longer applicable for exchange enrollees, as Aetna’s plans will not be available in the North Carolina exchange in 2017.

I'm watching the livestream of the AccessHealthCT board meeting. Among other stuff, they're announcing three major changes/improvements for OE4:

First, it sounds like ConnectCare (the largest carrier on the CT exchange) is jumping on the "standardized plan" bandwagon, by offering what they call "Passage" exchange plans:

  • HMO-style, $5 co-pay for Primary Care Physician (PCP) visits (pre-deductible)
  • The Silver "Passage" plan would have a flat $50specialist co-pay
  • High-quality PC network included
  • Simple/easy to understand standardized plans
  • also offering "Passage" plans to small group / Medicare enrollees

--Standardized plans help but not enough; still lots of confusion about process, what's included/not included, etc; launching 4 retail "ConnectiCare Centers" to help people shop, enroll, member services, billing/payment issues, health/wellness assessments, education/outreach events

--CliniSanitas: Multicultural health delivery for hispanic/etc. members (3 centers; 100% bilingual services)


The final rate approvals for the Idaho indy market are either positive or negative, depending on your POV. On the one hand, the statewide weighted average is roughly 24%. On the other hand, this is 4 points lower than the 28% requested average from the carriers. As I noted in June, Idaho is among the only states which also posts exactly how much each carrier earned in premiums and paid out in claims for both last year and this year to date, giving some insight into which carriers are making a profit or taking a loss on the indy market:

Over at Investor's Business Daily, Jed Graham has crunched some IRS numbers to determine just how many people ended up paying the ACA's dreaded "Shared Responsibility" mandate penalty this year. It's a pretty negative piece, as you'd expect, but I'm mostly interested in the actual numbers, of course:

Yet the IRS Taxpayer Advocate Service included some preliminary statistics on 2016 ObamaCare mandate payments, officially called the Individual Shared Responsibility Payment, when it issued its below-the-radar annual tax season review on July 7. As of April 30, 5.6 million tax returns included mandate payments averaging $442 per return, compared with 6.6 million tax forms including average payments of $190 at the same point in 2015.

More recent data from the IRS wrapping the past tax year show that the final tally for 2015 ObamaCare Mandate fines included payments on 8.1 million tax returns averaging $210 for a total of $1.7 billion.

Hey, remember back in May, when I noted that the House v. Burwell court case could, if ultimately won by Congressional Republicans, end up with several million people getting stuck with an extra $1,000/year in premium costs?

The short version was this:

  • In addition to the ACA providing "APTC" tax credits to those who qualify, the ACA also provides "CSR" (Cost Sharing Reduction) assistance to those who a) are under 250% FPL and b) enroll in Silver exchange plans.
  • The CSR payments don't actually go directly to the enrollee; instead the insurance carriers cover the appropriate chunk of deductibles/co-pays, with the CSR funds going to reimburse the carriers.
  • Former House Speaker, Republican John Boehner, sued the HHS Dept. and the Obama administration over CSR appropriations, claiming that since Congress never specifically appropriated funding for CSR payments, it's illegal for the HHS Dept. to reimburse the carriers.
  • So far, the federal judge in the case has sided with the House Republicans, although the case is still winding it's way up the ladder, presumably to eventually end up at, yes...the Supreme Court of the United States (which has to be sick to death of being dragged into the middle of Obamacare yet again)
  • For the moment, the CSR assistance/reimbursements continue to flow...but if they were to be cut off, the insurance carriers would still be legally required to keep paying out CSR assistance, even though they wouldn't be reimbursed by the HHS Dept.
  • This would result in the carriers either a) filing potentially millions of lawsuits to get legally-mandated reimbursements for each individual CSR claim, which would clog up the courts, or, more likely, b) it would result in the carriers basically saying "screw this, I'm just gonna jack up rates by $1,000 a pop to cover my CSR losses".
  • However, due to a quirk in how the metal levels and CSR rules work, only Silver plans (the ones with CSR) would have their rates increase...meaning that Gold plans could end up costing less than Silver, which would just confuse the hell out of everyone.