START OF 2018 OPEN ENROLLMENT PERIOD

Time: D H M S

Quick recap: As of 2013, the pre-ACA individual market consisted of around 10.7 million people. The vast majority of the policies these folks were enrolled in were not ACA-compliant for one reason or another, including not covering one or more of the 10 Essential Health Benefits (EHBs) required by the ACA, having annual/lifetime caps on benefits or any number of other reasons.

Under ACA regulations, non-compliant policies which people were enrolled in prior to March 2010 (when President Obama signed the ACA into law) were grandfathered in...that is, insurance carriers could continue to offer them to existing enrollees for as long as they wanted to, and existing enrollees could stay on them for as long as they wished, but they couldn't be offered to anyone else, and once a current enrollee dropped out of a grandfathered plan they aren't allowed to rejoin it later on. The number of "grandfathered" enrollees has gradually declined since 2013, of course, as people either move to other coverage, die off (hey, it happens) or the carriers decide to discontinue the policies altogether.

Back in early June, the New York Dept. of Financial Services posted the requested 2018 rate hikes for the individual and small group markets. In most states, the CSR reimbursement issue is a much bigger factor than whether or not the Trump Administration enforces the individual mandate, but in New York it's the exact opposite: According to the NY DFS, loss of CSR payments would only tack on 1.3 points to the total, while "a full repeal of the federal individual mandate would increase rates by an additional 32.6%".

The reason for the fairly nominal CSR factor is that the vast majority of NY's CSR-eligible population (those earning 138-200% FPL) is instead enrolled in the state's Basic Health Program. As a result, only 26% of New York's exchange enrollees receive CSR assistance, and the 200-250% FPL recipients only receive a fairly skimpy amount of CSR help anyway. At the opposite end of the spectrum, the 32-point mandate factor is far higher than most carriers are indicating (more like 4-5 points), but there's a big difference between the administration "not enforcing" the penalty and outright repealing it, which NY DFS is talking about.

In any event, this means that NY's requested average increases boiled down to: 15.0% if CSRs are paid/mandate enforced, 16.6% if CSRs aren't paid/mandate is enforced, or a whopping 50.5% if CSRs aren't paid and the mandate was repealed.

OK, perhaps this is just me being paranoid, but then again, given the #TrumpRussia/Hacking brouhaha, perhaps not.

Like most website owners, now and then I like to check my website analytics to see how the site is doing traffic-wise. Every now and then I'll poke through the various demographics of site visitors. Once in a blue moon I'll even check which country people are visiting from. Given the nature of this site, obviously the vast majority of the traffic comes from the United States; after that, most visitors typically come from Canada, the United Kingdom or France, none of which is particularly surprising.

However, I noticed something interesting today, and decided to go back to prior years to check on something...and sure enough, guess what?

As I noted earlier today, there’s a gazillion ways the Trump Administration could sabotage (and in some cases, is already sabotaging) the 2018 Open Enrollment period this fall, doing everything in their power to dampen, obstruct and otherwise minimize the number of people who actually enroll in a healthcare policy via the federal ACA exchanges.

However, as I've noted before (and as the CBO confirmed last week), due to the confusing, inside out way in which the APTC and CSR subsidy formulas happen to work, there's also the potential for one of the most pressing sabotage schemes by Trump and the GOP to backfire completely, leading to the potential for a significant increase in ACA exchange enrollment.

I've noted before that even if the Trump Administration does ensure CSR reimbursement payments and does enforce the individual mandate in 2018, there are literally dozens of other ways that Trump and HHS Secretary Tom Price could sabotage the 2018 Open Enrollment Period. Here's just a few, several of which they've already been caught doing:

  • Minimal or non-existent advertising/outreach/promotional efforts
  • Understaffing of call centers/support staff, leading to absurdly long hold times
  • Deliberately underthrottled server bandwidth, slowing HC.gov down or even taking it offline, especially during peak hours
  • "Accidentally" misentered enrollment instructions or policy specifications
  • Confusing or missing confirmation/status notification messages either on the site, via email or both
  • Incorrect APTC/CSR subsidy formulas giving incorrect tax credit/financial assistance details to enrollees
  • Burying/completely removing the "Window Shopping" tool on the site

Here's another one for you, courtesy of Abby Goodnough of the New York Times:

For all the fuss and bother about how much premiums are expected to go up on a percentage basis next year, using percentages can be misleading, since the lower the premium is to begin with, the more dramatic a percentage increase is going to seem relative to where it started.

With that in mind, I've decided to mush together two recent projects of mine: First, my debunking/correction of the May ASPE report which disingenuously claimed that individual market premiums had "increased by 105% since 2013 due to the ACA"; second, my 2018 Rate Hike Project.

As I noted when I debunked/corrected the ASPE report, not only did it turn out to be somewhat lower when all 50 states were included (84%, not 105%), but the ASPE report completely ignores both the financial assistance provided to roughly half the market and, just as importantly, blows off the apples to oranges mismatch between the numbers, because only a handful of states had guaranteed issue laws in 2013, and only one (NY) had a community rating law. Having said that, as long as you keep those caveats in mind, the (corrected) ASPE report does provide a good baseline for figuring out what the 2018 premiums are likely to be.

By merging the spreadsheets for these projects together, I've come up with a rough idea of what I expect to see in terms of unsubsidized, full-price premiums for individual ACA policies this November. I'm using a median instead of a weighted average this time around because I expect high variables in terms of the number of people who enroll in each state compared to 2017 (unfortunately, I still don't have 2018 data for several states, and I don't have the 2017 dollar average for DC to compare against).

I've ordered the states from lowest to highest based on the assumption that CSR reimbursements aren't made next year ("full sabotage effect"). The blue sections are my best estimates for each state assuming CSRs are paid; the yellow sections represent how much of the average premiums are due to "CSR padding" by the carriers.

Tuesday morning I left on a quickie family vacation to Mackinac Island; we got back into town last night, so I was gone for just 4 days. In that time, here's some of the bigger developments on the ACA/healthcare policy front:

  • The Congressional Budget Office issued their formal projection of the 10-year (9-year, really) impact of terminating CSR reimbursement payments permanently starting in January 2018. Their major takeaways are pretty much the same as what I and most other healthcare wonks have been projecting, with a few twists:
    • The fraction of people living in areas with no insurers offering nongroup plans would be greater during the next two years and about the same starting in 2020
    • Gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020—boosting the amount of premium tax credits according to the statutory formula
    • Most people would pay net premiums (after accounting for premium tax credits) for nongroup insurance throughout the next decade that were similar to or less than what they would pay otherwise—although the share of people facing slight increases would be higher during the next two years
    • Federal deficits would increase by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026
    • The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020.

In general, their projections on the impact on premiums (unsubsidized and subsidized) is similar to what I, the Kaiser Family Foundation, Oliver Wyman and others have been saying all along: Around 20 percentage point increases across all Silver plans (which would be the equivalent of around 14-15% if spread out across all plans on & off the exchanges.

Hey Michigan Residents! Do you live in Michigan's 1st Congressional District? Are you sick of Jack Bergman (MI-01) refusing to even talk to you about their "replacement" healthcare bill, which would tear away healthcare coverage for millions of Americans and hurt the coverage of countless millions more?

If so, come on out to Traverse City TOMORROW, Sunday, August 20th, and join State Representatives Christine Greig (appearing in person) and myself (appearing via Skype) as we explain what the latest craziness is regarding the ACA, the GOP attempts to repeal and/or sabotage it and healthcare policy in general from 10:30am - 11:30am at the Workshop Brewery, 221 Garland St. in Traverse City:

Tomorrow afternoon, CBO expects to release a report, which is being prepared with the staff of the Joint Committee on Taxation, about the effects of terminating payments for cost-sharing reductions. The analysis will include effects on the federal budget, health insurance coverage, market stability, and premiums.

Unfortunately, I'm not going to be in a position to write anything up about the CBO report, as I'm going on a long-overdue mini-vacation to visit Mackinac Island for a few days. I'm sure I'll be chiming in via Twitter when possible, but my wife will kill me if I try to write a full blog post, so that'll be about it.

Therefore, here's my thoughts about what the CBO is likely to conclude:

The effect on the budget will depend heavily on how many carriers decide to (or are allowed to) go the "Silver Switcharoo" route with their revised/final rate filings:

As I explained a couple of weeks ago, even if CSR payments aren't made next year, there are five different paths a given insurance carrier can take for 2018:

  • 1. Drop out of the on-exchange market so you're not at risk of having any CSR enrollees; stick around the off-exchange market.
  • 2. Drop out of the entire individual market, both on and off exchange.
  • 3. Preemptively cover your anticipated 2018 CSR losses by spreading them out across all plans on and off exchange.
  • 4. Preemptively cover your anticipated 2018 CSR losses by loading them onto Silver plans only both on and off exchange.
  • 5. Preemptively cover your anticipated 2018 CSR losses by loading them onto on-exchange Silver plans only.

Some carriers, tragically, have already thrown their hands up in the air and decided to wash their hands of the whole thing by choosing either #1 or 2 above. This includes Humana, Aetna, Wellmark and, most recently, Anthem, which is drastically scaling back their 2018 individual market participation levels.

Once upon a time there were 23 health insurance cooperatives created via ACA provisions, spread across a similar number of states (a few operated in more than one, while some states had more than one co-op operating within it).

The first one to fall was CoOportunity, which operated in Iowa and Nebraska. Their enrollments were halted in the middle of the 2nd Open Enrollment period, and they were liquidated before OE2 even finished.

As noted in the Virginia and Maryland updates, I've started going through the earlier state rate filings and revising them to include:

  • Updated/revised carrier rate filings;
  • Additional market withdrawls and/or expansions;
  • Corrections to CSR factor impact, etc.

The original versions of each state writeup includes screen shots of the actual filing documents and explainers behind specific requests; I don't have time for that with most of the updates, so I'm bundling several states together. Here's Connecticut, Oregon and Vermont's revisions:

As noted the other day, now that I've compiled the initial 2018 rate filing requests for 46 states + DC (the remaining 4 states aren't public yet), it's time to go back to the earlier states I analyzed and see whether there's been any updates/corrections to my original estimates. I started running the numbers back in early May, and a lot has changed since then, with carriers dropping out of the exchanges, expanding to fill the gaps or simply refiling with revised pricing requests.

Maryland was the second state I analyzed; I originally came up with the following average:

This strikes me as rather ominous...

Date: August 10, 2017
Title: Information on Risk Adjustment Methodology and Rate Filing Deadlines

Question: What changes will be made to the risk adjustment methodology to account for recent rating practices that assume issuers of silver-level QHPs facing increased liability for enrollees in cost-sharing reduction plan variations?

For the past two years, Virginia has been the first state in the nation to post their initial rate filings for the following year. I originally compiled their individual market 2018 change requests back in early May, and came up with the following at the time:

UnitedHealthcare had previously announced they were dropping out of Virginia, but I didn't have an enrollee number for them, and Aetna had also just announced their withdrawl from the state. I hadn't yet finalized my "CSR/Mandate Penalty" factor layout yet; at the time I assumed the 30.6% weighted average requested assumed full CSR/mandate sabotage and reduced that number by 17 points based on the Kaiser Family Foundation's "19% national average CSR rate hike" estimate analysis, which estimated the CSR impact at 17 points for Virginia.

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