I read with great interest your Op-Ed piece in yesterday's Washington Post extolling the virtues of "Short-Term, Limited Duration" plans and how awesome it is that the Trump Administration is hoping to flood the individual health insurance market with them. I figured you might appreciate a bit of fact-checking.
Obamacare forgot about you. But Trump didn’t.
For all the discussion of Obamacare since its passage, it is too rarely known that the law effectively split the United States’ individual insurance market in two.
Yes and no. What split the market in two was the fact that premiums have increased faster than expected. Those earning more than 400% of the Federal Poverty Level (FPL)--around $48,000/year for a single adult or $98,000/year for a family of four--don't qualify for financial assistance and have to pay full price.
Note: Much of this entry is a repeat of yesterday's, but I felt it was worth a separate entry.
This metaphor will take a bit, but bear with me.
On March 16, 1981, CBS aired the 17th episode of Season 9 of M*A*S*H. For those of you too young to remember, M*A*S*H, set at a U.S. Army medical camp in Korea during the Korean War, was one of the most successful TV shows in history, running 11 seasons. I believe the series finale remains the most highly-viewed broadcast in history. While M*A*S*H started out primarily as a sitcom, it evolved over the years into more of a drama with comedic moments.
Anyway, in S9 Ep17, "Bless You, Hawkeye", the main character, Dr. Benjamin Franklin "Hawkeye" Pierce (played by Alan Alda) finds himself stricken with a sudden, unexplained and violent allergic reaction to something. He spends much of the episode trying standard medical solutions, but his fits of sneezing and coughing become so bad that eventually a recurring character, psychiatrist Dr. Sydney Freedman, is brought in to see if there might be a psychological cause.
Vermont's situation is unusual compared to most other states for a couple of reasons. First of all, VT is one of only two states (Massachusetts is the other one) which has merged their Individual and Small Group market risk pools into one to help stabilize both markets. This is something I wish every state would do, frankly, although it's probably a lot easier to do in deep blue states (and Vermont having such a small population probably made it easier as well).
Because Congressional Republicans repealed the ACA's Individual Mandate Penalty, carriers were planning on increasing 2019 premiums by 12.6% on average, in part to account for the adverse selection which was expected to happen next year.
However, thanks to the Democratically-controlled New Jersey state legislature and Governor swiftly reinstating the ACA individual mandate, actual 2019 rate filings are only expected to increase rates an average of 5.8%, saving the average unsubsidized indy market enrollee around $470 apiece next year.
Finally, the NJ legislature also passed, and Governor Murphy signed into law, a robust reinsurance bill which, if approved by CMS, is expected to lower unsubsidized 2019 premiums by an additional 15 percentage points, for a final 2019 average premium reduction of around 9.2%.
It's also important to understand that New Jersey's portion of the funding for the proposed reinsurance program will be coming from the revenue generated by the reinstated mandate penalty itself.
The Department of Health and Human Services is urging states to cooperate with the federal government, but instead, insurance commissioners are panning the new plans as "junk” insurance and state legislatures are putting restrictions on their sales.
State insurance officials argue that, despite being less expensive than ObamaCare plans, the short-term plans are bad for consumers and aren't an adequate substitute for comprehensive insurance.
“These policies are substandard, don’t cover essential health benefits, and consumers at a minimum don’t understand [what they’re buying], and at worse are misled,” California Insurance Commissioner Dave Jones (D) said.
From the moment he took office, President Trump has used all aspects of his executive power to sabotage the Affordable Care Act. He has issued executive orders, directed agencies to come up with new rules and used the public platform of the presidency in a blatant attempt to undermine the law. Indeed, he has repeatedly bragged about doing so, making statements like, “Essentially, we are getting rid of Obamacare.”
Oral arguments have been scheduled for Sept. 10 in a Texas lawsuit seeking to strike down Obamacare as unconstitutional.
The case was filed in February by 20 Republican state attorneys general. They’re seeking a preliminary injunction halting enforcement of the federal health care law.
The Trump administration has partly sided with the plaintiffs in seeking to strike down the Affordable Care Act’s insurance protections, including the prohibition on denying coverage to individuals with pre-existing medical conditions.
The good news was that average unsubsidized 2019 ACA individual market premiums were expected to drop by about 5.7% after years of double-digit rate hikes.
The bad news was that due specifically to various types of deliberate sabotage by the Trump Administration and Congressional Republicans (primarily repeal of the individual mandate and expansion of #ShortAssPlans), that 5.7% drop was still a good 12 points or so higher than it otherwise would have been.
The ugly news was that due specifically to the Trump Administration's utterly unnecessary decision to freeze Risk Adjustment fund transfers in response to a lawsuit out of New Mexico, 2019 premiums would be hundreds of dollars higher still than they should have been for Blue Cross Blue Shield of Tennessee's 113,000 enrollees:
As regular readers know, each year I analyze hundreds of insurance carrier rate filings for the following year, then crunch the numbers to get an estimate of how much average premiums will increase (or in a few cases, decrease!) statewide.
As they also know, last year and again this year I've expanded on this by breaking out the portion of the annual rate increase which can be tied directly to sabotage efforts by the Trump Administration and Congressional Republicans. For 2018, this boiled down to roughly 17 points of the total nationwide increase being sabotage-related. It varied greatly by state, carrier and plan, but nationally, I estimated that without last year's ACA sabotage efforts, average premiums would have gone up around 11% instead of around 28%.
Assuming just 2/3 of that to play it safe, that still means that unsubsidized enrollees would have been looking at roughly a 12% drop in their 2019 premiums without those measures...a difference of over $120/month, or a whopping $1,400 more apiece next year. Ouch.
The most noteworthy thing about West Virginia's 2019 filings that I can see is that CareSource is expanding their state coverage from 10 counties to 35 counties, and the confirmation that West Virginia will remain one of the few states sticking with a Broad Load CSR strategy for reasons unknown next year (the state insurance commissioner might change their tune, however, now that CMS has done a complete 180 degree turn and has officially come out in favor of Silver Switching).
In any event, the statewide average premium hike appears to be around 14.9%...but once again, much of this is due to the ACA's individual mandate being repealed and Trump opening the floodgates on #ShortAssPlans.
At $843/month, West Virginia has one of the highest average monthly premiums in the country...and instead of only going up nominally next year, thanks to #ACASabotage, unsubsidized enrollees will likely have to pay a whopping $1,300 more apiece next year.
Utah has four carriers offering ACA-compliant individual market plans. Two of them (BridgeSpan and Regence BCBS) only offered their policies off-exchange this year; I'm not sure what the status is for either one in 2019. I can only find hard enrollment data for one of the four (Regence), so I'm estimating the other three based on a combination of last year's numbers and the total estimated individual market size in Utah from 2017. Because of this, consider the Utah estimates to be even rougher than some other states.
Having said that, there's one interesting extra sabotage factor to consider for the University of Utah rate filing: They note that they've added an extra 10.3% to their 2019 rates specifically tied to last year's Cost Sharing Reduction (CSR) cut-off. I presume they chose not to bake the CSR load into their rates this year, but I don't think Utah went the "mixed load" route so who knows?
In any event, as far as I can tell, this means around a 14-point #ACASabotage factor, between CSR load, mandate repeal and #ShortAssPlans.
South Dakota has two ACA indy market carriers, Avera and Sanford. The relative enrollment market shares are based on last year's numbers. The 14.4% #ACASabotage impact assumes 2/3 of the Urban Institute's projections to err on the side of caution.
THe average unsubsidized SD indy market enrollee pays $624/month this year; instead of that dropping by around $68/month, it's expected to increase by $22...for a total monthly difference of $90.
Assuming that's accurate, this means unsubsidized SD residents will be paying over $1,000 more apiece next year than they'd otherwise have to.
The only confusing thing about South Carolina's 2019 rate filings is that I'm not sure whether the "BlueChoice Health Plan" should be rolled in with the main Blue Cross Blue Shield of SC population. Carriers often have multiple listings in the same state for different policy lines, but they're generally listed under the same official corporate name. In this case, "BlueChoice" (which is clearly still part of BCBS) has a completely seaparate listing.
The BCBS filing clearly states the number of enrollees as around 203,000 people. The BlueChoice listing doesn't give a membership number, but appears to be roughly 6,800 people based on the full premium dollars they received in all of 2017 ($53.5 million divided by 12 months, divided by the statewide average of $654/month this year). This doesn't really make much difference, however, since BCBS still holds nearly 99% of the market anyway.
Assuming an 11.5% #ACASabotage factor (mandate repeal + shortassplans), this translates into unsubsidized enrollees having to pay an extra $900 than they'd otherwise have to (a 9.2% rate increase instead of a 2.3% rate drop).