END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

Time: D H M S

CSRs

As regular readers know, I've spent the third consecutive summer/fall painstakingly analyzing both the requested and approved unsubsidized (full-price) rate increases on the individual market for 2018. My track record the prior two years has been pretty good:

When I ran the requested rate hike numbers for Kentucky in early August, it looked like the only 2 carriers participating in the individual market next year (CareSource and Anthem BCBS) were asking for pretty hefty hikes of around 30.8% on average...and that assumed CSR reimbursement payments would be made next year. If they aren't, based on the Kaiser Family Foundation's estimates, I tacked on an additional 13.8% for a requested average of 44.3%. Ouch.

Since then, the Kentucky DOI has posted the approved rates...and the final numbers aren't not too far off, I'm afraid to say:

Until now, it looked like the District of Columbia was gonna be hit with rate increases of at least 26% or more. However, it looks like the powers that be negotiated a much better deal, especially from CareFirst:

Washington, D.C. – The District of Columbia Department of Insurance, Securities and Banking (DISB) approved health insurance plan rates for the District of Columbia’s health insurance marketplace, DC Health Link, for plan year 2018.

Insurers filed their initial rates with the Department in May. Since then, DISB engaged in its rate review process resulting in two out of the four insurers revising their rates down from their initial filings, one as much as half of what was proposed. The Department also held a public hearing during the rate review process to allow residents to provide input in the rate review process.

Back in August, I posted a rough analysis of the requested rate increase situation for Wisconsin's individual market carriers. However, I cautioned at the time that I was missing the enrollment market share numbers for four of the carriers (Aspirus, Compcare, Wisconsin Physician Service and WPS), and therefore had to guess at how the rate hikes for those carriers would impact the statewide average. I estimated the numbers assuming CSR payments are made at 21.7%, and from that assumed the impact of CSR reimbursements not being made would be around 7.8 additional points being tacked onto the average.

A couple of weeks ago, the state insurance commissioner announced the approved rate increases. The good news is that I overestimated on the "CSRs paid" front. The bad news is that I underestimated on the "CSRs not paid" front: It's actually 20% and 36% respectively:

 

I've written a lot in recent weeks about the real world impact that Trump cutting off CSR reimbursement payments will have on 2018 premiums in various states depending on how they choose to load the additional cost. As I've noted repeatedly, there are basically four strategies they can take: They can assume the payments will continue; they can spread the load across all ACA-compliant policies; they can load all of the cost onto Silver plans only; or they can load all of the cost onto on-exchange Silver plans only, while also creating (if one doesn't exist) a special off-exchange-only Silver plan as a backstop for unsubsidized Silver enrollees (aka the "Silver Switcharoo").

As of this writing, most states have gone with the third or fourth of these options, but a handful are still pursuing the first or second.

A healthcare wonk-blogger colleague, Andrew Sprung of Xpostfactoid, described the four CSR loading strategies as The Four Sons from the Passover Seder:

Up until a week ago, the possibility of Donald Trump pulling the plug on Cost Sharing Reduction reimbursement payments was a looming threat every day. While it hadn't actually happened yet, most of the state insurance commissioners and/or insurance carriers themselves saw the potential writing on the wall and priced their 2018 premiums accordingly (or at the very least prepared two different sets of rate filings to cover either contingency).

A few spread the extra CSR load across all policies, both on and off the exchange. This seems like the "fairest" way of handling things on the surface, but is actually the worst way to do so, because it hurts all unsubsidized enrollees no matter what they choose for 2018 and can even make things slightly worse for some subsidized enrollees in Gold or Platinum plans.

A week or so ago, David Anderson, Louise Norris, Andrew Sprung and I co-wrote an article explaining how different states were planning on handling 2018 individual market pricing given the massive uncertainty surrounding ongoing Cost Sharing Reduction (CSR) reimbursement payments.

Our timing couldn't have been more fortuitous: Less than 48 hours after we posted the piece, Donald Trump announced that, sure enough, he's finally following through on his threat to pull the plug on CSR payments, effective immediately.

When I plugged in the requested rate hike numbers for New Jersey back in August, they averaged around 8.5% assuming CSR payments would be made, or around 21.6% if they aren't.

The approved rate increases for NJ were just released, and the numbers appear to be pretty close to that, if a bit higher: 9.9% and 22.0% respectively.

Truth be told, I only have the hard numbers for the exchange-based carriers...and even those aren't technically official; they come from this NJ.com article:

TRENTON -- New Jersey residents who bought their own health coverage from Horizon Blue Cross Blue Shield through the Affordable Care Act could pay an average of 24 percent more next year, according to state-approved rates released on Tuesday.

Horizon is one of three insurance companies in New Jersey participating in the Obamacare marketplace in 2018. But it is the most dominant, insuring 72 percent of the 244,000 individual policy holders this year.

I first looked at Rhode Island's proposed rate hikes back in early July. At the time, the average increase for the two carriers participating in RI's individual market was 10.5% assuming CSR reimbursement payments are guaranteed for 2018. If they weren't guaranteed, however, I estimated at the time that an additional 19 percentage points would be added into the mix, based on an estimate by the Kaiser Family Foundation.

However, I realized a little later on that I was misinterpreting KFF's analysis; they were referring to how much they estimated silver plans would go up due to the lost CSR funds, not all metal levels. Furthermore, for Medicaid expansion states (which includes Rhode Island) they estimated the average was only 15%.. Based on these factors, the impact across the board on Rhode Island should have only been around 10.3%.

Way back in May, Blue Cross Blue Shield of North Carolina submitted their initial 2018 rate requests to the state insurance department, and noted at the time that they'd normally only be requesting an 8.8% average rate increase...but that due specifically to Donald Trump's threat to cut off CSR reimbursement payments, they were asking for a 23.3% increase instead. I noted that this meant that about 60% of their increase request was caused by Trump's CSR threat.

Then, in August, they gave a somewhat more positive news update: They were lowering their requested rate hike to 14.1%. Basically, their latest numbers had come in and the balance sheet was doing quite a bit better than they had previously thought:

Blue Cross said May 25 that the 22.9 percent rate increase was based on the subsidies ending, along with claims data from the first quarter of 2017. It projected an 8.8 percent rate increase with the subsidies remaining in place.

 

OK, I was in on the Breaking News a few hours ago; unfortunately a) I had to pick my kid up from school and b) our power went out. (I'm currently online via our generator). As a result, I haven't actually posted anything here at the site about the just-announced Alexander-Murray deal until now.

Axios has the basics:

Sen. Lamar Alexander says he and Sen. Patty Murray have reached a deal to fund the Affordable Care Act's cost-sharing subsidies in exchange for giving states more regulatory flexibility with the law. Shortly after Alexander announced the deal to reporters, President Trump called it a "good short term solution."

OK, right off the bat: I guarantee you that Donald Trump (who just yesterday ranted about how "Obamacare is 'dead' and 'gone') doesn't have the slightest friggin' clue whether this (or any other deal) is "good" or "bad". He hasn't read it and he wouldn't understand any of it if he tried to anyway.

Press release from the North Dakota Insurance Dept,, September 28, 2017:

Medica Leaving North Dakota Individual Health Insurance Exchange in 2018
Post date: Sep 28, 2017

BISMARCK, N.D. – Insurance Commissioner Jon Godfread today confirmed that the Insurance Department was informed late Wednesday, Sept. 27, that Medica does not intend to sign an agreement with the federal government to offer coverage on the Affordable Care Act (ACA) Exchange for their individual health insurance in North Dakota for 2018.

“We have had numerous conversations with Medica over the course of the past few months, and given the uncertainty that currently exists around cost sharing reductions, they are unable to move forward in the Federal Exchange,” Godfread said.

Things were looking pretty dicey for two of Montana's three insurance carriers participating on the individual market the past few days. One of the three, Blue Cross Blue Shield, saw the writing on the wall regarding Cost Sharing Reductions (CSR) likely being cut off and filed a hefty 23% rate hike request with the state insurance department. The other two, however (PacificSource and the Montana Health Co-Op, one of a handful of ACA-created cooperatives stll around, assumed that the CSR payments would still be around next year and only filed single-digit rate increases.

I'm not going to speculate as to the reasons why they both did so when it was patently obvious that having the CSRs cut off was a distinct possibility, although I seem to recall the CEO of the Montana Co-Op said something about their hands being tied since CSR reimbursement payments are legally required, after all. Basically, it sounds like he was genuinely trying to avoid passing on any more additional costs to their enrollees than they had to.

Pennsylvania is the first state which has released their approved 2018 rate hikes since Donald Trump officially pulled the plug on CSR reimbursement payments last Friday. It's also one of just 16 states which had yet to do by then. Most of the remaining states are small or mid-sized, so plugging Pennsylvania into the 2018 Rate Hike Project leaves just Texas, North Carolina and New Jersey as missing states with more than 8 million residents.

Back in June, the PA Insurance Commissioner was pretty up front and clear about what the major causes of 2018 rate increases on the individual market would be:

Insurance Commissioner Announces Single-Digit Aggregate 2018 Individual and Small Group Market Rate Requests, Confirming Move Toward Stability Unless Congress or the Trump Administration Act to Disrupt Individual Market

IMPORTANT: I need to stress that I am not in any way supportive of having CSR reimbursement payments cut off. I've written dozens of blog posts for the past year and a half about the danger this poses and I've repeatedly explained why this is a reckless, dangerous move by Donald Trump, I've even repeatedly noted how incredibly easy it would be to resolve the issue with a simple, one paragraph bill. Having said that, assuming the payments do stop being made, this is an explainer of how to turn it into a "lemonade out of lemons" situation for as many people as possible. Make no mistake, however: Millions of people will still be hurt by this...just not the people Trump thinks he's hurting.

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