Trump's CSR sabotage will mostly fail, but he's still trying to TKO OE5.

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.

Of the remaining three options, the most damaging one is #3, where the carriers take the money they anticipate being owed next year and spread the cost of it across all ACA-compliant policies, both on and off exchange, across all metal levels (Bronze, Silver, Gold and Platinum). The problem with this is that while roughly half of individual market enrollees should see their rates stay roughly the same thanks to APTC assistance, the other half...around 8 million people...would be hit with an additional ~15% rate hike, give or take, due specifically to the missing CSR reimbursements. This, of course, is in addition to the ~4-5% increase caused by the Individual Mandate Enforcement Uncertainty factor, which unfortunately there's little which can be done about, and the normal rate increases due to medical inflation and the like.

Fortunately, from what I can tell so far, it looks like #3 is also the least common choice of most carriers.

Option #4 seems to be the most common choice of both individual carriers and state regulators. The only ones hit with the actual CSR cost are those on Silver plans...which make up around 71% of on-exchange enrollees and perhaps 40% (?) of off-exchange enrollees. Since most on-exchange Silver enrollees also receive APTC, that means around 4 million unsubsidized Silver enrollees would be hit for the extra charge (~1.2 million on exchange, 2.8 million off-exchange, give or take). Half as many people, but they'd see an even higher increase of perhaps 19% or so.

Option #5 would be the best-case scenario. This is the #SilverSwitcharoo, in which only on-exchange Silver plans receive the full CSR load, while off-exchange Silver plans are "replaced" with a virtually-identical plan under a different code name. Those ~4 million unsubsidized Silver enrollees would have to switch to the "new" off-exchange Silver, but it it worked out, the subsidized Silver crowd would be covered by additional APTC assistance, while other subsidized enrollees would see an unexpected bonus to their assistance. The only state I know of which is definitely using the Silver Switcharoo gambit is California, but others may be doing so as well.

One way or the other, the 2018 Open Enrollment Period is gonna be messy, confusing and ugly for some...but assuming enough carriers stick it out and go with options #4 or, preferably, #5, the damage shouldn't be too bad. Everyone will still be hit with the Mandate Enforcement sabotage, but the CSR issue should be contained to some degree.

In other words, these particular sabotage attempts by Donald Trump should only be partly effective.

Unfortunately, as I also noted in mid-July, there's any number of other tools Trump, HHS Sec. Tom Price and CMS Admin. Seema Verma have at their disposal to sabotage, slow down and generally gum up the works this November:

  • 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 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

Sure enough, they're already pulling the plug on the various outreach/support/navigator partners who are such a critical part of getting people to sign up every year:

A wide array of groups that partnered for several years with the Department of Health and Human Services (HHS) and the White House to promote open enrollment under the Affordable Care Act say this year has brought a deafening silence from the Trump administration, with no sign the partnerships will continue.

Both representatives of the former partner groups and former HHS officials say the relationships with gig economy companies, youth organizations, churches, women’s groups, and African American and Latino civil rights non-profits were critical to keeping Obamacare’s markets functioning, and their termination is a clear example of sabotage.

“The failure to invest in local assistance and these enrollment partnerships will reduce enrollment, increase costs and drive up the uninsured rate,” warned Andy Slavitt, former head of HHS’ Center for Medicare and Medicaid Services under President Obama. “Hopefully they will reconsider taking these destructive actions.”

Without the partners’ help reaching out to young and healthy people who are less likely to sign up for health care, Slavitt explained, the government will find itself with a drastically smaller, older, sicker individual market with sky-high insurance rates.

With the first full open enrollment period of the Trump administration on the horizon, HHS has the power to make good on the president’s repeated promise to “let Obamacare implode”—either through active sabotage or passive neglect. Already this year, the administration has yanked PSAs about insurance deadlines, killed contracts for programs in 18 cities that helped people enroll, and redirected funds meant for the promotion of Obamacare toward the creation of ads against it—a decision now under GAO scrutiny. Both the president and HHS Secretary Tom Price frequently and publicly trash the law.

Now, dozens of organizations say the federal government has abandoned the collaborative outreach and education work they have pursued since 2013, putting the viability of the individual market in jeopardy.

The assistance provided by these groups will be (would be) even more critical this year, since the 2018 Open Enrollment Period will only be half as long...running from November 1st through December 15th, instead of the 3 months allowed in the previous 3 years. That means less time, more confusion and panic, longer lines and less room for error.

People have started asking me to give some sort of projection for OE5 enrollment. The answer is...I haven't the foggiest. It could be similar to last year's 12.2 million (which i doubt) or it could fall below 10 million for all I know. Even as low as 8-9 million wouldn't be out of the question, given how much Trump/Price have already screwed things up. The uncertainty factor is massive...which is just what Trump wants: Total chaos.