How will the CSR brouhaha affect YOU? It's complicated.

Over at Balloon Juice, David Anderson has whipped up a nifty little graph which attempts to break out just which ACA exchange enrollees would be positively or negatively impacted by the CSR reimbursement brouhaha under different scenarios.

As I noted last month with my "Silver Switcharoo" explainer, for carriers which remain in the ACA exchanges next year, there's three potential scenarios which could happen (well, four, actually, if you include "Congress manages to sneak a full CSR appropriation bill into law just under the wire", although that seems pretty unlikely at this point given the time crunch and the fact that it'd need a 2/3 majority in both the House and Senate to avoid being vetoed by Trump anyway):

  • 1. "Running Normally": Insurance carriers are somehow convinced that CSR payments will be made for all of 2018 (unlikely but who knows?)
  • 2. "Broad CSR Load": Carriers spread their anticipated 2018 CSR losses across all ACA-compliant individual market plans both on & off the exchanges.
  • 3. "Silver Load Only": Carriers apply 2018 CSR losses to Silver plans only (both on & off exchange)

  • 4. "Silver Switcharoo": Carriers apply 2018 CSR losses to On-Exchange Silver plans only & also create a "mirror" Silver plan which is only available off-exchange.

Anderson goes into quite a bit of detail to explain his reasoning, and for the most part it sounds right, but he didn't include the Silver Switcharoo scenario in his graph at all; adding it complicates things even more for unsubsidized enrollees. Therefore, after discussing it with him a bit this morning, I've come up with an expanded version of his graph, posted here with his blessing:

Again, read Anderson's piece for the full explanation, but this is what it basically boils down to:

  • If CSRs are guaranteed to be paid (least likely), no one would be better or worse off. Rates would still increase due to normal factors (medical inflation, the ACA carrier tax) as well as other Trump/Price sabotage (especially the uncertainty about enforcement of the individual mandate), but the CSR issue would be a non-factor.
  • In a Broad CSR Load scenario, APTC-subsidized enrollees receiving CSR assistance wouldn't see any impact...but APTC-only enrollees would be a mixed bag, and every unsubsidized enrollee, whether on or off the exchange, would be hit with an additional rate hike (averaging around 15% by my calculations).
  • In a "Silver Load" situation--which seems to be the most common direction most carriers are heading--some subsidized enrollees wouldn't see any impact, while the rest would see a windfall of additional APTC assistance. They could stay put and get a more robust Silver plan or get a hell of a bargain on a Gold plan instead. Unsubsidized enrollees in Bronze, Gold or Platinum plans wouldn't see any positive or negative effect, but unsubsidized Silver enrollees would likely have to switch to a bronze or gold plan and would still be somewhat worse off either way.
  • Finally, in states which go full "Silver Switcharoo" (California is the only state I'm certain intends to do this), the situation would be the same for subsidized enrollees (but even moreso!), along with unsubsidized Bronze/Gold/Platinum enrollees and, oddly enough, unsubsidized enrollees in off-exchange only Silver plans. Where it gets confusing, however, is for people who are a) unsubsidized and b) enrolled in Silver plans which are available on the exchange, whether they ENROLLED on the exchange or not.

Here's why: There are actually two types of ACA-compliant policies which people can buy:

  • Available on & off exchange
  • Available off-exchange only

Notice that there's no "on exchange only" option. If a plan is available on the exchange, it also has to be available off-exchange at the same price. That means if the CSR load is added to on-exchange Silver plans, it also has to be added to the off-exchange variant of that plan. There are, however, plans available off-exchange ONLY, which don't have to have any CSR load attached. This is what makes the Silver Switcharoo scenario so messy: Several million people enrolled in Silver plans (mostly off-exchange, some on-exchange) would have to switch to a brand-new, nearly identical off-exchange-only Silver plan in order to avoid the CSR hit.

Simple, huh?