FILED UNDER NO SH*T, SHERLOCK: OMB admits Trump's CSR sabotage raised unsubsidized premiums 15-20% this year.


With the 2018 Open Enrollment Period coming up just 5 days from now, it's time to put this to bed: After 6 months of painstaking research and analysis, I've compiled a comprehensive analysis of the weighted average rate changes for unsubsidized ACA-compliant individual market policies in 2018, including both the on- and off-exchange markets. It's already been confirmed by a different analysis by healthcare consulting firm Avalere Health, which used a completely different methodology to arrive at the exact same conclusion: The national average increase is between 29-30%, ranging from as low as a 22% average premium drop in Alaska (thanks to their successful reinsurance program) to as high as a painful 58% increase in Virginia.

I've further confirmed that of that 29-30%, the deliberate Cost Sharing Reduction cut-off by Donald Trump is responsible for roughly 13-14 percentage points overall, or nearly half of the total. An additional 3-4 percentage points (12% of the total) has been tacked on in response to carriers' ongoing concerns about whether or not the Trump administration intends on enforcing the Individual Mandate penalty.

Caitlin Owens & Jonathan Swan, Axios, today:

OMB: Funding insurer subsidies will lower ACA premiums 15-20%

Funding the Affordable Care Act's cost-sharing subsidies would lower premiums by 15-20%, according to an analysis being circulated around congressional offices from the Office of Management and Budget. OMB says those subsidies would be more cost-effective than a new reinsurance program.

Why it matters: Reinsurance has been gaining steam on Capitol Hill, and Sen. Susan Collins is still owed a vote on a reinsurance bill. But the White House budget office is saying Congress could get a better deal by restoring a funding stream that President Trump cut off last year.

President Trump's decision to quit making the cost-sharing payments this year caused premiums to rise by 15-20%, the analysis says, and funding them next year would undo that increase.

There's only two problems with this:

  • First, thanks to the Silver Loading/Silver Switcharoo workaround whipped up by the insurance carriers, state regulators and ACA exchanges, about 3.3 million subsidized exchange enrollees would see their net costs increase next year, because the enhanced subsidies they're receiving in 2018 would disappear.
  • Second, appropriating the CSR reimbursement payments NOW would cause even more confusion and disruption this fall, as the carriers have to completely overhaul their calculations again and consumers are confused a second time by the sudden shift/correction in plan pricing and metal level readjustments.

IF CSR funding is restored for 2019, it must be done ALONGSIDE other market stabilization measures such as reinsurance and/or raising or removing the 400% FPL cap on Advance Premium Tax Credits...which is exactly what Sen. Patty Murray was suggesting a few weeks ago.

Still, it's nice to see the Trump administration itself openly admit that their own actions on CSR payments are what caused unsubsidized average premiums to shoot up by 15-20% this year (which is even more than I estimated they were responsible for, I should note).