BREAKING: CMS releases Feb. 2018 ACA Exchange Effectuation Report!

This Just In...

Centers for Medicare and Medicaid Services Releases Reports on the Performance of the Exchanges and Individual Health Insurance Market
Reports show individual market erosion and increasing taxpayer liability

Um...yeah, deliberately sabotaging the ACA a dozen different ways and cutting off CSR reimbursement payments, thus forcing the carriers to load CSR costs directly onto premiums, which in turn jacks up APTC subsidies accordingly, will have the effect of "increasing taxpayer liability"). Go on...

Today, the Centers for Medicare and Medicaid Services (CMS) released three reports that provide important information on the current condition of the Federal and State-based Exchanges and state individual health insurance markets. Taken together, these reports show that state markets are increasingly failing to cover people who do not qualify for federal subsidies even as the Exchanges remain relatively stable. Steps taken by CMS in 2017, as the reports show, improved the performance of the Exchanges and began addressing market stability issues. However, serious problems persist. Rising premiums have left unsubsidized people with poor health coverage options and dramatically increased the federal cost of premium subsidies.

Um...yeah, the largest reason they're "failing to cover people who don't qualify for subsidies" is because of the ~17 percentage point rate hike on unsubsidized enrollees caused specifically by various types of deliberate sabotage attempts by the Trump administration, primarily the CSR cut-off.

“As the Trump Administration took office, there were warning signs that we were dealing with a crisis in the individual health insurance market and Obamacare was failing its consumers. These reports show that the high price plans on the individual market are unaffordable and forcing unsubsidized middle class consumers to drop coverage,” said CMS Administrator Seema Verma.

Well yes, unsubsidized rates were starting to become unaffordable...and then you guys deliberately pushed the pedal all the way to the floor by doing your damnest to make the ACA exchanges "explode" (that's your bosses' word, not mine).

Additionally, these reports represent the current state of the market, as well as confirm our Agency’s efforts to stabilize the market. The three reports released today include the Early 2018 Effectuated Enrollment Snapshot, Exchange Trends Report, and new for this year, Trends in Subsidized and Unsubsidized Enrollment. The reports include data on effectuated Exchange enrollment for 2017 and 2018, overall trends on the operational and programmatic performance of the Exchange, and trends in subsidized and unsubsidized individual market enrollment from 2014 to 2017. These data provide a number of insights on how well state individual health insurance markets and Exchanges are serving the American consumer.

Fair enough. I'm operating on the assumption that the data itself is accurate, even if your spin on it turns out to be garbage.

Serious problems in the individual health insurance market emerged in 2016.

  • The subsidized and unsubsidized enrollment report shows enrollment began to decline in some states between 2015 and 2016, and in particular among the unsubsidized portion of the market. Over that period, 23 states experienced a decline in unsubsidized enrollment, with 10 states experiencing double-digit declines.
  • For plan year 2017, for which enrollment began in November 2016, the report shows an alarming 20 percent drop in the number of people nationwide who enrolled in the individual health insurance market without federal premium subsidies. By comparison, subsidized enrollment dropped by just 3 percent, or 223,000 people.
  • This enrollment drop occurred at the same time average monthly premiums spiked by 21 percent.
  • The unsubsidized portion of some state individual markets have clearly entered a death spiral, with unsubsidized enrollment dropping by more than a third in 14 states, including an astonishing 73 percent decline in Arizona.
  • These dramatic drops in enrollment occurred under the insurance rules and rates established under the previous Administration.

Immediate actions taken by CMS improved the performance of the Federal platform Exchanges and began addressing market stability issues.

  • CMS took immediate steps in 2017 to address market stability issues and to improve the performance of the Exchanges using the Federal platform in order to mitigate the deterioration of the individual health insurance market for consumers. The Exchange trends report shows a number of these initiatives are already improving the Federal platform Exchanges.
  • The Exchange Call Center reported an all-time high customer satisfaction rate of 90 percent.
  • CMS increased efforts to leverage the capabilities of the private sector by expanding the role of health insurance agents and brokers who supported 3,660,668 health plan enrollments, 42 percent of plan year 2018 open enrollments on Federal platform Exchanges. In contrast, Navigators enrolled less than 1 percent of total enrollees.
  • CMS also added new changes to Special Enrollment Periods (SEPs) to improve the risk pool by requiring people to verify their eligibility for an SEP. As a result, the volume of exceptional circumstance SEPs granted by CMS declined by 56 percent for plan year 2017.
  • Consumer requests for SEPs continued to be served at a high level. Average response times for SEP verifications were one to three days and 90 percent of SEP applicants were able to satisfy SEP verification and begin coverage.

With enhancements to the Federal platform, enrollment through the Federal and State-based Exchanges remained steady into 2018.

  • Effectuated enrollment is when a person has selected or is automatically reenrolled in a plan and paid the first month’s premium, if applicable. The effectuated enrollment report shows that enrollment through the Exchanges remained steady for subsidized people moving into plan year 2018. In February 2018, 10.6 million individuals had effectuated their coverage through the Exchanges. This is approximately 3 percent higher than the 10.3 million people who had effectuated their coverage at the same time last year.

Um...OK, you were doing pretty well up until here. Open enrollment didn't end until January 31 for plan year 2017, which means that a significant chunk of enrollees didn't even start coverage until March 2017 to begin with. For plan year 2018, open enrollment (in 42 states) was cut off as of December 15th, which means that a much smaller percentage of enrollees started in March.

In prior years, CMS used March 31st (the end of Q1) as the baseline effectuation reporting date. Last year CMS tried to compare Feburary 28 effecutations against March 31st effectuations from 2016...and this year, for whatever reason, they're trying to compare February to February even though the Open Enrollment ending dates were wildly different.

The logical comparison would be March 31 to March 31 in each year for a true apples-to-apples comparison of how the shorter enrollment period actually impacts things.

  • Those who enroll through the Exchanges increasingly rely on federal subsidies. The report shows 87 percent of enrollees rely on Advance Premium Tax Credits up from 84 percent for plan year 2017.

Yes, that makes sense...the 17 percentage point bump caused by Trump cutting off CSR payments and other sabotage efforts also caused the benchmark Silver premium to rise above the 9.6% of income threshold for hundreds of thousands more people, making them eligible for APTC assistance.

  • People who made a plan selection during open enrollment were more likely to have effectuated coverage in 2018. Nine percent of people failed to follow through with effectuating their coverage in 2018, compared to 15 percent in 2017.

Ummmmm...hold the phone. 11,750,175 people selected QHPs during OE5. 91% of that is 10.7 million people. Earlier you said it was 10.6 million, as of February, so I'm assuming there's a rounding error here, but if that's supposed to be compared to the 10.3 million effectuated in February 2017 (84.3%), then again, that's an apples to oranges comparison. I'll have to read the actual reports to be sure about this, however. Again, the proper comparison date to use for both years is the end of Q1, since 100% of Open Enrollment QHP selections had settled by that point in both years.

Rising premiums dramatically increase the federal cost of subsidies and leave unsubsidized people with few if any coverage options.

  • The effectuated enrollment report also shows that average monthly premiums for coverage purchased through Exchanges rose another 27 percent in 2018 on top of the 21 percent increase consumers experienced in 2017.

Yep, that sounds about right. Heck, I actually have it slightly higher, around 28-29%, but we can go with 27% if you wish. Not sure why you're complaining about was your policies which caused 17 points of it.

  • This premium increase resulted in an even sharper increase in the average federal premium subsidy, which jumped by 39 percent in 2018, rising from $373 in 2017 to $520 in 2018.

Yep. It's amazing what happens when you cut off the contractually-required CSR funding to the carriers, isn't it? They have to make up that difference somewhere, and voila: They found a clever way to do so: Silver Loading and the Silver Switcharoo!

  • This increase in average premiums subsidy, as well as higher enrollment, will likely increase federal spending on premium subsidies by more than $17 billion in 2018.

Yup. I realize you were trying to lower subsidized enrollment, but your boss is an idiot who doesn't have a clue how any of this works, so his own sabotage scheme mostly blew up in his face. Instead of hurting lower-income enrollees (which was his intent), he ended up helping them...while hurting middle class enrollees (unsubsidized) instead. Mazel Tov!

  • Coverage options for the unsubsidized portion of the market were already bad in 2017 when 20 percent dropped coverage. Another 27 percent increase in premiums leaves unsubsidized people with few if any coverage options and likely resulted in another substantial decline in unsubsidized coverage for 2018.

Yup. See my note above. Your boss shot the wrong hostages.

It is clear that many Americans are being priced out of the health insurance market, especially for employed people who earn too much to qualify for tax credits and have no access to employer-sponsored coverage. This underscores the need for CMS to continue efforts to stabilize the market and provide all consumers—including those who do not qualify for large premium subsidies—with more affordable health coverage options.

CMS will continue to build on the significant steps already taken by the Administration to promote healthcare choice and competition and decrease costs. Americans should not be forced to choose between coverage they cannot afford and no coverage at all.

I agree 100%, which is why you should remove the 400% FPL subsidy cap, stop trying to eliminate guaranteed issue and community rating protections, reverse the decision to open up junky #ShortAssPlans, and reinstate the individual mandate which your own former HHS Secretary openly admitted will cause 2019 premiums to spike another 10% or so.

(I still have to read the actual reports, so check back soon for more updates/takeaways...)

UPDATE: I've decided to move my deeper analysis into a separate post since this one is getting a bit lengthy.