Exclusive! New Jersey: 2018 MLR Rebate Payments (& potential 2019 rebates)

MLR rebate payments for 2018 are being sent out to enrollees even as I type this. The data for 2018 MLR rebates won't be officially posted for another month or so, but I've managed to acquire it early, and after a lot of number-crunching the data, I've recompiled it into an easy-to-read format.

But that's not all! In addition to the actual 2018 MLR rebates, I've gone one step further and have taken an early crack at trying to figure out what 2019 MLR rebates might end up looking like next year (for the Individual Market only). In order to do this, I had to make several very large assumptions:

  • First, I've assumed that total enrollment for each carrier remains exactly the same year over year.
  • Second, I've assumed that the average 2019 rate changes I recorded for each carrier last fall are accurate.
  • Third, I'm assuming that 2019 is seeing a 5% medical trendline on average...that is, that total 2019 claims per enrollee will be 5% higher than 2018's.

All three of these are very questionable, of course, but they at least provide a baseline.

All that being said, here's what things look like in New Jersey for 2018:

  • Large Group market rebates increased from $14.4 million to $15.6 million
  • There are no Small Group market rebates for 2018, repeating 2017
  • Individual market MLR rebates dropped from an already-small $264,000 down to nothing.

For next year, New Jersey is an exception to my "huge MLR rebates in 2020!" projection; I'm anticipating only nominal individual market rebates again, due to the dramatic rate drop this year due to the reinstatement of the individual mandate penalty and the implementation of a robust reinsurance program:

  • In 2016, Indy Market carriers averaged 95.6% MLR
  • In 2017, that dropped to 90.5%
  • In 2018, it dropped further to 80.8%
  • The 3-year rolling average remains an ugly 88.4%, thus no rebates this year.

For 2019, however, I'm projecting New Jersey's indy market MLR to shoot back up again, possibly as high as 93.7%. The carriers dropped their rates an average of 9.3% this year in response to the mandate + reinsurance program, but they're reversing themselves and raising rates 8.6% next year, so it's hard to say how that will play out. Even the one carrier I anticipate to have MLR rebates is highly questionable...Horizon Healthcare of New Jersey doesn't even appear to have had any enrollees last year:

AGAIN: There's absolutely no guarantee that things will play out this way. It's possible that none of these carriers will make MLR payments next year, or only some of them will, or the amounts will be smaller. These 2019 projections are pure speculation on my part based on a number of big assumptions.