2020 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

Individual Mandate

*(Yes, I know, the District of Columbia isn't actually a state, and Vermont's mandate is...well, read on...)

As the 2020 Open Enrollment Period rapidly approaches (it starts November 1st nationwide...except for California, where open enrollment is starting on October 15th), it's time to start getting the word out about some important things to keep in mind this fall.

One of the most critical things to remember for residents of California, the District of Columbia, Massachusetts, New Jersey, Rhode Island and Vermont is that each of these states* has reinstated an individual healthcare coverage mandate law/ordinance to replace the federal ACA mandate penalty which was zeroed out by Congressional Republicans back in December 2017. This means that if you live one one of them, unless you receive an affordability, hardship or other type of acceptable exemption, you'll be charged a financial penalty when you file your state/district taxes for 2020 in spring 2021 if you don't have qualifying healthcare coverage.

I noted last month that Rhode Island was the latest state to put in for an ACA Section 1332 reinsurance program waiver:

Governor Raimondo’s proposed FY 2020 budget called for the creation of the Health Insurance Market Integrity Fund, which would make available reinsurance payments to health plans to reduce the burden of high cost claims on individual market premiums. According to insurer filings, the enactment of the Health Insurance Market Integrity Fund would reduce the individual market premium requests from 6.6% to -0.4% for BCBSRI and from 5.4% to 1.7% for NHPRI. These insurers’ pricing assumptions are subject to review and verification by OHIC. Table 1 shows the requested individual market rate increases with and without reinsurance.

I wasn't expecting my analysis of Rhode Island's 2020 ACA premium changes to be of any particular interest; it's a small state with only two carriers offering individual market policies, after all, so there's not usually much to it.

When I last checked in on the Ocean State (seriously...that's their official slogan for whatever reason), I had noted that the state Senate had passed a bill (2019-S 0738A) which, if signed into law, would lock in most of the ACA's "Blue Leg" protections, including guaranteed issue, community rating, removal of annual/lifetime coverage caps and so forth.

Last year, I noted several times that regardless of what your opinion may be of the ACA's Individual Mandate Penalty (which was, until this year, either $695 per adult/$348 per child or 2.5% of your household income, unless you received an exemption), one of the key things to keep in mind about the penalty is that any impact it has on encouraging people to go ahead and enroll in ACA-compliant healthcare coverage is entirely dependent on two things:

This actually happened back in March but I missed it at the time:

Lawmaker proposes Medicaid buy-in and individual mandate for Oregonians

Representative Andrea Salinas, the new Chair of the House Health Care Committee, recently filed a bill that aims to establish a Medicaid buy-in option for Oregon residents. The bill, HB 2009, would also establish a “shared responsibility penalty,” or an individual mandate for Oregonians.

HB 2009 would essentially allow individuals who do not qualify for Medicaid, or for premium tax credits under the Affordable Care Act, to enroll in CCOs by paying premiums to cover their health services.

(Note: "CCOs" = "Coordinated Care Organizations", which I believe is how Oregon designates their Medicaid program.)

Yesterday I noted that both houses of the California state legislature (Assembly and Senate) voted to expand Medi-Cal (the state's Medicaid program) to anywhere between 147,000 - 175,000 undocumented immigrants (young adults age 19 - 25 and seniors over 65), entirely funded using state dollars.

It turns out that this was only part of a marathon voting session yesterday over the past few weeks. Either the state Senate, Assembly or both have also voted to pass three a bunch of other healthcare-related bills (I've included simple descriptions of each):

BREAKING: California Assembly passes our #AB1246(@Limon) to align consumer protections for all Californians, including those in large group coverage. #Care4AllCA

Just a few minutes ago I noted that the state of Oregon is once again strongly considering taking a second crack at establishing their own, fully state-based ACA exchange after spending the past five years piggybacking on top of HealthCare.Gov.

Well, the Oregon State Public Interest Research Group just published an extensive report in which they urge the state to do just that...along with several other key changes which I also strongly agree with:

Steps like a mandate for Oregon residents to buy health insurance and relief for exchange customers who earn too much to receive tax credits under the Affordable Care Act could help reverse premium hikes that have shot up amid attempts by the Trump administration to roll back the law, OSPIRG, the Oregon State Public Interest Group, argued in a report released Wednesday.

Lost amidst all the other overwhelming ACA-related news this week is one other important nugget: The Affordable Care Act's "individual mandate penalty", which was lowered to $0 in December 2017, was still the law of the land until December 31, 2018. It may have been changed at the time, but that change didn't become effective until January 1, 2019.

Here's the exact text:

PART VIII--INDIVIDUAL MANDATE SEC. 11081.

ELIMINATION OF SHARED RESPONSIBILITY PAYMENT FOR INDIVIDUALS FAILING TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

(a) In General.--Section 5000A(c) <<NOTE: 26 USC 5000A.>> is amended--
(1) in paragraph (2)(B)(iii), by striking ``2.5 percent'' and inserting ``Zero percent'', and
(2) in paragraph (3)--

(A) by striking ``$695'' in subparagraph (A) and inserting ``$0'', and
(B) by striking subparagraph (D).

(b) <<NOTE: 26 USC 5000A note.>> Effective Date.--
The amendments made by this section shall apply to months beginning after December 31, 2018.

Shoutout to James Medlock for digging up this relic from the 2008 Presidential primariy race: A lit piece from then-Senator Barack Obama's campaign slamming then-Senator Hillary Clinton over her insistence on her proposed healthcare policy bill including an Individual Mandate Penalty. How many Republican talking points can you spot below?

There's a lot going on here. For starters, the couple on the first page are basically 2008 versions of "Harry & Louise"...it's a white, middle-age, middle-class suburban couple poring over their finances. Considering that the 1993 "Hillarycare" proposal was destroyed in large part due to the health insurance lobby's successful series of Harry & Louise "there's got to be a better way" ads, Obama using this same tactic had to sting.

Back in early December, I noted that while I applauded both New Jersey and the District of Columbia for creating their own individual healthcare coverage responsibility requirements (aka, The Individual Mandate) in response to Congressional Republicans repealing the ACA's federal penalty, doing so also required making sure that residents of NJ/DC *knew* they had done so:

There's only one problem with this: The impact of the mandate penalty is completely psychological in nature. It only works (to the extent that it does at all) if people know that they'll be penalized financially for not complying with the mandate.

Last night, in response to CMS Administrator Seema Verma taking shots at both Covered California (for blaming their drop in new enrollment on the federal mandate being repealed) and New Jersey (for seeing a 7.1% exchange enrollment drop in spite of reinstating the mandate), I wrote a long analysis which noted that:

  • Verma may have a valid point, but...
  • There's not nearly enough data available to know one way or the other (especially the missing off-exchange data for this year), and...
  • Even if she turns out to be correct about NJ's total enrollment drop, NJ reinstating the mandate still resulted in a substantial premium drop for well over 100,000 residents.

Today, I was able to fill in some of that missing data...although some of it is still frustratingly absent.

So, a couple of hours ago, CMS Administrator Seema Verma tweeted out the following:

.@coveredca blames subpar enrollment on no federal mandate penalty, but NJ kept penalty and saw much, much bigger drop. Forcing Americans to buy insurance they can’t afford isn’t the answer.

— Administrator Seema Verma (@SeemaCMS) January 31, 2019

Last fall, I reported that thanks to the one-two punch of a) reinstating the ACA's individual mandate penalty at the state level and b) using the revenue generated from the mandate penalty to help fund a robust reinsurance program, the state of New Jersey had successfully lowered average unsubsidized premiums for 2019 individual market policies by a net swing of nearly 22 percentage points.

This Just In from Covered California...

Covered California Plan Selections Remain Steady at 1.5 Million, but a Significant Drop in New Consumers Signals Need to Restore Penalty

  • Covered California finishes open enrollment with 1.5 million plan selections, which is virtually identical to 2018’s total, despite federal changes.
  • A key reason for the steady enrollment is that more people entered the renewal process for 2019 coverage after a strong enrollment period for 2018.
  • The federal removal of the individual mandate penalty appears to have had a substantial impact, leading to a decrease of 23.7 percent in new enrollment.

SACRAMENTO, Calif. — Covered California announced that more than 1.5 million consumers selected a health plan for 2019 coverage during the most recent open-enrollment period, a figure in line with last year’s total. There was a 7.5 percent increase in the number of existing consumers renewing their coverage and a 23.7 percent drop in the number of new consumers signing up for 2019.

As part of her proposed 2020 annual budget, Rhode Island Governor Gina Raimondo has included an item of particular interest to those following the ACA:

Health Care Access and Affordability

State government plays a critical role in today’s health care system. Every policy decision we make has an impact on the individuals, children and families who need care. The Governor’s FY20 budget proposal builds on this momentum, preserving vital ACA protections that promote market stability and help to keep uninsured rates low. There are no eligibility cuts or broad-based benefit impacts proposed.

...Market Stability and Reinsurance Initiative

Last week I acquired the DC Health Link enrollment data for the first two weeks of 2019 Open Enrollment. It showed that DC, unlike most of the other state-based exchanges, was lagging behind last year for the first two weeks (although not as much as most of the HC.gov states).

Well, I just received updated data out of DC and the enrollment situation over the following four weeks didn't improve (if anything they dropped off slightly more):

  • Nov. 1 - Dec. 11, 2017: 19,252 QHP selections
  • Nov. 1 - Dec. 11, 2018: 17,825 QHP selections

That's a drop of around 7.4% year over year so far.

As with most other state-based exchanges, the numbers for both years include auto-renewals, which means the vast bulk of 2019 enrollments are likely already baked in. Last year's final tally was 19,289; DC has already reached 92% of that as of 12/11. Keep in mind that DC's Open Enrollment Period does not end on Saturday the 15th; it continues for another 47 days after that, through January 31st.

Pages