Tuesday morning I left on a quickie family vacation to Mackinac Island; we got back into town last night, so I was gone for just 4 days. In that time, here's some of the bigger developments on the ACA/healthcare policy front:
The Congressional Budget Office issued their formal projection of the 10-year (9-year, really) impact of terminating CSR reimbursement payments permanently starting in January 2018. Their major takeaways are pretty much the same as what I and most other healthcare wonks have been projecting, with a few twists:
The fraction of people living in areas with no insurers offering nongroup plans would be greater during the next two years and about the same starting in 2020
Gross premiums for silver plans offered through the marketplaces would be 20 percent higher in 2018 and 25 percent higher by 2020—boosting the amount of premium tax credits according to the statutory formula
Most people would pay net premiums (after accounting for premium tax credits) for nongroup insurance throughout the next decade that were similar to or less than what they would pay otherwise—although the share of people facing slight increases would be higher during the next two years
Federal deficits would increase by $6 billion in 2018, $21 billion in 2020, and $26 billion in 2026
The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020.
In general, their projections on the impact on premiums (unsubsidized and subsidized) is similar to what I, the Kaiser Family Foundation, Oliver Wyman and others have been saying all along: Around 20 percentage point increases across all Silver plans (which would be the equivalent of around 14-15% if spread out across all plans on & off the exchanges.
Hey Michigan Residents! Do you live in Michigan's 1st Congressional District? Are you sick of Jack Bergman (MI-01) refusing to even talk to you about their "replacement" healthcare bill, which would tear away healthcare coverage for millions of Americans and hurt the coverage of countless millions more?
If so, come on out to Traverse City TOMORROW, Sunday, August 20th, and join State Representatives Christine Greig (appearing in person) and myself (appearing via Skype) as we explain what the latest craziness is regarding the ACA, the GOP attempts to repeal and/or sabotage it and healthcare policy in general from 10:30am - 11:30am at the Workshop Brewery, 221 Garland St. in Traverse City:
Tomorrow afternoon, CBO expects to release a report, which is being prepared with the staff of the Joint Committee on Taxation, about the effects of terminating payments for cost-sharing reductions. The analysis will include effects on the federal budget, health insurance coverage, market stability, and premiums.
Unfortunately, I'm not going to be in a position to write anything up about the CBO report, as I'm going on a long-overdue mini-vacation to visit Mackinac Island for a few days. I'm sure I'll be chiming in via Twitter when possible, but my wife will kill me if I try to write a full blog post, so that'll be about it.
Therefore, here's my thoughts about what the CBO is likely to conclude:
The effect on the budget will depend heavily on how many carriers decide to (or are allowed to) go the "Silver Switcharoo" route with their revised/final rate filings:
1. Drop out of the on-exchange market so you're not at risk of having any CSR enrollees; stick around the off-exchange market.
2. Drop out of the entire individual market, both on and off exchange.
3. Preemptively cover your anticipated 2018 CSR losses by spreading them out across all plans on and off exchange.
4. Preemptively cover your anticipated 2018 CSR losses by loading them onto Silver plans only both on and off exchange.
5. Preemptively cover your anticipated 2018 CSR losses by loading them onto on-exchange Silver plans only.
Some carriers, tragically, have already thrown their hands up in the air and decided to wash their hands of the whole thing by choosing either #1 or 2 above. This includes Humana, Aetna, Wellmark and, most recently, Anthem, which is drastically scaling back their 2018 individual market participation levels.
As noted in the Virginia and Maryland updates, I've started going through the earlier state rate filings and revising them to include:
Updated/revised carrier rate filings;
Additional market withdrawls and/or expansions;
Corrections to CSR factor impact, etc.
The original versions of each state writeup includes screen shots of the actual filing documents and explainers behind specific requests; I don't have time for that with most of the updates, so I'm bundling several states together. Here's Connecticut, Oregon and Vermont's revisions:
As noted the other day, now that I've compiled the initial 2018 rate filing requests for 46 states + DC (the remaining 4 states aren't public yet), it's time to go back to the earlier states I analyzed and see whether there's been any updates/corrections to my original estimates. I started running the numbers back in early May, and a lot has changed since then, with carriers dropping out of the exchanges, expanding to fill the gaps or simply refiling with revised pricing requests.
Date: August 10, 2017
Title: Information on Risk Adjustment Methodology and Rate Filing Deadlines
Question: What changes will be made to the risk adjustment methodology to account for recent rating practices that assume issuers of silver-level QHPs facing increased liability for enrollees in cost-sharing reduction plan variations?
For the past two years, Virginia has been the first state in the nation to post their initial rate filings for the following year. I originally compiled their individual market 2018 change requests back in early May, and came up with the following at the time:
UnitedHealthcare had previously announced they were dropping out of Virginia, but I didn't have an enrollee number for them, and Aetna had also just announced their withdrawl from the state. I hadn't yet finalized my "CSR/Mandate Penalty" factor layout yet; at the time I assumed the 30.6% weighted average requested assumed full CSR/mandate sabotage and reduced that number by 17 points based on the Kaiser Family Foundation's "19% national average CSR rate hike" estimate analysis, which estimated the CSR impact at 17 points for Virginia.
I've completed this process for 46 states + DC. I've confirmed (well, really, Louise Norris confirmed for me) that the filing data for the four missing states--Kansas, Missouri, Nevada and Utah--won't be made available publicly for another couple of weeks, which is irritating...but those four states combined only make up about 5% of the total population anyway; unless their average rate increase requests are significantly higher (or lower) than the average of the rest of the states, they aren't gonna move the needle up or down by more than a tenth of a point or so.
Like Wisconsin and Michigan, Ohio has a high number of carriers statewide...although the per-county competition is still lacking in some areas. Even so, their rate hike requests are still pretty high even with CSR payments being made...and dramatically higher if they aren't.
One interesting tidbit: Check out the CareSource filing letter (first one below the table). They don't mention CSRs or mandate enforcement...but they do specify that a full 5 points of their 23.9% increase request is tied to prescription drug inflation (see Shkreli, Martin)...and even more noteworthy, they say that another 5 points is due specifically to "a number of previously [Medicaid-] qualified individuals" being kicked over to the private exchange,
I had already posted a partial look at the New Jersey rate hike situation a couple of weeks ago with a video in which Topher Spiro of the Center for American Progress interviewed NJ Congressman Frank Pallone about the situation. Since his comments weren't official and only referred to Horizon Blue Cross, I didn't make it an official part of the Rate Hike spreadsheet, but now I've managed to plug in the remaining carriers and here's how it looks. As expected, with Horizon holding a commanding 70% market share, the statewide average is around 8.5% if CSR payments are made and the mandate is enforced versus 21.6% if CSR payments aren't made and the mandate isn't enforced.
Also, check out Horizon's cover letter explaining the rate hike...they're not screwing around with who to pin the blame on.
North Dakota's numbers are pretty straightforward. Only three carriers, none of whch say anything about CSR or mandate concerns, so I have to assume that their requested rate increases are the best-case scenario. In addition, the KFF estimates suggest only a 5 point additional CSR factor anyway. This results in roughly a 23% average hike if CSRs are paid vs. a 28% increase if they aren't.
Last year, Blue Cross Blue Shield of Oklahoma, as the only carrier participating on the ACA exchange in the state, jacked up their premiums by a jaw-dropping 76%. This resulted in the highest statewide average rate hike in the country of 71% overall.
Well, that certainly seems to have done the trick: This year BCBSOK (still the only on-exchange player and holding over 99% of the market anyway) is requesting a (relatively) modest 8.3% average rate increase...and their filing specifically calls out both the CSR and mandate enforcement factors as being major reasons. Assuming the Kaiser Family Foundation's estimates are accurate, that means that if the CSR payments were guaranteed for 2018, BCBSOK should actually be lowering their rates slightly, to the tune of around 2.4%.
Adding in the steep hikes from off-exchange only CommunityCare (which only has 1,400 enrollees) brings the averages in at a 1.9% rate drop if CSRs are paid, and an 8.7% increase if they aren't.
The good news is that Wisconsin has one of the most robust and competitive exchange markets in the country. The bad news is that, contrary to popular opinion, "competition" doesn't by itself magically lower prices, at least not by enough. Both Anthem and Molina are leaving the ACA exchange (although Anthem is technically sticking around off-exchange), but there's over a dozen other carriers still duking it out.
According to the 11 carriers I have enrollment numbers for, the statewide average rate increase being requested is around 20.8% assuming CSR payments are made; using the Kaiser Family Foundation estimates, that translates into roughly 32.4% assuming they aren't made. Unfortunately, I can't seem to dig up the enrollment data for four carriers: Aspirus, Compcare, Wisconsin Physician Service and WPS (I think the last two are actually subsidiaries fo the same company). Wisconsin's total individual market should be roughly 280,000 people, and when you add up all the numbers I have (including Anthem/Molina) it only comes to around 180,000, so there appear to be roughly 100,000 enrollees missing among those 4 carriers, or over 35%.
I've been operating ACASignups.net for nearly 4 years now. It started out as a nerdy hobby thing in my spare time, but quickly overtook my life. I always planned to shut it down after the first Open Enrollment Period ended back in April 2014...and then in March 2015...and again in 2016. Year after year, people clamored for me to keep it going one more year.
At this point a year ago I really planned on winding things down as of around April 2017. My reasoning was simple: If Hillary Clinton succeeded Barack Obama as President, there probably wouldn't be that much ongoing interest in my work here. After all, I figured, it's not like there are websites devoted to breathlessly tracking Social Security enrollments in real time. After four years, I assumed that interest in the site would drop off enough that it would be time to archive the site and refocus on my day job. Yes, that's right: I have a day job as a freelance website developer. I know that's hard to believe given how much time I spend on ACA/healthcare matters, but it's true...and frankly, I've been increasingly neglecting that business more and more of late, right when I should have been building it back up again.
I admit to being a bit confused about the distinction between BCBSSC and BlueChoice HealthPlan, which is also a BCBS carrier...I'm guessing one is for HMOs, the other for PPOs or something. In any event, BlueChoice plans appear to only be available off-exchange, and are thus not subject to the CSR issue. BCBSSC is, however, and the Kaiser Family Foundation estimates that their Silver plans would have to go up 23% if CSR payments are cut off. 87%% of SC exchange enrollees are on Silver plans, so that should be roughly 20.2% across all policies.
If CSR payments are made, South Carolina is looking at around a 13.2% average rate hikes; if they aren't, it's an uglier 32.5%.
We're heading into the home stretch now, with the only remaining "supersize" state, FLORIDA. FL has the largest exchange-based individual market enrollment, and the 2nd largest total individual market enrollment of any state in the country, surpassing California for a variety of local economic/demographic reasons. The Kaiser Family Foundation estimates that FL carriers would have to add about 25% to their Silver plan premiums in order to make up for CSR reimbursements if Trump pulls the plug and/or Congress doesn't formally appropriate them. Since 80% of FL exchange enrollees are on Silver plans, that translates to roughly a 20% additional "Trump Tax" for the CSR factor alone. Note that while none of the carriers mention the CSR issue (meaning they all assume the payments will be made), Molina does call out the individual mandate enforcement issues as being part of their 37.5% rate increase request. Unfortunately, they don't put a hard number on this.
New Hampshire's a bit of a head-scratcher this year: Of the three carriers on the individual exchange next year (each of whcih has a significant chunk of the market), Centene is requesting virtually no rate increases whatsoever...while the other two are asking to raise their rates by over 40% apiece.
Even more odd: Harvard Pilgrim's 42.5% seems to assume the worst regarding CSRs/mandate enforcement...yet Matthew Thornton (BCBS) is asking for 45.3% while assuming CSRs will be paid.
With Blue Cross Blue Shield of Nebraska declining to participate in the Nebraska exchange, that leaves just Medica as the sole individual market carrier. They're asking for a 16.9% average rate hike,
Interestingly, while Medica's rate filing letter clearly states that the 16.9% request assumes CSR payments will be made and the mandate will be enforced, they also list "unprecedented uncertainty/risk inherent in the marketplace" as one of the key drivers of the increase.
There's only two carriers participating in Mississippi's individual market next year (plus Freedom Life, which once again is just a shell company here). They're asking for 16.1% average rate hikes, and since there's no mention in any of the filings about CSR payments not being made or the mandate not being enforced, I'm assuming that increase doesn't account for those factors.
Massachusetts has one of the stablest statewide insurance markets, no doubt in large part due to their having instituted the precursor to the ACA, "RomneyCare", 4 years earlier. Massachusetts also merged their small business and individual market risk pools, which helps stabilize things. As a result, they have a high number of carriers participating in their ACA exchange and are among the few states with single-digit average rate hikes...assuming CSR payments are forthcoming and the individual mandate is properly enforced.
Assuming CSR payments aren't made, I used the Kaiser Family Foundation's 19% average estimate for Silver plan hikes due to the CSR factor. Since a whopping 92% of MA's exchange enrollees chose Silver plans (it looks like MA's unique "ConnectorCare" plans are considered Silver as well), that means an average CSR factor of around 17.5 points across the entire individual market.
Louisiana has 3 individual market carriers for 2018 (technically there's 4, but "Freedom Life" is basically just a shell company with a placeholder filing). Officially, they're requesting average rate increases averaging around 21.4%...but all three carriers state point-blank in their filing letters that a huge chunk of their request is due specifically to the CSR reimbursement and mandate enforcement issues. The Kaiser Family Foundation estimates the CSR issue alone adds around 20 points to Silver plans, and 71% of Louisiana exchange enrollees chose Silver, so that translatest into roughly 14.2 points across the whole market. This results in just a 7.2% average rate hike if CSR payments are made vs. 21.4% if they aren't:
I SCREWED UP ROYALLY. Instead of making a few simple corrections, I've chosen to completely rewrite this entry. My apologies for the error; full explanation and corrected data analysis below.
Longtime readers know that in addition to the core function of this site (it's right there in the title above), I'm also obsessed with tracking and breaking down the off-exchange individual market. This is easier said than done, because every state except for DC (which isn't actually a state) allows people to continue to purchase individual market policies directly through the insurance carriers...and unlike exchange-based enrollment, off-exchange enrollments don't usually have to be reported publicly. Some states require them to do so as part of internal state regulations, but they're usually a pain to get ahold of and other states protect the data as trade secrets, etc.
South Dakota is another fairly straightforward state: Two carriers, around 31,000 total ACA-compliant enrollees on & off exchange. Neither filing indicates whether they're assuming CSR payments will be made or not, so I'm assuming they're based on them being paid.
Another major state: Illinois. I've decided to scrap the "Low/High Increase" columns since they just confused people and made the table too wide, but replaced them with a new column showing the CSR factor estimate according to the Kaiser Family Foundation. Note that the percent listed will be smaller than Kaiser's estimate for each state, because their numbers only apply to silver plans, not all metal levels.
For instance in Illinois, Kaiser estimates that carriers would have to raise rates by 14% on Silver plans to cover their CSR losses. However, only 64% of Illinois exchange enrollees have silver plans to begin with, so I'm only plugging in about 9%. There are 5 carriers operating on the Illinois individual market (well, really 4, since "Freedom Life" doesn't count). I have the hard enrollment numbers for 4 of the 5; for Health Alliance Medical Plans I used 30,000 based on their 2016 number. Overall, Illinois is looking at around 11.3% w/partial sabotage, 20.3% with full sabotage:
Hawaii only has two carriers on the individual market (and in fact doesn't even have much of an individual market due to a state law mandating that nearly every business provide coverage anyway). HMSA's filing letter is very specific about calling out both the CSR and mandate enforcement sabotage factors as being part of their request. Kaiser doesn't really mention either issue at all, and the only CSR reference in the filing seemed to assume it would be paid, so I have one in each category. Kaiser Family Foundation assumes a 21% Silver CSR rate hike, and 71% of Hawaii's exchange enrollees are on Silver plans, so that amounts to roughly a 15% overall CSR factor.
Here's what it looks like...15.2% w/partial sabotage, 30.2% with full sabotage:
Whew! OK, Texas was a bear for obvious reasons...13 different carriers (well, 12 really...Centene is new to their market). Several more are dropping out (Aetna, Allegian, Cigna, Humana, Memorial Hermann and Prominence), but suposedly theyonly have around 64,000 enrollees in TX combined. Texas's total individual market is actually closer to 1.6 million, so I'm obvoiusly missing a big chunk of enrollees below (and before my regular commenters say it: Yes, I'm sure the off-exchange TX indy market has shrunk this year, but I find it hard to believe it's shrunk by over 60% already).
Anyway, I've managed to plug in one hard request percent for each carrier--the FULL Trump Tax for 3 of them, the NO/PARTIAL Trump Tax for most. In Vista's case, they're off-exchange only so the CSR issue isn't a factor anyway. Unfortunately, I can't seem to find the enrollment number for Community Health Choice, so I don't know what their share of the market is, which could make a big difference if they have high enrollment. I've plugged in a flat 100,000 enrollees for the moment, but will change that if I'm able to track the actual number down.
Another fairly straightfoward state: Three carriers, two of which (CareFirst and Health Plan of Upper Ohio Valley) appear to be assuming CSR payments will be paid; the third, Highmark BCBS (which holds the vast bulk of the individual market) openly states that they assume they won't be made and that the mandate won't be enforced to boot. I'm once again assuming roughly 2/3 of Kaiser Family Foundation's "Silver CSR hike", which in this case would be about 10%, giving the following: 17.8% if CSR payments are made, 27.8% if they are:
Louise Norris gave me a heads up that the Kentucky Insurance Dept. has posted their 2018 rate hike filings as well. The individual market is pretty straightforward...and pretty grim: Both individual market carriers, CareSource and Anthem, are asking for pretty steep rate hikes even if CSR payments are locked in next year, averaging around 30.8%, while assuming another 13.5 points on top of that (71% of Kaiser's 19% Silver average) would bring the average up to around 44.3%. Not much else to say about this one for the moment.
The states filings are piling up quickly...Arkansas is pretty straightforward. Interestingly, four of the five carriers seem to be assuming that CSR payments will be made, and have submitted their rate filings accordingly; the fifth (and largest), USAble Mutual (aka Blue Cross Blue Shield of AR) is the only one to break it out specifically. In order to estimate the CSR factor for the other 4 carriers, I'm assuming 2/3 of Kaiser's 15% Silver plan bump estimate, or around 10 percentage points. That brings things in at around 10% even without CSR sabotage or nearly 18% with the CSR factor.
One other important thing to keep in mind regarding Arkansas: Their total individual market, including grandfathered and transitional plans, is something like 430,000 but they only have around 70,000 officially enrolled in ACA exchange policies. The main reason for this is that they have another 320,000 people enrolled in exchange policies via their "Private Medicaid Option"...which is Arkansas' version of ACA Medicaid expansion. For some reason, those folks aren't counted as ACA exchange enrollees even though it's my understanding that the only distinction between them and the 70K official enrollees is where the payments/subsidies come from.
In late May, I noted that Blue Cross Blue Shield of North Carolina, which holds a near monopoly on the individual market in NC with around 95% of total enrollment, had submitted an initial rate hike request for 2018 averageing 22.9% overall. What was remarkable at the time is that while most carriers were pussyfooting around using euphamisms about the reasons for their excessive increase requests, BCBSNC was among the first to come right out and state point-blank that it's the Trump Administration's deliberate sabotage of the market--primarily via the threats to cut off CSR payments and to not enforce the individual mandate--that are responsible for over 60% of the increase. This is from their blog, not mine:
48 hours ago I posted this analysis/explainer of the "Silver Switcharoo", the goofy, bass-ackwards workaround which insurance carriers and state regulators could (if necessary) use to resolve Donald Trump's impending threat to pull the plug on Cost Sharing Reduction subsidy reimbursement payments.
There's been a whole bunch of additional CSR-related developments since then:
Congressional Republicans moved on Tuesday to defuse President Trump’s threat to cut off critical payments to health insurance companies, maneuvering around the president toward bipartisan legislation to shore up insurance markets under the Affordable Care Act.
Alabama, Alaska and Wyoming only have a single insurance carrier participating in each of their individual markets. While this is a bad thing from a competitiveness POV, it cetainly makes things easier for me from a tracking-average-rate-hikes POV.
ALSO IMPORTANT: The HHS Dept. is also starting to upload the rate filings to the official RateReview.Healthcare.Gov database, which should make things easier for me going forward (assuming that the data is uploaded properly and isn't messed with, which is a distinct possibility when it comes to the Trump Administration)
Officially, Alabama has the infamous "Freedom Life" phantom plan which is asking for a whopping 71.6% rate hike...to allegedly cover exactly one (1) person statewide. Un-huh.
Aside from that, however, it's Blue Cross Blue Shield across all three states...and they're asking for the following:
This isn't a full analysis, since I only have 2018 rate hike data for one of Arizona's carriers so far...on the other hand, AZ only has a couple of carriers on the individual market these days anyway. From AZCentral:
The Affordable Care Act insurer in 13 of Arizona's 15 counties plans to raise average rates across all plans a moderate 7.2 percent next year.
But Blue Cross Blue Shield of Arizona officials said the rate increases would be flat if President Donald Trump's administration did not plan to eliminate a key Affordable Care Act funding source.
7.2% isn't bad at all...of course, that comes after last years massive 57% average rate hike. Still, 0% would obviously be much better than 7%...
Trump suggested in a weekend tweet that " ... bailouts for insurance companies and bailouts for members of Congress will end very soon" unless Congress acts quickly on a new health bill.
Covered California Releases 2018 Rates: Continued Stability and Competition in the Face of National Uncertainty
Covered California remains stable, with an average weighted rate change of 12.5 percent. The change is lower than last year and includes a one-time increase of 2.8 percent due to the end of the health insurance tax “holiday.”
The competitive market allows consumers to limit the rate change to 3.3 percent if they switch to the lowest-cost plan in the same metal tier.
For 2017, unsubsidized enrollees on the Minnesota individual market faced massive rate hikes averaging 57%. It was so bad that the only way they could convince some carriers to participate in the market was to allow most of them to put a cap on how many people they'd enroll (with the balance being shunted over to Blue Plus, the HMO division of BCBSMN). This resulted in a massive initial surge of enrollment, as it was on a first-come, first-serve basis...but also left off-exchange and unsubsidized exchange enrollees high and dry.
In response, the state scrambled to pull together a $300 million package to help supplement premiums for those folks...knocking a flat 25% off of their premiums for 2017. This helped ease the problem in the short term, but the larger issue still loomed going forward.
It feels almost silly for me to spend so much time crunching the average 2018 rate hike numbers at this point. Between the (supposedly failed?) GOP repeal effort and Donald Trump's ongoing sabotage efforts--including what could be him officially pulling the plug on CSR reimbursements as early as sometime today--it's probably a bit of a futile effort. Besides, a dozen other wonks/analyses have already confirmed what the Kaiser Family Foundation projected months ago and which I've been proving on a state-by-state basis for months now: The CSR threat is causing average rate hikes of around 20 points on average, and the threats to individual mandate enforcement are tacking on another 4-5 points on top of that, beyond the ~10 points which rates would normally be increasing on average.