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:
The Arkansas Insurance Dept. just posted their preliminary 2020 individual and small group market premium rate change requests. For the most part it's pretty straightforward: Individual market premiums are increasing about 2.3% statewide, while small group plans are going up 6.5% overall.
However, there's two interesting things to note about Arkansas' individual market: First, unlike most states where over 70% of enrollees do so through the ACA exchange, in Arkansas it's more like 20%, with nearly 80% are enrolled off-exchange. The main reason for this is the state's unique "Private Option" Medicaid expansion waiver, in which around 252,000 residents who would otherwise be enrolled in Medicaid itself are instead enrolled in enhanced ACA individual market policies...with the state paying for their premiums.
Last week, the state of Arkansas released its latest round of data on implementation of its Medicaid work reporting requirement – the first in the country to be implemented. As readers of SayAhhh! know, over 18,000 lost coverage in 2018 as a result of not complying with the new reporting rules. And the policy is clearly failing to achieve its purported goal – incentivizing work – with less than 1% of those subject to the new policy newly reporting work or community engagement activities.
...For many low-income families, the Arkansas experiment has already proved disastrous. More than 12,000 have been purged from the state Medicaid rolls since September — and not necessarily because they’re actually failing to work 80 hours a month, as the state requires.
...McGonigal, like most non-disabled, nonelderly Medicaid recipients, had a job. Full time, too, at a chicken plant.
...More important, McGonigal’s prescription medication — funded by the state’s Medicaid expansion, since his job didn’t come with health insurance — kept his symptoms in check.
“But the plans were on display…”
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”
--Douglas Adams, The Hitchhiker's Guide to the Galaxy
Yesterday CMS Administrator Seema Verma posted this on Twitter...
I’m excited by the partnerships that Arkansas has fostered to connect Medicaid beneficiaries to work and educational opportunities, and I look forward to our continued collaboration as we thoroughly evaluate the results of their innovative reforms. #TransformingMedicaid
With the deadline for submitting 2019 rate filings having passed a week or so ago, the approved rates from the various state insurance regulators have been popping up left and right. Today I took a look at the Arkansas Insurance Dept. website and sure enough, they've posted the approved filings for all 4 carriers on the individual market (as well as the small group market).
On the one hand, the statewide average rate increase hasn't changed much from the preliminary average; it dropped 0.4 points from 4.5% to 4.1%...and some of that change is simply because I had misestimated the actual enrollment/market share for a couple of the carriers.
On the other hand, in Arkansas, at least, it appears that the carriers don't think the repeal of the individual mandate and/or the Trump Administration's expansion of short-term and association health plans will have nearly as big of an adverse selection impact as other estimates/projections have...including my own.
Arkansas has three carriers offering ACA individual market policies, but one of them is kind of/sort of split into two separate entities (QualChoice and QCA). Unfortunately, most of the key actuarial memo content has been redacted, so I'm missing data on market share for three of the four entries--Ambetter/Celtic is the only one which states outright their current enrollment number. For the other three I had to estimate based on last years data. For QCA and USAble (which is actually Blue Cross Blue Shield, for some reason), I had to sort of split the difference between the different entries to get the overall requested rate increases.
20 states went the full #SilverSwitcharoo route (the best option, since it maximizes tax credits for those eligible for them while minimizing the number of unsubsidized enrollees who get hit with the extra CSR load);
16 states went with partial #SilverLoading (the second best option: Subsidized enrollees get bonus assistance, though not as much as in Switch states; more unsubsidized enrollees take the hit, but they aren't hit quite as hard);
6 states went with "Broad Loading", the worst option because everyone gets hit with at least part of the CSR load except for subsidized Silver enrollees;
6 states took a "Mixed" strategy...which is to say, no particular strategy whatsover. The state insurance dept. left it up to each carrier to decide how to handle the CSR issue, and ended up with a hodge podge of the other three
3 states (well, 2 states + DC, anyway) didn't allow CSR costs to be loaded at all. Their carriers have to eat the loss, which makes little sense, but what're ya gonna do?
In nearly a dozen Republican-dominated states, either the governor or conservative legislators are seeking to add work requirements to Obamacare Medicaid expansion, much like an earlier generation pushed for welfare to work.
The move presents a politically acceptable way for conservative states to accept the billions of federal dollars available under Obamacare, bringing health care coverage to millions of low-income people. But to the Obama administration, a work requirement is a non-starter, an unacceptable ideological shift in the 50-year-old Medicaid program and a break with the Affordable Care Act’s mission of expanding health care coverage to all Americans. The Health and Human Services Department has rejected all requests by states to tie Medicaid to work.
Now that we've passed the 9/27 contract signing deadline for 2018 carrier participation on the ACA exchanges, the state insurance departments are posting their approved final rates pretty quickly. Arkansas has done a fantastic job of clearly laying out not just what the rate changes will be, but is explicitly stating how much of those increases are due to the GOP's refusal to formally appropriate CSR reimbursement payments next year:
Insurance companies offering individual and small group health insurance plans are required to file proposed rates with the Arkansas Insurance Department for review and approval before plans can be sold to consumers. The Department reviews rates to ensure that the plans are priced appropriately. Under Arkansas Law (Ark. Code Ann. § 23-79-110), the Commissioner shall disapprove a rate filing if he/she finds that the rate is not actuarially sound, is excessive, is inadequate, or is unfairly discriminatory. The Department relies on outside actuarial analysis by a member of the American Academy of Actuaries to help determine whether a rate filing is sound.
A week ago, Vox's Sarah Kliff reported that the Trump Administration was slashing the 2018 Open Enrollment Period advertising budget by 90% and the navigator/outreach grant budget by nearly 40%. As I noted at the time, the potential negative impact of these moves on enrollment numbers this fall--coming on top of the period being slashed in half, the CSR reimbursement and mandate enforcement sabotage efforts of the Trump/Price HHS Dept. and the general confusion and uncertainty being felt by the GOP spending the past 7 months desperately attempting to repeal the ACA altogether could be significant. In states utilizing the federal exchange (HealthCare.Gov), 2017 enrollment was running neck & neck with 2016 right up until the critical final week...which played out under the Trump Administration, which killed off the final ad/marketing blitz.
Result? A 5.3% total enrollment drop (or 4.7% if you don't include Louisiana, which expanded Medicaid halfway through the year) via HC.gov, while the 12 state-based exchanges--which run their own marketing/advertising budgets--saw a 1.8% increase in total enrollment year over year.
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.
The feds would have to approve the state's waiver proposal in order to enact the governor's plan, but the feds will only move forward if legislation is already in place. That's the reason for the special session: The governor will ask the legislature to pass laws granting him the authority to seek the waiver and his plan will be spelled out, in broad terms, in legislative language in these laws. Most expect that the governor will be able to get legislative approval relatively easily (he needs a simple majority). Note that some of the fine print will still have to wait for the state's actual waiver proposal and the terms and conditions if the Trump administration grants the waiver.
Here are some of the changes that Hutchinson will be pushing in the special session: