CSRs

2018 MIDTERM ELECTION

Time: D H M S

Utah has four carriers offering ACA-compliant individual market plans. Two of them (BridgeSpan and Regence BCBS) only offered their policies off-exchange this year; I'm not sure what the status is for either one in 2019. I can only find hard enrollment data for one of the four (Regence), so I'm estimating the other three based on a combination of last year's numbers and the total estimated individual market size in Utah from 2017. Because of this, consider the Utah estimates to be even rougher than some other states.

Having said that, there's one interesting extra sabotage factor to consider for the University of Utah rate filing: They note that they've added an extra 10.3% to their 2019 rates specifically tied to last year's Cost Sharing Reduction (CSR) cut-off. I presume they chose not to bake the CSR load into their rates this year, but I don't think Utah went the "mixed load" route so who knows?

In any event, as far as I can tell, this means around a 14-point #ACASabotage factor, between CSR load, mandate repeal and #ShortAssPlans.

North Dakota was one of only two states (the other one was Vermont) which didn't allow their insurance carriers to add any additional premium load into their 2018 rates to account for Donald Trump's cut-off of Cost Sharing Reduction (CSR) reimbursement payments.

In direct response to this, Medica Health Plans dropped out of the ND on-exchange individual market this year to avoid taking the CSR hit. They hung around the off-exchange market, however, and therefore still have about 600 enrollees in the state.

As a result of this, my estimated impact of ACA sabotage efforts by the Trump Administration and Congressional Republicans has to include the factors from both 2017 and 2018: Cost-Sharing Reduction cut-off (9%) as well as Mandate Repeal and Short-Term Plan expansion (13.8%).

March 20, 2018:

Azar Says He Is Not Aware Of Discussions On Blocking ‘Silver-Loading’ in 2019

HHS Secretary Alex Azar said that he has not been involved in discussions about blocking ‘silver-loading’ plans in 2019 and is not aware of any agency discussions about ending the practice at the moment.

...In recent weeks, some stakeholders have speculated that the Trump administration could block silver-loading in 2019. Several pro-ACA experts say that even though the administration may have authority to stop silver-loading, it would be a self-destructive move, especially leading up to the November midterm elections.

CMS Administrator Seema Verma told reporters on Thursday (March 22) that she was “very concerned” about certain aspects of ‘silver loading’ plans, namely that it raises costs for unsubsidized consumers and the federal government. Verma did not commit to allowing or blocking the process for the 2019 plan year.

 

via Amy Lotven of Inside Health Policy:

Update: The court has instead opted to dismiss the case; but states can bring action again if circumstances change i.e. Admin blocks silver-loading in 2020 and beyond. IHP story TK @nicholas_bagley @charles_gaba taking comments ! https://t.co/cPHJlmehsH

— Amy Lotven (@amylotven) July 18, 2018

She's referring to this:

Dem AGs Ask Court To Put CSR Case On Hold In Light Of Silver-Loading

This year, thanks to their reinsurance program, ACA individual market premiums dropped by around 23.6% on average, from a whopping $1,040/month to "only" $795/month per enrollee.

HOWEVER, they would have dropped about 4.5 percentage points more if not for Trump cutting off Cost Sharing Reduction reimbursement payments, or roughly $560/year per enrollee. AK averaged around 16,000 effectuated ACA-compliant individual market enrollees per month in 2017, so that amounts to right around $8.9 million total. 6,930 enrollees qualify for CSR assistance this year, so that averages around $1,280 apiece in CSR help, which sounds about right to me.

Last fall I wrote a lot about how different states would be dealing with the tens of millions of dollars in losses they were facing after the Trump Administration decided to cut off Cost Sharing Reduction (CSR) reimbursement payments to them. As a quick reminder, there basically four (or five, depending on your POV) options available to each carrier and/or state insurance commissioner for dealign with CSR costs for 2018:

  • No Load: They could gamble that the CSR problem would be resolved and the payments would be made after all (i.e., they would price normally).
  • Broad Load: They could spread the CSR cost out evenly across all of their 2018 ACA policies, on exchange & off.
  • Silver Load: They could load the CSR costs onto all Silver plans only (both on & off exchange).
  • Silver Switcharoo: They could load CSR costs onto all on-exchange Silver plans only, while also creating "mirror" Silver plans off-exchange without any CSR load.
  • Mixed Load: Each insurance carrier could choose whichever of the other 4 strategies they wanted to and let the chips fall where they may. Not sure if this really counts as a "strategy", since it's more or less "all of the above".

For nearly a year, healthcare wonks like myself, David Anderson, Andrew Sprung and Louise Norris have been heavily getting the word out to promote not just the "Silver Loading" CSR-load workaround, but an even more clever variant which I've coined "the Silver Switcharoo" which takes the concept of Silver Loading and goes one step further.

It gets a bit complicated, but here's my explainer of how the Silver Switcharoo works for ACA individual market policies.

The bottom line is that in theory/on paper, just about everyone either comes out ahead or at least is no worse off if they use silver switching:

A couple of months ago, I sounded a (semi-muted) alarm about the future of Silver Loading and Silver Switching of Cost Sharing Reduction costs when CMS Administrator Seema Verma not only failed to state flat-out that she wouldn't attempt to stop these workarounds, but started giving indications that she was actively considering doing just that.

If this were to happen, then it would be devastating to millions of people while helping almost no one, as my colleagues Dave Anderson, Andrew Sprung, Louise Norris and I explained in Health Affairs a few weeks back.

Well, it appears that this particular bullet will be dodged for at least one year, anyway:

HHS won’t ban silver-loading this year, Azar admits after being pressed. No time to write broad-loading regs for 2019 plan year.

I had actually already written about Vermont doing this back in March, but seeing how it was one of only 2 states (+DC) which didn't allow Cost Sharing Reduction (CSR) costs to be loaded onto premiums at all this year, I figured I should mention it here as well. Once again:

  • 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?

99% of what I write is posted either exclusively here at ACASignups.net or, at most, is cross-posted over at Daily Kos. Once in blue moon I've written a freelance piece for healthinsurance.org, and I even wrote one piece for Cracked.com last year. Today I'm proud to announce that an article which I co-wrote with three other healthcare wonks (David Anderson, Louise Norris and Andrew Sprung) has been published by HealthAffairs:

Implications Of CMS Mandating A Broad Load Of CSR Costs

In October 2017, the Trump administration eliminated federal funding to reimburse insurers for cost-sharing reduction (CSR) subsidies, which they are obligated to provide to qualifying enrollees in the Affordable Care Act (ACA) Marketplace. President Donald Trump had threatened to eliminate CSR funding throughout 2017, so insurers and insurance regulators in many states had anticipated the move by adding the cost of CSRs to premiums for 2018.

Well, Keith Hall, Director of the Congressional Budget Office, just confirmed pretty much everything that we've been saying for a year or more now:

The Affordable Care Act (ACA), in section 1402, requires insurers who participate in the marketplaces established under that act to offer CSRs to eligible people who purchase silver plans through the marketplaces. CBO views that requirement as establishing an entitlement for thoseeligible.

To qualify for CSRs, people must purchase a plan through a marketplace and generally have income between 100 percent and 250 percent of the federal poverty guidelines (also known as the federal poverty level, or FPL). The size of the subsidy varies with income.

CSRs reduce deductibles and other out-of-pocket expenses like copayments. For example, in 2017, by CBOs estimates, the average deductible for a single policyholder (for medical and drug expenses combined) with a silver plan varied according to income in the followingway:

(sigh) OK, gather 'round children, and let me tell you the story of how Cost Sharing Reductions went from being a thorn in the side of the Obama Administration to becoming a massive tree branch jammed into the kidney of Congressional Republicans. The following is an updated version of a lengthy post of mine from about six months ago.

The Cost Sharing Reduction (CSR) payment controversy has only really been sucking up a huge amount of political and policy oxygen for the past year and a half, since Donald Trump took office, but actually started long before then. Why? Because the whole reason the CSR payments were discontinued in the first place is a federal lawsuit filed by John Boehner on behalf of the House Republican Caucus back in 2014.

A few weeks ago I posted an entry title, "Will Trump's HHS Dept. do the stupidest thing possible? Reply Hazy; Try Again Later."

The "stupidest thing possible" being referred to was whether or not CMS Administrator Seema Verma is planning on putting the kibosh on Silver Loading and the Silver Switcharoo starting in 2019:

The head of the Centers for Medicare and Medicaid Services would not say Thursday if the Trump administration is considering setting limits on how insurers that sell Obamacare plans structure subsidies for their customers.

"I'm not going to comment on the agency's deliberations," CMS Administrator Seema Verma said when asked by the Washington Examiner about rumors that had circulated about the issue. When pressed about whether any conversations had occurred, Verma said, "I'm just going to leave it at that."

Welp. The Congressional Budget Office just released their latest 10-year economic outlook. There's a whole mess of stuff in there, but let's focus in on one area of particular interest to the healthcare wonk community:

Health Insurance Subsidies and Related Spending. Outlays for health insurance subsidies and related spending are estimated to increase by $10 billion, or 21 percent, in 2018.8 That jump mostly stems from an average increase of 34 percent in premiums for the second-lowest-cost “silver” plan in health insurance marketplaces established under the Affordable Care Act. (Those premiums are the benchmark for determining subsidies for plans obtained through the marketplaces.) Over the 2019–2028 period, the average growth in spending is projected to lessen considerably, to just under 5 percent per year, as per-beneficiary spending rises with the costs of providing medical care. CBO estimates that, under current law, outlays for health insurance subsidies and related spending would rise by about 60 percent over the projection period, increasing from $58 billion in 2018 to $91 billion by 2028.

Yup, thanks to deliberate sabotage from the first two years of the Trump Administration, premiums have spiked by ~30% this year and will do so again next year, requiring federal spending on subsidies to increase accordingly.

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