END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

Time: D H M S

BREAKING: Congressional Budget Office releases least-shocking report of the year!

All eyes are on the Godawful Tax Scam Bill this week, which once again lies mostly in the hands of a handful of Republican Senators including the usual suspects like John McCain, Lisa Murkwoski and Susan Collins.

McCain's biggest beef this year has been about "following regular order"; it's the reason he shot down the GOP's #BCRAP bill last summer. Of coruse, current tax bill most certainly isn't following regular order either. Will he stick to his guns on the issue or cave under pressure this time? Who knows?

Murkowski was a healthcare hero last summer as well...but she may have been bought off by the addition of a "Polar Payoff" in the form of the bill allowing oil drilling in the Arctic National Wildlife Refuge (ANWR). This is the only reason I can think of that would explain her rather disingenously defensive op-ed piece in the Anchorage Daily News last week.

Meanwhile, Maine Senator Susan Collins, who has been the most steadfast Republican opponent of screwing with people's healthcare until now, seems to have named her price for voting yes on the tax bill: Pass the Alexander-Murray bill as well as her own reinsurance bill first (Collins-Nelson):

Collins' bill with Nelson would set aside $4.5 billion over two years to help states establish reinsurance programs. Reinsurance directly compensates insurance carriers for their most expensive customers.

I'll write about the Collins-Nelson bill later, but first let's look at what Alexander-Murray would actually do:

  • Two years of subsidy funding, along with funding for the rest of 2017.
  • A "copper plan" for people older than 30.
  • $106 million in enrollment outreach funding in 2018 and 2019.
  • Shorter review time for states seeking waivers from some of the ACA's coverage requirements.
  • Authorization for funding to help states launch reinsurance programs.

The fourth and fifth bullets don't really change much of anything (it would authorize funding for reinsurance, but doesn't actually provide any). The impact of expanding Copper Plans to all enrollees is unknown; I suppose it might help a bit. The $106M in outreach funding would simply restore this to where it was supposed to be in the first place...and it wouldn't even go into effect until after the 2018 Open Enrollment Period (which we're halfway through) is even over with anyway.

So that leaves the first item: Formally appropriating CSR reimbursement payments. For two years (plus the $1-$2 billion or so which is already past-due to the carriers for 2017).

In other words, all this would do is restore things back to where they were two months ago...and even then, only for two more years.

What would that accomplish? Well, for 2018, probably not a damned thing. While there's a couple of states (Washington is the only one I've heard about) which might allow 2018 premiums to be recalibrated mid-year if CSR payments are restored, for the most part, they're locked in as is for the full 2018 calendar year. In addition, we're already halfway through the 2018 Open Enrollment Period anyway, so CSR restoration isn't likely to have any impact (good or bad) on 2018 enrollment on or off the ACA exchanges.

Passing A-M would be unlikely to have any significant impact intil 2019, and all it would do at this point, for the most part, is to reverse which populations see their premiums increase or decrease. Killing CSR payments resulted in premiums increasing by an additional 15-20% for unsubsidized enrollees... but thanks to Silver Loading and the Silver Switcharoo in over 40 states, it also resulted in net premiums decreasing significantly for most subsidized enrollees.

If you restore CSR funding now, guess what happens for 2019? Unsubsidized premiums would (in theory) drop by 15% or so...but subsidies would also drop back down again, meaning that 9 million or so people who are getting a nice windfall in 2018 would have that taken away the following year. Yes, it's the 2018 subsidies which are the outlier, but try telling that to someone who saw the price of their insurance policy get cut in half this year.

The irony of all of this is that whenever the Congressional Budget Office has issued their projections about the impact of repealing the individual mandate, they've done so assuming that CSR payments would be made anyway....even AFTER Donald Trump pulled the plug on them a couple months ago:

After consultation with the Budget Committees, CBO has not changed its baseline to reflect the Administration’s announcement on October 12, 2017, that it would stop making payments for CSRs. The Balanced Budget and Emergency Deficit Control Act of 1985, which specifies construction of the baseline, requires that CBO assume full funding of entitlement authority. CBO has long viewed the cost-sharing subsidies as a form of entitlement authority—that is, legal authority for federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. On that basis, in the agencies’ initial cost estimate for the ACA and in all subsequent baseline projections, they have recorded the CSR payments as direct spending (that is, spending that does not require appropriation action). For a related discussion, see Congressional Budget Office, The Effects of Terminating Payments for Cost-Sharing Reductions (August 2017), www.cbo.gov/publication/53009.

Yup, apparently they're legally required to assume the CSR payments will continue to be made even though they've already been cut off and are highly unlikely to be made anytime soon at this point. Craziness.

Anyway, that brings me to the headline: The CBO just sent a letter out to Democratic Senator Patty Murray and GOP Senator Lamar Alexander:

Re: The Bipartisan Health Care Stabilization Act of 2017 and the Individual Mandate

Dear Senator:

In October 2017, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) published a cost estimate for the Bipartisan Health Care Stabilization Act of 2017 (BHCSA), and in November 2017 the agencies published an updated estimate for repealing the individual health insurance mandate.1 This letter responds to your request for additional information about those estimates.

In your letter of November 21, 2017, you asked about the combined effects of simultaneously passing the BHCSA and legislation that would repeal the requirement that most U.S. citizens and noncitizens who lawfully reside in the country have health insurance meeting specified standards. Specifically, you asked if legislation that combined the provisions would change the agencies’ previous estimates of the number of people with insurance coverage or premiums in the nongroup insurance market.

(Note: BHCSA is apparently the official legislative name for the Alexander-Murray bill...I never knew what it was actually called before...)

In the estimate for the BHCSA, the agencies wrote that, relative to the Summer 2017 baseline, the legislation would not substantially change the number of people with health insurance coverage, on net. Because CBO’s baseline incorporates the assumption that cost-sharing reductions (CSRs) will be fully funded, premiums would not change under the BHCSA relative to that baseline. In the estimate of repealing the individual health insurance mandate, the agencies wrote that repealing the mandate would result in a decrease of the number of people with health insurance of 4 million in 2019 and 13 million in 2027. In addition, the agencies estimated that average premiums in the nongroup market would increase by about 10 percent in most years of the decade (with no changes in the ages of people purchasing insurance accounted for), relative to CBO’s Summer 2017 baseline projections.

(Again, that's a one-time 10% increase in addition to however much premiums would increase anyway due to inflation/etc).

If legislation were enacted that incorporated both the provisions of the Bipartisan Health Care Stabilization Act and a repeal of the individual mandate, the agencies expect that the interactions among the provisions would be small; the effects on premiums and the number of people with health insurance coverage would be similar to those referenced above.

I hope that you find this information helpful; if you wish to have further information we will be pleased to provide it. The primary staff contacts for this analysis are Kate Fritzsche and Sarah Masi.

Yup, there you have it: the CBO's "13 million losing coverage / 10% rate hikes" projections already assumed CSR funding would be appropriated...which, again, comprises most of what Alexander-Murray would do anyway.

That brings me back to the Collins-Nelson bill, which I'll address in my next post.