2020 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

Alaska: Not a huge thing, but Unsubsidized Silver enrollees should get a break next year.

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.

The good news is that Premera BCBS, the only carrier on Alaska's individual market, was wise enough to take advantage of Silver Loading to mitigate the CSR load damage to their enrollees:

Just last month Premera announced it would drop its health insurance rates on Alaska’s individual market by more than 26 percent. But the drop may not be quite that steep after all, at least for one type of plan. The new factor is President Trump’s decision Thursday night to stop paying Cost Sharing Reductions.

CSR is a type of subsidy under the Affordable Care Act. For certain low-income households, CSR lowers what they have to pay out-of-pocket when they see a doctor.

Premera, the sole insurer on Alaska’s individual market, said it will still provide the out-of-pocket discounts to eligible customers, as required by law. But to cover the cost, it will raise monthly premiums for the silver plan.

Alaska Insurance Division Director Lori Wing-Heier said if the government eliminates the CSR payments, the rates for a silver plan in 2018 will go up five or six percent from what they would have been.

The bad news is that Premera didn't go one step further and utilize the full Silver Switcharoo gambit to also protect unsubsidized Silver enrollees:

Most people who buy on the individual market qualify for a subsidy to help them pay their monthly premiums. They may not feel the increase, because the premium subsidy goes up as the premium goes up. But those who earn too much to get the subsidy will have to pay more to remain on the silver plan.

According to CMS's 2018 Public Use File, 7,571 exchange-based enrollees selected Silver plans this year. Alaska has another 1,300 or so off-exchange ACA enrollees, although I'm guessing only about half of them went with Silver plans. 94% of the on-exchange Silver enrollees were subsidized, so that leaves around 1,100 Alaskans who got hit with an extra $1,100 apiece this year. Ouch.

That brings me to today's news: According to this 2019 filing from the Alaska Commerce Department, next year Premera (and any other carriers who decide to jump into the ACA market) is being directed to go the full Silver Switcharoo route:

Rate Filing Guidance

  • Alaska has an effective rate review program and it is expected that CMS will certify a qualified health plan, if Alaska confirms the rates are justified.
  • Because of the single risk pool requirement, the Division requests that insurers submit a single rate filing for all individual ACA-compliant plans and a single rate filing for all small employer ACA-compliant plans.
  • Each rate filing submission must continue to comply with Alaska’s health rate filing regulation 3 AAC 31.235 as revised October 2016. Note that the rate filing must include development of the index rate and must describe and provide detailed justification for all assumptions used in the development of the index rate, adjustments to the index rate including risk adjustment, and development of proposed premium rates.
  • On the Rate/Rule Schedule tab in SERFF, submit a rate sheet showing consumer adjusted premium rate for each plan.
  • Individual market insurers should submit two sets of rates with and without the “silver loading” method. Off exchange only plans shall not include any CSR loading.
  • Provide an exhibit showing the calculation of the overall rate increase derived from the enrollment-weighted rate increases for each plan.

Bold-faced bullet refers to Silver Loading in general, which Premera is already doing now. The highlighted sentence is the difference for next year: OFF-exchange Silver plans will not include Silver loading.

What does this mean? Well, it means two things:

  • First, subsidized ACA enrollees should see their subsidies increase slightly more next year than they already are, lowering their net rates further yet.
  • Second, unsubsidized Silver enrollees will have the option of a virtually identical Silver policy minus the CSR load.

In other words, those 1,100 or so unsubsidized Silver enrollees should be able to eliminate that ~$1,100 or so CSR hit in 2019.