Trumpcare

2018 MIDTERM ELECTION

Time: D H M S

When I last looked at Colorado's 2018 rate hike summary in early September, it appeared that they were looking at an overall average rate increase of either 33% or 41% without CSR reimbursement payments depending on your interpretation of a state DOI quote, or 26.7% assuming CSR payments are made. The confusion wasn't really cleared up much by the later announcement that Colorado is going with the "Broad Load" strategy for their "lost" CSR reimbursements.

Today I checked in with the Colorado DOI again, and they've posted the official, presumably final rate increases, assuming no CSR funding:

I'm still missing final 2018 rate data for 6 states, but in the meantime I'm also doing some cleanup of some of the states I thought I already had final data for. Today both my home state of Michigan as well as Washington State released their official, approved increase tables.

Michigan's average is nearly identical to what it was before...it only dropped from 26.9%...to 26.8%.

However, I do give the Michigan Dept. of Insurance & Financial Services huge credit for making it incredibly easy for me to plug their data in. Look at that...they list all carriers, whether they sell on or off exchange, the exact average rate increases, and even include the number of affected enrollees, which is usually the hardest number for me to track down. Thanks, MI DIFS!!

With 43 states accounted for, Open Enrollment itself looming just 6 days from now and HealthCare.Gov's window shopping tool now open for business anyway, there aren't likely to be too many surprises left for my 2018 Rate Hike project. For that matter, healthcare consulting firm Avalere Health just published their own analysis which confirms my own closely: They have the 2018 on exchange average increase at 29.1%, while I currently have the combined on & off-exchange average (for 43 states) at 29.2%.

Still, I don't like loose ends, and those 8 missing states are bugging me, so I still want to fill them in for completeness' sake. The only big state remaining is Texas, but I'm also missing Alabama, Hawaii, Iowa, Missouri, New Hampshire, Oklahoma and Wyoming.

As regular readers know, I've spent the third consecutive summer/fall painstakingly analyzing both the requested and approved unsubsidized (full-price) rate increases on the individual market for 2018. My track record the prior two years has been pretty good:

When I ran the requested rate hike numbers for Kentucky in early August, it looked like the only 2 carriers participating in the individual market next year (CareSource and Anthem BCBS) were asking for pretty hefty hikes of around 30.8% on average...and that assumed CSR reimbursement payments would be made next year. If they aren't, based on the Kaiser Family Foundation's estimates, I tacked on an additional 13.8% for a requested average of 44.3%. Ouch.

Since then, the Kentucky DOI has posted the approved rates...and the final numbers aren't not too far off, I'm afraid to say:

Back in August, I posted a rough analysis of the requested rate increase situation for Wisconsin's individual market carriers. However, I cautioned at the time that I was missing the enrollment market share numbers for four of the carriers (Aspirus, Compcare, Wisconsin Physician Service and WPS), and therefore had to guess at how the rate hikes for those carriers would impact the statewide average. I estimated the numbers assuming CSR payments are made at 21.7%, and from that assumed the impact of CSR reimbursements not being made would be around 7.8 additional points being tacked onto the average.

A couple of weeks ago, the state insurance commissioner announced the approved rate increases. The good news is that I overestimated on the "CSRs paid" front. The bad news is that I underestimated on the "CSRs not paid" front: It's actually 20% and 36% respectively:

 

On November 10, 2016, at 4:30 in the morning, I was still in a bit of a dazed state trying to absorb the reality that a racist, misogynistic, xenophobic con-artist sexual predator moron was about to become the next President of the United States. We were 9 days into the 2017 Open Enrollment Period, and I realized that there was absolutely no way of knowing what sort of impact the election results might end up having on how many people would sign up for coverage.

My original, pre-OE4 projection was that it would come in anywhere between 13.5 - 14.0 million people, but I quickly realized that I'd have to drastically alter my thinking. How drastically? Well, I actually posted the following to give an idea of how deep into the unknown we were:

Up until a week ago, the possibility of Donald Trump pulling the plug on Cost Sharing Reduction reimbursement payments was a looming threat every day. While it hadn't actually happened yet, most of the state insurance commissioners and/or insurance carriers themselves saw the potential writing on the wall and priced their 2018 premiums accordingly (or at the very least prepared two different sets of rate filings to cover either contingency).

A few spread the extra CSR load across all policies, both on and off the exchange. This seems like the "fairest" way of handling things on the surface, but is actually the worst way to do so, because it hurts all unsubsidized enrollees no matter what they choose for 2018 and can even make things slightly worse for some subsidized enrollees in Gold or Platinum plans.

When I plugged in the requested rate hike numbers for New Jersey back in August, they averaged around 8.5% assuming CSR payments would be made, or around 21.6% if they aren't.

The approved rate increases for NJ were just released, and the numbers appear to be pretty close to that, if a bit higher: 9.9% and 22.0% respectively.

Truth be told, I only have the hard numbers for the exchange-based carriers...and even those aren't technically official; they come from this NJ.com article:

TRENTON -- New Jersey residents who bought their own health coverage from Horizon Blue Cross Blue Shield through the Affordable Care Act could pay an average of 24 percent more next year, according to state-approved rates released on Tuesday.

Horizon is one of three insurance companies in New Jersey participating in the Obamacare marketplace in 2018. But it is the most dominant, insuring 72 percent of the 244,000 individual policy holders this year.

I first looked at Rhode Island's proposed rate hikes back in early July. At the time, the average increase for the two carriers participating in RI's individual market was 10.5% assuming CSR reimbursement payments are guaranteed for 2018. If they weren't guaranteed, however, I estimated at the time that an additional 19 percentage points would be added into the mix, based on an estimate by the Kaiser Family Foundation.

However, I realized a little later on that I was misinterpreting KFF's analysis; they were referring to how much they estimated silver plans would go up due to the lost CSR funds, not all metal levels. Furthermore, for Medicaid expansion states (which includes Rhode Island) they estimated the average was only 15%.. Based on these factors, the impact across the board on Rhode Island should have only been around 10.3%.

Way back in May, Blue Cross Blue Shield of North Carolina submitted their initial 2018 rate requests to the state insurance department, and noted at the time that they'd normally only be requesting an 8.8% average rate increase...but that due specifically to Donald Trump's threat to cut off CSR reimbursement payments, they were asking for a 23.3% increase instead. I noted that this meant that about 60% of their increase request was caused by Trump's CSR threat.

Then, in August, they gave a somewhat more positive news update: They were lowering their requested rate hike to 14.1%. Basically, their latest numbers had come in and the balance sheet was doing quite a bit better than they had previously thought:

Blue Cross said May 25 that the 22.9 percent rate increase was based on the subsidies ending, along with claims data from the first quarter of 2017. It projected an 8.8 percent rate increase with the subsidies remaining in place.

Things were looking pretty dicey for two of Montana's three insurance carriers participating on the individual market the past few days. One of the three, Blue Cross Blue Shield, saw the writing on the wall regarding Cost Sharing Reductions (CSR) likely being cut off and filed a hefty 23% rate hike request with the state insurance department. The other two, however (PacificSource and the Montana Health Co-Op, one of a handful of ACA-created cooperatives stll around, assumed that the CSR payments would still be around next year and only filed single-digit rate increases.

I'm not going to speculate as to the reasons why they both did so when it was patently obvious that having the CSRs cut off was a distinct possibility, although I seem to recall the CEO of the Montana Co-Op said something about their hands being tied since CSR reimbursement payments are legally required, after all. Basically, it sounds like he was genuinely trying to avoid passing on any more additional costs to their enrollees than they had to.

Pennsylvania is the first state which has released their approved 2018 rate hikes since Donald Trump officially pulled the plug on CSR reimbursement payments last Friday. It's also one of just 16 states which had yet to do by then. Most of the remaining states are small or mid-sized, so plugging Pennsylvania into the 2018 Rate Hike Project leaves just Texas, North Carolina and New Jersey as missing states with more than 8 million residents.

Back in June, the PA Insurance Commissioner was pretty up front and clear about what the major causes of 2018 rate increases on the individual market would be:

Insurance Commissioner Announces Single-Digit Aggregate 2018 Individual and Small Group Market Rate Requests, Confirming Move Toward Stability Unless Congress or the Trump Administration Act to Disrupt Individual Market

Several healthcare wonk colleagues and I have been carefully piecing together the CSR sabotage price loading strategies for every state over the past week or so. This changed from a theoretical exercise to a real one due to Donald Trump officially pulling the plug on Cost Sharing Reimbursement payments effective immediately late Thursday night.

As in most states, the Michigan Dept. of Financial Services, seeing the potential writing on the wall, sent out a memo to all individual market insurance carriers instructing them to submit two different sets of rate filings for 2018: One assuming CSR payments would continue, the other assuming they won't:

Right on top of his potentially devastating executive order this morning (I haven't written up a formal post about it after the fact, but my explainer from a few days ago does a pretty good job of giving the gist), Donald Trump has supposedly finally decided to lower the boom for real on cutting off the legally and contractually mandated Cost Sharing Reduction reimbursement payments to insurance carriers:

President Donald Trump plans to cut off subsidy payments to insurers selling Obamacare coverage in his most aggressive move yet to undermine the health care law, according to two sources.

The subsidies, which are worth an estimated $7 billion this year and are paid out in monthly installments, may stop almost immediately since Congress hasn’t appropriated funding for the program.

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