The HHS Dept. is very much aware that they have got to get more millennials enrolled in ACA-compliant individual healthcare policies this season; the exchange risk pool has been hovering at around 28% 18-34 year olds for three years running, when the conventional wisdom among those who know more about such things is that they need that number to be somewhere closer to 40% to stabilize the market.
Now, there's a lot of reasons why more young people aren't signing up, including affordability, which of course is the main reason HHS is trying to get more of them to sign up in the first place, creating a bit of a Catch-22. In addition the very "19-25 year olds allowed to stay on their parents plan" provision of the ACA is itself cannibalizing several million potential ACA exchange enrollees, creating some additional irony, since most of those "sub26ers" are presumably enrolled in the employer policies of their parents. Some of these reasons are completely outside of HHS's control
UPDATE 10/26/16: In light of yesterday's official confirmation by the HHS Dept. that my estimate of ~25% weighted avg unsubsidized rate hikes on the individual market was dead-on target, I thought it was important to pin this entry to the front of the website again.
Remember that big pie chart I posted last March which broke out the entire U.S. population by type of healthcare coverage? Well, here's a modified version, showing which people will and won't be impacted by the "25% average" figure being argued about today:
A few people have asked whether or not the "25% average hikes" I've estimated which have been cited by pretty much every outlet under the sun also apply to job-based coverage.
NO! Absolutely not!
That 25% weighted national average only applies to the roughly 18 million people enrolled in ACA-compliant individual policies...and even then, roughly half of those folks are mostly protected from the hikes thanks to the federal tax credits. So we're really talking about roughly 9 million people who have to pay the full 25% average increases.
When I decided to once again launch my Annual Rate Hike Estimate project this summer, I knew that this year, the rate increases for the individual market were likely to be significantly higher than in years past. Coming as they are in an election year, as a Democrat and ACA supporter, I obviously took no joy in reporting this truth.
However, a) The data is the data; it would be dishonest of me to try and ignore reality; and b) I knew that if I didn't report the rate increases as accurately as possible, Donald Trump and his Republican Party would flat-out lie about them.
Thanks to the heads up from Louise Norris, however, I now have hard numbers from the Maryland Dept. of Insurance. I was close, but the actual weighted average is slightly higher. In addition, they've provided the small group averages as well:
The Maryland Insurance Administration Approves Premium Rates for 2017 Small Group and Individual Markets
Open Enrollment Begins Nov. 1 in the individual market; Consumers Encouraged to Shop Rates
Today (Friday, Sept. 23) happens to be the deadline for insurance carriers to sign agreements with the federal government for participating in the exchange this Open Enrollment period (I'm not sure if today's deadline also applies to the state-based exchanges or not; they might be different). Until today, it looked as though there were going to be 3 carriers offering individual policies on the Nebraska exchange:
The figures compared 2016 and 2017 rates for Blue Cross Blue Shield of Nebraska, Aetna Health Inc. and Medica, the three companies that will offer policies to Nebraskans on the exchange when open enrollment starts Nov. 1.
However, as commenter M E noted, it looks like BCBSNE decided to wait until literally the last minute (last hour, anyway) to change their minds:
A couple of days ago, I noted that the latest development in House v. Burwell (the lawsuit brought by former Republican House Speaker John Boehner on behalf of the GOP caucus in the House of Representatives) could, in a worst-case scenario, end up resulting in millions of exchange-based policies being terminated with little notice. Basically, the HHS Dept. has included an "escape hatch" for exchange carriers in the event that the Supreme Court eventually rules in favor of the GOP House when it comes to Cost Sharing Reduction (CSR) financial assistance, although a final ruling wouldn't be likely to happen for at least another year or so.
Today, Michael Cannon of the Cato Institute has posted his own entry about the HvB "escape hatch" development, and while it obviously has an extremely anti-ACA spin, his conclusion is pretty much the same as mine (he assumes all 11 million enrollees would be kicked off their plans, while various state/federal laws could mean a much smaller percentage...but it would be pretty devastating no matter what).
Back in March, Bruce Japsen and Andrew Sprung noted that regardless of the financial woes many carriers are having on the individual market under the ACA, many of those same carriers are raking in big bucks in other divisions...particularly managed Medicare and Medicaid:
A snapshot of health insurers’ Medicaid windfall under the ACA could be seen in the earnings reports of Wellcare Health Plans (WCG) and Centene CNC +0.20% (CNC), which both beat Wall Street’s fourth quarter 2015 earnings expectations. These companies are an important measure of whether health insurers can find financial success providing Medicaid coverage to poor Americans under the health law President Obama signed six years ago even as the other key part of the legislation has growing pains.
Larger plans like Aetna AET +1.51% (AET), Anthem ANTM +1.31% (ANTM) and UnitedHealth Group UNH +1.08% (UNH) are also doing well in the Medicaid business, but their overall profit margins have been somewhat negatively impacted due to the private coverage on the exchanges.
For the two carriers that are expected to participate in the exchange in 2017, the proposed average rate hikes for 2017 are:
Blue Cross Blue Shield of North Carolina: 18.8 percent 24.3 percent (new rates were filed in late August)
Cigna: 7 percent (based on current off-exchange plans) 15 percent (new rates were filed)
Aetna had proposed an average rate increase of 24.5 percent, but that is no longer applicable for exchange enrollees, as Aetna’s plans will not be available in the North Carolina exchange in 2017.
