New Analysis Finds Leading State-Based Marketplaces Have Performed Well, and Highlights the Impact of the Federal Mandate Penalty Removal
The report examines the impact that federal and state actions have had on state-based marketplaces and the federally facilitated marketplace (FFM).
Cumulative premium increases in California, Massachusetts and Washington are less than half of the increases seen in FFM states, but 2019 premium increases spiked in California and Washington compared to Massachusetts, which continued its state-based penalty.
WASHINGTON D.C. — A new report highlights the benefits of state-based exchanges, particularly in the areas of controlling premium costs and attracting new enrollment. The report, which was produced by Covered California, the Massachusetts Health Connector and the Washington Health Benefit Exchange, found that premiums in these states were less than half of what consumers saw in the 39 states that relied on the federally facilitated marketplace (FFM) between 2014 and 2019.
*"Not as bad as expected" depends on your perspective. Even the 6-7-point average premium increase caused by mandate repeal is still an average of $430 - $500 per unsubsidized enrollee for the year...or $1,300 - $1,500/year for a family of three.
Earlier this year, most healthcare wonks (along with the Congressional Budget Office) projected that Congressional Republicans repealing the ACA's individual mandate last December (effective January 1, 2019) would have a significant Adverse Selection impact on the ACA-compliant individual market risk pool. Projections of the premium increases imposed in response to the drop-off of healthy enrollees ranged from 10% (CBO) to as high as 16.6% (Urban Institute, although that also included a small increase due to Trump's expansion of short-term plans as well).
As I noted a few days ago, now that the 2019 ACA Open Enrollment Period is actually underway and the approved individual market premium rate changes have been posted publicly for every state, I'm finally able to go back and wrap up my 2019 Rate Hike Project for the nine states which I was still missing final numbers for.
As I further noted, the approved rates in most of those states didn't change much compared to the preliminary/requested rate changes I had already analyzed earlier this year:
I realize this may seem a bit late in the game seeing how the 2019 ACA Open Enrollment Period has already started, but I do like to be as complete and thorough as possible, and there were still 9 states missing final/approved premium rate change analyses as of yesterday which I wanted to check off my 2019 Rate Hike Project list.
Fortunately, RateReview.HealthCare.Gov has finally updated their database to include the approved rate changes for every state, which made it easy to take care of most of these.
Nebraska has a slightly confusing siutation, which is surprising since Medica is the only carrier offering ACA policies in the state, When I first took a look at the requested premium changes for 2019 back in August, it looked like the average was around 1.0%...that was based on splitting the difference between the 3.69% and -2.60% listings, since the filing form was redacted and I didn't know what the relative market split was between Medica's product lines.
I realize this may seem a bit late in the game seeing how the 2019 ACA Open Enrollment Period has already started, but I do like to be as complete and thorough as possible, and there were still 9 states missing final/approved premium rate change analyses as of yesterday which I wanted to check off my 2019 Rate Hike Project list.
Fortunately, RateReview.HealthCare.Gov has finally updated their database to include the approved rate changes for every state, which made it easy to take care of most of these.
However, while state insurance regulators left one of the three carriers offering individual market policies alone, they knocked the other two down substantially: CareSource was lowered from around 13.1% to 9.5%, while Highmark Blue Cross Blue Shield was lowered from an average of 15.9% to 9.0%.
I realize this may seem a bit late in the game seeing how the 2019 ACA Open Enrollment Period has already started, but I do like to be as complete and thorough as possible, and there were still 9 states missing final/approved premium rate change analyses as of yesterday which I wanted to check off my 2019 Rate Hike Project list.
Fortunately, RateReview.HealthCare.Gov has finally updated their database to include the approved rate changes for every state, which made it easy to take care of most of these. In addition, in a few states the insurance department has also posted their own final/approved rate summary.
I realize this may seem a bit late in the game seeing how the 2019 ACA Open Enrollment Period has already started, but I do like to be as complete and thorough as possible, and there were still 9 states missing final/approved premium rate change analyses as of yesterday which I wanted to check off my 2019 Rate Hike Project list.
Fortunately, RateReview.HealthCare.Gov has finally updated their database to include the approved rate changes for every state, which made it easy to take care of most of these. Making things even easier (although not necessarily better from an enrollee perspective), in three states the approved rates are exactly what the requested rates were for every carrier: Alabama, Mississippi and Utah:
This is about as minor a rate filing update as I've had, but I'm posting it separately in the interest of completeness.
Insurance carriers in my home state of Michigan originally submitted their requested 2019 ACA individual market rate filings back in June. At the time, the average premium increase being asked for was pretty nominal, around 1.7%, with a smaller-than-average #ACASabotage factor of around 5% due to the ACA's Individual Mandate being repealed and #ShortAssPlans being expanded by the Trump Administration.
Today, just two days before the 2019 Open Enrollment Period actually begins, the Michigan Dept. of Financial Services finally posted the approved 2019 rate filings...and practically nothing ended up changing.
There was practically no change whatsoever between the rate changes requested by Louisiana carriers for the 2019 ACA individual market and the rates approved by the state insurance regulators. However, it's still good to be able to lock in the official rates just ahead of the Open Enrollment Period itself, including the individual filing data.
Overall, unsubsidized premiums should drop around 6.5%, which is good news...except that, once again, if it weren't for the ACA's individual mandate being repealed and #ShortAssPlans being expanded by the Trump Administration, I estimate they'd be dropping by another 9.3%, give or take, for a total premium reduction of more like 15.8% on average.
At $649/month full-price on average this year, that means the average unsubsidized enrollee will be paying somewhere around $724 more apiece next year due to those factors.
OK, this is a pretty minor update, but in the interest of completeness I should post it.
In mid-September, the Washington State insurance commissioner posted the approved 2019 average ACA individual market premium changes for carriers statewide, coming in at 13.8% overall.
The only problem is that the report only included the seven on-exchange ACA market carriers. The four carriers which offer off-exchange policies (which are pretty much identical and are part of the same risk pool, but don't qualify for tax credits) weren't included. They make up roughly 23% of Washington State's total individual market.
Today, just a few days before Open Enrollment begins, the WA Insurance Commissioner posted the complete approved rate change information. The overall average has dropped slightly, to 13.6%:
Eleven insurers approved to sell 74 plans in Washington's 2019 individual market
13.57 percent average rate increase approved
