OE5

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:

• In October 2015, I projected a national average rate increase of 12-13%, but cautioned that this assumed 100% of current enrollees kept their existing policies; I stated this could easily drop "below 10%" due to people shopping around, downgrading to less expensive plans and so on.
• In December 2015, the Robert Wood Johnson Foundation confirmed that sure enough, average individual market plans were going up around 11.6%...
• ...which, sure enough, turned out to actually be 8% in practice when the shopping around dust settled the following spring.

• In mid-October 2016, I projected a national average rate increase of around 24-25% for 2017...
• A week or two later, the ASPE department of CMS issued a report putting the average at 22%...except that they were missing 7 states, only included benchmark Silver plans and didn't include off-exchange policies. The missing states had higher average premiums on the whole, so I'm pretty sure the actual overall average was pretty close to 24-25% in the end.

Let's suppose that you and your spouse were 39 years old last fall, and you have two young children. None of you smoke, and you live in Oakland County, Michigan. Let us further suppose that you decided to enroll your family in a standard Silver policy via the federal ACA exchange, HealthCare.Gov. Blue Cross Blue Shield of Michigan is the biggest carrier in the state, and Blue Care Network is their HMO division, so you decide to go with them.

How much of a tax credit will they receive, and how much would they end up paying for 2017 at different income levels after applying tax credits?

In 2017, the Federal Poverty Line in the 48 contiguous states for a family of four $24,300. Let's plug in some different incomes and see where they fall on the FPL scale:

Several of the states operating their own ACA exchanges have already had their 2018 Window Shopping tools up and running for several weeks now, including Covered California, Your Health Idaho and the Maryland Health Connection, so this really shouldn't be that big of a deal, but given the insanity and uncertainty surrounding this years' Open Enrollment Period and especially the fact that HealthCare.Gov is responsible for 39 states (while being operated by the federal government under the thumb of an openly-hostile Trump Administration), it's pretty important news regardless.

In any event, HealthCare.Gov's 2018 Open Enrollment Period Window Shopping tool is now live.

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:

A week or so ago, David Anderson, Louise Norris, Andrew Sprung and I co-wrote an article explaining how different states were planning on handling 2018 individual market pricing given the massive uncertainty surrounding ongoing Cost Sharing Reduction (CSR) reimbursement payments.

Our timing couldn't have been more fortuitous: Less than 48 hours after we posted the piece, Donald Trump announced that, sure enough, he's finally following through on his threat to pull the plug on CSR payments, effective immediately.

Press release from the North Dakota Insurance Dept,, September 28, 2017:

Medica Leaving North Dakota Individual Health Insurance Exchange in 2018
Post date: Sep 28, 2017

BISMARCK, N.D. – Insurance Commissioner Jon Godfread today confirmed that the Insurance Department was informed late Wednesday, Sept. 27, that Medica does not intend to sign an agreement with the federal government to offer coverage on the Affordable Care Act (ACA) Exchange for their individual health insurance in North Dakota for 2018.

“We have had numerous conversations with Medica over the course of the past few months, and given the uncertainty that currently exists around cost sharing reductions, they are unable to move forward in the Federal Exchange,” Godfread said.

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

IMPORTANT: I need to stress that I am not in any way supportive of having CSR reimbursement payments cut off. I've written dozens of blog posts for the past year and a half about the danger this poses and I've repeatedly explained why this is a reckless, dangerous move by Donald Trump, I've even repeatedly noted how incredibly easy it would be to resolve the issue with a simple, one paragraph bill. Having said that, assuming the payments do stop being made, this is an explainer of how to turn it into a "lemonade out of lemons" situation for as many people as possible. Make no mistake, however: Millions of people will still be hurt by this...just not the people Trump thinks he's hurting.

UPDATE 10/13/17: Welp. Trump officially lowered the boom on cutting off CSR reimbursement payments last night, so CSR sabotage is no longer a threat, it's a reality (unless there's a court injunction or the GOP-held Congress actually gets off their asses and formally appropriates the payments with a simple, 87-word bill).