• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Before Header

  • About Us
  • Lexicon
  • Contact Us
  • Our Store
  • ↑
  • ↓
  • ←
  • →

Balloon Juice

Come for the politics, stay for the snark.

This really is a full service blog.

We’ve had enough carrots to last a lifetime. break out the sticks.

Trumpflation is an intolerable hardship for every American, and it’s Trump’s fault.

Speaker Mike Johnson is a vile traitor to the House and the Constitution.

Oppose, oppose, oppose. do not congratulate. this is not business as usual.

Someone should tell Republicans that violence is the last refuge of the incompetent, or possibly the first.

No offense, but this thread hasn’t been about you for quite a while.

Fight for a just cause, love your fellow man, live a good life.

Black Jesus loves a paper trail.

It may be funny to you motherfucker, but it’s not funny to me.

DeSantis transforming Florida into 1930s Germany with gators and theme parks.

Do we throw up our hands or do we roll up our sleeves? (hint, door #2)

Fight them, without becoming them!

We are builders in a constant struggle with destroyers. keep building.

Live so that if you miss a day of work people aren’t hoping you’re dead.

I desperately hope that, yet again, i am wrong.

Republicans choose power over democracy, every day.

Never entrust democracy to any process that requires Republicans to act in good faith.

This country desperately needs a functioning fourth estate.

Petty moves from a petty man.

“Just close your eyes and kiss the girl and go where the tilt-a-whirl takes you.” ~OzarkHillbilly

We need to vote them all out and restore sane Democratic government.

Wow, you are pre-disappointed. How surprising.

A snarling mass of vitriolic jackals

Mobile Menu

  • Seattle Meet-up Post
  • 2025 Activism
  • Targeted Political Fundraising
  • Donate with Venmo, Zelle & PayPal
  • Site Feedback
  • War in Ukraine
  • Submit Photos to On the Road
  • Politics
  • On The Road
  • Open Threads
  • Topics
  • COVID-19
  • Authors
  • About Us
  • Contact Us
  • Lexicon
  • Our Store
  • Politics
  • Open Threads
  • 2025 Activism
  • Garden Chats
  • On The Road
  • Targeted Fundraising!
You are here: Home / Open Threads / APTC Hacks — De Minimis Actuarial Value variation

APTC Hacks — De Minimis Actuarial Value variation

by David Anderson|  January 9, 20178:00 am| 1 Comment

This post is in: Open Threads

FacebookTweetEmail

The ACA simplifies insurance by restricting the actuarial value of the plans that can be sold.  Bronze covers roughly 60% of expected pool costs, Silver covers roughly 70% of the expected pool costs, Gold covers roughly 80% of the expected pool costs and Platinum covers roughly 90% of the projected pool costs.  Cost Sharing Reduction (CSR) adds three more layers of coverage at roughly 73%, 87% and 94% of the projected pool costs to be covered by the insurer.  

However the law allows for the Secretary of Health and Human Services (HHS) through the Center for Medicare and Medicaid Services (CMS) to make rules that allow for de minimis variation from the targeted actuarial value.  CMS has had a consistent rule that a 2% variation in actuarial value is the maximum allowable wiggle room for a policy to be included in a band.  Therefore a Silver policy with no CSR could cover anywhere from 68% to 72% of the pool’s expected cost.  

This is an area of exploitation for premium tax credit benchmark strategic manipulation. The benchmark for all premium tax credits is the cost of the second least expensive Silver plan.  A large spread between the least expensive Silver plan and the benchmark Silver plan advantages subsidized buyers.  Most of my analysis of the Silver Gap strategy space has focused on network manipulation as an obvious source of creating a useable gap between the first and second least expensive Silver plans in a region.  My background is in network and provider configuration so this was my prism.  

However, the de minimis actuarial value variation in a band is another opportunity for aggressive gap creation.  In this scenario, a carrier with a low cost network and product type can use two different cost sharing structures to create two plans.  The first plan would have a minimal actuarial value of 68% while the second, benchmark plan would have an actuarial value of 72%.  

UPMC Health Plan in Pittsburgh is an example of the foregone opportunity.  Plan 16322PA0050104 is the least expensive Silver in zip code 15219.  It has an actuarial value 71.53%.  Plan 16322PA0050103 Is the benchmark Silver.  It has an actuarial value of 71.5%.   These values are from the 2017 PUF URRT Worksheet 2.   Both plans are at the high end of the allowed actuarial value range.  They are both using the same network and the same EPO plan type.  The extreme similarity means the premiums minimally differ.  Healthy, low income individuals will not be seeing a significantly better deal on the least expensive Silver after the subsidy than the same value proposition for the least expensive Silver.  

If UPMC Health Plan elected to offer a their lowest priced offering a 68% Silver plan with a comparatively higher cost sharing structure and concurrently lower actuarial value  and then offered 16322PA0050103 as the benchmark Silver, the almost four percent actuarial value spread would, all else being equal, lead to 4% to 5% reduction in premium for the least expensive Silver plan compared to the current case.  The lower premium will mildly advantage most non-subsidized buyers as their option space will have expanded.  It will significantly advantage low income, subsidized buyers who previously were marginally deciding to not buy at the current price points.  These individuals are highly likely to be comparatively healthy and profitable for a carrier and their decision to opt out of the market and pay either the individual mandate tax or claim an exemption leads to a less healthy risk pool.  

Carriers who have a dominant position at the lowest price Silver Plans without proximate competition due to either their sole carrier status or the lack of low priced, narrow network competition should seek to offer a significant actuarial value spread as allowed by the de minimis variation in order to improve the risk pool by including more comparatively healthy and low cost subsidized buyers.  

FacebookTweetEmail
Previous Post: « Monday Morning Open Thread: “… Your Generation Will Build A Wall, and Our Generation Will Knock It Down”
Next Post: The CSR sword of Damocles »

Reader Interactions

1Comments

  1. 1.

    tamiasmin

    January 9, 2017 at 10:33 am

    De minimis. Ablative.

Comments are closed.

Primary Sidebar

On The Road - Christopher Mathews - Iceland: Season's Fleeting 3
Image by Christopher Mathews (6/13/25)

PA Supreme Court At Risk

We did it!

We raised the 25,000 for The Civics Center, and with the external matches, that gives them $60,000 for this Spring effort!

You guys rock!

Recent Comments

  • Jackie on Friday Night Open Thread (Jun 13, 2025 @ 9:07pm)
  • Gloria DryGarden on Friday Night Open Thread (Jun 13, 2025 @ 9:06pm)
  • Matt McIrvin on Friday Night Open Thread (Jun 13, 2025 @ 9:03pm)
  • Gloria DryGarden on Open Thread: “It’s Called Remigration”… (Jun 13, 2025 @ 9:03pm)
  • zhena gogolia on Friday Night Open Thread (Jun 13, 2025 @ 9:03pm)

Balloon Juice Posts

View by Topic
View by Author
View by Month & Year
View by Past Author

Featuring

Medium Cool
Artists in Our Midst
Authors in Our Midst
War in Ukraine
Donate to Razom for Ukraine

🎈Keep Balloon Juice Ad Free

Become a Balloon Juice Patreon
Donate with Venmo, Zelle or PayPal

Calling All Jackals

Site Feedback
Nominate a Rotating Tag
Submit Photos to On the Road
Balloon Juice Anniversary (All Links)
Balloon Juice Anniversary (All Posts)
Fix Nyms with Apostrophes

Social Media

Balloon Juice
WaterGirl
TaMara
John Cole
DougJ (aka NYT Pitchbot)
Betty Cracker
Tom Levenson
David Anderson
Major Major Major Major
DougJ NYT Pitchbot
mistermix

Keeping Track

Legal Challenges (Lawfare)
Republicans Fleeing Town Halls (TPM)
21 Letters (to Borrow or Steal)
Search Donations from a Brand

Site Footer

Come for the politics, stay for the snark.

  • Facebook
  • RSS
  • Twitter
  • YouTube
  • Comment Policy
  • Our Authors
  • Blogroll
  • Our Artists
  • Privacy Policy

Copyright © 2025 Dev Balloon Juice · All Rights Reserved · Powered by BizBudding Inc

Share this ArticleLike this article? Email it to a friend!

Email sent!