I got Iowa wrong.
I thought the single twelve million dollar patient would empty out the Iowa on-Exchange to only a single carrier that could then have the ability to jack up rates to the point where it could cover the twelve million dollar claim and conduct normal operations as well.
Right now, the market is converging to a rational single carrier solution. The single carrier can raise their rates high enough to cover this catastrophic claim while the post-subsidy price is low enough to actually attract normal risk as well. The off-exchange market can be competitive especially if the single on-Exchange carrier splits their filing IDs so they can use different actuarial assumptions for a more normal market….
The other solution is that this is the textbook case of where a high cost risk pool or invisible reinsurance or a prospective re-assignment system would make sense. This is fundamentally an uninsurable scenario but the care needs to be paid for, so removing this single individual from the risk pool and paying for this person’s care out from general taxation lowers premiums in the individual market by $10 per member per month and allows them to function as if they mostly normal markets.
Medica covers the entire state of Iowa. It is effectively the last insurer standing. It is thinking about getting out. There would only be a single insurer in five counties in northeast Iowa.
Iowa, next year, if Medica stays. (It’s talking about leaving.) pic.twitter.com/GzolSLTeoZ
— Margot Sanger-Katz (@sangerkatz) May 3, 2017
Some of it hints that the massive single member cost is still an issue:
Here's what Medica says could help keep the company in Iowa's Obamacare market pic.twitter.com/iKwtGvL6gZ
— Zachary Tracer (@ZTracer) May 3, 2017
I got this wrong. I thought that the combination of monopoly pricing and high enough rates that are mostly paid for via premium tax credits would not give the last surviving carrier a reason to leave or threaten to leave.