The Des Moines Register reports that Medica is planning to stay in Iowa. They are requesting a 43% rate increase for the individual market.
“When you find yourself as the only ones between people getting access to care and people not getting access to care, your view of the situation becomes very different,” Medica Vice President Geoff Bartsh said in a prepared statement. “We’ve filed with the intent to provide access to insurance for all Iowans, whether they are farmers, small business owners or other individuals who need coverage.”
The relatively small, Minnesota-based carrier told Iowa regulators Monday that in order to stay in the market, they would need to increase premiums by an average of 43.5 percent….
Monday was the deadline for carriers to file proposed rates for individual health-insurance policies in Iowa for 2018. Medica was the only carrier to file, state regulators said.
I was wrong on being wrong. Iowa is now a single carrier state. There are no risk adjustment problems. The only risk that Medica is bearing is that their actuaries are projecting the state market wrong or there is a cavalcade of clown cars crashing. It is a rational solution to a market design problem.
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.
I am not seeing anything saying that Medica is splitting their plan into an on-Exchange entity and an off-Exchange only entity. So the people who are not subsidized will be paying a lot more for their insurance.
They also need to change their strategy. In 2017, in all counties in Iowa, they offered two Silver plans. The two Silver plans have the same regulatory actuarial value at 70.7%. The two plans have minor differences in price. For a 40 year old in Warren County, there is a $6 spread between the least expensive and the new Benchmark Silvers offered by Medica. With the price increase, that will lead to a $9 spread. Medica should offer a low actuarial value plan at 66% or 67% AV with a higher deductible and keep one of the two current plans as the actual benchmark. This will lead to s bit less price shock for the off-Exchange buyers and a better deal for subsidized buyers.
The last thing of interest to me is that this makes the 1332 waiver that Iowa wants as a “rescue mission” even more contradictory in their assumptions.
There are four major guide posts for a 1332 waiver. The waiver must provide at coverage at least as comprehensive as the baseline ACA, with cost sharing protections at least as good as the ACA to at least the same number of people at no more net federal costs than the ACA.
Iowa’s argument is one of choosing a favorable counterfactual. Their counterfactual will be that their plan will meet the coverage requirements of at least as good for as many people as the ACA if one assumes that the ACA will cover no one on the Exchange because there will be no insurers on the Exchange. That is a plausible counter-factual. It is one that can be defended with a straight face.
However, let’s think about the implication of that counterfactual. In this scenario, the ACA will cover no one. Covering no one means the federal government spends no money….
Iowa has a lot of money that could be available for state innovation or BHP programs with Medica staying in the market. But now they can’t meet the qualification that the cost sharing be no worse for people under a 1332 than under the ACA. If Iowa continues down the path of a 1332, there will be even more lawyers.
In effect, does this count as a private single-payer system for Iowans buying individual plans for 2018?
@VFX Lurker: yes
What are the anti-trust protections that can be brought to bear in situations like this? Medica will have a lot of control of the success of doctors in Iowa, potentially to the point of being able to drive them out of business depending on where the local patient pool is getting their insurance.
My personal take-away from this is that I’d better manage to stay employed until 65. My sociopolitical take-away is that plenty of people will read 43% increase and say, “See! Obamacare is a failure!”
I have a personal insurance question for you David.
Ohio Medicaid is forcing my autistic son into a managed care plan. Truthfully, I haven’t read the letter carefully yet because we just got back from vacation and the Medicaid letter was part of a huge stack of mail I only picked up at the Post Office yesterday afternoon. Apparently, there are about a half-dozen plans to choose from.
I don’t even know what questions to ask. Son is 20 and covered under Husband’s plan; Medicaid has picked up the co-pays and deductibles (he is a somewhat expensive patient on pysch meds).
My plan at the moment is to call up the following and ask their advice:
Our caseworker at our county
DDS (the agency formerly known as the MR/DD Board), though I usually don’t find her all that helpful;
Children’s Hospital’s patient financial assistance department (I’ve heard them speak at conferences and they know lots about insurance and government programs — after all, the hospital wants to get paid);
My friend’s husband, the Family Practioner;
Our Pediatrician’s office.
Any general advice you can add? If we do not choose an HMO, we will be assigned one.
@stinger: Better keep tabs on whether the Medicare age is raised. You might be working a few years longer than you are currently anticipating : (
Isn’t the Medicare age already raised for people after a certain age? I thought it already has moved to at least 66, in 6 month increments. It won’t effect people for a while I think.
@Ruckus: Ohio Dad and I are still enough years from Medicare eligibility that I am not yet paying careful attention to all the rules. I’m figuring that if I mastered the details of the current rules, they would change and all that effort would be for naught.
We are in the nail-biting home stretch, in the midst of acquiring chronic conditions, and also old enough that If Ohio Dad needed to find a new job, he’d meet with a lot of ageism. The idea that the goal post of age eligibility keeps moving further out just adds to the overall stress.
@Ohio Mom: I am well aware of that danger! As it happens, I’m less than 2 years away from Medicare eligibility and 3 years away from “full benefit” SS eligibility.
Ruckus, I think you’re thinking of the gradual rise in SS eligibility, which in fact is now 66 for people born in a certain date range, and later for others. My youngest brother will have to work until he’s 67 before he can retire (if then). Medicare still kicks in at 65.
@stinger: Thanks, that clarifies things a little for me re: what’s ahead for Ohio Dad and me.
David, in the words of Roseanna Dana, Nevermind.
I called the Medicaid Hotline and found out that people on Ohio DD Medicaid Waivers (like my son) have the option but are not required to join a Managed Care Network — I guess being forced to join a network is Kasich’s idea of punishment specifically for low-income Medicaid patients.
Still have to figure out the proper channels for turning this fabulous offer down but heaving a sigh of relief that arguing with a Managed Care Network on a regular basis is not in my immediate future.
@Ohio Mom: I try to remember that other people and entities (and even Republican governors) may have legitimate viewpoints and aren’t just being intentionally cruel, but sometimes they make it hard!
My agency sells Medica plans…….
The Medica rates in northeast Iowa this year for a 55 year old male are:
With a 43% increase, the new rates would be:
And that does not even take into account a change in the old:young ratios!
Thanks for nothing, Medica
@Ohio Mom: Really good question.
1) If you don’t choose the HMO, you will be assigned to one.
2) Talk to your current employer based insurer
2a) As I understand it your husband’s insurer is the primary and Medicaid is the secondary insurance. Ask if they have a good coordination of benefits arrangement with any of the MCO’s. The MCO’s will pay eventually but a good relationship makes things smoother.
3) You don’t have network concerns as your husband’s insurance drives the network.
4) Write everything down and make sure anything confusing is voice verified when you read back your understanding of it.
@Bob Hertz: Bob — the age ratios are not changing.
Yeah, the non-subsidized are getting kicked in the shorts in Iowa
Isn’t Iowa the state that has the person whose medical bills every year is > 1 million $?
Are they covered by this carrier?
@EthylEster: Yes and yes.
A single carrier in the state with no risk adjustment problems is a rational and stable solution. It is not the optimal solution but it is a stable solution