Right now the early data indicates that the ACA is chugging along. Ineffective sabotage may be the key factor. The decision to announce the termination of CSR payments was probably made at the second to worse time if the goal was to effectively damage or destroy the ACA individual market. All of this is against the counterfactual of either a permanent appropriation or the suit getting bounced in early 2017 for lack of standing.
What's really amazing to me about week 1 of open enrollment is that NEW enrollees were up 30% and 67% over 2015 and 2016 respectively on a per-day basis. This in spite of sabotage & thanks to a heroic effort from the health advocacy community. #GetCovered https://t.co/kukwO4g87u
— Dustin Pugel (@Dpugel) November 9, 2017
The optimal time to announce the non-payment of CSR obligations would have been between January 20th to early June. That would have stopped payments early enough in the year that insurers would have faced a choice: Eat a $5 to $7 billion dollar loss in a market that was improving but still not lucrative or exit mid-year. If there was a mid-year exit, chaos could have created a demand or a receptivity to “DO SOMETHING.”
The second optimal time for sabotage would have been this week or later. If payments were made through October and plans went to market on November 1st with a variety of pricing strategies in place, a mid-November CSR termination would have forced some plans to withdraw, more plans to temporarily pull plans as new pricing tables got loaded on Healthcare.gov. The minimal intervention scenario would have been mass chaos with some insurers pulling out.
A late summer (July/August/September payments) CSR termination would still put insurers on the hook for $2-$3 billion in losses. Most insurers would have built their 2018 rates to accommodate the changes. Some of the thinly capitalized insurers would have left the market as they would be experiencing capital shocks.
The actual termination of payments after the September payments were made and after the contracts were signed for 2018 but before open enrollment started was the second least effective time window if sabotage was the goal. Insurers had plenty of time to price no CSR into their rates for 2018. Most states had a plan in place. Insurers had enough time and friendly enough regulators to adjust from optimistic rates to realistic rates. These rates went in early enough (except for one insurer in New Mexico) to offer really good subsidized rates for Bronze and Gold plans in large chunks of the country.
The only time where pulling CSR funding would have been less effective would have been the ten days between the September CSR payment and the contract finalization due date. If that happened, there would have been less confusion and all insurers and states that had multiple plans in place would have filed their no CSR rate plan. The biggest gain is that I would have had a bit more sleep in the middle of October.
The rates are set so the following is true:
KFF is basically begging people to pay attention to this: Over half (54%) of the people eligible for financial help can purchase a bronze plan in 2018 for $0. https://t.co/hyJjOOZYIz
— Joshua Peck (@joshuafapeck) November 9, 2017
Ineffective sabotage and a lot of attention to the ACA might be helping enrollment. Right now, it does not seem to be hurting enrollment.