I think the next big ACA story will be state based waivers. Liberal states have submitted Section 1332 waivers. Conservative states have submitted Section 1332 waivers. Hard to categorize states are preparing waivers. I think that the non-appropriation of Cost Sharing Reduction (CSR) subsidies and thus the routing of payments through Advanced Premium Tax Credits (APTC) is a net benefit to waiver applications that have to meet strict federal budget neutrality guardrails but this is not an infinite benefit.
Andrew Sprung at Xpostfactoid is sketching out a potential auto-enrollment waiver. I think auto-enrollment is interesting and solves some significant political and policy problems if well implemented but I don’t think auto-enrollment is a plausible waiver pathway.
the Kaiser Family Foundation has calculated that more than half of the 10.7 million people who are uninsured and eligible for marketplace coverage can find free bronze plans in the ACA marketplace, and 70% can access bronze plans for less than the cost of paying the penalty for going without coverage…..A state could use an ACA innovation waiver, however to try an auto-enrollment scheme — especially a state in which a particularly higher percentage of the uninsured had incomes below 250% FPL.
I am trying to figure out how this would score and I am running into problems.
The toy model is that an auto-enrollee would be placed into a plan whose premium is no greater than the advanced premium tax credit that they would qualify for. States would probably structure their program so that people are randomly assigned to a set of very low cost plans within a county. This would not work for everyone in every county. Younger auto-enrollees making 300% to 400% FPL (singles making $36,060 to $48,080) may not have large enough eligible subsidies to pay for a $0 Bronze plan.
There are a couple of major mechanical challenges to getting a waiver like this approved. Every incremental auto-enrolled individual has double costs to budget neutrality. First, the direct hit to budget neutrality is the additional APTC spending. A cheap Bronze plan still costs $3,000 or more per year for a single 40 year old. Expensive regions may see low cost Bronze plans cost twice as much for a 40 year old.
More subtly, auto-enrollment reduces the uninsured rate. Fewer people who are uninsured means fewer people are paying the mandate penalty. CMS was clear in their Iowa estimate that they are counting the loss of revenue from the mandate penalty in their 1332 waiver calculations.
100% coverage of people whose APTC qualify them for a $0 Bronze plan is an expensive proposition. I don’t think budget neutrality rules would allow it to happen.
Furthermore, most of the waiver activity is focused on bringing down non-subsidized premiums for Off-Exchange buyers as they are the ones who are bearing the full risk of premium inflation. I just don’t see these waivers being a priority for anyone given the current mechanical and political constraints.
Fair Economist
Since eligibility depends on income, which is not public info, it seems like it would be hard to determine whether somebody making an appointment would or wouldn’t have insurance. Add in complications from moving and multistate metros and this seems like a logistical nightmare. At the same time it seems like really good policy and perhaps a system of making sure everybody has *some* form of insurance automatically would be the best next step forward.
J R in WV
Just because income isn’t “public” doesn’t mean that quasi-federal agencies can’t use it to place people in broad brackets. They don’t need the exact income numbers, just to put people in categories to know how much of an insurance plan they can afford.
Both Social Security and IRS knows how much you’re making and could provide data putting social security numbers together with categories for purposes of issuing insurance policies automatically.
It may take legislation, as so many good ideas do, but it seems easy to accomplish from a data perspective.
Sab
My Dad is 93 with a nurse’s aide we have had for about ten years. She is amazing and is the only thing that keeps the whole managing old dad thing under control.
Every year we have this debate. She doesn’t want to be greedy or exploit us on health insurance. She’s well into her fifties with some potentially significant health issues.
We don’t want to exploit her by providing non-insurance. Weird situation since she wants less insurance and we want her to have more.
Any advice on what’s best for a fiftyish woman with some health issues?
David Anderson
@Sab: Have a long talk with her and think about total cost of compensation (salary + taxes + health benefits) instead of these things as distinct categories.
Maximize her well being within that total cost of compensation. If it makes sense to move her to the Exchange with a subsidy, pay her more cash and less insurance. But talk, and then talk some more.