I have long thought that the politics of appropriating Cost Sharing Reduction (CSR) payments created strong incentives for Democrats to not fund those payments without policy concessions elsewhere. Here is the bluntest description of the political argument:
If CSR is not funded, the premium increases that occurred in 2018 will be baked into the baseline premiums for 2019. Those premiums are likely to increase by 15% to 20% or more due to the combination of short term plans and the pragmatic elimination of the individual mandate. Final premiums are announced a few weeks before election day. The headlines of 20% premium increases are far more beneficial to Democratic political chances than headlines that premiums are flat or declined by 2%.
And now we are seeing rate requests from a couple of states with competitive House seats where the CSR costs are baked into the premiums:
BREAKING: PENNSYLVANIA: Preliminary 2019 #ACA rate hike request: Only 4.9% thanks to state efforts to counter #ACASabotage: https://t.co/fDW3qfqUlz
— Charles Gaba (@charles_gaba) June 5, 2018
and in Maine:
Maine preliminary renewal rates filed – 2 sets for each insurer (with and without reinsurance program pending CMS waiver)
2 marketplace insurers:
Community Health Options w 6.9% w/o 9.2%
Harvard Pilgrim w 4.6% w/o 9.5%
Pleasant surprise! https://t.co/yjHguzASnI#mepolitics
— Mitchell Stein (@mhstein) June 5, 2018
If CSR was fully funded, both of those states would be seeing average rate decreases of 5% to 10%. Policy wise that is a good thing. For the folks who don’t get subsidies that is a good thing. And the political incentives would allow Republican incumbents to go up on the air and say the following:
‘After years of premium increases on you, President Trump and the Republican Party got a 10% decrease… what a deal, we can do healthcare…”
And yes, the reason why there was a huge premium spike in 2018 was due explicitly to Republican policy. In a universal where CSR is appropriated after termination, I know that, you know that and almost no voter knows that. It is too arcane to explain that sabotage happened and then appropriation happened and if we look at a two year rolling average of premiums we are back on trend.
My eyes glazed over on that.
Policy is working orthogonally to political incentives with CSR and that always led me to scratch my head.
They want people to think “government doesn’t work” and they get into office and it comes true!
So since I’m somewhat unexpectedly losing my corporate health insurance this Friday I went to an insurance agent who told me the only real option was the Exchange, and I was pretty much horrified at the premium (almost $700 for a bronze plan for one person in Michigan). We’re just above the cutoff so no subsidies. Are there any options? (COBRA through the company is even worse.)
@Butch: If you are just above the cut-off, look into IRAs and other means to legally get your reported income under 400% FPL
Or see if you can get underwritten
@David Anderson: I will ask the agent about underwriting. Thanks!
The local paper reported an average 24% increase in NYS premiums next year. Source: Rochester D&C
@Butch: I’m 59, non-smoker, in the Detroit suburbs, and have a Bronze with high deductible ($6500) and HSA for $527 a month. BlueCare. There were cheaper plans with narrower networks that did not cover my doctors. I get my coverage through the exchange, and have no subsidy.
Mind you, last year the same coverage was only $450 through HAP. Thank you GOP.
I’m in the Upper Peninsula (Michigan); maybe rates are higher here? The best I could do on the Exchange was very nearly $700 for a nonsmoker. I’m looking at undewritten plans now which means I would pay the ACA penalty; they’re basically indemnity plans, as I understand it, but with pretty good coverage for about half the cost. Since I’m starting my own business after this layoff the monthly expenses are a big deal.