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You are here: Home / Anderson On Health Insurance / The dog that has not barked

The dog that has not barked

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Charles Gaba is projecting that the average, population weighed rate hike for the individual market for 2019 to be 3.3%. This is due to a lot of variables:

Price Hikers

  • No Individual Mandate
  • Short Term Plans
  • Association Health Plans
  • Normal medical expense trend

Price Cutters

  • 2018 rates are way too high (this is a 5th grade percentage change math problem issue not an actuarial issue — denominator is too big)
  • 1332 waivers for reinsurance
  • Far fewer monopoly counties
  • No Health Insurance Premium Tax (HIT) for 2019

Baked in

  • CSR Termination
  • Low outreach
  • Negative messaging

 

The big thing, in my opinion, is that the 2018 rates were set very high and right now insurers are running very low Medical Loss Ratios.

This means that the denominator for the percentage change equation (New-Old)/Old is too high so a lot of the price increases that people expected due to the repeal of the individual mandate penalty and the new rules on limited duration, short term plans, was baked into the 2018 pie.

Now there is a very interesting political point that Kimberly Leonard is picking up on:

 

Almost no Republican is claiming credit for inflation level price increases on a national basis or even local premium decreases.

The following ad could easily pass a Polifact fact check**:

“10% increases, 15% increases, 35% increases —
Middle class families were getting hit with massive premium increases on their health insurance because of Obamacare.

now that we’ve taken action and gotten tough on the insurers to get a better deal for you, people in this fine state of East Wobegon are seeing their monthly premiums decrease by 10%… vote for Generic Republican Incumbent as I’ll fight for you…

I’m Generic Republican Incumbent and I approve this message”

Now there is a long explanation about the denominator being too big because of the 2018 rate hikes being too high so under the right counterfactual (assume 2018 was priced accurately for an 82% MLR), the proposed 2019 rates are still much higher than they would have been given 1/19/17 policy … but my eyes are glazing over as I write that.

ACA premiums are a quiet dog sleeping in the corner right now. Interesting…..

** I should never write ad copy for anyone

Reader Interactions

9Comments

  3. 3.

    psycholinguist

    Maybe the concern is that they can’t claim they “killed” Obamacare as they had promised with a full repeal. What’s to stop their Democratic opponent from claiming that it was the Democrats (and John McCain!) that saved the program and got them these lower rates? That would put the republican in the position of having to do the eye-glaze explanations of how they have managed to change the program around the edges.

  4. 4.

    Raoul

    Couldn’t the counter-ad be something like
    “2019 insurance rates have stabilized. Despite the damaging antics of Republicans. But they still want to ruin the Affordable Care Act. If Republicans keep the House, they will rip up the game plan that has finally brought some order and predictability to healthcare. Don’t let them ruin what’s finally working. Vote _____ for House to keep YOUR care affordable.”

    (And yeah, I think I should never write ad copy for anyone probably applies to me, too)

  6. 6.

    Butch

    So suddenly on August 29 I started getting bills from BCBS for heath insurance. I hadn’t applied for insurance with BCBS (or with anyone) so I called and asked who had approved this insurance and where they got the information. I was told that confirmation was received on August 22, although they couldn’t say from who (it wasn’t me or anyone in my household), and that I had to file an appeal to correct this situation (even though I never asked for or approved it) or it would appear on my credit report. I don’t like BCBS right now. They had even back-dated the insurance to May so the bills come to something like $3,000;

  9. 9.

    Butch

    @David Anderson: Insurer (BCBS) can’t even tell me who supposedly approved it. I have phone records to prove it wasn’t me. Insurance agent is trying to handle the situation right now but I’ve saved the state’s insurance commission website just in case. (These bills arrived the same day I lost a 19-year-old cat I had since she was a kitten; I was not in the mood…..)

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