The 2020 ACA premiums were released this morning. The press release headline is as follows:
Today, the Centers for Medicare & Medicaid Services (CMS) announced that the average premium for the second lowest cost silver plan on HealthCare.gov for a 27 year-old will drop by 4 percent for the 2020 coverage year. Additionally, 20 more issuers will participate in states that use the Federal Health Insurance Exchange platform in 2020 bringing the total to 175 issuers compared to 132 in 2018, delivering more choice and competition for consumers. As a result of the Trump Administration’s actions to stabilize the market, Americans will experience lower premiums along with greater choice for the second consecutive year.
The cynical take on this paragraph is that 2018 was a local minima due to massive policy, political and legal uncertainty. 2019 and 2020 are reactions to the re-stabilization of expectations and rule sets which were not present in 2018.
We know that 2018 was massively overpriced. We know that as insurers are paying out very large Medical Loss Ratio (MLR) rebates for the 2016-2018 plan years and are expected to pay out even larger rebates for the 2017-2019 period. If we assume that the final 2020 rates are reasonably rates that “should” be close to actuarially fair plus “normal” profits and admin costs, there are two pathways that we could have arrived at this price level with a starting point of 2017 being priced at a reasonable level high enough to cover claims and normal profits. The first is the path we took; massive rate hike in 2018 and then slight declines in 2019 and now 2020. The other is a slow and steady route.
Both paths get to the same exact endpoint. One path produces the headline of multiple years of premium decreases. The other one produces a headline of steady rate increases.
germy
wvblondie
But the path we took also means the insurance companies had premium-payers’ overpayments in their bank accounts for two years, right? To reap returns on interest, returns on investments, provide windfall bonuses to execs, etc. And given the time value of money, the “rebates” we’ll be given will actually be worth less in today’s dollars, correct? Sounds like a great scheme for the insurance companies …
burntoutdoc
I am a 60 year old male in WV, and my COBRA insurance just ran out. I signed up for an ACA Silver plan for Nov/Dec 2019 for an annual premium of $16,900 with a $5,700 deductible. Even if rates stabilize, or go down a bit, they are still ASTRONOMICALLY unaffordable!!
David Anderson
@burntoutdoc: Agreed, for folks who earn over 400% FPL, the ACA is expensive as fuck.
And that is doubly true for folks in their 50s or older and who live in rural/low competition regions.
If you can pass underwriting into something that is fairly comprehensive,it is worth your time to investigate that option.
Also see if the Bronze plan works out given your age and expected medical expenses (if the premium is $2400 less than the Silver you’re breaking even at the Oh Shit scenario of getting hit by a meteor)
Just Chuck
More short-term profit in the red line, so that’s what we get.
David Anderson
@wvblondie:
Chyron HR
@wvblondie:
And therefore we would be better off to have NO ACA and NO rebates whatsoever?
Ha ha, you almost had me there. Excellent parody of “Kill The Bill” assholes.
daveNYC
@Chyron HR: I think he’s just remarking on insurance companies gaming the system to get a nice bump to their profits in 2018/2019. Any excess premiums paid by consumers during those years is basically a nice negative interest loan to the insurance companies. Wankers, the lot of them.
The ACA needs to start bending the curve of insurance costs a hell of a lot more than it is because 6% or so annual increases in premiums is still not sustainable.
And a $5700 deductible will wipe out the median American savings account.
lumpkin
I wonder if trump will take credit for this.
TKinNC
Tangentially off-topic, but I am starting to see the return of begging/fundraisers to cover medical procedures. There was a coin jar at the local bar for some kid’s cleft palate & a family sitting outside Tractor Supply raising money for a liver & kidney transplant for one of the kids. It’s sad but I gave them exactly nothing. I could empty my bank account into their baskets and still not make a dent in the medical bills.
DAVID ANDERSON
@lumpkin: yep
Sab
Plan D is weirdly complicated and hard to research. Aside from the usual parameters ( premium, deductible, donut hole) there is what pharmacy is in network, and do you have to buy by mail. Also they can change the formulary any time, but you are locked in for the year.
I am grateful to have minimal rx costs, because my plan d has been pretty much worthless this year.
Anyone have useful advice on pitfalls to avoid?
r€nato
@TKinNC: it’s a super-fucked-up dilemma. Yes, you want to help these people and not make their lives a political statement. OTOH isn’t donating to a medical GFM just aiding and abetting a fundamentally cruel health care system? I sure hope these people are remembering who/what put them in this situation: conservatives and vulture capitalism. I have become a single-issue voter on this matter. The 2020 presidential election excepted, no Democrat who is not behind single-payer gets my vote and support. All the good stuff like reproductive rights tends to come in that package anyway.
Sab
Been on hold for 30 minutes just to get the new shingles shot. Waited 2 weeks to get senior flu shot.
No waiting list in American health care. Just long lines to get on the waiting list.
wvblondie
@Chyron HR: You get me wrong – my family and I absolutely rely on our ACA insurance. But over the two years in question, there were months when I couldn’t pay the mortgage, or electric bill, or gas/phone/etc. (you get the picture), because I HAD to make sure I had enough to cover the premium payment. Especially during and for three months after the government shutdown, when I effectively had NO income. So I look at the prospect of rebates and, while I’m glad of it, I also remember the worry and anxiety I felt while trying to keep that insurance in the face of so many other challenges made worse by the higher premiums. daveNYC had it right.
MoCA Ace
Tangential but pertinent… I was ecstatic this morning when I saw a headline that the FDA approved a new treatment for cystic fibrosis that should be effective for 90% of those with the genetic disorder. However, upon following the link the story went on to say the insurance companies were trying to decide how much of the annual $311,000 price tag they would cover. Nice to know that somewhere rooms full of insurance execs are deciding whether or not the life of my sons fiance is worth the extra $160,000 per year. I get that in the abstract these decisions are made all the time but my future daughter-in-law is not an “abstraction”.
Adam, In your estimation how long before these drugs come to market and what can I do to help. Right now the future DIL is in the ACA marketplace and and she covers the annual maximum co-pay by the end of January with help from family.
Another worry… she has two semesters left at the University then on to a teaching career. What are the odds a school district googles her and finds that she has CF? I know they cannot discriminate in hiring because of this but who’s going to know amiright? How often are people like her passed over so as not to blow a hole in the organizations health care budget?
I worry about this all the time. I actually hope they are too young and idealistic to realize what a fucked up shit-show this world is just yet.
Gimme some of that sweet socialized medicine stat!