The Affordable Care Act individual health insurance market is likely to be open for enrollment for most if not all of the year.
NEWS: The special enrollment period for the federal health insurance marketplace is extended from May 15 to August 15, @SecBecerra announced today during a visit to Carson City.
— Jazmin Orozco Rodriguez (@jazmin1orozco) March 23, 2021
At some point, I think we should have pity on the actuaries and the enrollment departments of the insurers and just say that open enrollment is going to be open for the entire year.
There are two policy points that need to be made.
The first is that the ACA insurance plans are designed on an annual basis. A Gold plan with an 80% Actuarial Value on January 1st is not effectively an 80% AV plan if it starts on July 1st. The July 1st policy has the same cost sharing that needs to be filled in half the time. The effective actuarial value of a Gold designated plan that starts on July 1st is way less than 80%. Over the course of the year, effective actuarial value declines. Plans that are heavy on deductible and light on co-pays and coinsurance see bigger declines in effective value over time.
Secondly, 2021 is going to be mispriced. Some insurers are in a position to see huge risk adjustment outflow shocks. Some insurers are going to be rolling in the dough. Medical Loss Ratios (MLR) rebates are going to get another big boost for some insurers this year as 2019 was notably overpriced, 2020 was COVID with weird utilization, and now 2021 made have positive risk adjustment shocks and the insured pool is likely to be healthier and exposed to cost-sharing for a larger proportion of costs over the contract year. MLR rebates go to the contract holders of the paying insurer in the last year of the rebate cycle. This means that insurers will be making MLR rebate checks for 2019-2021 in the summer of 2022. With ARA upping the subsidy schedule, there will be a large number of individuals who will be paying nothing in net premiums and receiving checks from their insurer. This is weird. We should not be paying people to get insured through a convoluted bizarrely structured one way risk corridor especially when the federal government is paying all or almost all of the actual premium. Congress should look at restructuring the MLR rebate so that no one gets more of a rebate than their net premium and the rest returns to the Treasury.
It’s almost like the whole pretense of a “free market” for health care is nonsense.
While I appreciate the detailed analysis, the conclusion is always the same: the US health insurance market is socialized medicine done poorly, with a ton of extra steps and a horde of pointless bean-counting cash-skimming middlemen. The middlemen pay plenty of lobbyists to make laws that let them keep stealing, and pay even more propagandists to whip up the rubes with “ZOMG DETH PANELZ” if anyone questions the arrangement.
Fuck the actuaries! Full steam ahead!
Hoping the actuaries will go a bits nuts and say Screw It! I’m Opening the Scented Candle Business I Always Wanted To! and it will be harder for the companies to find appropriately skilled people and then their calculations will all go awry and then the “insurers” (skimming middlemen) will go bankrupt … and then Medicare for All!
Looking forward to this being the argument for government insurance in 2024.
Back in the Stone Age when actuaries had to chisel this stuff out on stone tablets, I get why the enrollment periods were vital to the process.With contemporary data gathering, processing and analytics, it is interesting that we the insureds are still prone to the enrollment period. I can dump every other form of insurance and move to another carrier with a some furious mouse-clicking in the wee hours, or with a couple of phone calls in the daylight. I’m certain there are logic, persistent reasons why Kaiser and Blue Cross don’t want to do this because it somehow cuts into profitability. In my simple ignorant mind, I welcome the one that jumps first and says, enroll at will.
Preach, brother, preach!
ETA: When GoFundMe is reported to be the largest health insurer in this country, that should be a wake-up call to the for-profit insurance racket.
I was looking at an ACA calculator last night and it appears as if the Out-of-Pocket Maximum functions as a cliff. That seems poorly designed.
Relatedly, if my income changed and I re-enrolled in the same plan, but with income for the lower Out-of-Pocket Max, would I get a refund for the amount I had already gone over the new, lower, Out-of-Pocket Max?
Single payer does seem easier.
There is no need to feel sorry for actuaries. Ever. Seriously, they are a well-paid, rarefied group who are up for the challenge. The only issue should be and is whether continuous open enrollment is destabilizing for the market at large. Also, you did not say and right now I am too lazy to look up, but “continuous open enrollment” in my view means having the ability to go from one exchange plan to the next just because you feel like it. I am assuming this is not the case. It used to be the case for Medicare managed care plans and it was destabilizing and it tended to encouraged all kinds of marketing abuses.
An even better reason for national healthcare. It’s what I have with the VA and it works. Sure it’s not perfect, what is? But it is the most comprehensive healthcare I’ve had in my 7 decades.
we should have single fucking payer universal healthcare goddammit, and if this version of “heightening the contradictions” actually works, then that would be awesome.
Going into 2021 I never would have imagined that Joe Biden would be FDR v2.0 but that could well be what we are seeing. Fingers crossed!