David Anderson

Just a reminder that Open Enrollment for the ACA for Healthcare.gov and many state based marketplaces ends at 11:59 PM on January 15th

Go sign up.

We have no idea if there will be an extension of subsidies. We have no idea what else is happening so just go sign up.

Sign up for the ACA NOWPost + Comments (11)

The House Republican health insurance bill has items — some are inconsequential (CHOICE/ICHRA accounts), some are esoteric ways to introduce more risk rating to the small group market (ERISA pre-emption for stop-loss insurance as a F-U to California) and some are theoretically supposed to drive down prices.  The word theoretically is doing a lot of lifting.

The bill appropriates funds to pay ACA Cost-Sharing Reduction subsidies. This will reduce the benchmark premiums of Silver plans.  It makes subsidized not-Silver coverage more expensive.  It scores as a coverage loser and money saver:

CBO score for House GOP bill:

-100k fewer people with health coverage
-saves govt $35bn over 10 yrs

(Funding CSRs results in a cut to subsidies, resulting in some losing health coverage, also saving govt money)
https://t.co/HlXFjZqPLP

— Peter Sullivan (@PeterSullivan4) December 16, 2025

As a side note, this policy as it has an anti-abortion rider is surgically designed to dick punch Red states like Texas and Florida while mostly leaving Blue states which may have mandatory non-Hyde abortion riders harmless.

But when your coverage bill leads to a modest drop in net coverage, that is a CHOICE!

Interesting coverage billPost + Comments (7)

The opportunity to buy health insurance on the ACA marketplaces that becomes active on January 1st ends tonight in most states.

If you need health insurance, go online and buy today.

If you need help, drop a line in comments.

 

 

Hurry Up and Buy Health Insurance TodayPost + Comments (33)

Senators Cassidy (R-LA) and Crapo (R-ID) released their health plan proposal for the ACA.

It does not extend premium subsidies but it does provide limited cost-sharing subsidies that are likely to be valuable for healthy and higher income enrollees.

That is the basis of their plan:

 

There is a lot going on here.

1.  Direct payment of HSA funds is great for pretty healthy folks who can afford full priced premiums
2. The decision to fund Cost Sharing Reduction subsidies in 2027 would end the practice of silverloading.
   1. Silverloading inflates Silver premiums
   2. Silverloading is great for enrollees with incomes between 200% to 400% Federal Poverty Level (FPL)  
   3. Silverloading has next to no impact on 100-175% FPLers nor over 400% FPLers
   4. Silverloading and Premium Alignment have juiced the Texas and Florida ACA markets
3. Catastrophic plans have a price advantage on average over Bronze plans for unsubsidized buyers only because risk adjustment does not move Catastrophic funds to cover Silver, Gold and Platinum plan enrollee expenses while Bronze premiums partially cover other enrollees’ expenses
4. Catastrophic plans for everyone worsens both the Metal Level and Catastrophic risk pools
   1. Great for remaining subsidized metal level buyers as higher morbidity is great in generating bigger premium spreads
   2. Really bad for non-subsidized Catastrophic and metal level buyers
5. There is a world where the ACA individual market acts as a well subsidized high cost risk pool — this is not that world.

 

The short version is that this plan does nothing for premium affordablity, and for those who actually need care a $1000 HSA contribution instead of extending the enhanced premium tax credits is still a money loser.  Getting rid of Silverloading increases premiums paid by middle class Americans for Bronze and Gold plans.

There are CHOICES BEING MADE HERE.

Cassidy and Crapo — great for healthy over 400% FPLersPost + Comments (21)

A friend of mine asked me to check out Jackson County Illinois for its ACA pricing.  There is a single insurer in the state.  Illinois requires the Silverload for Cost Sharing Reduction subsidies to be heavily loaded onto Silver plans. Silver plans are important because the second least expensive Silver plan determines the amount of subsidies an individual is eligible for.  Non-subsidized buyers care about premium levels while subsidized buyers care about premium spreads from the benchmark.  The bigger the spread, the more affordable the plan is.

And this is fascinating as I pull up the the pricing for a non-subsidized 45 year old.  I am pulling up the cheapest Bronze plan, and then the two cheapest Silver plans.

 

There are a couple of things to notice.

First, the premium spread between cheapest Bronze and the benchmark silver at this age is $595.  If Illinois did not have a mandatory non-Hyde abortion benefit requirement that can not be paid for by federal subsidies, then anyone with incomes under 399% Federal Poverty Level at this age or older will qualify for a zero premium Bronze plan.

The raw Silver Spread between the benchmark Silver plan and the cheapest Silver plan is $49.  Under current law, no one who wants to buy a Cost Sharing Reduction Silver plan could be exposed to a zero dollar Silver plan if Illinois allowed for those plans to be offered.

This is weird especially as Blue Cross and Blue Shield of Illinois, the only insurer in the county, offers a more expensive Silver plan as the 3rd Silver.  They could have dropped the current benchmark from the offerings and made a bigger spread without any work OR they could have engaged in substantial strategic pricing decisions to make sure that the largest population of ACA enrollees that they are guaranteed to get will be exposed to a very low but non-zero plan.

If we are to assume that sicker low income enrollees will pay premiums and healthier ones won’t and we assume that BCBS-IL gets to determine the extensive margin by changing the least expensive plan’s net of subsidy costs, BCBS-IL is leaving money and enrollment on the table.

This is just WEIRD.

Pricing strategies in the ACAPost + Comments (4)

The GOP — just in time again — is trying to come up with a health policy.  Right now there are a lot of flavors of direct to consumer subsidies instead of intermediating through insurance companies.  There are a lot of flavors as Dr. Adrianna McIntyre identifies in this skeet:

 

We also need to know *which* subsidies are in play. As I understand it:

Paragon has proposed converting CSRs to HSA contributions

Cassidy has proposed converting ePTCs to HSA contributions

Trump has proposed (I think? this is least clear) converting *all* subsidies to HSA contributions.

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— Adrianna McIntyre (@adrianna.bsky.social) November 19, 2025 at 10:50 AM

The two things that I’m pinging on is distribution  and incentives.

Lump sum distributions are great for pretty healthy folks.  Most years I am a light user of healthcare services with a one or two PCP appointments, an urgent care visit because of a bum ankle or a bad sinus infection that won’t clear on its own and zero to two generic antibiotic prescriptions at $5 a piece from Target or Walmart.  If I was to get a $1000 Health Savings Account distribution I’m golden in my normal years as my out of pocket spend would be net zero.  This year I’m a low to middle spender as I’m getting a mental health tune-up in therapy.  A $1,000 lump sum distribution would reduce my out of pocket spend in half.

There are people in my life who their good, low spend year is a $20,000 year and their high spend year is a $50,000 to $100,000 year.  A $1000 contribution does nothing for them. Their insurance limits their catastrophic cost exposure.

First dollar aid at the trade-off of lifting last dollar caps is great for 50% to 70% of the low using population.  It is hideous for the portion of the population that actually incurs substantial medical costs.

Secondly, incentives matter.  Right now, I have a deductible.  I am currently paying fully out of pocket for therapy.  I am happy to do so as it is helping me out. I am unlikely to hit my deductible cap in either 2025 or 2026 at the current utilization pattern.   But cutting the cost of therapy substantially by effectively reducing my deductible means I am likely to max out my deductible in 2026 which all of a sudden substantially reduces the cost of a few likely deferrable things to near zero.  I might consumer more fairly low value medical care as a function of timing.

Is that what we really want?

 

 

 

FSA and distributional consequencesPost + Comments (41)