I am a policy writer. I am not needed for the next four years. I will be radio silent for the week.
A hiatus
by David Anderson| 144 Comments
This post is in: All we want is life beyond the thunderdome, Bring On The Meteor
by David Anderson| 144 Comments
This post is in: All we want is life beyond the thunderdome, Bring On The Meteor
I am a policy writer. I am not needed for the next four years. I will be radio silent for the week.
This post is in: Anderson On Health Insurance, Election 2016
Health wonks like to say that the ACA is not a single program but fifty one programs. It works well in some states (California) and poorly in others (Arizona) and muddles through in most. This is a good insight but it is an incomplete insight. The ACA as experienced has some state level components such …
County level inequities in the ACAPost + Comments (9)
#SilverGap #SilverSpam
Lowest Silver 40 year old earning $25,000
Roane County TN 37763: $142
Perry County TN 37096: $44
Extreme example— Richard Mayhew (@bjdickmayhew) November 3, 2016
Family of 3 (40,40,10) in 37096 $0 Silver up to $38,600. Same family in 37763 $182 for Silver and $0 Bronze #SilverGap #SilverSpam
— Richard Mayhew (@bjdickmayhew) November 4, 2016
This is an extreme example. In Perry county, a 40 year old earning $25,000 a year, which is slightly more than 200% Federal Poverty Level (FPL), saves $100 a month or roughly 5% of their income because of the Silver Gap compared to the same individual in Roane County. Going to a broader scenario, a married pair of 40 year olds plus a ten year old kid can earn up to $38,600 (~190% FPL) before they have to pay a dollar for Silver plan with Cost Sharing Assistance. In Roane County, that same family is paying $182 per month or 5.6% of their monthly income for their Silver plan.
If that family of three is a pair of 50 years olds and a 10 year old, the Perry County family can earn up to $45,000 a year before they have to pay a dollar for their Silver plan. Bronze plans are zero dollar premiums for this family when they earn just north of $75,000.
The same family in Roane County pays 7.2% of their monthly income for a Silver plan if they earn $45,000 a year. Their zero dollar Bronze plan ends once they earn more than $43,500.
From a risk pool perspective, Perry County should be extremely healthy. The subsidies are rich enough that almost everyone can afford a plan even if it is a minimal Bronze plan. Roane County will see good uptake among people who earn under 150% FPL and decent uptake to 200% FPL. Above those income levels, there will be significant adverse selection as the deals just aren’t too good for healthy people, so the population will be fairly sick and expensive.
More importantly, people in Perry County who are getting subsidized will see the ACA working really well. They have good, cheap health insurance. However their cousins across the state are getting a raw deal compared to the great deal that they get in Perry County. This is especially true as we move up the income scale which means moving up the likely voter scale and influence scale.
by David Anderson| 84 Comments
This post is in: Open Threads, Popular Culture
I’m sleep and caffeine deprived and I am waiting for an exceptionally exciting phone call so I am watching Cat Twitter: Oh my god my cat is trying to catch the ball ??? I’m gonna die. #WorldSeries pic.twitter.com/ArJtXkAmYt — Amanda M. Steiner (@amandamichl) November 3, 2016 Open Thread
This post is in: Anderson On Health Insurance
@wcsanders @bjdickmayhew found out that the community health center in Concrete WA is labeled multiple ways on WA exchange provider search — rebeccastob (@rebeccastob) November 2, 2016 Rebecca is an actuary and a health policy nerd who has been extremely helpful to me during many Twitter conversations. She is identifying a very legitimate problem of …
by David Anderson| 46 Comments
This post is in: Anderson On Health Insurance, Free Markets Solve Everything, Fuck The Poor, All we want is life beyond the thunderdome
Just a pair of tweets as to why I am so passionate about continual healthcare reform and system improvement: The good news: As open enrollment begins today The Impact of Obamacare, in Four Maps https://t.co/KKiDuBExx0 pic.twitter.com/0PhVc8XuMR — Andy Slavitt (@ASlavitt) November 1, 2016 The bad news: The gap in life expectancy between Connecticut and Louisiana …
Why Healthcare reform is continually importantPost + Comments (46)
This post is in: Anderson On Health Insurance, C.R.E.A.M.
Last week was a blur. I had a whirlwind tour of the health policy universe. I received a job offer that I have declined. I then met with a team that is charged to produce awesome work in health policy and I am looking forward to see where things could go from here. I was …
Exchanges in 2018Post + Comments (7)
2017 Single Carrier States
In the states with only a single carrier for the 2017 plan year, the only reason for the incumbent to leave the on-exchange market in 2018 is if they lose massive amounts of money in 2017 AND they can not get the rates hiked in 2018. If a carrier is losing a lot of money in a state, that state or region is unlikely to be attractive to other carriers to enter. We see in 2016 that states are willing to approve very large rate increases from carriers if they can demonstrate that this is the only way to cover the expected claims. If the incumbent carrier in a single carrier state is seeing large medical losses, they will get the rates. This normally would trigger concerns about a death spiral where higher rates drive out healthier individuals. Off Exchange could see a death spiral. However the on-Exchange subsidized population is protected from most of the rate increases by the subsidy formula. The individual market in a high cost, single carrier state could turn into an extremely sick Off-Exchange population plus a reasonably healthy subsidized population.
2017 multi-carrier states
There are two scenarios to consider here. The first scenario is what happens if or when a carrier is shut down and liquidated mid-year. I do not think this is too likely in 2017 as most of the weakly capitalized carriers in the form of the co-ops are out. Furthermore, one of the major sources of capital impairment, the underpayment of the risk corridor receivables will go away. Either CMS will settle claims or the courts will order the carriers to be made whole through the Judgement Fund. This will lead to significant capital and cash position improvement.
The second scenario is if there are multiple carriers in a market that is losing money. We need to split this into two groups. The first group are carriers that have adapted a Silver Spam strategy to choose a narrow and fairly unhealthy risk pool while exploiting risk adjustment. Under that scenario, the narrow network carrier should be making money in 2017 or at least not doing too badly for itself. The other carriers will exit. After an exit, the Silver Spamming carrier will face a challenge as I have strong doubts that a Silver Spam strategy is viable for a super narrow carrier without some ability to offload high cost and high complexity medical risk to someone else. We should expect significant rate increases in 2018 from the sole Medicaid like carrier to cover their shipping out of network costs for their new members with highly complex and highly expensive care needs.
The other scenario is if there is not a single Medicaid like carrier in the market. If both carriers are losing money, we get an interesting staring contest as both carriers will often think that if they are the sole surviving carrier in the market, they can suck at the federal money hose. In that scenario we see a lot of sound and fury signaling very little. Both carriers will make noise about how tough the Exchange market is. Carrier A will say that they need to raise rates by 33% and Carrier B will say they need to raise rates by 37%. A is waiting for B to drop and B is waiting for A to drop. Both carriers will file plans and networks in 2017 for 2018 and then they will withdraw some and accuse the insurance regulator of acting in bad faith. As the summer comes along, the board of A might tell them to pull the plug and concede the market to B or vice versa.
At that point the surviving carrier has an effective monopoly on the subsidized Exchange market. Very large rate increases could be pushed through where the Federal government eats most of the cost. If the surviving carrier is smart, they’ll Silver Gap in 2018 as much as they can to get a far larger check from the Feds while driving the risk pool to be broad and healthy as the post-subsidy premiums will drop. The Off-Exchange market will be in trouble if the surviving carrier is the sole carrier but so far we have seen national carriers stick around off-Exchange far more willingly than they have been on-Exchange.
I would not be shocked if a single state has to get crazily creative to keep a single carrier on-Exchange in the entire state. But I do not expect mass withdrawal of carriers because the interaction of the subsidy attachment point and the ability of a monopolist insurer to effectively print money from the Feds will keep the last carrier involved.
This post is in: Anderson On Health Insurance
Rhode Island is silver gapping their exchange but the communication effort is horrendous. WPRI reports: two insurers – Neighborhood and Blue Cross & Blue Shield of Rhode Island – will be offering plans to individuals in 2017. A third carrier, UnitedHealthcare, declined to do so after attracting few customers this year and last. The decline …