Executive announcement to end cost sharing reductions

[Senator]

I do not think I have heard any proposals to not cover pre-existing conditions. Quite the contrary. But if you maintain coverage, you are generally not being charged for having a health issue, to my knowledge.

Is there something i am missing here?

You are 100% correct.

 

[Senator]

Since you cannot be sure what kinds of policies will be available for the next few years, whether they will be affordable or how pre-existing conditions will be covered or priced, people on the cusp of ER are forced into OMY until the situation is clarified.

And that is exactly the situation of everyone that has ever retired and considered or completed OMY, and sometimes many times over.

Whether it is healthcare, kids college expenses, SS, the stock market, higher taxes, lower taxes, having extra for travel, the extra home, etc., there will always be another reason to OMY.

The only certain thing is death. And generally you do not know when it is coming, but you know the older you get, it is very likely closer than the year before.

When you are ready to retire, you retire. When you are not, you work. Work is only an option, no one is required to do it. The only reason a person would do it, is to create more choices in life.

 

[Pilot2013]

And that is exactly the situation of everyone that has ever retired and considered or completed OMY, and sometimes many times over.

Whether it is healthcare, kids college expenses, SS, the stock market, higher taxes, lower taxes, having extra for travel, the extra home, etc., there will always be another reason to OMY.

The only certain thing is death. And generally you do not know when it is coming, but you know the older you get, it is very likely closer than the year before.

When you are ready to retire, you retire. When you are not, you work. Work is only an option, no one is required to do it. The only reason a person would do it, is to create more choices in life.

+1

 

[Rianne]

And while it would be a radical departure and broadly unpopular, a better solution might be the inverse... to prohibit employers from offering health insurance... every person has their own individual policy and the pool becomes so big that the health insurers must play and be competitive... also, it you lose your job or change jobs health insurance is a non-event.

+1000, too. Employer plans are getting more expensive, but employers spell out the options so you know the quality of health insurance you're getting. We were in the corporate world for over 25 years and each year plans got skimpier. But it takes an insurance broker or specialist to figure out what is actually covered and what is right for you in the ACA. I miss that corporate umbrella which covered so much of our living expenses and paid us to move and even bought 2 of our houses. But the day to day stunk big time.

 

[Ginny]

I have private pay individual health in in CA and I will pay 17% more in 2018. I am glad that Kaiser sent me the info before Trump made his announcement, which I like.

 

[flintnational]

Just a reminder, Animorph posted a useful Excel spreadsheet that allows you to compare policies with different premiums, deductibles and co-pays, and see the total yearly cost of each based on different scenarios. It's here http://www.early-retirement.org/for...nd-coinsurance-copay-68965-3.html#post1374536

Thanks for the reminder. I did not have this.

FN

 

[sengsational]

What many people forget is if an insurer offers aca plan in a state or county they have to offer it to everyone csr or not. The rules won’t let them charge more for a policy if they are csr eligible. The insurers have two choices to get back this seven billion
1. Charge every aca policy more premiums or
2. Stop offering Aca policies

It was my understanding that you could have a cost sharing policy or a high-deductible policy (which disallows cost sharing)...mutually exclusive.

So it seems like the insurance companies have historical cost data on these two kinds of policies and should be able to set pricing independently of each type of policy?

If they knew that they were not getting paid by the feds for cost sharing, they'd need to increase the price of the cost sharing policies, but couldn't that (wouldn't that) be independent of pricing on the policies that prohibit cost sharing? Or I suppose they might realize that pricing the cost sharing policies to make a profit would cause such a wild swing that they need other policies to pay part of the freight. I don't suppose that's out of the question...it's how they decide to run their business.

 

[FIREd]

It looks like my insurer anticipated the end of the CSR subsidy. The announced premium increases for Bronze and Gold plans were in the low single digits but they were in the 2-digit range for Silver plans.

It seems like the short term effect for us will be to increase our premium tax credit since the latter is based on the SLCLP and it is going way up in cost.

I am waiting for the final numbers, but the net cost of my Bronze HSA plan might actually go down for 2018.

 

[BeachOrCity]

It was my understanding that you could have a cost sharing policy or a high-deductible policy (which disallows cost sharing)...mutually exclusive.

So it seems like the insurance companies have historical cost data on these two kinds of policies and should be able to set pricing independently of each type of policy?

If they knew that they were not getting paid by the feds for cost sharing, they'd need to increase the price of the cost sharing policies, but couldn't that (wouldn't that) be independent of pricing on the policies that prohibit cost sharing? Or I suppose they might realize that pricing the cost sharing policies to make a profit would cause such a wild swing that they need other policies to pay part of the freight. I don't suppose that's out of the question...it's how they decide to run their business.

technically the csr subsidies are only on silver plans. Insurers could use this requirement to artificially inflate the premiums for all silver plans csr or not. What i do not know is if aca and or state rules will allow them to do this.

 

[jim584672]

Looks like the insurers have an excellent lawsuit ahead:

"Even without an appropriation, the ACA creates an entitlement to cost-sharing reductions. Health plans can vindicate that entitlement before the Court of Federal Claims. Payment would then come from the Judgment Fund—a permanently appropriated fund to pay court judgments where “payment is not otherwise provided for.” The question is thus not whether the government will pay, but when.”"

https://theincidentaleconomist.com/wordpress/cutting-off-the-cost-sharing-payments/

 

[CardsFan]

Looks like the insurers have an excellent lawsuit ahead:

"Even without an appropriation, the ACA creates an entitlement to cost-sharing reductions. Health plans can vindicate that entitlement before the Court of Federal Claims. Payment would then come from the Judgment Fund—a permanently appropriated fund to pay court judgments where “payment is not otherwise provided for.” The question is thus not whether the government will pay, but when.”"

https://theincidentaleconomist.com/wordpress/cutting-off-the-cost-sharing-payments/

I have several comments I could make regarding this, and rebutting this, but I don't want to attract Porky, so I will refrain.

 

[Senator]

Looks like the insurers have an excellent lawsuit ahead:

"Even without an appropriation, the ACA creates an entitlement to cost-sharing reductions. Health plans can vindicate that entitlement before the Court of Federal Claims. Payment would then come from the Judgment Fund—a permanently appropriated fund to pay court judgments where “payment is not otherwise provided for.” The question is thus not whether the government will pay, but when.”"

https://theincidentaleconomist.com/wordpress/cutting-off-the-cost-sharing-payments/

And if it takes years, and goes through appeals and eventually the Supreme court, how does that help you next year?

I do not think anything should be planned on any future lawsuit. Even if the insurers win, the law could be changed.

 

[donheff]

NEVERMIND! Looks like everything may be off since the WH has embraced the bipartisan deal in the making. It's a topsy-turvy world we live in.

 

[ShokWaveRider]

Just got this email from Florida Blue This morning on the Subsidies and CSRs.

"You may have heard in the media about government subsidies going away. We want to assure you that the premium tax credits (sometimes called subsidies) that help with premiums are NOT going away and will continue to help lower the cost of monthly premium bills. And just like this year, in 2018 they'll be available for those who qualify.
Florida Blue members will also still get the benefit of the cost sharing reductions (CSRs) that help lower the cost of doctor visits and other services. The government has decided to stop paying for the CSRs; however our members don't have to worry about it. Florida Blue members with CSRs will still save on their copays, coinsurance and deductibles. This year and next year."

 

[donheff]

This is a good article in the NYT (paywall for non-subscribers) that explains in detail the 40 state silver only premium hack that could make it cheaper for many including higher income people to get ACA plans if the CSR suspension goes through. The CBO concluded that the hack would result in more total insured over time with a concomitant increase in the deficit. Isn't it ironic.

 

[rodi]

The proposed bipartisan "fix" is just a proposal at this point. Normal rules about speculation of proposed legislation, that is not up for a vote yet, still applies. This thread is for discussion of the executive order (that has been signed.)

Thanks.

 

[Senator]

This is a good article in the NYT (paywall for non-subscribers) that explains in detail the 40 state silver only premium hack that could make it cheaper for many including higher income people to get ACA plans if the CSR suspension goes through. The CBO concluded that the hack would result in more total insured over time with a concomitant increase in the deficit. Isn't it ironic. Of course that is just more of an indication why the bipartisan compromise is more likely to get enacted.

A great article. It appears the sky is not only not falling, but may help premiums in the long run.

The new pricing structure is the worst for people who earn too much to qualify for a subsidy — those earning more than four times the federal poverty level, or about $100,000 a year for a family of four. But most of them will also be protected from the cost increases.

If they avoid silver plans sold on the Obamacare marketplaces in most states, they can find plans that don’t have the special, Trump-prompted increases.

That means that unsubsidized customers who want to buy silver plans will probably need to shop outside of HealthCare.gov, through a human or online broker. Or they can buy a bronze, gold or platinum plan.

 

[donheff]

The proposed bipartisan "fix" is just a proposal at this point. Normal rules about speculation of proposed legislation, that is not up for a vote yet, still applies. This thread is for discussion of the executive order (that has been signed.)

Thanks.

Easy to stray into speculation. I edited my last post to remove it.

 

[rodi]

Thanks donheff. I have the same issue not staying into speculation. My sons and I are on an ACA plan.

 

[MichaelB]

So, to summarize what we knew, and still know.

- The cost sharing reduction has been eliminated.
- Insurance companies are still required to offer a silver plan with reduced cost sharing / higher actuarial values (94/87/73)
- The premium tax credit continues as before.
- The "expected contribution", otherwise know as the amount each individual is expected to pay for health insurance, continues unchanged, and is still based on MAGI.
- The actual subsidy an individual receives will continue to be the difference between the second lowest cost silver plan and the expected contribution for their income level.

What matters now is how insurers price their 2018 policies. What matters most is the difference in premium between the SLCSP and the plan with reduced cost sharing, because it looks to me as if that amount will not be eligible for premium assistance.

It is too early to say "nothing to worry about here". We know states are taking different approaches, and without actual prices, we should not assume a specific outcome. Am I reading this wrong?

 

[Senator]

It is too early to say "nothing to worry about here". We know states are taking different approaches, and without actual prices, we should not assume a specific outcome. Am I reading this wrong?

Good synopsis, but I think it's too early to say there is anything to worry about, other than the standard worries about life.

And all rate increases must still be approved by regulators.

 

[MichaelB]

Good synopsis, but I think it's too early to say there is anything to worry about, other than the standard worries about life.

And all rate increases must still be approved by regulators.

1. All rate increases have been reviewed and implemented. Florida BCBS are between 25 - 90%.
2. Read my post. I did not say there is reason to worry. However, it is definitely premature to say there is nothing to worry about.
3. Insurers were forced to submit rate increases for 2018 before any of these measures were announced. Very few rates for 2018 have been announced. There is no way we can confirm the impact on us until we see the actual premiums.

 

[Senator]

1. All rate increases have been reviewed and implemented. Florida BCBS are between 25 - 90%.
2. Read my post. I did not say there is reason to worry. However, it is definitely premature to say there is nothing to worry about.

Good points.

Do all BCBS plans (bronze, silver, gold, platinum) go up 25-90%? And is the entire increase attributable to the end of the subsidy?

How much would the plans have gone up if the CSR subsidy did not get eliminated?

Healthcare is generally good, it's the pricing that is a problem.

 

[donheff]

Good points.

Do all BCBS plans (bronze, silver, gold, platinum) go up 25-90%? And is the entire increase attributable to the end of the subsidy?

How much would the plans have gone up if the CSR subsidy did not get eliminated?

Healthcare is generally good, it's the pricing that is a problem.

This Kaiser Foundation piece says the increase due to CSR suspension is 19% for all markets, 21% for non-expansion markets. YMMV in your state.

 

[ivinsfan]

Good synopsis, but I think it's too early to say there is anything to worry about, other than the standard worries about life.

And all rate increases must still be approved by regulators.

The regulators no longer have any teeth. The insurance companies threaten to leave the state and regulators simply let them have their way..This is fact not a political comment