Executive announcement to end cost sharing reductions

[CardsFan]

Quote:

Originally Posted by 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/w...ring-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]

Quote:

Originally Posted by 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/w...ring-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]

Quote:

Originally Posted by 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. 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.

Quote:

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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by MichaelB 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]

Quote:

Originally Posted by Senator 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]

Quote:

Originally Posted by MichaelB 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]

Quote:

Originally Posted by Senator 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]

Quote:

Originally Posted by Senator 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

[FIREd]

Quote:

Originally Posted by Senator 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.

In my state, BCBS requested premium increases based on the assumption that the CSR would not be federally funded in 2018.

They requested increases for Bronze and Gold plans in the 0-5% range and ~20% for Silver plans (no Platinum plans available). This is a non-expansion market.

[LARS]

Seems to me the biggest concern is in poor counties and how the impact of uncertainty will play out for insurers. Will we see more insurers pulling out of individual markets? Feel reasonably confident, notwithstanding uncertainty, more viable insurance markets (read: more income levels) will continue to limp along.

Anyone disagree? For me, biggest fear is not having any plans offered, which some counties in US are facing...

[scrabbler1]

Quote:

Originally Posted by ivinsfan 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

It depends on which state you live in. My state, New York, has a competitive market and the state's toothed insurance department frequently reduces rate increases. If a company wants to pull out because of that, they pull out.

[SecondCor521]

Quote:

Originally Posted by 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?

Emphases added by me.

I think it is more accurate to say that the cost sharing reduction payments from the government to the insurers have been eliminated. I'm pretty sure that's what you meant, but some people might misunderstand from your wording.

In my state at least - and maybe my understanding is wrong, but the premium assistance is simply, as you say, the difference between the expected contribution (which is a formula based on ACA MAGI) and the SLCSP, and that one can apply that premium assistance to any marketplace plan, including bronze, silver, silver with CSR, gold, or platinum. So I am a little confused by the second phrase I bolded in your post.

Finally, my state has had prices for 2018 on the website published for a week or two now. The state discussed CSRs ending with the insurance companies during the rate setting process, so they don't have to go back. I can see some states revisiting the issue and possibly revising/amending rates given the recent actions. But I was under the impression that final participation and rates from the insurers were due by 9/27 or so, so aren't all the rates already available for people to review?

I did find out that in my state for my insurer, part of the ~40% increase in Silver plans for 2018 is loss recovery from 2017. The premiums collected covered about 3/4 of the benefit payments, and I believe that the CSR payments from the federal government were not enough to cover the remaining 1/4 gap.

Idaho is a non-expansion state and has/had a high percentage of people on silver CSR plans.

[Senator]

Quote:

Originally Posted by ivinsfan 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

I think it is 100% a political comment.