Monday, May 21, 2018

Four ways states can leverage ACA sabotage

Sabotage of the ACA by the Trump administration and the Republican Congress will partially reverse the ACA's coverage gains, causing hardship to millions. But it differs from Republicans' failed legislative repeal in a fundamental way: The ACA's funding streams and mechanisms remain in place.

Not only can states that retain the will to make the ACA work continue to tap federal funding -- if they're willing to be creative, they can tap revenue streams created and inflated by the sabotage. Each form of sabotage has created new opportunities. There are at least four ways that states can not only fight off sabotage, but leverage funding opportunities that sabotage has created.

Tuesday, May 15, 2018

In Health Affairs: If CMS ends silver loading

I've co-authored with David Anderson, Charles Gaba and Louise Norris a blog post in Health Affairs that surveys the fallout from Trump's cutoff of federal funding for Cost Sharing Reduction subsidies in 2018 and considers the likely effects if the Trump administration moves to block the current effective strategies that most states have employed for dealing with that cutoff.

That is, what happens if CMS administrator Seema Verma and/or HHS Secretary Alex Azar move to block states from allowing or instructing insurers in the individual market to price CSR into silver plans only, a strategy that has created discounts in gold and bronze plans?

Part one recounts the history of how states and insurers found their way to silver loading. Part two quantifies how many people likely benefited from discounted bronze and gold plans. Part three reviews the impact of the CSR cutoff on unsubsidized premiums. And Part four considers the likely effects on plan pricing and enrollment if HHS/CMS either forces individual market insurers to spread the cost of CSR evenly among all ACA-compliant plans or to spread it evenly among all plans sold on-exchange only.

Hope you'll take a look.

Friday, May 11, 2018

Melt like wax into God or be born into her womb?

Continuing vacation posting of old non-political bits...

Kierkegaard, Julian, Obama

(5/5/13) -- Who knows what governs how a moderately engaged undergraduate makes sense of abstruse philosophic texts? As a sophomore, my mind settled on a basic dichotomy: Hegel bad, Kierkegaard good. This was probably what you might call a gendered thought. Hegel's basic How-Things-Work was to my mind aggressive, imperialist, male: thesis absorbs antithesis in new synthesis. Man slays dragon, eats its heart, becomes (relative) superman. Kierkegaard, by contrast, kept apparently irreconcilable opposites in eternal balance, on an eternal toggle switch whereby they could be seen alternately as part of a unity and eternally distinct.

I can't tell you at this distance whether my abstract caricature is accurate, but it has stayed with me all my life, and I tend to class thinkers on one side or the other of this divide. In retrospect, I'm sure that I placed the subject of my dissertation, the medieval mystic Julian of Norwich (an achoress, i.e. a nun in self-imposed solitary confinement) on the Kierkeaardian side of the ledger, though I never zoomed up the centuries to probe the association. *

Julian had a brilliant trick of subordinating the harsh elements of Catholic dogma that she didn't like (the damned are damned forever) to those that she felt by force of direct revelation to be true (all will be well, and all will be well, and all manner of things will be well).  Her basic dynamic was that God-as-man maintains two "cheres," or points of view: the human, limited one, whereby we must see and condemn our own sin, and the "inward, more ghostly" and more strictly divine one, whereby no one does anything except by God's will, and God is delighted with all, and sin is merely an instrument of human self-education.

Thursday, May 10, 2018

"New Jersey is poised to fight off ACA sabotage. Is Gov. Murphy on board?"

As Ive noted before, while the New Jersey legislature has passed bills establishing a state individual mandate and a reinsurance program, Gov. Murphy has not committed to signing them. I have an op-ed up on NJ Spotlight arguing that the need is urgent.:
The Congressional Budget Office forecast that mandate repeal in itself would generate premium increases of 10 percent per year throughout the next decade. An analysis of the impact on states commissioned by Covered California the state's ACA marketplace, put New Jersey in the highest risk category, where premiums are forecast to rise as much as 90 percent over three years if action is not taken to strengthen the markets. Early insurer rate requests filed in Virginia and Maryland are showing sky-high increases. Maryland's insurance commissioner is warning of a death spiral and placing hope on the state's reinsurance waiver proposal.
If there's any sticking point, it's probably related to cost. Here is an outtake with someone more detail than I had space for:

Outside our diseased political realm...

Good morning! I'm going to be on vacation for a week-plus, and probably not blogging healthcare. In the interlude, I thought I'd re-post a few non-political entries. The first, below, is from January 2010. I also have a couple of healthcare articles placed elsewhere (one a co-byline) that should drop during my time away. I'll post links when that happens.

A Cliff note for deconstruction

(1/8/10) -- Deconstruction, the literary theory that "attempts to demonstrate that any text is not a discrete whole but contains several irreconcilable and contradictory meanings" (Wikipedia - a definition as good as any) has been popularly regarded as an arcane, perverse bit of wizardry on the border between fraud and rocket science. I always felt that it demonstrated itself pretty well empirically (though logically, it should also unravel its own propositions...).

One Shakespeare sonnet, No. 24, always seemed to me to capture the idea in a line - the one bolded below.

Mine eye hath played the painter and hath stelled
Thy beauty's form in table of my heart.
My body is the frame wherein 'tis held,
and perspective it is best painter's art.
For through the painter must you see his skill
To find where your true image pictured lies,
Which in my bosom's shop is hanging still,
That hath his windows glazed with thine eyes.

Monday, May 07, 2018

Virtually no enrollment loss in state-based ACA exchanges in 2018

I imagine it's been noted before, but states that run their own ACA exchanges collectively had virtually no enrollment losses in 2018, while enrollment in the 39 states shrank 5%.

The loss even among unsubsidized exchange enrollees in the state-based exchanges (SBEs) was very slight, just 1% -- compared to 10% in the states. After Trump cut off federal funding for Cost Sharing Reduction (CSR) subsidies, most of the SBEs silver-loaded CSR costs on-exchange, and allowed insurers to offer silver plans off-exchange with no CSR priced in (for an explanation, see note below). That includes California, which accounts for almost half of SBE enrollment. It might therefore have been expected that more unsubsidized enrollees in the SBEs would have moved off exchange. And where unsubsidized on-exchange enrollment did drop, it will be hard to determine if many may have enrolled in ACA-compliant plans off-exchange.

Saturday, May 05, 2018

Will Trump's cutoff of CSR reimbursement boost ACA enrollment by 2-3 million, per CBO?

Trump's cutoff of federal funding for Cost Sharing Reduction subsidies (CSR) last October created discounts in bronze and gold plans for many subsidized enrollees in the ACA marketplace, as explained below.  The availability of these discounts partly offset other forms of sabotage, so that on-exchange enrollment was down a relatively modest 5%.

On May 3, CBO Director Keith Hall estimated in a blog post that the CSR cutoff has boosted or will boost marketplace enrollment by an astonishing 2-3 million. The verb tense and time frame is ambiguous, per below (my emphasis). The estimate surely does not apply to 2018 -- I doubt the enrollment boost this year exceeded 500,000, for reasons explained below. 

Here's Hall's explanation of how the CSR discounts came about and their likely effects:
On the basis of an analysis of insurers’ rate filings, CBO and JCT estimate that gross premiums for silver plans offered through the marketplaces are, on average, about 10 percent higher in 2018 than they would have been if CSRs were funded through a direct payment. The agencies project that the amount will grow to roughly 20 percent by 2021.

Tuesday, May 01, 2018

Silver loading yields some gold dividends in Kansas

Quick: what changed in the Kansas ACA marketplace in 2018, besides a shortened enrollment period?

Metal Level Selection in Kansas, 2018 vs. 2017


% of total enrollment
Number enrolled


% of total enrollment
Number enrolled

Yup. For two thirds of enrollees, the cheapest gold plan was cheaper than the cheapest silver -- the exceptions being those in Johnson and Wyandotte counties (adjacent to each other), together home to two thirds of the state's marketplace enrollees.* Hence gold enrollment nearly tripled statewide, whereas gold takeup was half the statewide total in Johnson County (10.5%) and one third in Wyandotte (6.5%).*

Monday, April 30, 2018

George Orwell's mirror for American leaders

I have been essays that George Orwell wrote in the thirties and during World War II. They hold up a distant mirror* to our current predicament.

Orwell, a "democratic socialist" with an evolving dislike and distrust of hard-line Communists, is not always insightful. His major error was assuming that Britain -- and ultimately, I gather, all countries -- had to make a binary choice between fascism and socialism. He roughs out some national stats, such as how many British citizens were likely to be malnourished circa 1937, but he doesn't seem to have much of a grasp of economics. He's vague about the changes he'd like to see, at least in the essays I've read (and in The Road to Wigan Pier, really an extended essay).

But Orwell did know people -- he was a passionate embedder, becoming a tramp to get to know tramps, staying in the miserably substandard homes of coal miners, talking in depth to hundreds of working and middle class people. And he has a certain moral clarity, a commitment to justice and alleviating suffering. He judges the privileged, but with empathy. He sees that his Marxist quasi allies are driven largely by hatred and he recoils from that.

Thus, while condemning  Britain's leadership through the post-WWI era for myopia, for clinging to their privilege, for cowardice and incompetence, Orwell pays grudging tribute to a certain baseline integrity. And that's where we get, to mangle a metaphor, a kind of mirror-by-contrast held up to the U.S. just now:

Thursday, April 26, 2018

Rational choice in the ACA marketplace, Pennsylvania 2018 edition

Pre-script: Looking again at the first chart below, I fear this was one of my bury-the-lead days. In the three income brackets ranging from 200-400% FPL -- subsidized enrollees not eligible for strong CSR -- 42% bought gold plans. Forty-two percent! That is back-door CSR, statewide -- a significant boost in value available to those at the upper end of subsidy eligibility.
While unsubsidized buyers of health insurance in Pennsylvania's individual market suffered from rate hikes north of 30%, subsidized enrollees got all kinds of  bounty as a result of the state's decision to "silver load" the cost of Cost Sharing Reduction (CSR) subsidies. That is, once Trump cut off federal reimbursement to insurers for CSR, Pennsylvania insurers priced it in to silver plans only, generating discounts in other metal levels  (see note at bottom for an explanation).

In the state's most populous counties, the individual insurance market is dominated either by Independence Blue Cross (Philadelphia and surrounding counties), Geisinger (e.g., counties just to the west of the Philly region) or UPMC (e.g., Allegheny, including Pittsburgh). Thanks to silver loading, Geisinger and UPMC offered gold plans that were cheaper than the cheapest silver available. Independence Blue Cross offered a gold plan that was priced a more or less normal range above the cheapest silver. But as explained in my previous post, thanks to a huge gap between the cheapest silver plan and the benchmark silver plan, that gold plan was free or very low cost to many subsidized buyers.

In fact in all counties except those clustered near Philadelphia and served by Independence BC, the cheapest gold plan was cheaper than the cheapest silver. And in Philly and the surrounding counties, the cheapest gold plan was cheaper than the benchmark silver plan, and so heavily discounted, as subsidies are set against the benchmark. (David Anderson has mapped cheapest gold vs. cheapest silver prices in all counties nationally here; you can select a Pennsylvania-only view.)

As a result, gold plan enrollment more than tripled in Pennsylvania in 2018. Enrollment in bronze plans, which were free to everyone over 30 with an income of $30,000 in large swaths of the state, more than doubled.

Tuesday, April 24, 2018

A free silver plan with a $0 deductible...What's not to like?

I have been fond of noting that notwithstanding the complexity of health insurance, most enrollees in the ACA marketplace seem to get the most consequential choice right: metal level. In particular, most people eligible for strong Cost Sharing Reduction (CSR), which is available only with silver plans, chose silver and access it.

This year, subsidized enrollees' responses to the anomalous discounts generated by Trump's cutoff of federal funding for CSR (see note at bottom if you're unfamiliar with this) reinforce this narrative. In some states where the cheapest gold plans are cheaper than the cheapest silver, gold enrollment quadrupled or tripled. In the 200-250% FPL income band, where CSR is negligible, silver enrollment fell off a cliff in states where "silver loading" the cost of CSR generated large bronze/gold discounts (on, silver selection in this income band dropped from 68% in 2017 to 53% in 2018).

But when it comes to plan complexity, there are layers within layers -- literally, in the form of tiers. While I was working on a post about rational choice in Pennsylvania, where CSR takeup remained fairly strong even as gold enrollment more than tripled to 27% of total enrollment, I came across a mystery.

Wednesday, April 18, 2018

Two NJ healthcare bills awaiting Gov. Murphy's signature should reduce premiums by 20-30% in the individual market

On April 12, both houses of the New Jersey legislature passed bills to establish a state individual mandate (A3380) and a reinsurance program (S1878). The bills are designed to work in tandem to stabilize and reduce premiums in the individual market for health insurance.

It is not certain that Governor Phil Murphy will sign the bills. A mandate is a tax, and taxes are hard. The reinsurance program will cost the state some money, though not much -- probably an amount in the low tens of millions each year. But the payoff would be dramatic. Taken together, as outlined below, the bills can be expected reduce premiums in the individual market 20-30% compared to what they would be if neither bill is enacted.

Thursday, April 12, 2018

If Seema Verma bans silver loading, how many ACA marketplace enrollees will suffer?

A few weeks ago, using ACA marketplace enrollment data available for Maryland, I calculated that about 20% of Maryland marketplace enrollees would lose valuable discounts in gold and bronze plans if federal reimbursement to insurers for Cost Sharing Reduction (CSR) subsidies were restored by Congress, after being cut off by Trump last fall.

Early this month, CMS published enrollment data for all states, with more detail (as always) for the 39 states using the federal exchange,, which account for just under three quarters of all enrollment. And while Congress balked at restoring CSR funding for 2019, CMS administrator Seema Verma is now intimating that CMS may ban "silver loading," the pricing practice that produced this year's discounts in bronze and gold plans. With the full enrollment data for, we can now calculate roughly how many people would lose access to the kind of de facto subsidy enhancements that emerged this year.

Tuesday, April 10, 2018

Does marketplace resilience show creator brilliance? Not quite, Krugman

Paul Krugman crows a bit about the ACA's relative resilience:
What’s the secret of Obamacare’s stability? The answer, although nobody will believe it, is that the people who designed the program were extremely smart. Political reality forced them to build a Rube Goldberg device, a complex scheme to achieve basically simple goals; every progressive health expert I know would have been happy to extend Medicare to everyone, but that just wasn’t going to happen. But they did manage to create a system that’s pretty robust to shocks, including the shock of a White House that wants to destroy it.
Um, maybe, sort of. The perspective is a useful corrective to those of us prone to lamenting the ACA's many design flaws and susceptibility to sabotage. And Krugman does highlight a resilience-making feature that I suppose could have been otherwise:
Those subsidies aren’t fixed. Instead, the formula sets the subsidy high enough to put a limit on how high premium payments can go as a percentage of income.
Yes, the subsidy-eligible are insulated from the massive premium hikes of the past two years -- averaging well over 20% in each year -- and that would not be the case if they were not benchmarked to income. The Trump administration even added some accidental extra resilience in an act of spite -- cutting off federal CSR reimbursements to insurers -- which simply boosted the subsidies, and allowed many enrollees to leverage the increase by buying bronze or gold plan (since in most states insurers concentrated the un-reimbursed price of CSR in silver plans, against which subsidies are set).  So the subsidy structure seems to preserve a pool of 8 million subsidized -- if erosion among the unsubsidized, and the Trump administration's fostering of a lightly regulated, medically underwritten alternative market for the healthy among them -- doesn't drive large numbers of insurers out.

But Krugman overstates the case on several fronts -- the most notorious being a straight factual fudge. Noting that 83% of enrollees on the exchanges are subsidized, he concludes:

Sunday, April 08, 2018

Getting rid of Trump on the cheap

Shortly after Trump won the presidency, David Frum warned that the gravest danger to American democracy was the likelihood that Republicans in Congress would refuse to hold him accountable and would go along with his multi-front assaults on core American institutions and norms. Ever since then, I've thought that a stupid Trump move that triggers a recession or economic crisis might be the one thing that would induce Republicans to drop him -- "like a hot rock," as McConnell once falsely promised to do prior to Trump's nomination. If so, a recession would be the cheapest way we'd likely find to shake off the various mortal and merely grave dangers Trump poses. Trump's tariffs have markets gyrating and shaking; they could trigger this scenario

Wishes can be calibrated only in superstitious prayer. So much could go wrong with this scenario. Trade war could trigger hot war. Trade war could start, and Trump could set off an unrelated hot war. Trade war could lead to global depression. Republicans could stick with Trump no matter what he does. Various crises could trigger other extreme reactions in Trump -- moves to shut down media or criminalize/jail adversaries of various types. And of course, trade war may not happen -- China may give Trump a fig leaf while cleaning his clock in negotiations.

Nonetheless, a tightrope walk of fortune -- a Trump-triggered financial crisis (hopefully of the short and mild variety), followed by a Republican loss of one or both houses of Congress, followed by Republican acquiescence in various Congressional moves to rein Trump in, up to and including impeachment -- remains possible. Mount to heaven, O superstitious prayer!

Friday, April 06, 2018

New Jersey can sabotage-proof its ACA marketplace next week

Update, 4/12/18: All three bills discussed below passed in both houses of the New Jersey legislature today (info below via the legislature's bill lookup feature). On to Governor Murphy!

1. Individual mandate bill
A3380 Aca (1R) "New Jersey Health Insurance Market Preservation Act." 
Passed both Houses  

2. Reinsurance bill
S1878 ScaScaScs (SCS) "New Jersey Health Insurance Premium Security Act;" establishes health insurance reinsurance plan. 
Passed both Houses  

3. Out-of-network bill
A2039 Aca (1R) "Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act." Passed both Houses 

Original post, 4/6:
Amid all the worry about the effects on the ACA marketplace of individual mandate repeal and administrative rules fostering an ACA-noncompliant market, some really good news is pending in New Jersey.

Bills to establish a state individual mandate (S1877/A3380) and to start the process of seeking a waiver to obtain federal funding for a reinsurance program have passed through committee and are scheduled for floor votes on Thursday, April 12.  The mandate bill would dedicate the revenue collected to the reinsurance program.

While both bills are expected to pass, it's not a sure thing. All Republicans are opposed to the mandate. Governor Murphy has been quiet about it. Mandates are a heavy lift even in blue states. But New Jersey is close, and that's very good news.

Tuesday, April 03, 2018

"Strong" CSR takeup dropped only slightly on in 2018

Update/correction: This year, for the first time, CMS broke out enrollment at each level of CSR (at actuarial values of 73%, 87%, and 94%) -- and separately, metal level enrollment at each income level (indirectly - see note below). As explained below, the percentage of apparently subsidy-eligible enrollees with incomes up to 200% FPL who obtained strong CSR (94% or 87% AV) is somewhat lower than the percentage who selected silver plans. 

I noted recently with respect to Maryland ACA marketplace enrollment, the downside of "silver loading" the cost of CSR is a drop in takeup of the strong CSR available to enrollees with incomes below 200% FPL. CSR is available only with silver plans (please see the prior post to un-abbreviate all this).

That downside (for the subsidized) is outweighed by the upside. In Maryland, about 30,000 enrollees with incomes over 200% FPL obtained steep discounts in bronze and gold plans, whereas about 6,000 fewer enrollees under 200% FPL obtained strong CSR than would have had Trump not disrupted the market by cutting off federal funding for the benefit (see appendices to post linked to above for a quick explanation).

Now we have enrollment numbers for the all states -- with, as usual, more precise breakouts for the the 39 states using the federal exchange, than for the whole country.  In states, CSR takeup among those with incomes up to 200% FPL downticked only slightly.  -- to  about 82%. Silver selection among those with incomes ranging from 100-200% FPL dropped from 86.9% in 2017 to 85.3% in 2018. For 2017, we don't know how many silver enrollees in the income bracket did not obtain CSR.

Could Trump's ACA sabotage pave the way to a strong public option?

The Urban Institute's Linda Blumberg and John Holahan, authors of an "ACA 2.0" blueprint, mull healthcare reform after Trump

In August 2015, Urban Institute scholars Linda Blumberg and John Holahan warned that the ACA marketplace as then constituted would probably never perform to expectations. Subsidies were insufficient to draw the robust participation the law's creators had anticipated. They proposed a revamped subsidy schedule that reduced premiums and out-of-pocket costs at every income level. For those with incomes above the current subsidy threshold of 400% of the Federal Poverty Level, premiums for a benchmark plan covering 80% of the average enrollee's costs would be capped at 8.5%.

Hillary Clinton more or less incorporated the Blumberg-Holahan proposal into her healthcare platform. And now, two years later, bills to improve the ACA introduced by Democrats in the House and Senate do likewise. Both bills precisely reproduce the plan's enhanced premium subsidies and offer even more generous reductions in enrollees' cost sharing (see the Appendix below for a summary).

The Senate bill, introduced by Elizabeth Warren and four colleagues,* places several new constraints on insurers in the individual market. These include requiring insurers to provide a better selection of doctors and hospitals, raising the percentage of premium revenue insurers are required to spend on enrollees' medical costs, and standardizing plan design. The preamble to a one-page summary of the bill appears to blame insurers alone for Americans' high healthcare costs.  By generously subsidizing enrollees at all income levels, however, the bill creates conditions under which insurers in the individual market can thrive.

ACA 2.0 -- or a whole new system?

I spoke to Blumberg and Holahan last week to get their reaction to the "ACA 2.0" bills, the Warren bill in particular. Blumberg confirmed that they had been consulted by the bill's creators, though they did not participate in the drafting.

Saturday, March 31, 2018

Open thread: How Trump's cutoff of CSR funding affected Maryland enrollment

My last post looked at the drop-off in silver plan selection among Marylanders eligible for strong Cost Sharing Reduction subsidies in 2018. CSR is available only with silver plans. When Trump cut off federal funding for CSR, insurers in Maryland priced it into on-exchange silver plans only,which generated large discounts in bronze and gold plans for subsidized buyers . For an explanation of how that worked, see the first note at bottom. For a summary of the discounts to the subsidized on offer in Maryland in 2018, see the second note.

Today, let's kick back and squint at the changes in metal level choices in Maryland at each income level (including the upper brackets this time) from 2017 to 2018. I'll offer a couple of observations below the charts now, and maybe more through the weekend. I invite you to offer your own.

Here are the percentages who chose each of the three main metal levels in each income band in both years. In both years, a bit under half of all enrollees had incomes under 200% of the Federal Poverty Level, and so were eligible for strong CSR (about 98% of them, anyway).  At bottom, the raw numbers at each metal level are charted, courtesy of the Maryland Health Connection. (Platinum and catastrophic plans accounted for 3% of enrollment between them in both years.)


Income (% FPL)
% bronze
% silver (CSR)
% gold
< 100 
0-200 (strong CSR)
200-250 (weak CSR)
>; 400


Income (% FPL)
% bronze
% silver (CSR)
% gold
< 100
<100 p="">
0-200 (strong CSR)
200-250 (weak CSR)
> 400

Wednesday, March 28, 2018

A downside to silver loading: CSR takeup drops in Maryland

note 3/30 updated at bottom.

Maryland is one state that experienced beneficial effects from Trump's cutoff of federal funding for Cost Sharing Reduction (CSR) subsidies. In Maryland, insurers concentrated the cost of CSR into silver plans offered on-exchange only, creating dramatic discounts in gold and bronze plans for many subsidized buyers, as well as cheaper off-exchange silver plans for the unsubsidized (who nonetheless were stung by super-high premium increases). In January, I reviewed the bounty available to subsidized buyers:
Throughout the state, all subsidy-eligible* enrollees with incomes below 200% of the Federal Poverty Level (FPL) could obtain an bronze plan for under $20 per month. Most at this income level -- e.g., everyone over 30 -- could get a bronze plan for under $4 per month. In the state's most populous counties, subsidy-eligible buyers could get a gold plan for just a few dollars more than a silver one.  And in several rural counties, an enormously expensive benchmark (second cheapest) silver plan, which determines subsidy size, rendered silver and gold plans as well as bronze plans free for many enrollees.
Probably as a result of those discounts, subsidized enrollment in the state increased slightly over 2017, despite the shortened enrollment period and sharply reduced advertising and enrollment assistance funding from the Trump administration (overall enrollment was down slightly). Gold plan selection almost quadrupled.

Those were the benefits. But there was a downside as well. CSR,  available only with silver plans, makes silver plans roughly equivalent to platinum for enrollees with incomes up to 200% of the Federal Poverty Level (FPL). Among enrollees with incomes below that threshold, as with higher income enrollees, silver selection dropped significantly.

Today the Maryland Health Connection sent me a breakout of metal level selection by income for 2017, to go with the 2018 numbers they supplied in January.  Below, I've extracted the percentage changes in selection of each metal level among those eligible for CSR. Note aggregate numbers for all groups up to 200% FPL. At 200-250% FPL, CSR is available but negligible.  Switching to discounted gold and bronze makes sense for many in that income range.

Thursday, March 22, 2018

Elizabeth Warren roars at health insurers, but her ACA 2.0 offers them a pretty sweet deal

Elizabeth Warren loves to bash insurers. Yesterday, she introduced a bill* that would radically improve the health insurance offered in the ACA marketplace. Reading the preamble to the bill's one-page summary, you'd think that problems of access and affordability in U.S. healthcare are solely a product of insurance company greed.

Leaving aside various hat-tips to the ACA, here's the indictment:, too many patients still have to battle with their insurance companies just to see a doctor or get a prescription filled. Insurance companies draw networks so narrow that patients struggle to find a doctor or get an appointment.1 Patients find out when they get a bill in the mail that they unwittingly relied on an outdated provider directory and now owe hundreds of dollars in unexpected costs for out-of-network care. Insurance companies can drop doctors from their network in the middle of the plan year with no notice, suddenly jack up out-of-pocket costs for a cancer or MS drug, or rip up a plan at the end of the year and leave new mothers or patients dealing with a serious health condition scrambling to maintain access to their doctor.

Tuesday, March 20, 2018

Health Insurers' risk corridor suits could seek a lot more than $12.3 billion

Stephanie Armour reports in the Wall Street Journal that a decision should come down soon from the U.S. Court of Appeals for the Federal Circuit in two of the risk corridor lawsuits against the federal government filed by health insurers seeking reimbursement for losses in the ACA marketplace. Those suits seek a total of about $12.3 billion in risk corridor payments the government failed to make in 2014, 2015 and 2016.  In fact, the bill could be considerably higher if insurers prevail. That's what I'd like to spotlight, below.

The risk corridors, to review briefly, were one of three risk management programs the ACA established to cushion health insurers' plunge into an unprecedented market structure. Insurers with losses above a fixed threshold would get a large chunk of them reimbursed by the federal government, while those with profits above a mirror-image threshold would pay a chunk of those gains in. The ACA statute states that insurer losses will be paid according to this formula, and HHS guidance through 2013 affirmed this. In early 2014, though, with the program under attack from Marco Rubio and other Republicans, HHS and CMS indicated that reimbursements would be revenue neutral, and reduced if the contributions from profitable insurers did not cover unprofitable insurers' losses. Republicans then, in omnibus funding bills for FY 2015 and 2016, banned the agency from using its funding streams to pay any shortfall beyond insurers' contributions. In October 2015, CMS announced that it would pay just 12.6% of $2.87 billion in insurers' compensable 2014 losses. A cascade of failures among the nonprofit insurance co-ops established (and underfunded) by the ACA followed. How many of those co-ops would have survived had the risk corridor promises been kept is debatable.  By 2016, the last year of the program, unpaid risk corridor losses totaled $12.3 billion.

The insurers have a clear case on the merits, regardless of what the courts decide about the paradox of funds promised by statute by unappropriated by Congress (one of several such paradoxes generated by serial Republican sabotage of the ACA, all of them eroding the full faith and credit of the U.S. government). One aspect of the complaint highlighting the extent of the moral debt, and possibly the financial one, caught my eye in the class action complaint joined by some 150 insurers, Health Republic Insurance Company v. The United States of America.

Saturday, March 17, 2018

Who'd be hurt by restored federal CSR funding? A snapshot from Maryland

Update: snapshot from Rhode Island added at bottom, 3/19.

Based on 2017 ACA marketplace enrollment data, Aviva Aron-Dine of the Center on Budget and Policy Priorities estimates that as many as 36% of marketplace enrollees might be harmed if federal funding for Cost Sharing Reduction (CSR) payments is restored by Congress. That's an upper bound, if all who could potentially benefit in 2018 by switching from silver plans to other metal levels did so. It comes to about 22% of all individual market enrollees, since about 40% of those in ACA-compliant plans bought their plans off-exchange -- and so are ineligible for subsidies.

One sample of data already available for 2018 -- Maryland's -- indicates that Aron-Dine's estimates are on target. I have something of a quibble with how the potentially harmed population is defined, however.

Wednesday, March 14, 2018

Inflation that tracks your march to death

As the ACA-compliant individual market shuddered under a second consecutive round of premium hikes averaging well north of 20% in 2018, I took in an earful of stories from people in their fifties and sixties who were paying full freight, partly recounted here.

One thing that struck me somewhere along the way is the impact of the personal inflation hit induced simply by aging. In the best of markets, late-middle-agers will pay 4-5% more in many years simply for getting a year older. that's  a turbo-charge to double-digit hikes for everyone (particularly for couples).

David Anderson, who may do a more analytical post about this, was kind enough to pull an ACA age rating chart for me. I begin at age 45,  just before price increases accelerate. This is for one bronze plan in Arizona:

Monday, March 12, 2018

We're not in ACA Repeal-and-Replaceville. We're in Cassidy-Collinstown

Peter Suderman argues that The GOP Accidentally Replaced Obamacare:
Republicans, having failed to repeal Obamacare, have stumbled, almost accidentally, into replacing it. For better and for worse, and with little coherent vision at work, they are making Obamacare their own. And over time, they are likely to embrace it.
There's a good degree of truth in this. Suderman runs through the panoply of Republican legislative and administrative whacks at the ACA's structure and benefits on the federal and state level: individual mandate repeal; creation of a parallel market of non-ACA-compliant plans; regulatory hurdles to Medicaid enrollment aimed particularly at the ACA Medicaid expansion population; repeal of the Independent Payment Advisory Board for Medicare. And Suderman adds a creative future-cast twist: If Democrats take power and pursue a fully or quasi-single payer system, Republicans may end up defending the relatively moderate -- and Republican-moderated (or adulterated) -- status quo, i.e. the ACA.

Suderman's neat conceit leaves a core factor out of the equation, though: funding.

Thursday, March 08, 2018

Can Medicare Advantage plans lower enrollees' out-of-pocket costs? A talk with Kaiser's Juliette Cubanski

A month ago, I took a look at the resources available -- or unavailable -- to Medicaid enrollees who face a "Medicare cliff" when they turn 65 -- that is, a transition from having basically all their medical expenses covered to a program that carries a monthly premium for most of $134, requires 20% copays for most medical services and potentially huge outlays for inpatient hospital care, and has no cap on out-of-pocket costs.

Some 10.7 million Medicare enrollees are "dual eligibles" of one kind or another -- enrolled either in ABD (Aged/Blind/Disabled) Medicaid, which provides comprehensive coverage,  or in Medicare Savings Programs (MSPs), which offer more partial coverage, or in some cases both.  But the income thresholds for all of these programs are lower than for Medicaid in states that accepted the ACA expansion, and the asset tests for the MSPs are quite low -- $7560 for an individual, excluding home and car.  The application process is complex, and help and outreach are underfunded.  (For a useful overview, see Josh Schultz.)

For the many seniors of quite limited means who don't qualify for MSPs, I wondered to what extent Medicare Advantage (MA) plans might function as a de facto discount plan. About one third of current Medicare enrollees are in MA plans. MA plans usually incorporate a Part D drug plan, and often the premium is lower than the combined premium for Medicare Parts B and D (e.g., in zero-premium plans, in which enrollees pay only their Medicare Part B premium).  MA plans may offer extra benefits, such as dental, vision or hearing coverage (often quite limited). Perhaps most importantly, they cap out-of-pocket costs at a maximum of $6,700 per year. The main tradeoff is acceptance of a limited provider network -- often quite limited.

I spoke to Juliette Cubanski, Associate Director of the Program on Medicare Policy at the Kaiser Family Foundation and lead author of a recent Kaiser report on healthcare spending in Medicare households, about the appeal, real or perceived, of Medicare Advantage plans for lower income Medicare enrollees.  An edited q-and-a is below.

xpostfactoid: Does Medicare Advantage often offer effective de facto discounts over traditional Medicare?

Tuesday, March 06, 2018

Getting creamed in New Jersey: Testimony of the unsubsidized

As noted in my last post  (and called for in my January op-ed), a bill introduced in the New Jersey Senate  (S-1877) last month would implement a state individual mandate and earmark the penalty revenue for a state reinsurance program. A companion bill (S-1878) would authorize pursuit of an ACA innovation waiver to seek federal funding for the reinsurance, as Alaska, Oregon and Minnesota* have successfully done.

BlueWaveNJ, a grassroots group for which I volunteer, supports these paired bills. We have lots of members who insure themselves through the individual market -- many subsidized, and many unsubsidized. In support of the bills, we collected testimony from the latter group -- who were slammed by this year's premium increases. Yesterday, I submitted their testimony at a hearing of the state Senate's Budget and Appropriations Committee, which approved amended versions of both bills.

The testimony is posted here, on the BlueWaveNJ website. As the personal narratives indicate:
These are individuals in their fifties and sixties now facing premiums in the $600-1000/month range and family premiums north of $2000.  They describe tough choices between narrow network coverage and still-higher premiums, or between narrow networks and down-sizing to bronze plans that offer basically catastrophic coverage. Subsidized members are faced with a similar choice between ultra-narrow networks and steep premium increases or reduced coverage.

Saturday, March 03, 2018

New Jersey bill aims to block Trump admin's proposed rule for Association Health Plans

New Jersey is relatively well defended against the Trump administration efforts to fragment the individual and small group health insurance markets by allowing short-term plans to be sold for year-long terms and easing the path for association health plans (AHPs) to be deemed employers in their own right and so gain large group status.

New Jersey bans short-term plans outright, and tightly regulates association plans (the main species of  multiple employer welfare arrangements, or MEWAs, that is, plans that cover the employees of two or more unrelated employers). In Jersey, MEWAs are regulated as small group plans,even if they're self-funded. (While self-funded plans generally are subject to federal oversight under ERISA, which preempts state law, there has long been an exception enabling states to exert all but full  regulatory control over MEWAs.)

As small group plans, MEWAs in New Jersey are subject to the full suite of ACA coverage rules, including Essential Health Benefits. Small group plans are not available to self-employed individuals, or to small businesses that have no employees other than owner and spouse.. Under the Department of Labor's proposed rule for AHPs, these self-employed individuals and small business owners would be eligible to enroll in AHPs that gain large group status.

Does the proposed rule threaten New Jersey's current regulation of AHPs? That's not clear. On the one hand, "The proposed rules also would not modify the States’ authority to regulate health insurance issuers or the insurance policies they sell to AHPs" (p. 42). At the same time, Kevin Lucia, a professor in Georgetown University's Health Policy Institute, cites concern among experts "that this is potentially going to have to be litigated. If you're an association and you set up in Oklahoma, if you read these regulations, you think, well I can sell everywhere -- and yet, California tells me I can't come in?"

Bottom line for Lucia: "It's a big question whether states will be able to maintain their authority to regulate MEWAs."

That uncertainty likely drives a provision addressing MEWAs in a bill introduced in the New Jersey legislature, S-1877, that would establish a state individual mandate to replace the federal mandate effectively repealed by the Republican Congress.

Tuesday, February 27, 2018

Hey Senator Warren, Medicare Extra fills your prescription

Last month, at the Health Access 2018 conference, Elizabeth Warren decried rising out-of-pocket costs required in employer-sponsored health plans and demanded that a new round of healthcare reform "require private insurers to be just as affordable as public insurers like Medicare and Medicaid.”  (I discussed the speech at some length here.)

That formulation struck me as problematic in several ways: 1) Medicaid and Medicare offer very different levels of affordability (except where they're merged for dual eligibles); 2) employer-sponsored insurance, on average, is "just as affordable" as Medicare and in fact provides better protection against crushing out-of-pocket costs than traditional Medicare; and 3) Warren bashed insurers alone for price-gouging without mentioning provider payment rates, which would have to be squashed down if commercial insurance were subject to stricter affordability mandates.

Perhaps, though, Warren had some inkling of the Medicare-for-all-who-need-or-want-it plan that was brewing at the Center for American Progress, released yesterday.