New Jersey individual market premiums set to rise, bucking national trend

Surprise...while individual market premiums for 2020 are up an average of just 0.7% in the 40-odd states tracked so far* by Charles Gaba, requested rates are up a weighted average of 8.6% in New Jersey -- after a 9% drop last year, the product mainly of a new reinsurance program and a state-enacted individual mandate.

AmeriHealth, which gained market share this year and currently enrolls 41% of the total NJ individual market, is requesting increases averaging 11%. Horizon Blue Cross, with 62% market share, is requesting increases averaging 6.2%. Oscar, with 4.4% market share, is requesting a 16.3% average increase.

Here are the rate requests (from https://ratereview.healthcare.gov/). Enrollment is negligible in Horizon Health of New Jersey, Horizon's HMO. AmeriHealth HMO accounts for 11.4% of AmeriHealth's Q1 2019 enrollment. Oxford Health enrollment is negligible.

Some context, presented without attempt at causal explanation:

Is New Jersey's unsubsidized marketplace enrollment migrating off-exchange?

Politico and Modern Healthcare have both wondered why ACA marketplace enrollment for 2019 is down in New Jersey, as in most of the 39 states using HealthCare.gov. As MH's Shelby Livingston put it, New Jersey "did everything right" to boost enrollment -- swiftly passed a state individual mandate and implemented a reinsurance program that brought 2019 premiums an average of 9% below 2018 levels. Yet 5 weeks into Open Enrollment for 2019, enrollment is down 13% compared to 2018. In all 39 HealthCare.gov states, it's down 10.4%.

One hope is that lower premiums are driving more enrollees whose incomes are too high to qualify for subsidies into the off-exchange ACA compliant market. There should be at least some movement in that direction, for two reasons.

First, benchmark silver plan premiums dropped a long way -- 15% in much of the state. Consequently, fewer people with incomes at the upper end of subsidy eligibility qualified for subsidies this year, because the unsubsidized premium cost less than the "affordability" threshold, 9.86% of income at 300-400% FPL. In 2018 in New Jersey, 37,991 enrollees as of the end of Open Enrollment had incomes in the 300-400% FPL range.

Second, this year New Jersey's Department of Banking and Insurance actively encouraged insurers to use on-exchange-only "silver loading" (see note below) to offer cheaper silver plans off-exchange only. AmeriHealth and Oscar responded. AmeriHealth's three cheapest silver are offered off-exchange only; the cheapest one, a narrow network HSA, costs a 46 year-old $108 per month less than the cheapest on-exchange silver.  Oscar's cheapest off-exchange silver plan is $39 per month less for a 46-year old than its cheapest on-exchange silver.  And in Jersey, an unusually high percentage of off-exchange enrollees do choose silver -- 65% in 2018.

As of the end of Open Enrollment for 2018, New Jersey had 62,360 unsubsidized enrollees on-exchange. Some of those enrollees, plus a significant share of the 38k in the 300-400% FPL band, may have some incentive to move off-exchange.

A closer look at off-exchange enrollment in New Jersey, however, suggests that such movement may be limited.