CSRs

Last year there was much hand-wringing by myself and other healthcare wonks about whether or not the Trump Administration would attempt to kill off Silver Loading (and its even-wonkier cousin, Silver Switching). HHS Secretary Alex Azar and CMS Administrator Seema Verma kept sending out mixed and confusing signals about their intentions.

Eventually, Azar decided that while he doesn't like the practice, there wasn't enough time to change the rules before the 2019 Open Enrollment Period was set to begin, so he decided to take a pass for the time being.

Well, in yesterday's NBPP release, the HHS Dept. addressed the issue of CSR reimbursement funding directly...but they also made it clear that they're letting Silver Loading slide for another year:

In the midst of the ongoing #TrumpShutdown, where hundreds of thousands of federal employees are either off the job altogether or having to work without being paid and hundreds of federal contractors are being stiffed for the work they've done in good faith, I just wanted to remind folks that Donald Trump also screwed over several hundred insurance carriers in October 2017 when he cut off contractually-owed Cost Sharing Reduction reimbursement payments to insurance carriers nationwide.

Once again, the very short version is this:

As regular readers know, every spring/summer I spend countless hours poring over the annual insurance carrier rate filings, plugging in increases (and occasionally decreases) in ACA-compliant premium changes for every carrier in every state. I actually do this twice for most states (and occasionally even three times), as the process moves from preliminary/requested rate changes to "semifinal" rates to "final/approved" rates throughout the fall.

For 2018 and again for 2019, I've taken this one step further; instead of simply running the overall weighted average premium changes in each state, I've also attempted to break out what portion of the change is caused by various factors...in particular, what portion is caused by legislative or regulatory changes by Congressional Republicans and/or the Trump Administration.

UPDATE 10/30/18: Thanks to some additional reviews/checking by Dave Anderson, Louise Norris, Andrew Sprung and myself, I've been able to update the spreadsheet further; the blog post has also been updated correspondingly.

Last year, while Congressional Republicans were doing everything possible to officially repeal the Affordable Care Act via legislative means, Donald Trump spent months repeatedly threatening to cause the ACA individual market exchanges to either "explode" or "implode" (depending on the day) by, among other things, cutting off Cost Sharing Reduction reimbursement payments to insurance carriers.

*(OK, that's hyperbole...unsubsidized enrollees are still left holding the bag for thousands of dollars in unnecessary premium payments for at least another year or so, and there's still no guarantee of the final ruling...see below...)

Almost exactly a year ago, Donald Trump, after 9 months of bluster about doing so so, finally pulled the trigger on his threat to cut off Cost Sharing Reduction reimbursement payments to insurance carriers for the deductibles, co-pays and other out-of-pocket expenses which they agree to cover every month for around 7 million low-income ACA exchange policy enrollees.

Trumps stated goal in doing so was, of course, to "blow up" the ACA, to cause it to "implode" (which is actually the opposite of blowing something up, but that's a different discussion) and ultimately fail in the process.

Today at 11am CST (I think that's Noon EST?), HHS Secretary and Donald Trump's Used Car Salesman Alex Azar will give a Big Speech to the Nashville Health Care Council in Tennessee:

Tomorrow, HHS Secretary Azar will join Governor Haslam in Nashville, Tennessee to deliver remarks at an event hosted by the Nashville Health Care Council.

Secretary Azar will share news regarding the Affordable Care Act marketplace and reflect on lessons for healthcare reform.

In advance of tomorrow, here are a few excerpts of Secretary Azar’s remarks (as prepared for delivery):

“The previous administration’s major healthcare achievement, the Affordable Care Act, was an attempt to use more government regulation and intervention to improve American healthcare.

“As we all know, the results were disastrous, with skyrocketing costs and disappearing choices.

“But today, I am here to share with you some good news.

As I noted last month when I first analyzed the requested 2019 rates for North Dakota insurers, ND was somewhat unique last year in that it was one of only two states (the other was Vermont) which didn't tack on any extra premium increases for 2018 to account for the lost Cost Sharing Reduction reimbursement revenue after Donald Trump cut off those payments last October.

This led to one of North Dakota's three carriers, Medica, dropping off the ACA exchange altogether, though they still ended up enrolling a few hundred people directly via the off-exchange market.

I received a tip about this early this morning...which, unfortunately, I was unable to scoop anyone with due to being bogged down/caught up with the #TexasFoldEm drama.

As a result, it looks like Shelby Livingston of Modern Healthcare was first to post about it:

Montana insurer wins lawsuit against feds over unpaid cost-sharing reduction payments

Several health insurers have sued the U.S. government over its failure to make cost-sharing reduction payments that help lower healthcare costs for certain consumers. One just scored the first victory. The U.S. Court of Federal Claims ruled in favor of Montana Health Co-op, which sued the federal government for $5.3 million in unpaid cost-sharing reduction payments, finding that the government violated its obligation under the Affordable Care Act when it stopped paying the CSRs in October 2017."

The rest of the article is behind a paywall, but the gist of it is as follows:

When I first analyzed Vermont's 2019 ACA policy rate filings back in May, the state's two ACA carriers, Blue Cross Blue Shield and MVP Healthcare, were requesting average premium increases of 7.5% and 10.9% respectively.

Vermont's situation is unusual compared to most other states for a couple of reasons. First of all, VT is one of only two states (Massachusetts is the other one) which has merged their Individual and Small Group market risk pools into one to help stabilize both markets. This is something I wish every state would do, frankly, although it's probably a lot easier to do in deep blue states (and Vermont having such a small population probably made it easier as well).

Utah has four carriers offering ACA-compliant individual market plans. Two of them (BridgeSpan and Regence BCBS) only offered their policies off-exchange this year; I'm not sure what the status is for either one in 2019. I can only find hard enrollment data for one of the four (Regence), so I'm estimating the other three based on a combination of last year's numbers and the total estimated individual market size in Utah from 2017. Because of this, consider the Utah estimates to be even rougher than some other states.

Having said that, there's one interesting extra sabotage factor to consider for the University of Utah rate filing: They note that they've added an extra 10.3% to their 2019 rates specifically tied to last year's Cost Sharing Reduction (CSR) cut-off. I presume they chose not to bake the CSR load into their rates this year, but I don't think Utah went the "mixed load" route so who knows?

In any event, as far as I can tell, this means around a 14-point #ACASabotage factor, between CSR load, mandate repeal and #ShortAssPlans.

North Dakota was one of only two states (the other one was Vermont) which didn't allow their insurance carriers to add any additional premium load into their 2018 rates to account for Donald Trump's cut-off of Cost Sharing Reduction (CSR) reimbursement payments.

In direct response to this, Medica Health Plans dropped out of the ND on-exchange individual market this year to avoid taking the CSR hit. They hung around the off-exchange market, however, and therefore still have about 600 enrollees in the state.

As a result of this, my estimated impact of ACA sabotage efforts by the Trump Administration and Congressional Republicans has to include the factors from both 2017 and 2018: Cost-Sharing Reduction cut-off (9%) as well as Mandate Repeal and Short-Term Plan expansion (13.8%).

March 20, 2018:

Azar Says He Is Not Aware Of Discussions On Blocking ‘Silver-Loading’ in 2019

HHS Secretary Alex Azar said that he has not been involved in discussions about blocking ‘silver-loading’ plans in 2019 and is not aware of any agency discussions about ending the practice at the moment.

...In recent weeks, some stakeholders have speculated that the Trump administration could block silver-loading in 2019. Several pro-ACA experts say that even though the administration may have authority to stop silver-loading, it would be a self-destructive move, especially leading up to the November midterm elections.

CMS Administrator Seema Verma told reporters on Thursday (March 22) that she was “very concerned” about certain aspects of ‘silver loading’ plans, namely that it raises costs for unsubsidized consumers and the federal government. Verma did not commit to allowing or blocking the process for the 2019 plan year.

 

via Amy Lotven of Inside Health Policy:

Update: The court has instead opted to dismiss the case; but states can bring action again if circumstances change i.e. Admin blocks silver-loading in 2020 and beyond. IHP story TK @nicholas_bagley @charles_gaba taking comments ! https://t.co/cPHJlmehsH

— Amy Lotven (@amylotven) July 18, 2018

She's referring to this:

Dem AGs Ask Court To Put CSR Case On Hold In Light Of Silver-Loading

This year, thanks to their reinsurance program, ACA individual market premiums dropped by around 23.6% on average, from a whopping $1,040/month to "only" $795/month per enrollee.

HOWEVER, they would have dropped about 4.5 percentage points more if not for Trump cutting off Cost Sharing Reduction reimbursement payments, or roughly $560/year per enrollee. AK averaged around 16,000 effectuated ACA-compliant individual market enrollees per month in 2017, so that amounts to right around $8.9 million total. 6,930 enrollees qualify for CSR assistance this year, so that averages around $1,280 apiece in CSR help, which sounds about right to me.

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