Friday, November 17, 2017

Halfway back to the future in the individual market for health insurance

The ACA-compliant individual market for health insurance is at a mid-point between Trump sabotage that's been executed and Trump sabotage that's threatened. At present, the market remains viable for most subsidized prospective enrollees -- and even accidentally improved for a good number of them via discounts for bronze and gold plans. It's largely dysfunctional for the unsubsidized, however, after two years of average premium hikes in excess of 20%.

The main (though by no means only) act of sabotage in 2017 was Trump's long-running threat -- executed in October -- to cut off federal reimbursement that the federal government is legally obligated to pay insurers for providing Cost Sharing Reduction (CSR) payments to qualifying enrollees. Stiffed by Trump, insurers had to boost premiums to cover the cost of CSR. That in itself accounted for nearly half of this year's 29% average premium hike, according to Charles Gaba.

The next sabotage threat is individual mandate repeal, coupled with pending administrative action to empower a non-ACA-compliant market of medically underwritten, loosely regulated plans. -- which currently do not satisfy the mandate. Those measures in combination will trigger a fresh wave of premium hikes in the ACA-compliant market by draining its risk pool. Many if not most of the 6-7 million current unsubsidized enrollees in ACA-compliant plans will probably be driven perforce into the unregulated market if this next round of sabotage is fully implemented.

We are already halfway there, I suspect.  Recently I spotlighted the choice facing a 58 year-old in Pottsville, PA who's ineligible for subsidies -- that is, with an income over $47,520 for an individual or $64,080 for a couple. For this person

Thursday, November 16, 2017

Replacing the individual mandate with auto-enrollment, part II

A week ago, I suggested that the wide availability of free bronze plans in 2018 for subsidy-eligible potential ACA marketplace enrollees opens a window for replacing the individual mandate with auto-enrollment of the uninsured, a measure that's popped up in various Republican bills and conservative repeal-and-replace proposals.

That was tongue-in-cheek, since the House and Senate tax cut bills make it obvious that Republicans are not interested in using current federally budgeted dollars to insure more people. They'd rather give the subsidy money to the wealthy via tax cuts.

That said, a fact brought to my attention by Politico's Dan Diamond does boost the case for auto-enrollment. 80% of the 6.7 million households that paid the mandate penalty in 2016 (for tax year 2015) had incomes below $50,000 -- that is, near the subsidy eligibility threshold for a single person, $48,240. Many of those households with incomes over $50,000 are also doubtless subsidy eligible. (On the other hand, a good number of those with incomes in subsidy range may have been disqualified for subsidies by an offer of insurance from an employer. Kaiser estimates that 3.7 million are rendered subsidy-ineligible for this reason.)

IRS tables show that payers of the mandate penalty in tax year 2015 were pretty heavily concentrated at income levels where free bronze plans are common this year:

Wednesday, November 15, 2017

Who'll go to the mat for the individual mandate?

I fear that the trio of Republican senators who killed "skinny repeal" in late July (Collins, Murkowski, McCain) are going to have a hard time rejecting the tax cut bill in the name of the individual mandate.

Skinny repeal was linked to a (somewhat uncertain) presumption that the bill would be merged in conference with the House bill, which included repeal of enhanced federal funding for the Medicaid expansion and imposition of per-capita caps on federal Medicaid spending. Defense of Medicaid was the heart and soul of the Resistance, as it should have been.

Now, we may well get a partial birth abortion of the ACA - - mandate now, massive cuts to Medicaid (include expansion repeal) later. As Andy Slavitt has warned, that splits the "23 million uninsured" baby.

The individual mandate has always been unpopular -- and frankly, after years of both self-inflicted wounds and sabotage of the ACA marketplace, it has cause to be.  Health economists say that the mandate penalty was too small and too lightly enforced to be fully effective. The counterpoint is that a stricter mandate requires stronger subsidies - e.g., a cap on insurance premiums as a percent of income for all buyers, perhaps one that that matches the "affordability" threshold (currently 9.56% of income for employer-sponsored insurance and 8.05% of income for an ACA-compliant bronze plan).

For many who don't qualify for marketplace subsidies but must look to the individual market for coverage, the mandate is already effectively dead - -and so is the market.  To cite just a couple of cases I've had cause to look up lately:

Monday, November 13, 2017

Tax math for dummies like me

The math is plain as day, and Senate Republicans have seized on it: According to the Joint Committee on Taxation, the nonpartisan tax policy counterpart of the Congressional Budget Office, the Senate tax bill cuts taxes on low and middle incomes more sharply than on higher incomes. Right?

Wrong, explains David Kamin, Obama's former Special Assistant to the President for Economic Policy.  The percent cut in your tax rate is very different from the percent increase in your after-tax income. Here is his chart  (with an adjustment at the top end for repeal of the estate tax, which JCT leaves out):

Sunday, November 12, 2017

Trump thinks Putin's mind works like his

Trump's walk-back of his avowals that he believes Putin's denials with respect to interfering in US elections is a window into Trump epistemology.

Here's the walk-back:
I believe that he feels that he and Russia did not meddle in the election...I believe very much in our intelligence agencies...what he believes is what he believes.
That, incidentally, does comport with what he said about the Putin:
He said he didn't meddle. He said he didn't meddle. I asked him again. You can only ask so many times...Every time he sees me, he says, 'I didn't do that".. And I believe, I really believe, that when he tells me that, he means it.
Trump actually did not say that Putin didn't meddle. He said Putin "means it" when he say he didn't meddle.

In other words, Trump thinks, or purports to think, that Putin thinks like he does: Whatever he wants to believe is true is true. Or, whatever he finds convenient to affirm is true.

Friday, November 10, 2017

Hey, Republicans: Auto-enrollment is within reach

Put it in Chapter 1 of the Annals of Unintended (though not un-forecast) Consequences: Trump's cutoff of federal funds to reimburse health insurers for Cost Sharing Reduction (CSR) subsidies has made free bronze plans widely available to subsidized buyers in the ACA marketplace*.

So available, in fact, that the Kaiser Family Foundation has calculated that more than half of the 10.7 million people who are uninsured and eligible for marketplace coverage can find free bronze plans in the ACA marketplace, and 70% can access bronze plans for less than the cost of paying the penalty for going without coverage.

That paradoxical effect of cutting off funding for a subsidy suggests a political deal -- a second paradoxical effect.  Recall that ever since Democrats included the individual mandate in the various bills that became the ACA, Republicans have cast the mandate as a mortal threat to freedom -- and seek to this day to repeal (and maybe replace) it.

As a substitute for the mandate, several Republican bills and plan outlines included auto-enrollment of the uninsured in a catastrophic plan that would cost the enrollee nothing, since its premium would equal whatever subsidy the enrollee was eligible for.

Monday, November 06, 2017

For Whom the Bronze Bell Tolls in the ACA Marketplace

My last post looked at the likely impact of the availability of free or very cheap bronze plans for ACA marketplace customers who are eligible for strong Cost Sharing Reduction (CSR), available only with silver plans, in the five largest markets in the country.

In this post, we'll look at current CSR takeup in the five counties in question and consider how it's likely to change. Here are the counties, with their 2017 initial marketplace enrollment totals:

Miami-Dade, FL              387,848
Los Angeles, CA             380,520
Broward, FL                    240,984
Harris, TX (Houston)      240,064
Cook, IL (Chicago)         144,418

While bronze plans generally have deductibles above $6,000, CSR-enhanced silver plans, for enrollees with incomes up to twice the Federal Poverty Level, generally have deductibles in the $0-1,000 range. Silver plan premiums can be hard for CSR-eligible buyers to afford, though. The wider the spread between cheapest bronze and cheapest silver premiums, the more people will choose bronze.