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On the Third Hand: 2016 prices

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Many states have published documents showing what their individual health insurance premiums will be in 2016.

Charles Gaba of has looked hard at the numbers and estimated the overall national average increase might be somewhere between 11 percent and 15 percent. 

I look at the premium numbers and have a sense that I ought to write about them, but then I think about the fact that, due to uncertainty about the Patient Protection and Affordable Care Act (PPACA) “three R’s” risk-management programs — the PPACA reinsurance, risk corridors and risk-adjustment programs — it seems as if insurers have only a vague idea of how their individual health insurance products have performed since 2013, before dramatic PPACA market changes rolled in.

On the one hand, maybe what seems to a layperson like three R’s mountains are really a bunch of little three R’s molehills. Maybe most insurers can deal with any repercussions by buying a boring brand of coffee for the office coffee machines for a few quarters.

See also: Mark Farrah: Big health insurers still profitable

But, on the other hand, it looks — from a distance — as if insurers have built their individual rates on top of a dream castle on top of a dream mountain. Just thinking about what kinds of verbs and adjectives I need to use to express the right degree of uncertainty makes my head hurt.

On the third hand, if the Centers for Medicare & Medicaid Services (CMS) tries to speed things up by saying that being close enough with the three R’s filings is good enough for 2014, then the watchdog agencies and congressional committees will probably tear into CMS for making the real-world compromises necessary to speed things up.

See also: 3 ways the PPACA data filing mess makes insurers want to SCREAM

And, if the watchdog agencies and congressional committees show some mercy, the insurers that might be required to pay into the PPACA risk-adjustment and risk corridors programs might then pick up the ax.

On the fourth hand: Maybe even the PPACA loathers need to stop and think that the point of the three R’s is to eliminate the need for health insurers to do detailed medical underwriting, and to go back to people who have already filed claims for, say, treatment for cancer, and look for evidence that they lied about anything, at all, on their applications.

How much does anyone really want to go back to fighting to rescind the policies of people with cancer?

Is it possible that private-sector insurers would try to preserve some kind of privately run but antitrust-safe risk-adjustment system that would minimize the need for medical underwriting? 

If so, then, maybe even some of the insurers that could end up paying into the current version of the three R’s have a reason to try to get the programs working as smoothly as possible as quickly as possible, even if that means speeding up the arrival of big, annoying bills.

See also: What if CMS risk-adjustment bill collectors fail?


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