The open enrollment period for individual major medical insurance for 2018 is about to start Wednesday, and it’s still not very clear how exactly the market for that product will work, or if it will really exist in much of the country.
It’s not every clear whether the market will face cataclysmic change. Insurance markets have moved through tumultuous times before, inspired predictions of doom, and gone on to do just fine. The individual major medical market could still shock everyone by bobbling a bit and, in the end, doing just fine.
This will be the first full open enrollment period under the administration of President Donald Trump, and under his administrator for the Centers for Medicare and Medicaid Services, Seema Verma.
Trump has been trying to win major changes in the Affordable Care Act individual major medical product rules, and in the ACA public health insurance exchange system, by ACA programs that individual coverage issuers like.
But, aside from a little-discussed total ACA spending cut-off provision in an ill-fated House 2018 budget bill, no major Republican ACA change proposal that has come to the floor in the House or the Senate has sought to eliminate the ACA exchange system. Many have proposed replacements for the ACA advance premium tax credit and cost-sharing reduction subsidy programs, but none has actually eliminated the subsidies, and most would seem to keep subsidy spending roughly at 2017 levels for the next two years.
And CMS has been quietly trying to encourage agents and brokers to do business with HealthCare.gov, a federal system that provides ACA exchange account setup and administration services for coverage issuers and residents in 39 states.
It’s not easy for a member of the public to know how many of the issuers still in the individual market will pay agents to send them business in 2018. It’s possible, however, that some agents may continue to sell individual major medical coverage even if they do not earn commissions or enrollment fees, because they have figured out how to charge consumers user fees, or because they see helping consumers with major medical coverage applications as a way to generate leads for selling other, moneymaking products.
So, jeers from ACA haters and caterwauling from ACA lovers aside, what clues are there about how the individual market might actually work?
Here are a few new clues, gleaned from new documents and online data sources.
CMS Administrator Seema Verma (Photo: CMS)
1. The Centers for Medicare and Medicaid Services (CMS)
CMS Verma and another Trump administration official recently concluded that CMS lacks a valid congressional appropriation to make payments through the ACA cost-sharing reduction subsidy program, a program that helps low-income exchange plan users with their deductibles and coinsurance payments, and will stop making the payments.
CMS is reducing funding for exchange advertising and marketing support, and some exchange program supporters have accused the Trump administration of trying to sabotage the program.
CMS officials themselves say in a fact sheet emailed to reporters Wednesday that they are adjusting individual major medical marketing support to be more like Medicare program support, and focusing their resources on the marketing programs and strategies that have worked best in the past.
“This year’s outreach and education campaign will target people who are uninsured as well as those planning to reenroll in health plans, with a special focus on young and healthy consumers,” CMS officials say. “CMS committed resources to proven high impact, low cost digital outreach efforts including short YouTube videos, social media, and mobile and search advertising.”
CMS will also continue to try to reach people using email, text messaging and autodial messages, officials say.
“Targeted email has proven to be the most cost efficient and effective way to reach consumers,” officials say. ”As part of this effort, CMS will send most consumers multiple emails per week, with increasing frequency as the deadline approaches.”
Another clue to how well CMS might be supporting 2018 open enrollment efforts is the 2018 HealthCare.gov agent and broker registration count.
The registration numbers have been down about 30%, and only about 30%, from year-earlier figures since the start of the 2018 agent training period.
HealthCare.gov has also developed a new direct enrollment system that will make it easier for agents and brokers to sell exchange plans to people who qualify for ACA subsidies.
On Oct. 24, for example, about 38,000 agents and brokers had registered to sell HealthCare.gov coverage for 2018. That was down 30% from the 2017 HealthCare.gov producer count figure recorded Oct. 24, 2016.
It’s possible that total HealthCare.gov sales could fall more than 30%, because the remaining agents are less interested in exchange plan sales, have less attractive products to offer, and have to cope with the fact that HealthCare.gov open enrollment is now set to end after just eight weeks, on Dec. 15, rather than extending to Jan. 31, as in the past few years.
But it’s also possible that the remaining producers are the ones who have had the best results in the exchange plan market in the past, that the new direct enrollment system will increase their productivity, and that increased HealthCare.gov producer productivity will compensate for the fall in the number of products.
Avalere Health, a consulting firm that crunches health care systems numbers for insurers, drug makers and other organizations interested in health care, says it believes the full cost of mid-level, “silver” level exchange plans will increase 34%.
That big increase is partly due to the effects of the looming ACA cost-sharing reduction subsidy cut-off, which, for technical subsidy program reasons, will have the most effect on silver plans.
But the average premium for bare-bones bronze plans may rise just 18%, and the average premium for gold plans will rise 16%.
Because of the way the ACA subsidies work, consumers with income under about 350% of the federal poverty level, who qualify for significant premium subsidies, and who shop actively for care may find that the increase in the full premium cost has no effect at all on the amounts they pay out-of-pocket for coverage.
A web broker, eHealth Inc., reported in January that its full-cost individual market health customers were paying 22% more for 2017 coverage than they paid in 2016.
But consumer decisions about health coverage can hold down actual increases.
In June, CMS reported that the average full cost of exchange plan coverage actually purchased had increased just 7.4% between 2015 and 2016, to $392, in spite of predictions of double-digit increases.
In Colorado, a state with a state-based public exchange, officials estimated in November 2016 that, because of a combination of subsidy programs and consumer purchasing decisions, consumers average net costs for coverage would probably be 1.7% lower for 2017 coverage than for 2016 coverage.
Even very conservative Republicans in the House still seem be open to finding a way to create a temporary cost-sharing reduction subsidy program fix for the individual market for 2018.
Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., ran into resistance last week when they unveiled a bipartisan proposal for trading CSR continuation money for a loosening of state Affordable Care Act waiver request restrictions.
But Sen. Orrin Hatch, R-Utah, and Rep. Kevin Brady, R-Texas, then countered with a similar proposal on Monday that would still continue CSR funding, in exchange for an end to the ACA individual and employer mandates and an increase health savings account contribution limits.
4. The insurers
Executives from UnitedHealth Group Inc., which is getting out of the exchange plan market, seemed to do what they could to avoid thinking about individual major medical coverage when they released their third-quarter earnings.
Executives from Anthem Inc., which is reducing its exchange plan footprint for 2018, said they want to be in that market but would like to see more clarity before they jump back in.
Executives from Centene Corp., a Medicaid plan manager that gets some of its youngest, healthiest enrollees through the exchange plan market, said they’re expanding their footprint in 2018 and still hope to do well in that market in 2018.
Judge Vince Chhabria (Photo: Jason Doiy/ALM)
5. The Judge
Judge Vince Chhabria, a judge in the U.S. District Court for the Northern District of California, commented a little about how the 2018 exchange plan market might look when he was considering a suit filed by states that want him to make the federal government continue paying the cost-sharing reduction subsidy money.
The states were hoping the judge would issue a restraining order that would require the government to at least make the payments while the suit is in progress.
Chhabria refused the request for the restraining order, partly because he sees evidence that states have figured out how to protect residents from the effects of the cost-sharing reduction subsidy payment cut-off in 2018, and that 2018 exchange plan sales might be pretty good.
—-Read Judge Thinks Health Insurers Could Still Get 2017 CSR Money on ThinkAdvisor.