2nd Silver shift

Charles Gaba is passing along that Oregon has approved their Exchange rates for 2015.  There are two important policy points that leaped out at me.

The first is from the Oregonian:

Insurance rate decisions were issued by the Oregon Insurance Division Thursday and announced today, showing a tighter range of premiums in the individual market for people not covered by employers or Medicare. [emphasis mine]

We should expect clustering of price points, especially on the lower end of the Silver market.

The Exchange and subsidy design create the first segment of the Silver market…. All subsidies on the Exchange are based on allowing an individual to buy the second cheapest Silver plan on the Exchange for a percentage of their income. ….there is a strong incentive for insurers to offer at least a  Silver plan that is either the cheapest two Silvers or very close to the subsidy cut-off.

This segment in a competitive market should see a cluster of plans that are at the subsidy line plus or minus a couple percentage points.

If we take 2014 as fundamentally a beta testing year as well as an information gathering year for insurance companies, we should have expected to see the companies that priced too optimistically or aggressively increase their rates while companies that were too pessimistic decrease their rates as new information about the actual composition of the risk pool became clearer.  It is still messy, but the entrails are now legible as if a fourth grader still learning cursive wrote the details instead of a too busy doctor writing out the last prescription for hillbilly heroin at the end of a forty eight hour shift.

The second interesting note is related to the above point:

Moda’s once market-leading rates have jumped to middle of the pack. For a silver plan, a 40-year old in Portland can find four insurers with lower premiums approved by the state.

Moda subscribers/members will see premium/subsidy shock if they don’t actively change. They are moving from the cheapest and therefore the best subsidized Silver plan to a plan that requires out of pocket premium payments over and above the minimal income charges.  Other companies saw Moda pick up a lot of membership as Moda offered the cheapest plans, so the other companies cut their rates, cut their networks, and attempted to price below Moda.  Four companies seem to have accomplished this.

It almost looks like a managed competition model with clear pricing points and subsidy structures is working to effectively shape a market to reduce premium increases compared to typical history.

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13 replies
  1. 1
    RaflW says:

    It almost looks like a managed competition model with clear pricing points and subsidy structures is working

    Kill it! Kill it! The GOP cannot, repeat cannot, have managed competition actually work. No no no no no.

    And subsidies! Those are only for job creators. Please.

  2. 2
    Mandalay says:

    It almost looks like a managed competition model with clear pricing points and subsidy structures is working to effectively shape a market to reduce premium increases compared to typical history.

    Really? This is how things are shaping up in Florida:

    Floridians who buy health insurance on the individual market for next year will face an average increase of 13.2 percent in their monthly premiums, according to rate proposals unveiled Monday by the state’s Office of Insurance Regulation…

    Of the 11 returning plans, eight filed average rate increases ranging from 11 to 23 percent, and three filed rate decreases ranging from 5 to 12 percent, the state’s insurance regulator reported.

  3. 3
    MomSense says:

    Can you believe we went through such gnashing of teeth and drama over this??

  4. 4
  5. 5
    Patricia Kayden says:

    More good news about the ACA.

  6. 6
    RaflW says:

    @Mandalay: Really? Florida is more of a mess than Oregon?
    How shocking.

  7. 7
    cmorenc says:

    @Mandalay:

    Floridians who buy health insurance on the individual market for next year will face an average increase of 13.2 percent in their monthly premiums, according to rate proposals unveiled Monday by the state’s Office of Insurance Regulation…

    …and the only rate “information” that’s going to be broadcast within the Faux News/RW bubble are instances of insurance rate increases, stripped of any accurate context (such as, compared to pre-ACA rate increases, or decreases in other insurance plans and levels or states etc.)

  8. 8
    HinTN says:

    What concerns me is that survival on the exchange requires aggressive management of your personal insurance. That’s all well and good for computer literate and well informed folks but it can lead to low information consumers being hit with sticker shock, leaving them susceptible to demagoguery from the party that wants to wipe the ACA off the books ASAP.

  9. 9
    Xantar says:

    @Mandalay:

    The important bit here is the part where some insurance companies filed for large rate decreases which never used to happen before.

  10. 10
    gene108 says:

    @HinTN:

    They’ve already successfully demagogued to all those they can demagogue to. I am not referring to peak wingnut, which is an unobtainable infinite thing, like God.

    No, I am talking about the fact that Republicans, in states that did everything in their power to lie to, obstruct, and deny their citizens access to the goodies in Obamacare – from health insurance exchanges, to publicizing benefits, to Medicaid expansion – will not pay a political price in state wide elections.

  11. 11
    Mnemosyne says:

    @Mandalay:

    I know, it’s almost as though the states that don’t want Obamacare to succeed are actively trying to sabotage it. Funny how that works.

    Here in California, rates are only going up 4.2%, and many people will see decreases. This is because the state of California is actively trying to make health insurance work for most people.

  12. 12
    bg says:

    Florida’s Republicans have wilfully done everything in its power to make ACA fail. That includes passing a bill to substantially deregulate health insurance rates. See, for example, this. http://articles.orlandosentine.....-insurance
    Now of course they will blame Obama, very loudly, and everywhere.

  13. 13
    Charles Gaba says:

    Thanks for the shout-out!

    Another important factor which ties in nicely with your piece here:

    http://acasignups.net/14/08/05.....grain-salt

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