The CSR sword of Damocles

I need to start morning drinking after the following exchange this morning.

It started with Politico reviewing what some carriers are thinking about doing if the Cost Sharing Reduction subsidies are pulled if the Trump Administration drops an appeal a loss to the Court of Appeals.

That lawsuit challenged the Obama administration’s authority to fund those subsidies, and prevailed in a federal district court ruling last spring. The Obama administration appealed that decision. But if the Trump White House doesn’t continue that appeal, and Congress fails to appropriate funding, the subsidies would end.

Insurers would likely bolt from the health law’s markets if that happens because they’d still be on the hook for providing reduced costs to their customers, but with no guarantee they’d ever be reimbursed by the federal government, say experts….

Ken Janda, CEO of Community Health Choice, a Houston-based nonprofit health plan with nearly 150,000 customers, said the insurer would shift customers into less robust coverage that wouldn’t trigger the subsidies if the funding disappears. But that would mean that Obamacare customers with incomes below 150 percent of the federal poverty level — or less than $18,000 for an individual — would go from paying nothing to see a doctor or get a prescription, to having a $1,500 deductible before most of their insurance kicks in

How I read this (along with a few other tweeps) is that CHC would try to move people who had Silver 94 or Silver 87  with CSR to Gold plans after they pull their Silver plans from the market.  CMS in their 2017 QHP contracts allowed carriers to pull products from the market if the CSR subsidies disappear and it looks like that would be the plan of CHC to pull their Silvers.  My immediate thought on this is that this would be a massive adverse selection problem.  People on CSR with 94% Silver or 87% Silver make under 200% FPL.  They are getting subsidized as they are buying Silver.  If they are switched to Gold or Platinum their monthly post-subsidy premiums will dramatically increase and quite a few healthy people will drop coverage as it is no longer functionally affordable.  The only people who would stick would be the very sick and very expensive.

Wait, it gets’ worse:

Carriers have to offer Silver plans to participate on Exchange. If they yank all of their Silvers, they have to yank everything on Exchange.

And carriers will flee if CSR disappears as they will not eat a 30% revenue loss for a high cost population in a market that they don’t know if it will be around long enough to actually make money on.

#Daydrinking

60 replies
  1. 1
    Hildebrand says:

    So is this how it plays out? 1. Trump and Congress submarine the ACA by doing nothing. 2. Claim that the law was so flawed that it fell all on its own. 3. Promise to replace the law at some date in the future. 4. Smile and pat themselves on the back.

  2. 2

    @Hildebrand: it could… still blows up the off exchange market and MEdicaid Expansion would be safe for the week

  3. 3
    Spanky says:

    @Hildebrand: Yes, and because the press can’t be arsed to cover anything that doesn’t fit in a 15-second sound bite, the public will only hear about the effects as the exchanges collapse, and nothing of the cause.

    Pass the bottle.

  4. 4
  5. 5
    Weaselone says:

    So the best case scenario actually is that the Republicans in Congress are so hot and bothered that they actually pass a repeal instead of letting the ACA collapse under it’s own weight thanks to government neglect?

  6. 6
    salvage says:

    Well yeah, Obama’s plan still made profits priority so Trump and the GOP won’t have much work in pulling it apart and returning it to the previous state of “If you are working poor to middle class the best thing you can do for your family when you get sick is to die”.

    It was already drifting back to that so give points to the Republicans for being efficient at least.

    But what’s important is that the Democrats learn no lessons.

  7. 7

    @salvage: okay, tell me how to get 218-51-1-5 for your preferred system

  8. 8
    rikyrah says:

    Thanks for telling us the truth, Mayhew

  9. 9
    p.a. says:

    Will anyone/anything have standing to appeal if USG doesn’t? If so (and they win appeal), at least it would put ball in Rethug Congress’ court to have actual votes on record to blow it up.

  10. 10
    PaulW says:

    In short: we’re screwed.

  11. 11
    Weaselone says:

    @Richard Mayhew:

    Simple. Buy the government with the proceeds from selling all that unicorn poop to fertilizer companies.

  12. 12
    Belafon says:

    @p.a.: Trump can also decide to just not fund them.

  13. 13
    Belafon says:

    A lot of this reminds me of the trouble FDR had trying to get the New Deal through. When Republicans and conservative Democrats weren’t opposing him, the courts were ruling just about everything unconstitutional.

  14. 14
    cmorenc says:

    A central part of the GOP’s actual plan to repeal Obamacare is to wait to undertake actual repeal, but in the meantime do what’s necessary to undermine its parts so that it can be made to appear to collapse of its own weight – and only repeal it after it unravels due to their inside demolition job. And then lie their asses off that they had anything whatever to do with undermining and ripping it apart, claiming it just fell on its own.

  15. 15
    Rob in CT says:

    @Richard Mayhew:

    Democrats – voters and pols alike – need to learn the lesson that pre-emptively compromising to appear reasonable doesn’t gain them a damned thing. #1 priority needs to be simplicity. The ACA, which I’ll defend to the end, is complex. Voters don’t handle complexity well. This is unfortunate, but it’s reality. We did not have the votes for Medicare for all back in ’09 because enough Dem senators would’ve balked. Ditto lesser options like the Public Option or Medicare buy-in (fuck you, Joe Lieberman).

    What we need the next time we have power is fewer (ideally no) Joe Liebermans. And for this to happen, it can’t just be about being left-wing enough. There has to be a lesson learned on a partisan level, such that even Dems who are moderates (by personal inclination or due to their states/districts, or likely both) still get that pussyfooting around isn’t going to work. They have to understand they need to go all in and then unapologetically back what they did every day. Loudly.

    That’s not something that can be done as some new bill is being debated. It has to happen between now and the next big Dem election victory.

    This applies generally – it’s not just about healthcare reform. Successful programs: Social Security – applies universally. Ditto Medicare (once you age in, yes, but that’s true of SS too). Pushing for the same approach to health insurance, universal pre-K, or whatever you want to pick, needs to not just be about how it’s morally right/the correct liberal policy. It needs to also be pointed out that these things are more politically durable. Go universal or go home.

  16. 16
    Rob in CT says:

    In moderation, maybe because I used a bad word. It was aimed at Joe Lieberman, though, so I really think there should be an exemption! ;)

  17. 17
    Spanky says:

    @Belafon: It would be a better analogy if Wilkie had won in 1940 and had the courts and enough of congress to dismantle the whole thing.

  18. 18
    MomSense says:

    This is a nightmare. It makes it impossible to try and plan out your life if you have no idea whether or not you can access health insurance and health care and how much it will cost. Do I take a job for crap pay like retail just to get the insurance? But if they do destroy the ACA there will likely be a recession which will make retail really vulnerable. At that point would I qualify for Medicaid? Will there be Medicaid with the Sociopath Speaker? I don’t even think there are retail jobs with benefits in my area.

    Then there is the issue of the rural hospital in my area which will not survive a major shock. The local health care providers seem to have been expanding because of all the new patients who can now afford to see the doctor thanks to insurance. They have hired billing staff and medical assistants. What happens to those practices if their supply of paying customers disappears?

    This is madness.

  19. 19
    mai naem mobile says:

    Well, I just ordered a second industrial sized vat of vaseline because one vat of lube isn’t going to be enough for how many times I’ll have to bend over and get f@*ked by Lumpy and his pals. I think I will invest in whoever makes Vaseline. Should be a big money maker for the next four years.

  20. 20
    cmorenc says:

    @Belafon:

    A lot of this reminds me of the trouble FDR had trying to get the New Deal through. When Republicans and conservative Democrats weren’t opposing him, the courts were ruling just about everything unconstitutional.

    The GOP has a handful of far-right Federal District Court Judges (especially one down in Texas) they forum-shop to obtain when they initiate their suits against democratic-supported federal programs and policies. Expect filling lots of Federal District Court Judge slots with far right-wing ideologues to be a priority of the Pence, er Trump Administration, to be there for decades even if they are defeated in 2020.

  21. 21
    cmorenc says:

    @MomSense:

    But if they do destroy the ACA there will likely be a recession which will make retail really vulnerable.

    What’s maddening is that the better than 50% chance of a fortuitously-timed recession may be our best hope of defeating these assholes in 2020. And so we’re forced to secretly sort-of root for Trump and the GOP to inflict undeniable, unspinnable disaster upon the country.

  22. 22
    NobodySpecial says:

    @cmorenc: No, we are not. And fuck 2020, you better start taking care of business in 2018.

  23. 23
    Jeffro says:

    Still waiting on Dems to get their messages together: 1) Obamacare bends the cost curve for everyone, not just the ACA-insured, 2) “job-killing” Obamacare did nothing of the sort, and 3) Republicans only want to undo it because it’s largely funded by taxes on the 1%.

  24. 24
    CaseyL says:

    I can’t reasonably and fairly accuse the Dems of failing to defend the ACA and excoriate the GOP for playing with peoples’ lives, because I don’t watch TV news.

    So, does anyone here watch enough TV news to know if the Dems are, in fact, appearing on every news show, every pundit panel show, and generally taking every opportunity to get their mugs on TV, to shout from the rooftops about this? Or about anything else the GOP is up to?

  25. 25
    John says:

    Seriously, day one this needs to be constant messaging: Trump is taking away your insurance by not defending the ACA.

  26. 26
    MomSense says:

    @cmorenc:

    Too many people won’t make it to 2020. We really need to win big in 2018.

  27. 27
    Spanky says:

    @CaseyL: You do realize that they have to be invited, don’t you? It’s not like no Dem can get up early enough on Sunday to beat John McCain for a seat at the table on Press the Meat.

    The press has on who they want to have on, and it ain’t Dems. The press belongs to the Corporate Party, which is neither democratic nor Democratic.

  28. 28

    @Jeffro: Except for 3 those are all too complicated. Republicans want to take away your health insurance, your subsidies, your children’s coverage, your pre-existing conditions waver, (insert popular policy in Obamacare) so they can give a tax cut to the rich.

  29. 29
    RepubAnon says:

    @Hildebrand: That was obviously the plan from the start. We need to try and force media coverage.

  30. 30
    CaseyL says:

    @Spanky: I’m not talking about the talk shows, which I know are irredeemably useless and corrupt; but about the “regular ” news which is supposed to report things that happen.

    If the Dems call press conferences, are those covered by the “regular” news? If they hold town halls, are those covered by the local news?

  31. 31

    @CaseyL:

    If the Dems call press conferences, are those covered by the “regular” news? If they hold town halls, are those covered by the local news?

    Well, they do those things. Ever seen them on the news?

  32. 32
    GHayduke says:

    Just wanted to thank whatever admin chose to mailbait my email account. Getting 400 spam emails the day after I admonished some of the worse Clinton supporters for blaming Sanders for Clinton’s (rather predictable) loss was damn terrific.

    Grow up.

  33. 33

    The people who voted for the Republicans are willing to throw the last 100 years in trash. Its not just the top of the ticket that is terrible. That is the point we need to make again again. Reasonable, moderate Republicans in office are like Yeti, fabled, but never actually seen. That’s the mistake HRC made in her deplorables speech, appealed to Yeti like creatures that don’t exist.

  34. 34
    CaseyL says:

    @Major Major Major Major: As I pointed out in the earlier comment, I don’t watch TV news; that’s why I’m asking.

  35. 35
    daveNYC says:

    So basically the Trump administration can get a death spiral going on the ACA by simply not filing whatever paperwork is necessary for the appeal?

  36. 36
    Yarrow says:

    If the Republicans don’t vote to “repeat Obamacare” will their followers care? Is this something they can’t avoid doing? Or is it something their voters will forget they ever wanted?

  37. 37
    Irony Abounds says:

    If the Democrats’ argument at this point is the ACA failed because Republicans didn’t give enough money to health insurance companies, Republicans win 99 times out of 100. People hate the insurance companies. This is the easy way out for Republicans, so unless they are dumber than a bag of rocks, it is the route they’ll take.

  38. 38
    gvg says:

    @CaseyL: the press ignores them. Clinton explained a lot of things and it didn’t get covered. Obama did too. After he wasn’t new and shiny or something, he didn’t get covered. The president did not get covered. Let that sink in for awhile. I am not even sure the reason is that the press is owned by the rich and corporations. I can’t quite settle on a reason but I think it has to do with a lot of stupid people and a lot of stupid audiences who would rather watch celebrity gossip or “reality” shows. Tabloids that sell big foot and decades old famous scandals re repeated again seem to indicate something about us. I do think that was a factor in Clinton’s loss-her name has become one of those famous scandals that gets repeated to the end of time like JFK assasination, Elizabeth Taylors lovelife, Jon Bennett Ramsey’s murder and Elvis lives.
    I am not sure people even expect real news anymore. Holding press conferences and announcing policies just isn’t working. The GOP may be selling who gets fed to the loins this week horror shows. People do watch them more. The fed to the lions I want to see is things like Trump and Bush on trial and a bunch of GOP congress people. crooks and law breakers should be on trial. I think the networks are missing out on viewers they could get…

  39. 39
    gbbalto says:

    @GHayduke: I’ve been a steady reader at this site for a number of years. I’ve never seen any indication that the administrators/front pagers would pull a stunt like this on anyone for any reason. You owe them an apology.

  40. 40
    Jeffro says:

    @Major Major Major Major:

    Republicans want to take away your health insurance, your subsidies, your children’s coverage, your pre-existing conditions waver, (insert popular policy in Obamacare) so they can give a tax cut to the rich.

    Most Americans don’t get their health insurance through the exchanges – they get it through work, Medicare or Medicaid. So my 3 points were to try and point out to those folks that a) your costs are about to start climbing by double-digits annually without the ACA’s cost-controlling measures, b) we were able to cover the uninsured without causing mass unemployment (and thus the GOP is lying to you) and c) the reason they’re so dead-set to do this despite a) and b) is that – as usual – they’re in thrall to the 1%.

    I don’t see most folks responding to the “GOP wants to take away your insurance” argument because for most it isn’t true. I do see them responding to the concern that repeal will make everyone’s insurance more expensive. And there’s no reason to do away with the ACA – our economy has done quite well under the Obama admin, including the ACA.

  41. 41

    @Jeffro: the cost curve thing, nobody understands that, everybody blames all increases on the ACA.

    How about republicans want to bankrupt Medicare to give tax cuts to the wealthy? Extending its solvency was one of the ACA things.

  42. 42
    kindness says:

    That is the feature of Republican’s plan, not a bug. The sooner they can get every Insurance carrier to quit the easier time they will have blaming Obama and Democrats. And let us not deny that is exactly what they are going to do on every level for any problems they create going forward. Blame Obama and to hell if Obama had nothing to do with the blame. They’ll still blame because Fox & (sadly) too much of the MSM will repeat those talking points making it seem true to the uninformed.

  43. 43
    randy khan says:

    @GHayduke:

    Other explanations seem more likely. As gbbalto mentioned, that’s not something that this site’s admins would do, even to obvious trolls (not saying you’re one, at least not yet).

  44. 44
    Mike in DC says:

    Well, my premiums just went up by a third. And they were already pretty high. Granted, I have a fairly premium plan with full coverage, low copay and no deductible. But I’m also doing non-employer-based coverage because I am doing contract attorney work, so it’s pricey to begin with. If subsidies are withdrawn, I think that may still affect me. Either they will cover less for the same high price, or they will charge me more, or they’ll just drop out of the market altogether.

  45. 45
    dr. bloor says:

    @Jeffro: You have Yahtzee. I have a number of people who confuse correlation with causality, and attribute their measly $3000 deductibles to “Obamacare,” not realizing that deductibles were coming down the track anyways. They’re going to love the five figure deductibles coming soon to a theater near them.

  46. 46
    Mnemosyne says:

    @salvage:

    We have commenters here who are pre-planning their suicides for when they lose their Medicaid, because they won’t be able to afford healthcare at all anymore.

    So go fuck yourself.

  47. 47
    daveNYC says:

    @Irony Abounds: I’ll do you one better. This is coming off of a court case that the Obama administration lost. The Republicans can probably spin it as the Democrats wanting to illegally funnel money to insurance companies.

    Good times… good times.

  48. 48

    @daveNYC: “plus, Obama didn’t defend DOMA when he thought it was unconstitutional.”

  49. 49
    daveNYC says:

    @Major Major Major Major: Nice. So we’ve got some “both sides do it” a taint of illegality, and Corporate Welfare for one of the more hated industries.

    Gentlemen, to evil!

  50. 50
    FlipYrWhig says:

    @dr. bloor: The vast majority of the people who hate “Obamacare” think it gives Those People free medical care while forcing Hardworking People Like Us to pay for it.

  51. 51
    Brachiator says:

    @cmorenc:

    And so we’re forced to secretly sort-of root for Trump and the GOP to inflict undeniable, unspinnable disaster upon the country.

    The only people who ever say this, or believe this, are people who are comfortable and believe that they will ride through whatever disaster they wish upon everyone else.

  52. 52
    mai naem mobile says:

    This is hindsight is 20/20 but when the teabagger townhall crap was going on, the DNC or OFA or some similar organization should have bought time on teepee and done shortish informercials with a combo of easy to sympathetize with people and celebrities. I am not certain it would have worked but it couldn’t have hurt. Over the years I’ve had so many people flippantly blame stuff on Obamacare that have nothing to do with Obamacare.

  53. 53
    Steeplejack says:

    @Rob in CT:

    No, it was “pussyfooting.” FYWP doesn’t like anything p-word. You can say fuck Joe Lieberman all you want. And are encouraged to do so.

  54. 54
    EBT says:

    @Mnemosyne: A lot of people have not yet accepted that liberal western democracy has died.

  55. 55
    Suffragete City elftx says:

    I recall reading about that suit and thought at the time it was the perfect way for them to gut it. They would say the courts had their back and proved ACA was the worst thing since sliced bread.

    Also so an imgur , sorry no linky where people were complaining they did NOT have Obamacare. They had ACA and needed it. Fox News Nation speaks!

  56. 56
    low-tech cyclist says:

    God DAMN Politico and our sorry mainstream press in general.

    The piece at the link is EXACTLY the sort of piece that should have been run back in September or October, so people could understand how devastating a Trump win could be, that this wasn’t just ‘go Team Blue, beat Team Red.’

    Instead, they spend the campaign season reporting on the horse race and bullshit scandals like the emails, and don’t report on the likely consequences until AFTER IT’S WAY TOO FREAKIN’ LATE.

    Politico can gorge on a ton of shit, then die and rot in hell.

  57. 57
    Bob Hertz says:

    Why can’t the Republicans cancel the CSR’s altogether? Then insurance companies would not have to include them in silver plans, and the insurers would not lose money?

    I am not saying I want this, but wondering why it cannot be done.

  58. 58
    Seth Owen says:

    And carriers will flee if CSR disappears as they will not eat a 30% revenue loss for a high cost population in a market that they don’t know if it will be around long enough to actually make money on.”

    And why should they?

    The entire GOP plan seems predicated on insurance companies acting irrationally and hoping that there will be a suitable substitute. They’d be foolish to do it.

  59. 59

    @Bob Hertz: They can zero out the money via reconciliation and Republican votes but they can not eliminate the requirement that the carriers offer them even if the government does not pay for those benefits without Democratic votes

  60. 60
    Revrick says:

    So, this can quickly screw the millions benefiting from the ACA, but doesn’t it also screw doctors, hospitals and other providers who benefited from paying customers? And doesn’t it also screw insurance companies, who will have to deal with Obamacare regulations, even if they abandon the exchanges?
    And while the MSM is too clueless to figure all this out, aren’t the many of those providers and insurers who are active in their local Chambers of Commerce savvy enough to understand what’s happened and who pulled the rug out from under them?
    Or is the Evil Empire really committed to their fully operational Death Star?

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