CMS incidentally drops the truth on monkey-wrenching

The Center for Medicare and Medicaid Services issued a technical release concerning the payment of Basic Health Plan (BHP) funds to Minnesota and New York. They accidentally dropped an official government baseline of what they expected premiums on the Qualified Health Plans to have been absent significant monkey-wrenching.

For the trend factor we will use the annual growth rate in private health insurance expenditures per enrollee from the National Health Expenditure projections, developed by the Office of the Actuary… For 2018, the projected increase in private health insurance premiums per enrollee is 5.3 percent.

States running a BHP can elect to use this multiplier against 2017 Benchmark Silver or use actual 2018 Benchmark Silver premiums. It would be wise for New York and Minnesota to use the actual 2018 premiums for their local Benchmark Silvers because their insurers are pricing in significant policy risk into their premiums so actual premiums will result in a windfall for these two states’ BHP trust funds.

What I find interesting is that the CMS Office of the Actuary analysis finds that 5.3% is a reasonable national trend rate for 2018. That would imply that rate increases based on trend plus health insurance tax plus idiosyncratic local features should have been coming in between 5% and 15% depending on local circumstances for most regions. Anything above that is odd in the counterfactual universe of no monkey-wrenching.

But we live in a universe of at least strongly feared monkey wrenching so this gives us a good baseline to estimate the monkey wrench cost.

Music below the fold:

<iframe width=”854″ height=”480″ src=”https://www.youtube.com/embed/I7rCNiiNPxA” frameborder=”0″ allowfullscreen></iframe>

3 replies
  1. 1

    CRITICAL question, David. Is the new AHCA likely to get the needed CBO score to go to the senate? My hopes were raised, and now I find it’s uncertain and I am very unhappy.

  2. 2
    David Anderson says:

    @Frankensteinbeck: see my next post. My guess is probably but not certainly but that is a guess not knowledge

  3. 3
    JGabriel says:

    David Anderson @ Top:

    The Center for Medicare and Medicaid Services issued a technical release concerning the payment of Basic Health Plan (BHP) funds to Minnesota and New York. They accidentally dropped an official government baseline of what they expected premiums on the Qualified Health Plans to have been absent significant monkey-wrenching. …

    … What I find interesting is that the CMS Office of the Actuary analysis finds that 5.3% is a reasonable national trend rate for 2018.

    Isn’t 5.3% kind of high for a “no monkey-wrench” increase in an era of relatively low inflation?

    I thought the ACA would be keeping insurance increases more in line with inflation. Or is inflation increasing too?

    For how long can health insurance increases outpace inflation before the cost of the average health care plan is greater than the US mean income?

Comments are closed.