Timing matters for for any potential stabilization bill. Let’s go into the details first and then the mechanics.
This is big: Senate Republicans are talking about a bipartisan stabilization bill. https://t.co/EUejGjpTyU pic.twitter.com/qMF3sz6zvy
— Topher Spiro (@TopherSpiro) July 12, 2017
The function of this bill would theoretically be to create certainty by explicitly funding and appropriating CSR subsidies and creating a source of money independent of premiums that will take on some of the extreme tail risk. Funding CSR makes the market structure more coherent as insurers are pricing in a 20% rate increase to compensate for the projected non-funding of CSR due to the House v. Price lawsuit. Creating a national reinsurance pool funded by non-premium dollars addresses the Iowa $12 million dollar man distortion. It would take off some of the extreme right hand tail risk from the books of individual carriers and nationalize the risk.
That reinsurance can be called reinsurance, it can be called invisible high cost risk pooling, it can be called Bob. As long as the money is not coming from premium revenue, it will lower premiums as premiums are no longer responsible to cover 100% of claims.
If this bill was to pass, timing is critical. The Center for Medicare and Medicaid Services (CMS) has a filing schedule in place. Final pricing offers have to be submitted to CMS by insurers by August 16th. CMS will review and technical corrections will go back and forth. By September 27th, insurers commit to the Exchange or pull out.
If the bill was to be passed and signed into law by early August, insurers would work their actuaries into the ground and refile much lower rates as they would have certainty and they would see catastrophic claims exposure limited. The timeline would not change significantly for 2018 plan processes. If the bill was passed and signed by late August, CMS might be able to issue an emergency interim final rule changing the timeline. There would be some wiggle room in the schedule as insurers scramble to recalculate and refile.
If the bill was not passed until October or November, there would be no effect on 2018 premiums. Locally monopolistic insurers would be swan diving into their vaults full of gold coins. They would have accepted rates based on no CSR and no additional external to premium reinsurance.
There is a chance that insurers in competitive markets would resubmit as the new, lower rates late as the subsidy attachment structure would strongly encourage at least one insurer to refile to capture the benchmark Silver and thus most of the membership and thus everyone would need to refile or withdraw.
If the bill was to pass late it is primarily a play for the 2018 midterms as insurers would be pricing with certainty and with additional funds outside of premiums. In a late bill scenario, it produces a 15% to 20% premium decrease a week before the 2018 midterms.
So call your Senators and tell them to work together on a smart bill now!
Another Scott
Fixing things is good.
Do we think that they can plan far enough ahead to think that setting things up for premiums to drop 20% before the 2018 midterms would actually work? Aren’t there a lot of additional assumptions in place, like people not being outraged and camping out in their offices for months as a result of losing their coverage or paying much more than they should?
Dunno…
It’s kinda “funny” that McConnell can find $50B when he wants, but so much of the rest of government is starved for funding (e.g. From 2015 – Congress would’t appropriate money to build a new FBI building, but forced the GSA to try to do a sketchy land-swap deal instead. A deal-process that collapsed yesterday.)
Cheers,
Scott.
rikyrah
just came to post the tweet. Thanks for explaining it, Mayhew.
Ohio Mom
Okay, I am enjoying the fact that they realize the market needs shoring up.
But what does this do for Medicaid?
David Anderson
@Ohio Mom: If there is just a stabilization bill that means BCRA is dead and Medicaid is safe for this round.
If BCRA passes there is 0 Democratic votes for this
? ?? Goku (aka The Hope of the Universe) ? ?
Should we want this thing to pass? It would be good for lowering premiums, but then that would help the GOP look good, just in time for the midterms next year
Punchy
And if my Aunt had balls, she’d be my transsexual Aunt.
Mr. Johnson is funny. He’s abandoning Cleek’s Law for one and only one issue, then will go back to being a complete asshole in every other regard. For that, some will say he’s “reasonable”. Great job, Wisconsin voters.
David Anderson
@? ?? Goku (aka The Hope of the Universe) ? ?:
How does one win an ideological battle?
Make your opponents into your supporters out of fear for their poltiical lives. Social Security became embedded and entrenched with the Eisenhower Amendments as both parties were on board with a significant expansion of benefits in 1956.
A stabilization bill means two things:
1) Republicans actively vote for something that makes individual insurance markets work
2) Both parties are now on record as believing that the Federal government has at least some responsibility to provide healthcare coverage to as many people as possible.
2a) At that point the disagreement is haggling over price and mechanics
In my opinion collecting a massive policy and ideological scalp at the cost of a few marginal seats in a mid-term that should be a very good midterm for Democrats anyway is a worthwhile trade-off (I’m betting treason/espionage will dominate coverage no matter what). It is this thought process that has led me to go down the Cassidy-Collins rabbit hole
Ohio Mom
@David Anderson: That would be nice (BCRA dead, Medicaid safe for now), wouldn’t it? Dare I hope?…
? ?? Goku (aka The Hope of the Universe) ? ?
@David Anderson: I guess. I just don’t want to give away any possible means of attacking them. Do you think the moneymen and teabaggers would be pissed off enough to try to primary a lot of them if this stabilization bill passes, including the Turtle?
StringOnAStick
@? ?? Goku (aka The Hope of the Universe) ? ?: Well, we would be trading this issue for the lives saved by having insurance, and that’s no small thing, especially if you or someone you love is one of those people. I’d suggest we get this passed, and then have a two-pronged media campaign on it (thanks, Citizens United, we can play this game too). One prong is all “hey, look how we saved insurance rates from ballooning thanks to the R’s trying to kill the ACA”, and the other is aimed at Tea Baggers with “look at how your R senator sold you out on not repealing the ACA”. Since the latter stick to just one kind of media and never venture out of their news bunkers and Citizens United allows PAC’s to rain speech as money on anything they want, the latter group will never know who is yanking their chain. You know, kinda how it is right now. /s
TenguPhule
This also known as “SPREAD THE BLAME”.
Stop falling for the fucking Football, Charlie Brown!
Percysowner
The Democrats are finally being proactive Group Of House Dems Unveil Proposals To Tweak Obamacare I’m sure the Republicans would rather slit their wrists than support it, but at least the Democrats now have a proposal to point to. It looks interesting to me, but I hope someone more knowledgeable will weigh in on it.
West of the Cascades
@? ?? Goku (aka The Hope of the Universe) ? ?: I think you would get some teabagger primaries but also at least a possibility that the Democrats can claim they were responsible for the premium reductions, not the Republicans — I would guess that in both the House and the Senate the majority of votes in favor of a stabilization bill would come from Democratic representatives and Senators, even if (obviously) the bill has to be “bipartisan.”
Raven Onthill
I am concerned that having this discussion now, at this time, is a distraction from the fight against the BCRA. Maybe we can do both, but for now I think we’d better concentrate on defeating the BCRA.
Aaron
My proposal:
1. fed gov re insures exchange health insurers for 50% of actual costs when more then a million dollars is paid out for one member in a year
2. consider moving this in future years toward fed gov covering 90% reinsurance of member when the members cost exceeds 100k$/yr
3. feds provide all prescription drug coverage (prescription drug medicaid for all)
4. eliminate bronze tier, move all subsidy calculation up one tier.
5. consider eliminating silver then gold tiers in future years, each time moving subsidy calculation up one tier
6. allow medicaid to offer exchange plans