Jed Graham raises a good point at IBD on the problems of medicaid managed care providers spamming the exchanges in Mississippi:
A closer look at Centene’s much-heralded success reveals that competition between insurers on the ObamaCare exchanges has become toxic. Rather than being a boon to consumers looking for a good deal, competition is hurting the very people it is supposed to help…
only 40% of the subsidy-eligible exchange population is enrolled in Mississippi, putting it dead last among states which didn’t expand Medicaid and, therefore, cater to a more heavily subsidized group.
Yet the fallout was entirely predictable. Although subsidies are pegged to the premium of the second-lowest-cost silver plan in each market, Centene has been scrunching down its silver premiums by making the plans more bronzelike…. That in turns shrinks the government subsidies that are supposed to help make coverage affordable. If customers can’t afford, or don’t like, the cheap Centene silver plans on offer, they’ll have less of a subsidy to buy a bronze plan or a silver plan from a competitor.
In the largest HealthCare.gov market in 37 states, the second cheapest silver plan costs, on average, 27% more than the cheapest bronze plan this year. But in Mississippi, where Centene’s Ambetter brand is the low-cost provider, the gap between bronze and silver is only 12.6% in 2016, down from 34.8% in 2015.
Ambetter/Centene has adapted a Silver spam strategy that has been a hobby horse of mine for a while. The goal is to proliferate a bunch of plans tightly clustered around the subsidy benchmark point. For markets where all insurers are paying near commercial rates, this is not a big deal. In markets where one insurer is paying Medicaid plus something or Medicare like rates and everyone else is paying commercial rates to providers, this is a big deal. It forces heavily subsidized buyers to choose between half a dozen affordable plans that are functionally similar from the same insurer or not really be able to afford a choice.
This is due to the lack of good meaningful difference regulation. Currently Meaingful Difference regulation is a farce.