North Carolina anti-gerrymandering and Medicaid Expansion

As I noted yesterday, the North Carolina state courts have struck down the state legislature gerrymander that has made Raleigh a foregone Republican conclusion since 2011 despite Democrats winning a majority of the two party vote in 2018. The state Republicans are not appealing the decision.

There are a lot of policy angles here. The biggest one to me is Medicaid expansion.

Right now, North Carolina has not expanded Medicaid. The Democratic Governor Cooper wants to expand Medicaid, the Republican State Assembly Leader Berger does not. The state does not have a budget as Cooper has vetoed the last budget that did not expand Medicaid. The Legislature is passing a series of mini-buses funding significant chunks of the state government.

There has been some interest from Republicans to pass a fairly restrictive, work requirement and administratively burdensome Carolina Care Medicaid expansion for the past couple of years but the bill won’t get pass gatekeepers. It has gone nowhere.

There are now two paths forward for Medicaid expansion. I am assuming that the new maps will put a lot of Republicans in districts that instead of being R+8 or R+10 are now R+2 or even. Those incumbents will be facing new voters and voters with a different preference profile. The incentive for a larger band of Republicans than those currently pushing Carolina Care would be to do something about Medicaid Expansion much like their counterparts in Virginia did after the 2017 election.

The other pathway is that the maps will be significantly friendlier Democrats and more politically elastic in general. At that point the 2020 state election can be fought over Medicaid Expansion and if the Democrats can get the governors’ mansion and at least one gavel, the path forward to expansion gets a whole lot clearer.

I’ve upped the probability of a North Carolina Medicaid expansion in the next three years significantly in the past twenty hours.








Annals of the Horrible

Thought I’d share some (late) lunch joy by cleaning out a couple of browser tabs I’ve been meaning to share with the Jackaltariat.

First up in the catalogue of awful…

Nothing says more about a society than how it treats its most vulnerable.  Which is why this, from Pennsylvania coal country last month, says all you need to know about a certain kind of Republican* values:

Wyoming Valley West School District, one of the poorest districts in the state as measured by per-pupil spending, is located in a former coal mining community in Northeastern Pennsylvania, known affectionately by locals as “The Valley.”

When officials there noticed that families owed the district around $22,000 in breakfast and lunch debt…

…school council president Joseph Mazur thought that this would be a good next move:

…the now-infamous letter to about 40 families deemed to be the worst offenders in having overdue cafeteria bills — those were children with meal debt of $10 or more.

“Your child has been sent to school every day without money and without a breakfast and/or lunch,” said the letter signed by Joseph Muth, director of federal programs for the Wyoming Valley West School District. “This is a failure to provide your child with proper nutrition and you can be sent to Dependency Court for neglecting your child’s right to food. If you are taken to Dependency court, the result may be your child being removed from your home and placed in foster care.”

That this was about performative cruelty, and not fiscal prudence can be shown with two facts. The $22,ooo in arrears comes to about 1/4 of one percent of the district budget; you gotta know that if this was about keeping the school doors open, proposing a (surely) expensive round of child theft would not be the first move the financial folks would make.


Just to drive the point home, the guy behind the move, school council president Mazur went on to refuse an offer from a guy in Philadelphia who wanted to pay off the whole debt.  Mazur was eventually forced to reverse course.

Next up, an even more grotesque example of cruelty for cruelty’s sake from July.  I believe some commenters pointed out this incident, and I’ve been meaning to vent rage about it ever since, but here it is:

At a Border Patrol holding facility in El Paso, Texas, an agent told a Honduran family that one parent would be sent to Mexico while the other parent and their three children could stay in the United States, according to the family. The agent turned to the couple’s youngest daughter — 3-year-old Sofia, whom they call Sofi — and asked her to make a choice.

“The agent asked her who she wanted to go with, mom or dad,” her mother, Tania, told NPR through an interpreter. “And the girl, because she is more attached to me, she said mom. But when they started to take [my husband] away, the girl started to cry. The officer said, ‘You said [you want to go] with mom.’ “

 

I rate that child abuse, and those who did the crime should be in prison, as far as I am concerned. Een if the family separation followed the letter of the law, putting the kid in that position was gratuitous immiseration, and will deliver lasting trauma, doled out, it seems, for the agent’s amusement.

 

There is a word to describe such behavior and such people:  evil.  This was evil.  I say this as one with more memory of than current participation in organized religion, but it seems to me that those who welcome evil into our republic commit a grievous sin.

 

Happy lunch!  Open thread.

*Luzerne County, in which the relevant school district operates, went 58-39% for Trump in 2016.

 

Image: Pieter Breughel the Elder, The Massacre of the Innocentsc. 1565-7








Changing Minimum premiums in California

The least expensive premium (net of any applicable subsidy) determines the size and health status of the individual market ACA risk pool.  We assume that the marginal buyer is flipping a coin as to whether or not they want to buy insurance.  These buyers tend to be healthy and price sensitive.  The point of the individual mandate was to make not buying insurance more expensive than buying heavily subsidized insurance so as to at least nudge if not hip-check healthier buyers into the risk pool.

Yesterday, I outlined that Covered California will see lower silver premiums and higher bronze premiums.  This action will compress subsidized spreads and potentially increase the net of subsidy premium for the cheapest bronze plan. Kevin Drum thought this was no big deal, but the details matter as I ran the numbers.   I used the Robert Woods Johnson Foundation (RWJF) HIX Compare April 1, 2019 data set to calculate expected minimum premium for the cheapest Bronze plan in 2019 and 2020 for a single 50 year old non-smoker at 200% and 300% FPL for each rating area.  A rating area is a group of counties where insurers have to offer a particular plan at the same premium.  California has nineteen rating areas including two that split Los Angeles County.  I used actual data for 2019 and projected a 5.7% increase in the cheapest bronze premium and a 4.3% decrease in the benchmark silver premium. I then calculated net premiums and changes from 2019 to 2020.

This is a significant set of changes in several rating areas in California.

The short version is that the changes in spreads will mainly hit folks earn between 200%-400% FPL if they are looking to buy the cheapest coverage possible. The new state funded subsidies will be smaller than the premium increases that we should expect. The state will be spending a lot of money to partially and incompletely back fill a problem that an actively managed market is creating. Previously the Feds were bearing the entire cost of making the cheapest plan very cheap and now the state is taking on some of that cost from the Feds as the spread is being compressed.

The ACA is complicated, and California is showing that seemingly good things have negative consequences for some groups.
 








State discretion and the ACA

At Health Services Research**, I have a commentary out this morning that looks at the wide amount of discretion that states have in promoting a wide variety of goals for their specific individual health insurance market.  The ACA has always been a story of 51 states (including DC) and 3,000 counties but since October 2017 with the termination of CSR payments, the possibility space has widened dramatically.

Here the big decisions state regulators and elites can make:

  • Expanding Medicaid to 138% FPL instead of not expanding or expanding only to 100% FPL — Yes lowers non-subsidized premiums and slightly increases subsidized net premiums
  • Silver loading and/or Silver Switching vs Broad Loading — 3 states broad load which raises costs for everyone and lowers enrollment
  • Managing Monopoly and spread games
  • Messaging support and advertising
  • Reinsurance and subsidization to support net prices paid by people earning over 400% FPL
  • Managing the allowable parallel markets such as Short Term Plans and Farm Bureau Plans

State regulators and insurers have tremendous discretion to shape their states’ markets however they wish.  Some states will make choices that I normatively like and others will make choices that make me gag.  The ACA requires states to make decisions and states will choose who to prioritize and how to do so from a very wide toolbox.

 

 

** https://doi.org/10.1111/1475-6773.13189








Another co-op acting oddly?

Charles Gaba is doing his regular job of collecting all initial rate filing requests. He looks at New Mexico and something is odd in the filing. The largest individual market insurer (Molina) and two smaller carriers all initially filed effectively flat rates. To me, this implies that the 2019 premiums were slightly overpriced and we should expect to see Medical Loss Ratio (MLR) rebates of decent to significant size in September 2020. However, the second biggest carrier by enrollment in the ACA individual market, New Mexico Health Connections (NMHC), a co-op, filed for a 30% rate increase.

ACAsignups.net accessed 6/12/19

I wonder if NMHC will be a going concern in 2021.

My question comes from a pricing perspective. Molina has been an aggressive spread strategy player in New Mexico. They have a low cost, Medicaid-esque network that allows them to significantly underprice insurers that pay their provider networks something closer to standard commercial rates instead of significantly under those rates. Molina’s pricing advantage is especially notable for their Bronze plan in 2019. Their 2019 Silver plan is only $8 below benchmark for a single 40 year old non-smoker so it is price superior but not price dominant for the 138-200% FPL group that makes up a huge chunk of the individual market. NMHC has a slight pricing advantage on Gold compared to Molina. Blue Cross and Blue Shield priced 2019 a bit above NMHC.

That all changes in 2020

I am making some very quick estimates of the premium spread changes in Bernalillo County, New Mexico, the largest county in the state. I am assuming no change in plan offerings by any current 2019 carrier and flat rates for all non-NMHC carriers.

Assuming no other changes, Molina has a dominant pricing position. They would have the cheapest Bronze, Silver and Gold plan by a significant margin. A significant portion of the subsidized population would see a Molina plan that has a zero dollar premium. That is likely to be important for both attraction and retention as it is hard to terminate a policy for non-payment of premiums when there is no consumer facing premium. Gold plans from Molina will have a very significant pricing advantage over other insurers’ golds. NMHC will be priced over Blue Cross so if people are looking for a non-Molina product, NMHC is a second choice on price after an initial quality/attribute assessment.

I am assuming that the rate requests are approved as is. That is implausible but a realistic starting point. I am assuming that the other insurers don’t alter their product offerings. That, too, is a large assumption. If I was running Molina, I would introduce a 59% AV Bronze plan that I could price $30 or $40 below the current Molina Expanded Bronze offering. Doing that would pull in even more people to a zero premium plan. I am assuming that the NMHC currently covered population is no more intrinsically sticky than the rest of the ACA market. I think that is reasonable.

If these assumptions are true (enough), then NMHC has problems as they will be losing a good percentage of their current, low cost members while perhaps holding onto a morbid pool of high cost patients whose expenses may not be appropriately compensated by risk adjustment. At this time, I think that keeping an eye on one of the few operating co-ops is worth the time and attention. I don’t anticipate much news until the summer of 2020 but there is a possibility of failure if the current pricing is approved in magnitude if not in exact number.