Monday DeLong Smackdown Watch: Still Looking for a High Quality DeLong Smackdown Over the Past Month (or Earlier) Kevin Hassett Edition

Should-Read: David Anderson: State Approaches to Handling CSR Uncertainty for 2018 Premiums – Balloon Juice: "The 2018 ACA Marketplace that begins on November 1, 2017...

...Much of the pricing variance will be a result of choices that states and insurers have made in response to the uncertainty over whether the federal government will continue to reimburse insurers for the Cost Sharing Reduction (CSR) subsidies that insurers are legally obligated to provide to qualified exchange enrollees. In the ACA Marketplace, enrollees choose among plans grouped in four “metal levels” defined by... the percentage of average medical costs the plan will cover. Bronze plans... 60 percent AV, Silver plans... 70 percent... Gold... 80... and Platinum... 90....

CSR is available only to low income enrollees, and only with Silver plans. For low income enrollees, CSR boosts AV from a baseline of 70 percent to:

  • 94 percent for enrollees with incomes up to 150 percent of the Federal Poverty Level (FPL)
  • 87 percent for enrollees with incomes between 150 and 200 percent FPL
  • 73 percent for enrollees with incomes between 200 and 250 percent FPL

At present, 57 percent of on-Marketplace enrollees access CSR, including over 80 percent of Silver plan enrollees.  Silver plans are priced, however, as if the AV is 70 percent for all enrollees. Under threat that the Trump administration will stop reimbursing CSR, or that the courts eventually will order the administration to stop payment if Congress fails to appropriate the funds, states and insurers must decide how to enable insurers to cover the cost of providing the richer CSR-boosted coverage. States and insurers have taken several approaches....

  • Assume CSR is paid in a timely manner
  • Assume CSR is not paid and load all costs onto plans at all metal levels.
  • Assume CSR is not paid and load all costs only to all Silver Plans
  • Assume CSR is not paid and load all costs only onto on-exchange Silver plans....

The distributional consequences of these different choices are significant and varied...

State Approaches to Handling CSR Uncertainty for 2018 Premiums Balloon Juice

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