Uncertainty On CSR Payments, Mandate Still Weighs On Insurer Exchange Participation And Premiums

On August 9, 2017, the Centers for Medicare and Medicaid Services published its latest 2018 exchange issuer county map. Only 17 counties, all but three in Nevada, remain without insurers currently enlisted to participate in an Affordable Care Act exchange for 2018. They are largely rural counties, including a total of 9,595 current exchange participants, one tenth of 1 percent of total current enrollees.

As of August 9, another 1,409 counties, with 2.5 million current enrollees, about 27 percent of the total, will have only one insurer available on the exchange for next year, although many of these enrollees will have a choice of several plans. Insurers have until September 27, 2017, to make a final decision as to whether they will participate for 2018, and these numbers are likely to change.

Also on August 9, 2017, the Kaiser Family Foundation released an early look at 2018 exchange rates and insurer participation in 21 cities in 21 states. Kaiser found a reduction in insurer participation in the exchanges for eight of the states it surveyed, although all but one still had more than one insurer participating. Premium increases in unsubsidized second-lowest cost silver plans in the surveyed cities varied from a 5 percent decrease in Providence, Rhode Island, to a 49 percent increase in Wilmington, Delaware, with most cities experiencing premium increases below 25 percent. Individuals receiving premium tax credits will pay slightly less than in 2017 for the second lowest-cost plan after the tax credits are applied.

Kaiser reports that “the vast majority of insurers included in this analysis cite uncertainty surrounding the individual mandate and/or cost sharing subsidies as a factor in their 2018 rates filings.” Where these factors are addressed explicitly in rate filings, insurers that have assumed that the individual mandate will not be enforced have factored in additional rate increases of 1.2 to 20 percent, while those that have assumed the cost-sharing reduction payments (CSRs) will not be paid have factored in an additional 2 to 23 percent. Other insurers have filed rates assuming that the CSRs would be made, but stated that they would increase their rates an additional 6 to 28 percent if payment ceased.

The Trump administration continues to emphasize the weakness of the exchange markets for next year, but many of the problems that are causing that weakness, according to the insurers, are primarily of the administration’s own making. There is still time for the administration to announce a solid commitment to funding the CSRs and to enforcing the individual mandate. It also needs to work with Congress to secure longer-term CSR funding.

But time is growing very short — open enrollment begins on November 1. At stake is the fate of the exchanges and the 10 million Americans who receive coverage through the exchanges, and in particular the 6.7 million people who purchase individual insurance on or off the exchanges without subsidies. This last group of people will bear the full brunt of the premium increases if administration actions to undermine the market continue.

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