Thread by @charles_gaba

🗣 THREAD: A Kinda, Sorta Deep Dive into the 2020 NBPP! acasignups.net/19/04/19/kinda…

The #NBPP2020 is a long, wonky document from CMS which basically lays out the rules for the 2020 #ACA Open Enrollment period. Most of it is basic stuff like setting the dates (Nov. 1 - Dec. 15th) and the like, but it also makes some tweaks to the subsidy formula and so forth. 1/

As you can imagine, some of these changes are pretty benign, but others will have big implications for #ACA enrollees in 2020. There's a total of 17 items on the list, a few of which I actually don't understand well enough to comment on, but let's take a look at the rest! 2/

The first is actually a *positive* change: HCgov (the federal ACA exchange which hosts 39 states) is funded by a special "user fee" paid by insurance carriers (& thus passed on to enrollees). Until now it's been 3.5% of premiums for 34 states & 3.0% for another 5 states. 3/

The 5 states w/the lower rate are AR, KY, NM, NV & OR. These five states technically have their own ACA exchange in place (board of directors, etc), but still use HCgov as their technical platform for enrollment. 4/

The thing is, that 3.5% fee has been the same *since 2014*. Since that time, enrollment on the #ACA exchanges has increased by around 66% and *unsubsidized* premiums have (as GOP loves to point out) more than doubled...which means fee *revenue* has more than *tripled*. 5/

I pointed this out more than a year ago and asked the obvious question: Where the hell is all the extra money going, especially considering that Trump's CMS *slashed* the HCgov marketing/advertising budget by 90% and the navigator budget by 60-80%? 6/
acasignups.net/18/02/13/updat…

Apparently @FrankPallone, @BobbyScott & @RepRichardNeal had similar questions, because they announced that they plan on *auditing HCgov* to see how @SeemaCMS is actually spending the $2 billion+ in user fees being paid by enrollees to run it. 7/
acasignups.net/19/01/14/new-s…

In fact, the HCgov user fees have become so unreasonable that *three* states currently hosted by HCgov have decided to break free from it and establish their own full exchange platforms: @NVHealthLink starting this fall, and both @NMHIX and @GetCoveredNJ starting next fall. 8/

Whether due to the audit threat or not, CMS is knocking the user fees down a half a point: Starting next year it'll be 3.0% for most states and 2.5% for "piggyback" states. This amounts to a savings of around $3/month per enrollee, or perhaps $36/year apiece. Good. 9/

Don't get me wrong: it's still awful of CMS to have slashed the marketing & navigator budgets...but *if* they're gonna do so, they should at the very least not keep pocketing the same amount of money from enrollees. So, fine: They whittled the fee down by $3/mo. Fair enough. 10/

OK, next: "Prescription Drug Provisions". I was a bit fuzzy on this one but @hyperplanes helped me out. I *think* it works like this:
--Let's say a brand-name drug list price is $200, while the generic equivalent is $100. 11/

--The brand-name drug co might offer a $150 coupon to undercut the generic & get the enrollee to choose it over the generic
--Right now, the *full $200* gets applied towards the maximum out-of-pocket expense limit, after which the *insurance co* has to pay for everything. 12/

--Starting in 2020, only the first $50 would count towards the MOOP, making them more likely to choose the generic drug, where the full $100 would be counted.
--This discourages brand-name drugmakers from using "coupons" to manipulate prices and soaking insurance cos as much. 13/

At least, I think this is how it works. In practice, who knows? A lot of people don't understand how the MOOP rule works, or just don't think about it, so it could result in the enrollee still choosing the brand-name drug for the up-front savings & getting screwed later. 14/

OK, next up: SILVER LOADING. This is part of one of the dumbest and longest-running dramas of the ACA saga. It dates back to a lawsuit filed in *2014* by *John Boehner* against *Sylvia Burwell* when she ran CMS over Cost Sharing Reduction subsidies. 15/

I won't rehash the entire thing here, but in the end, it resulted in Donald Trump *trying* to "blow up" the entire ACA by cutting off CSR payments in 2017...but because he didn't understand how CSRs work, healthcare wonks came up with a clever workaround... 16/

...which *mostly* caused Trump's attemped #ACASabotage to backfire: #SilverLoading and the #SilverSwitcharoo. Since today is Passover, it's the perfect time to repost this explainer of how that works: 17/
acasignups.net/18/05/23/four-…

#SilverLoading (especially #SilverSwitching) is imperfect & messy, but it actually resulted in more people being *helped* than *hurt* by Trump's sabotage, no thanks to him. CMS was thinking of banning Silver Loading next year, but decided to give it a pass in the end. 18/

That brings me to Automatic Re-enrollment. This was another thing consumer advocates were worried about: CMS was seriously thinking of scrapping auto-renewals. There's actually a defense to be made of this (it forces people to actively shop around for a better deal)... 19/

...HOWEVER, the downside *massively* outweighs the upside: It would result in several million people losing their coverage altogether. Rhode Island actually experimented with requiring active renewals in 2015 but abandoned it a year later, presumably for this very reason. 20/

Anyway, like with #SilverLoading, CMS ultimately decided not to mess with auto-renewals for another year either.

The next *FOUR* #NBPP2020 changes have to do with Risk Adjustment, which I don't know nearly enough to declare whether they're good or bad, so I'm skipping them. 21/

OK, that brings me to the ugliest change. This is the one which got big headlines like "Trump to cut #ACA subsidies by $1 billion!"...which is, sadly, accurate. 22/

https://twitter.com/ASlavitt/status/1119236728370257920

Short version: ACA subsidies are available to exchange enrollees earning between 100-400% FPL (around $12K - $49K if you're single, or $25K - $100K for a family of four) on a sliding scale. CMS is tweaking the sliding scale formula. 23/

The change is wonky, but the bottom line is that they expect it to result in ACA subsidies being reduced by around $980 million in 2020. Assuming roughly 7.8 million exchange enrollees receiving subsidies next year, that'd average around $125 apiece for the year. 24/

Remember, *all* enrollees (subsidized or not) will *save* ~$36 from the user fee reduction, so this amounts to *unsubsidized* enrollees paying $36 *less* while *subsidized* enrollees pay around $89 *more*. The irony of this is not lost on me. 25/

The next two deal with Maximum Out-of-Pocket costs ("Maximum Cost Sharing Limits). These are increasing by 3.2% to $8,150 (one person) or $16,300 (household). MOOP already increases slightly every year, so not all of this is due to the #NBPP2020 change, but some of it is. 26/

What about people receiving CSR subsidies? Well, their maximum out-of-pocket costs are going up next year as well...by $100 - $200 (single) or $200 - $400 (per household). Again, I'm not sure how much of this increase is due specifically to the #NBPP2020 change, but some is. 27/

OK, 11 down, 6 left.
"Required Contribution Percentage". Under the #ACA, all exchange plans have to cover 60-90% of your healthcare expenses (Bronze, Silver, Gold, Platinum)...with one exception: Certain people under 30 years old are allowed to enroll in Catastrophic plans. 28/

Catastrophic plans (with some exceptions) are even skimpier than Bronze plans, so of course they're cheaper. If you're *over* 30, you're only allowed to choose a Catastrophic plan under very special financial circumstances. The #NBPP2020 tweaks that rule slightly. 29/

However, only around 98,000 people enroll in Catastrophic plans each year anyway, and of those only small number are over 30, and the tweak itself is pretty tiny, so this seems like a non-issue for the most part. 30/

Navigator Program: In addition to slashing the funding to the bone for #ACA navigators (they're the folks who provide education, outreach and hand-holding to help people through the enrollment process as well as with how to actually *use* their insurance)... 31/

...CMS is now further weakening the program by "encouraging" navigators to enroll people in #ShortAssPlans...the exact type of junk plans the #ACA was supposed to *discourage* people from enrolling in in the first place. 32/

In fact, since exchange user fees are used to *pay* for the program, this means that *ACA insurance carriers* are now *paying* for navigators to enroll people in junk plans...mostly from *NON*-ACA carriers. In other words, they're being charged to help their competitors. 33/

If I was an ACA-compliant insurance carrier, I'd be pretty pissed off that MY user fees were being used to pay to help some fly-by-night junk plan companies steal my business...but whatever. As for #NBPP2020, here's what else they're changing: 34/

https://twitter.com/BenDAvanzo/status/1119055323929747462?ref_src=twsrc%5Etfw

The next change is a strange one to include in a rule released on April 18th since it's a one-time change which only applies to people's 2018 tax returns...which were due on April 15th. 35/

The GOP repealed the ACA individual mandate penalty in December 2017...but it wasn't actually effective until 2019. That means when people filed their *2018* taxes, the penalty was still in place one last time. Since Trump/Verma hate the penalty... 36/

...they modified the 2018 Form 1040 to make it easier to get out of paying it. Before, if you wanted an exemption from the waiver due to "hardship", you had to provide some evidence. This year it was purely on the honor system--just check a box. 37/

acasignups.net/19/03/29/remin…

If the penalty itself hadn't also been repealed effective 2019, this would be a pretty big deal, because it makes it ABSURDLY easy to get out of paying the mandate penalty...but since the penalty is now set to $0 anyway, it's pretty much a moot point. 38/

OK, three more to go.
Next: "Direct Enrollment". I have mixed feelings about this one.
In addition to the official ACA exchanges (HCgov, CoveredCA, etc), there are a handful of private, third-party websites which have been authorized to enroll people in on-exchange ACA plans. 39/

This includes sites like eHealth, HealthSherpa and so forth. Until last year, "direct enrollment" partners had to utilize a dual-entry system: They'd plug your info into their site, which would then have to be re-entered into HealthCareGov. 40/

Last fall CMS rolled out the "Enhanced" Direct Enrollment system, which lets the 3rd-party sites integrated *directly* into HCgov, eliminating dual-entry, speeding up the process and so on. Technically this is a good thing, but there are a lot of concerns about it. 41/

Last year HealthSherpa was the only 3rd party vendor which qualified for EDE...and to their credit, they play by the rules, are tight on security, ONLY sell ACA-compliant plans (no junk plans!) and so on. Disclaimer: They had a banner ad on my site last open enrollment. 42/

HOWEVER, aside from potential security/privacy concerns, not every vendor is as scrupulous as HealthSherpa. Other "direct enrollment" vendors also sell #ShortAssPlans, which pay higher commissions, which also means they have an incentive to direct enrollees to junk plans. 43/

DEs also cause confusion for consumers. A major reason for creating HCgov/etc. in the first place was so that people knew there was an OFFICIAL website they could trust to ONLY offer subsidy-eligible, ACA-compliant policies without any bias. This muddies the waters. 44/

This article from @CenterOnBudget by @TaraStraw explains some of the concerns about the DE program: 45/
cbpp.org/research/healt…

Special Enrollment Period: With the individual mandate repealed, the only part of the ACA's "Red Leg" left is the limited-time Open Enrollment Period. This was 6 months for 2014, 3 months in 2015-2017, and is down to just 6 weeks under the Trump Administration in most states. 46/

For most people, if you don't enroll within that narrow time window, you're SOL until the following November. This is done to prevent gaming the system (going without coverage for months at a time and then only enrolling the moment you get diagnosed w/something expensive). 47/

There are some exceptions to this, however: If you have a qualifying life event (QLE), you get a 60-day Special Enrollment Period (SEP). This includes stuff like getting married/divorced, giving birth/adopting a kid, moving to a different state, etc. 48/

For 2020, CMS is adding *another* SEP condition: If you enroll in an OFF-exchange individual market policy because you think you'll earn too much to qualify for subsidies...but then realize partway through the year that your income will be low enough to qualify after all. 49/

The income cut-off for ACA subsidies is around $49,000/year if you're single. Let's say you expect to earn $55K next year, so you decide to save 20 minutes by enrolling directly with Blue Cross instead of via HCgov, since you won't qualify for subsidies anyway... 50/

But then it turns out that you have a shitty year and only earn $45,000. If you had enrolled via HCgov, you would have gotten financial help after all...but since you enrolled off-exchange, you're S.O.L. Starting in 2020, people in that situation will qualify for an SEP. 51/

Again, I have mixed feelings about this. On the one hand, it does suck for middle-class people who have a crappy year that they miss out on financial help due to a technicality. On the other hand, it gives people yet another opportunity to potentially game the system. 52/

On the other hand, in this particular situation the person DID enroll in fully ACA-compliant coverage like they were supposed to...they just did so directly through the carrier. I doubt this will cause much gaming or adverse selection, so...fine, I guess. 53/

FINALLY (LAST ONE!): "Segregation of Funds for Abortion Services":
This was already one of the stupidest provisions of the ACA, and #NBPP2020 makes it even dumber. All of it is attached to the "Hyde Amendment", which states that federal $ can't be used to cover abortion. 54/

Under the ACA, policies *can* cover abortion, but only as long as $1 of the premium per month per enrollee is separated out and deposited in a separate "Abortion Fund". I'm quite serious...insurance carriers have to have a special bank account for this money. 55/

I wrote about the consequences of this in 2017...apparently there's at least $100 million in ACA premium dollars just sitting in "Abortion Fund" bank accounts gathering dust (and interest) nationally. It can't legally be used for anything else. 56/

acasignups.net/17/10/08/absur…

Last fall, CMS made the "$1 segregation rule" even MORE insane by proposing to require enrollees in ACA plans which cover abortion to be sent separate INVOICES...one for the rest of the policy, another for the $1 "Abortion Premium". Seriously. 57/
acasignups.net/18/11/12/updat…

Imagine the fallout from that. Not only would it cause major billing system headaches and expenses for the insurance carriers, but how much confusion will be caused when enrollees receive a 2nd invoice for $1.00? How many will throw it out assuming a glitch? 58/

How many (especially men) will be pissed off about having to pay an "extra" $1.00 to cover abortion, not understanding that the very nature of health insurance is that you're covered for services you may never *personally* receive (women pay for prostate exams, for instance)? 59/

Of course, the likely outcome of this rule would be that insurance carriers will stop offering plans which cover abortion *at all* to avoid the whole mess. Except, of course, in states like CA and NY, which *require* all policies to cover abortion. Fun times! 60/

I'm not sure what happened to the "abortion invoice" rule, but CMS was *also* talking about making carriers which include abortion coverage to ALSO offer the exact same policy *without* abortion coverage. Fortunately, they decided to scrap that rule for another year as well. 61/

SO, THERE YOU HAVE IT: A mixed bag of good news, bad news, dodged bullets and unknowns.

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UPDATE: @greg_fann corrected me on the $36 "savings" point above. So it sounds like unsubsidized enrollees will save $36 next year, but unsubsidized enrollees will pay ~$125 more, not $89. Hooray...

https://twitter.com/greg_fann/status/1119647027019702272