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Matt Fiedler @MattAFiedler
, 7 tweets, 3 min read Read on Twitter
Good to see this new @CEA report acknowledging that the 2017 individual market premium increases were a transitional phenomenon, particularly after a year of WH claims that the individual market was in a “death spiral”:….
Remain proud of this January 2017 report from the Obama CEA that predicted exactly this outcome when it was far from conventional wisdom:….
One analytic quibble with the new report: I doubt much of the change in insurer stock prices since 2010 is due to the ACA. Looking at stock price changes around key moments in repeal debate makes it hard to believe the ACA mattered much one way or the other.
Also, I’m not sure if the Administration intends to use the report to argue against reinsurance funding, which it has opposed in the past. If so, it’s worth noting that current individual market profitability is basically irrelevant to whether reinsurance is a good idea.
To be clear, I do not love the idea of a large reinsurance program. A small reinsurance program + enrollee-side subsidies > 400% of FPL is a better way to help unsubsidized enrollees. And the CSR provisions of the current bill wipe out the good from reinsurance.
But the case for reinsurance centers on: (1) reducing premiums for unsubsidized enrollees; (2) diminishing selection incentives; and (3) insulating insurers from tail risk. Those arguments are basically orthogonal to what insurers’ current margins are.
* Addendum: First tweet should have tagged @WhiteHouseCEA, not @CEA.
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