Professional Documents
Culture Documents
AmendmentontheIndividualMarket
July15,2017
PRELIMINARYDRAFT
OverviewandMethodology
Inresponsetoarequestfortechnicalassistance,wemodeledtheimpactofallowingthesaleofnonACA
compliantplansalongsideACAcompliantplansintheindividualmarket,whilestillmaintainingtheconsumer
choiceprovisionsofSection1312(c)(1)ofthePatientProtectionandAffordableCareAct.NonACAcompliant
planssoldinplanyear2019orlatermayalsobereferredtoasConsumerFreedomPlansthroughoutthis
document.
AnalternatescenarioabsenttherequirementsofSection1312(c)(1)ofthePatientProtectionandAffordableCare
Actisalsoincluded.
Inbothscenarios,itisassumedthatanadequatenumberofissuersofferatleastonebronze,silver,andgold
qualifiedhealthplan,andthatallstatesin2020permitallcarrierstoofferhealthinsuranceplanswithalower
actuarialvalueandfewerrequiredbenefitswithoutimposingstricterrequirementsandpremiumratingrules.
Wedividedthenationwideuninsuredandindividualmarketpopulationsintodemographiccells(basedonage,
income,andhealthrisk)andtheirinsurancestatus(uninsured,insuredinACAcompliantplan,insuredinannon
compliantplan).
Usingproprietaryelasticityestimates,themodelcomparescurrentyearandprioryearpremiumcostsfor
individualsineachage/income/riskcategory,todeterminethenumberofindividualschoosingtopurchase,
maintain,ordropcoverage,orremainuninsured.
Arangeofcoverage,premiumrate,andfederaloutlayestimatesweredevelopedbetweentwoscenarioshigh
total/nonACAenrollmentandlowtotal/nonACAenrollment forboththecurrentlawandtheConsumer
FreedomAmendment.
Thehighenrollmentscenarioassumesgreaterpricesensitivity,moreenrollmentinnonACAplanspriorto2017,10%fewer
claimsasaresultofloosenedEHBrequirements,and$10Binannualfederalfundingusedasreinsuranceeachyearfrom2020
2026.
Thelowenrollmentscenarioassumeslowerpricesensitivity,halfthepre2017nonACAenrollment,5%fewerclaims,andno
federalfunding.
Afulllistofassumptionsandlimitationsofourapproachisdescribedintheendnotes.
PRELIMINARYDRAFT
TotalEnrollment SingleRiskPool
18
17
16
MillionsofCoveredLives
15
CurrentLawHigh
14 CurrentLawLow
ConsumerFreedomAmdtHigh
ConsumerFreedomAmdtLow
13
12
11
PRELIMINARYDRAFT
10
2017 2018 2019 2020 2021 2022 2023 2024
FederalOutlays:
APTC,CSRs,andSection301Funding SingleRiskPool
80
75
70
65
60
$Billions
CurrentLawHigh
55 CurrentLawLow
ConsumerFreedomAmdtHigh
50 ConsumerFreedomAmdtLow
45
40
35
PRELIMINARYDRAFT
30
2017 2018 2019 2020 2021 2022 2023 2024
IndividualMarketEnrollment:
ACACompliantvsNonACACompliantPlans SingleRiskPool
18
16.1 16.1
16
14.8 14.8 14.8
14.4
14 1.6
2.6 2.3 5.1
3.8 6.7
12
MillionsofCoveredLives
10
NonACACompliant
8 ACACompliant
13.2
6 12.2 12.4
10.9 10.6
9.4
4
0
2017 2017 2020 2020 2024 2024
Low High Low High Low High
PRELIMINARYDRAFT
IndividualMarketMonthlyPremiums
900 SilverACACompliantvsNonACACompliantPlans SingleRiskPool
$845
700
$635
600
$570
500 $490
$430
400 $380
$370
$360 $360
$330
300 $290
$240
$230
200
100
2017SilverACA 2020 2020 2020 2024 2024 2024
Compliant CurrentLaw SilverACACompliant NonACACompliant CurrentLaw SilverACACompliant NonACACompliant
EnrollmentWeighted EnrollmentWeighted
Average PRELIMINARYDRAFT Average
Scenariopremiumsareforage40anddonotincludepremium assistanceunderthecurrentlaworConsumerFreedomAmendment.Enrollmentweightedaveragecontainsallages.
IndividualMarketEnrollment:
DemographicMixofNonACACompliantPlans SingleRiskPool
IndividualMarketEnrollmentbyrisk IndividualMarketEnrollmentbyage IndividualMarketEnrollmentbyFPL
40 40 40
HighRisk Over50 Over400%FPL
MediumRisk 30to50 34% 200400%FPL 34%
35 34% 35 35
LowRisk Under30 Under200%FPL
3
30 30 30
10
25 25 23% 25 23%
23% 20
1 3
20 17% 20 17% 20 17%
34 7
15 3 15 15 14
5
3 10
10 21 10
22 10
5
12
13
5 11 5 5
6 7
7
1 1 2
0 0 0
2017 2020 2024 2017 2020 2024 2017 2020 2024
Totalsmaydifferbecauseofrounding
PRELIMINARYDRAFT
IndividualMarketEnrollment:
DemographicMixofACAcompliantPlans SingleRiskPool
90 HighRisk 90 90
Over50 Over400%FPL
83% 83% 83%
MediumRisk 200400%FPL
77% 77% 30to50 77%
80 80 80
LowRisk Under200%FPL
Under30
19
70 66% 70 66% 70 24 66%
21 29
22
60 60 30 60
16 16
22
50 50 31 50
17
28
40 40 27 40 27
22
25
30 30 30
48 22
20 39 20 20
31 28 28
25 27
10 10 22 10
13
0 0 0
2017 2020 2024 2017 2020 2024 2017 2020 2024
Totalsmaydifferbecauseofrounding
PRELIMINARYDRAFT
TotalEnrollment TwoRiskPools
18
17
MillionsofCoveredLives
16
CurrentLawHigh
15 CurrentLawLow
ConsumerFreedomAmdtHigh
ConsumerFreedomAmdtLow
14
13
12
2017 2018 2019 2020 2021 2022 2023 2024
PRELIMINARYDRAFT
FederalOutlays
APTC,CSRs,andSection301Funding TwoRiskPools
90
80
70
CurrentLawHigh
$Billions
60 CurrentLawLow
ConsumerFreedomAmdtHigh
ConsumerFreedomAmdtLow
50
40
PRELIMINARYDRAFT
30
2017 2018 2019 2020 2021 2022 2023 2024
IndividualMarketEnrollment:
ACACompliantvsNonACACompliant TwoRiskPools
18
16.7 16.6
15.8
15.9
16
14.8 14.8
14 1.6
2.6
5.5 6.9
MillionsofCoveredLives
12 7.4 8.6
10
NonACACompliant
8 ACACompliant
13.2
6 12.2
10.4
9.7
4 8.4 8
0
2017 2017 2020 2020 2024 2024
Low High Low High Low High
PRELIMINARYDRAFT
IndividualMarketMonthlyPremiums
SilverACACompliantvsNonACACompliant TwoRiskPools
$845
$660
$635
$590
$570
$430
$370
$360 $360
$210
$200 $200
$190
60 60 60
HighRisk Over50 Over400%FPL
MediumRisk 30to50 200400%FPL
LowRisk Under30 49% Under200%FPL
50 49% 50 50 49%
6 8
40 40 40
34%
34% 34%
14 28
2
30 30 4 30
9 19
20 17% 42 20 17% 20 17%
3 31 5
3 27
10 17
10 10 5 20 10
12
11
7 6
1 2 3
0 0 0
2017 2020 2024 2017 2020 2024 2017 2020 2024
Totalsmaydifferbecauseofrounding
PRELIMINARYDRAFT
IndividualMarketEnrollment:
DemographicMixofACACompliantPlans TwoRiskPools
90 HighRisk 90 90
Over50 Over400%FPL
83% 83% 83%
MediumRisk 200400%FPL
30to50
80 80 80
LowRisk Under200%FPL
Under30
19 66% 66% 66%
70 70 70 24
29
60 60 60
51% 51% 17 51%
16 20
50 50 28 50
8
28
40 21 40 27 25 40
23
16
18
30 30 30
22
48 11
20 20 20
18
30 31
27 27 26
10 19 10 10
16
9
0 0 0
2017 2020 2024 2017 2020 2024 2017 2020 2024
Totalsmaydifferbecauseofrounding
PRELIMINARYDRAFT
Assumptions&Limitations
Therangeofassumptionsbehindthemodeledscenariosassumeallofthedetailsbelowaretrueforthemodeltohold.
RulesgoverningtheACAmarketremainunchangedexceptforonesexplicitlylistedbelow
Inthisscenario,itisassumedthatanadequatenumberofissuersofferatleastonebronze,silver,andgoldqualifiedhealth
plan,andthatallstatesin2020permitallcarrierstoofferhealthinsuranceplanswithaloweractuarialvalueandfewer
requiredbenefitswithoutimposingstricterrequirementsandpremiumratingrules.
InyearspriortotheopensaleofnonACAplans(20172019),a15%lapseratefornonACAplansisused
RangeoflivesonnonACAplansin2017isestimatedtobe2 3M
Modelingisnationwideandassumesallstateshavea5:1agecurve,bothforACAandnonACAplans
Nochangeinpopulationgrowth,economicgrowth,ormedicaltrend
Priceelasticityisdeterminedbasedoncombinationsofrisk,age,andincome
Probabilityofenrolleesswitchingbetweenplansisrangedandbasedonacomparisonofoutofpocket&premiumcost
differencebetweenanonACAplanandACAbronzeplanwithhighertotalcostdifferentialsleadingtohigherratesof
switching
NonACAplandesignedwitha$12Kdeductibleand$12Kmaximumoutofpocketlimit
OverallAssumptions
HealthstatusratingusedfornonACAplansbeginningin2020inbothscenarios
Federallevel policychangeinplacetoallowforopensaleofnonACAplans,withallstatesadoptingthischangeandcarriers
inallmarketsofferingnonACAplans
RatingoccursinasingleriskpoolwithoutriskadjustmentbetweennonACAplans
PRELIMINARYDRAFT
Assumptions&Limitations
SingleRiskPoolAssumptions
Hightotal/nonACAenrollmentscenario:
HigherpricesensitivityintotalcostcomparisonbetweenACAandnonACAplans,leadingtohigherratesofswitching
100%enrollmentretentionofenrolleeswholapsenonACAcoveragefrom20172019
Higher2017startingpointofnonACAenrollment
10%lowerclaimsinnonACAplansduetoEHBreductions
$10Binadditionalfederalfundingusedasreinsuranceineachyear20202026
Lowtotal/nonQHPenrollmentscenario
LowerpricesensitivityintotalcostcomparisonbetweenACAandnonACAplans,leadingtolowerratesofswitching
50%enrollmentretentionofenrolleeswholapsenonACAcoveragefrom20172019
Lower2017startingpointofnonACAenrollment
5%lowerclaimsinnonACAplansduetoEHBreductions
Noadditionalfederalfundingusedasreinsuranceineachyear20202026
DoubleRiskPoolAssumptions
FederallevelpolicychangeinplacetoallowforopensaleofnonACAplans,withallstatesadoptingthischangeandcarriers
inallmarketsofferingnonACAplans
Ratingoccursinseparateriskpools(oneforACAplansandanotherfornonACAplans)
Lowenrollmentandhighenrollment:sameasthesingleriskpoolscenario
PRELIMINARYDRAFT