Must-Read: Richard Mayhew: ObamaCare APTC Hacks

Must-Read: For a single carrier in a market, the obvious strategy to offer is the “narrow network, low price Silver as the #1 and a broad network Silver at a significantly higher premium as the #2 benchmark Silver” in order to pump Exchange subsidy money out of CMS, and then spend that pumped money to make everybody happy, no? There are ways to do that, no? The single carrier markets will see a lot of market power exercised, but won’t the main impact of it be to raise costs to CMS rather than to diminish the well-being of Exchange purchasers?

Just thinking aloud here…

Richard Mayhew: ObamaCare APTC Hacks:

There are other exchange strategies that don’t rely as much on manipulating… [Silver Plan price] structures…

Some carriers are not as price conscious.  Instead they are targeting risk-adjustment plays by offering people with high risk adjustment scoring conditions insurance where the gamble is the insurer can manage their care and outcomes to be better and cheaper than the combined sum of premiums and risk adjustment inflows. Others are still throwing mud against the wall.

I’m fascinated by the APTC hacking strategies because as major players pull out of the markets, more regions are seeing either only a single carrier offer plans or two carriers offer plans. Depending on how the plans are offered we could see consumers be either very happy or extremely pissed off. If carriers are offering a narrow network, low price Silver as the #1 and a broad network Silver at a significantly higher premium as the #2 benchmark Silver, people will be, on the whole, very happy. If carriers offer a narrow network HMO with miniscule benefit configuration tweaks as Silver #1 through #8 people will be extremely pissed off. The ACA story devolves into a story about the experience of individual counties at this point.