Simplicity can be done without ignoring entire swaths of the market influences.
For example, look at how Actuary.org used paragraph headings:
"Major Drivers of 2018 Premium Changes
* UNDERLYING GROWTH IN HEALTH CARE COSTS.
* LEGISLATIVE / REGULATORY UNCERTAINTY.
* RISK-SHARING PROGRAMS FOR HIGH-COST ENROLLEES.
* CHANGES IN THE RISK POOL COMPOSITION AND INSURER ASSUMPTIONS.
* HEALTH INSURER FEE.
<
https://www.actuary.org/content/drivers-2018-health-insurance-premium-changes>
And do note that in the above, the only major heading with sub-bullets was
from legislative/regulatory risk, namely:
* LEGISLATIVE / REGULATORY UNCERTAINTY.
* Cost-sharing reduction subsidies.
* Enforcement of the individual mandate.
* Special Enrollment Period and Open Enrollment Period.
* Potential changes to the ACA.
FWIW, note that the above also stated (published July 2017):
"Due to the uncertainty of whether CSRs will continue to be paid, some state
regulators have allowed or even required insurers to build CSR costs into their
premiums. There are different approaches to adjust premiums, either allocating
additional costs solely to silver plans or across all plans....If levied on silver
plans only, premium increases could average nearly 20 percent, over and
above premium increases due to medical inflation and other factors.[2]"
> > However, from what I've been reading (I'll look for a good link), there's more to the
> > story than merely the above. IIRC, it circulated around the market uncertainty risk
> > of if the Feds were to balk on paying the Insurance Cos the subsidies, as they were
> > legally still on the hook to provide the insured at the promised (subsidized) rate even
> > if the Feds cut. As such, they jacked up their rates just in case the Feds stopped paying.
> >
> > FWIW, I believe that the implications of this should be windfall profits if the Feds don't cut
> > the subsidies, although they will probably try to bury it in their SEC filings, probably with
> > discretionary expenses, such as contracts to go,renovate still new offices, etc.
>
> Really...windfall profits. That explains why insurers have gone out of business in
> many states, including the ill conceived Co-ops that ACA sponsored...with our tax money.
Yeah, you've made that claim before - - but does it hold water, such as by
demonstrating that your new start business failure rate is significantly higher
than the normal rate of new business failures?
Your baseline, according to the Small Business Association (SBA), is that 30% of
new businesses fail during the first two years of being open, growing to 50% fail
during the first five years, and at ten years, 66% have failed (Ron Paul's claim of
90% failure doesn't appear well supported).
<
https://www.investopedia.com/slide-show/top-6-reasons-new-businesses-fail/>
<
https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf>
your "why [many] insurers have gone out of business" metric claim actually
Oh, I've not forgotten the MLR - - not only are there accounting backflips which
can invariably be done to hide money (as always), but with the pro-business
climate of the current administration, don't you think that that waivers for the
MLR won't be soon handed out like cheap candy?
> Got anymore theories?
Oh, it ain't a mere theory that the Capitalist Market hates uncertainty.
And when the States have coaxed them to raise rates (ostensively to try to
forestall losing coverage in their regions) and keeping in mind that it isn't
predominantly the State who pays the bulk of that rate increase ... its a no-brainer
slam-dunk positive financial opportunity for the business that can't be ignored.
Case in point, from your own citation, Maine's approved (2012) waiver had the
outcome where their healthcare insurance companies were allowed to revise
their MLA from an 80% min to a 65% min, which means that the ratio change
of their allowed non-medicals (i.e., overhead & profits) nearly doubled.
Oh, and don't think that the insurers don't know who's buttering their toast,
and is using the provisions of the law to their own fiscal advantage:
"Because many insurers raised prices most sharply on plans that are attractive
to people who receive the most generous subsidies, those unable to get
subsidies may have to shop for plans that are not affected or look beyond
their state marketplaces for lower-priced options."
<
https://www.nytimes.com/2017/10/03/health/aca-insurance-rate-increases.html>
Oh, and in case you want to claim that its just one 'liberal rag' which has
pointed out the contribution of marketplace uncertainty & risks, here's a
report that states that it is the insurers themselves who have stated this
in their official filings:
"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. Some insurers explicitly factor this uncertainty into
their initial premium requests, while other companies say if they do not receive
more clarity or if cost-sharing payments stop, they plan to either refile with
higher premiums or withdraw from the market."
<
https://www.kff.org/health-reform/issue-brief/an-early-look-at-2018-premium-changes-and-insurer-participation-on-aca-exchanges/>
Similarly,
"Two market influences, in particular, are complicating 2018 rate setting:
the uncertainty surrounding continued funding of cost sharing reduction (CSR)
payments and the question of how the relaxation of the individual mandate will
impact enrollment and risk pools."
<
http://health.oliverwyman.com/transform-care/2017/06/analysis_market_unc.html>
"...the administration has offered states only uncertainty about what to expect
in 2018, which has made it difficult to set premium rates. In particular, state
officials are struggling to keep their insurance markets afloat in the face of the
Trump administration’s continued indecision over whether to reimburse insurance
companies for Affordable Care Act (ACA) cost-sharing reduction (CSR) plans."
<
http://www.commonwealthfund.org/publications/blog/2017/sep/cost-sharing-reduction-payment-indecision>
"Before CSR Cuts, ACA Health Plans Expected Stable Premiums
The Trump Administration’s decision to withhold CSR payments likely
interrupted payers’ plans to keep premium increases relatively stable."
<
https://healthpayerintelligence.com/news/before-csr-cuts-aca-health-plans-expected-stable-premiums>
And many more similar reports have been published this past year.
For you to have not even mentioned it at all is quite surprising, as I was under the
impression that you're not this ignorant as to what's going on in your profession.
-hh