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I have been mulling this over the past few days and am interested in the thought/input of others.....bear with me here......
Here in SC we will have 4 FFE exchange carriers including the startup grant funded co-op. I do not expect the co op to have a major footprint - so for all intents and purposes we have 3 carriers - Blues, Bluechoice, & Coventry....
Currently, there is a nearly inverse relationship between premium & market share - Blue owns 60ish percent of the market - maybe more, and are generally somewhat higher than the other 2 FFE carriers in the current individual market.
In addition, SC has a $33,884 – Annual personal income per capita (2010 - ranked 45th in US) & $42,580 – Median household income (2009).
Based on relatively low household income, it seems obvious that MANY residents will fall into the under 250% FPL making them eligible for cost sharing subsidies. And unless something has changed lately, a silver plan must be purchased to take advantage of cost sharing subsidies. And of course, premium subsidies are based on the 2nd lowest cost silver plan.
Based on my back of the cocktail napkin math - it seems that whichever carrier ends up in 3rd place on silver plan premium is gonna be left out in the cold if they are more than a point or two higher on premium-
Based on kff.org numbers - for a 21 male making $24k/209 % fpl, premium is $3018 yr, with a $1432 subsidy (47% of premium).
So what happens when the 3rd place carriers rates are 9% higher? By my calculations, that is an additional $22.64/mo in unsubsidized premium.
Currently, for a 5k HDHP for a 21y/o in South Carolina, prices from these 3 carriers are: $95.41 Bcbs, $76.72 Bluechoice, $72.71 Coventry, according to Ehealth......
Anyone else see a problem here?
A couple of scenarios I keep running thru -
1. what if the 3rd place carrier has the best network? Obviously the target for 2014 enrollment is to get as much young healthy business as possible- I do not see 21 y/o people paying 20 bucks a month more for a network - at least not without some serious sales guidance.
2. What if the 3rd place plan has the highest broker comp? It seems this would be the likely adjustment by whichever carrier ends up in 3rd place once the curtain comes up with respect to rates. Could create some moral dilemmas......
Seems like there is a very good chance someone could get burned- temporary reinsurance pool or not......
Here in SC we will have 4 FFE exchange carriers including the startup grant funded co-op. I do not expect the co op to have a major footprint - so for all intents and purposes we have 3 carriers - Blues, Bluechoice, & Coventry....
Currently, there is a nearly inverse relationship between premium & market share - Blue owns 60ish percent of the market - maybe more, and are generally somewhat higher than the other 2 FFE carriers in the current individual market.
In addition, SC has a $33,884 – Annual personal income per capita (2010 - ranked 45th in US) & $42,580 – Median household income (2009).
Based on relatively low household income, it seems obvious that MANY residents will fall into the under 250% FPL making them eligible for cost sharing subsidies. And unless something has changed lately, a silver plan must be purchased to take advantage of cost sharing subsidies. And of course, premium subsidies are based on the 2nd lowest cost silver plan.
Based on my back of the cocktail napkin math - it seems that whichever carrier ends up in 3rd place on silver plan premium is gonna be left out in the cold if they are more than a point or two higher on premium-
Based on kff.org numbers - for a 21 male making $24k/209 % fpl, premium is $3018 yr, with a $1432 subsidy (47% of premium).
So what happens when the 3rd place carriers rates are 9% higher? By my calculations, that is an additional $22.64/mo in unsubsidized premium.
Currently, for a 5k HDHP for a 21y/o in South Carolina, prices from these 3 carriers are: $95.41 Bcbs, $76.72 Bluechoice, $72.71 Coventry, according to Ehealth......
Anyone else see a problem here?
A couple of scenarios I keep running thru -
1. what if the 3rd place carrier has the best network? Obviously the target for 2014 enrollment is to get as much young healthy business as possible- I do not see 21 y/o people paying 20 bucks a month more for a network - at least not without some serious sales guidance.
2. What if the 3rd place plan has the highest broker comp? It seems this would be the likely adjustment by whichever carrier ends up in 3rd place once the curtain comes up with respect to rates. Could create some moral dilemmas......
Seems like there is a very good chance someone could get burned- temporary reinsurance pool or not......