A timeline to run

The Republican Party does not have the luxury of time to get their act together on health policy. They have maybe fifty days to get a coherent plan with the possibility of passage before external actors move to foreclose on the 2018 policy option space:

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Below is the Center for Medicare and Medicaid Services plan filing timeline.

If an insurer is already in a market with an approved network for 2017, the compliance costs that are being incurred now to prepare a filing with no material changes in it is not significant for an incumbent carrier. Right now, minor network changes will be made as some doctors move into an area, other doctors retire and contracts are re-arranged and reworked as they are renewed. A few people could run the prep work right now for a caretaker filing. The option cost to offer plans on Exchange in 2018 right now is not particulary high for incumbents in current service area. The prep costs to prepare a filing for either dramatically new plan designs, fundamentally new networks or new service areas are far higher.

Incumbents can file caretaker plans through May 3, 2017. After that, barring extraordinary circumstances, the number of possible plans that can be sold will only decrease as state regulators knock out marginal networks, carriers pull back an alternative benefit design because their competitors did not offer the target the alternative was supposed to counter and providers pull out of MOU’s and drop themselves from a network. That is what happens in a normal plan filing cycle. This year, quite a few carriers could decide that the policy uncertainty will not allow them to effectively project the market at all and thus withdraw in the early summer.

And as there is longer policy uncertainty the probability of policy success declines so the increased cost of having an option to participate on the QHP market will decline in expected pay-off. Carriers need to have a good enough idea of the policy environment by the middle of April. Right now, hunkering down and quietly talking behind the scenes is a reasonable and low cost option. That cheap option expires far sooner than everyone wants to acknowledge.

About David Anderson
I am a research associate at the Margolis Center for Health Policy. I've written about health policy at Balloon-Juice.com as Richard Mayhew where I've enjoyed explaining the logic behind why an insurance company is behaving the way it is as there is almost always a reason besides pure spite or evil.

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