Friday, July 01, 2016

He who buys bronze absconds

In the spring of 2014 my son, knowing he'd enter a graduate program that September, switched his health insurance from COBRA to a bronze marketplace plan. Healthy, he gambled the premium difference between bronze and silver (or bronze and COBRA) against the deductible difference, essentially settling for catastrophic protection for a limited period.

Yesterday I noted that attrition in the ACA marketplace, which is sharpest in the months immediately following open enrollment since 10 percent or more of those who select plans never pay the first premium, is highest among those who enroll in bronze plans.   As of March 31 of this year, while bronze enrollment dropped 15.5%, from 2,873,422 to 2,427,337, silver dropped just 9.3%, from 8,520,787 to 7,721,983. A similar discrepancy was recorded in the spring of 2015.

It turns out that the same pattern held throughout the year in 2015. By December 31, total enrollment was down from 11,688,074 as of  Feb. 22, 2015 (not all of it "effectuated," or paid for in the first month) to 8,780,545, a 24.8% drop. Among bronze plan holders, the drop was 30.5%, versus 23.2% for silver, 18.8% for gold and 18.6% for platinum. Those with gold, hold -- relatively speaking.  And he who buys bronze... absconds.

As bronze plans typically carry deductibles over $6,000, many enrollees may decide that they're not worth the money. But I think it's also likely that those who know they have a short-term need for insurance, like my son, may lean toward bronze, basically holding their breath until employer insurance, or school-based insurance, or a spouse's insurance kicks in.

Thursday, June 30, 2016

ACA Marketplace snapshot: Bronze plan enrollees drop plans at higher rate than silver plan holders

CMS just released its "attrition report" for the ACA marketplace -- that is, its first snapshot of "effectuated enrollment" as of March 31 after tallying total plan selections at the end of open enrollment on Feb. 1.

The drop is comparable to last year's as of March 31: enrollment is down from 12.7 million to 11.1 million. That is, it's down 13%. As CMS points out, enrollments took place earlier on average this year, so enrollees had somewhat longer to drop out by 3/31.

As I always keep an eye on takeup of Cost Sharing Reduction (CSR) subsidies, available only with silver plans, I was interested to note that as the smoke cleared, the overall rate of silver plan enrollment for the whole marketplace rose markedly, from 67.1% on Feb. 1 to 69.7% as of March 31. The percentage of enrollees in bronze plans went down, from 22.6% to 21.9%.

While bronze enrollment dropped 15.5%, from 2,873,422 to 2,427,337. Silver dropped just 9.3%, from 8,520,787 to 7,721,983.  It makes sense that more people would drop bronze plans, with their deductibles typically north of $6,000 per person. Similarly, by March 31 of last year, bronze enrollment had dropped 15.9% since the end of open enrollment, compared to 11.5% for silver. By June 30, 2015,  bronze was down 18.6%,, and silver 13.3%.

This year, then, silver attrition is 60% of bronze attrition, versus 70% last year. Last year, government audits of enrollees' income claims led to hundreds of thousands having their CSR (and premium) subsidies eliminated or reduced, though that drop was not reported until the enrollment snapshot for June 31, released last September. This year, better data matching has reduced such subsidy reductions by more than two thirds.  Perhaps the higher volume of data audits in 2015 induced a slightly higher proportion of silver plan enrollees to drop their plans, since a good proportion lost some or all of their CSR.

Updated 7/1.

Tuesday, June 28, 2016

Uh oh: Trump has a coherent narrative

Donald Trump is a kind of idiot savant of demagoguery. Too lazy, ego-driven and solipsistic to analyze the facts of any business deal, let alone policy question, he does have an acute radar for the kinds of scapegoating that large numbers of people will respond to.

So far, though, with the American public as a whole, his credibility has been undercut by his boasting, his schoolyard insults, his lack of impulse control, his whining. Policy aside, a disinterested six-year old should be able to see through him. as 70 percent of Americans have to some degree.

Now, however, in the wake of Britain's primal scream, someone has put together for him a more coherent narrative that I fear could be very powerful, delivered today in a speech in a steel and aluminum shredding plant outside Pittsburgh. Never mind that the narrative fundamentally false -- it has enough elements of truth in it to seem plausible.

Like Obama's speeches, this speech has a historical sweep from the country's founding through Obama's presidency (and Hillary Clinton's tenure as Secretary of State).  While it projects a duce-like can-doism, it eschews direct boasting, as well as racial or religious scapegoating. The enemies are American elites and foreign nations, with the Clintons as the chief avatars of the domestic despoiling class. Trump is always all about blame, but here the domestic betrayers overshadow the overseas cheaters and predatory migrants.

The speech begins with a stab-in-the-back narrative:

Monday, June 27, 2016

A close look at one more ACA glitch

Georgetown University's Sabrina Corlette highlights a glitch in the ACA's provisions aimed at helping young adults obtain health insurance:
Consumer assisters receive frequent questions from parents who want their son or daughter to enroll in their family plan. The Affordable Care Act includes a requirement that health plans permit children under age 26 to stay on their parents’ health plan, regardless of whether or not the child is a tax dependent. However, the FFM currently requires adults under age 26 who are not tax dependents to be assessed separately for subsidy eligibility. The FFM platform does not allow them to enroll together under a family plan if they want to receive subsidies.*

This can have significant financial implications. For example, a young adult whose eligibility for subsidies is screened separately from his or her parents may not have sufficient income to meet the income threshold for premium tax credits (100 percent of the federal poverty line). In a state that hasn’t expanded Medicaid, this may mean that the young person falls into the coverage gap. In addition, a young adult child enrolling separately into a QHP must pay a separate premium and meet a separate deductible and out-of-pocket maximum from the rest of his or her family
Point taken about the Medicaid coverage gap: allowing young adults to be considered part of their parents' household would shield some from it. To put that in perspective, according to Kaiser Family Foundation estimates, there are probably just under a million adults under age 26 in the coverage gap (income 100% FPL in nonexpansion states). Relatively few of them would have parents in subsidized marketplace plans, but perhaps that few is in the tens of thousands.

What about young adults who live in states that have accepted the Medicaid expansion, or those who earn too much to qualify for Medicaid? In expansion states, those earning under 139% of the Federal Poverty Level (FPL), $15,800 this year, are eligible for Medicaid, and so would be better off financially -- if not necessarily with regard to the quality of care available -- on their own.

Sunday, June 26, 2016

Subtitle to the Federalist Papers: We are not throwing away our shot

In the grand (or not so grand) tradition of blogging the Bible, another lay impression as I work my way through the Federalist Papers:

Hamilton and Madison are both deeply frustrated and alarmed by what they paint as the ever-more complete enfeeblement of the federal government under the Articles of Confederation. Both, too, present themselves as cold realists with respect to human motives and response to incentives. At the same time, they are breathless with the sense of the U.S.'s potential -- geographically, as a contiguous, fertile, navigable and highly defensible land mass; culturally, as speaking one language and being bred to liberty by English heritage; and politically, as having won the opportunity for a fresh start informed by human experience to date.

Both are at pains to argue that the perceived and often cited failures of democracies past do not apply to representative democracy. Madison, making the distinction in No. 9, touts representative democracy as a kind of emerging technology that the Constitution will bring to scale. Acknowledging that the republics of antiquity present a cautionary tale of constant warfare and corruption, he argues:

Thursday, June 23, 2016

Obama, Florida, Hanauer

In an extended interview with Bloomberg editors about America's economic future and role in the global economy, Obama hewed to a simple principle: embrace global trade, but adjust current rules to increase labor's bargaining power while investing in education and skill development. He struck a couple of  notes that recalled things I've read that have resonated with me, about why, where and how wages have to rise. 

First, with respect to manufacturing vs. service jobs:
I think that as we move toward an economy where, because of automation, you need fewer and fewer people to make more and more stuff, more and more of us are going to have to move into the service sector. The service sector historically has been a low-wage sector. And in order for us to make sure that we don’t see this growing divide between haves and have-nots, with a middle class that’s shrinking, we’re going to have to make sure the service sector pays better.
Yes, the U.S. can create some good new advanced manufacturing jobs, in ways that James Fallows has illustrated in his travels around the country for the American Futures project, but the share of those jobs in U.S. employment won't match the totals of yesteryear.  The notion that service jobs are not inherently inferior to manufacturing jobs is one that Richard Florida has been advancing for some time, e.g., in this 2010 essay:

Wednesday, June 22, 2016

Average income and reported satisfaction in the ACA marketplace: Kaiser survey revisited

A month ago, the Kaiser Family Foundation's annual survey of enrollees in the individual market for health insurance recorded a marked decline in enrollees' satisfaction, closely correlated with a sharp rise in the percentage of enrollees in high-deductible plans.

As I noted at the time, part of the decline in satisfaction and rise in reported high deductibles was attributable to a change in respondents' income distribution. In 2016, a smaller percentage of respondents had incomes below 250% of the Federal Poverty Level (FPL), which is the eligibility cutoff for Cost Sharing Reduction (CSR) subsidies in the ACA marketplace. Most of that drop was concentrated among those with incomes below 138% FPL, as we'll see below.

Recently, Brian Blase of the Mercatus Center framed the deterioration in coverage and satisfaction reflected in the Kaiser survey in stark visual terms. That sent me back to look more closely at the shift in the income distribution of Kaiser respondents, with the help of some details about the income distribution kindly provided by the Kaiser researchers.  Here, first, is the Mercatus graphic:

Satisfaction survey option 3