Thursday, January 08, 2015

In Rhode Island, low-income ACA buyers chose silver

From Rhode Island comes fresh evidence that a very high percentage of lower-income private plan buyers nationwide who bought silver plans, and thus accessed the Cost Sharing Reduction (CSR) subsidies that reduce deductibles and out-of-pocket expenses (CSR is available only with silver plans).

I have been tracking, in states that publish or provide me with the info, the percentage of buyers with household incomes under 200% FPL who bought silver plans, because at under 200% FPL, CSR is really strong. Without CSR, a silver plan is mandated to cover 70% of the average plan holder's yearly medical expenses - that is, its actuarial value is 70%. For buyers with incomes under 150% of the Federal Poverty Level (FPL), CSR raises the AV to 94%. For those with incomes between 150-200% FPL, the AV goes to 87%. For those between 200-250% FPL, it's 73%.

Understandably, silver plan selection falls off a cliff at 201% FPL. It falls further among those who are eligible for premium subsidies but not CSR. It's lowest among those who earn too much to qualify for any kind of subsidy. I have concerned myself with trying to divine the percentage of buyers under 200% FPL who bought silver, because those who did not are leaving a major subsidy on the table and probably also buying plans that require far more out-of-pocket spending than they can afford.

Last spring, HHS reported that in the 36 states using 76% of buyers eligible for any kind of subsidy bought silver plans. HHS does not provide data about buying decisions at specific income levels, but some states do. In New York, where 74% of all subsidy-eligible buyers selected silver, 89% of those under 200% FPL did so. That's my baseline comparison suggesting that the silver takeup rate for those under 200% FPL on  was in the 90% range. And the Rhode Island numbers support that.

In Rhode Island, as of Dec. 31, the overall silver plan takeup was comparatively low -- 62%, compared to 65% for all states in 2014 and 69% for states. Just 60% of Rhode Island buyers eligible for any kind of subsidy bought silver, compared to 76% in the states in 2014.

However. According to a breakdown sent to me by a spokesperson at HealthSource Rhode Island, the state exchange, an unusually high percentage of Rhode Island buyers were CSR-eligible-- 64.6%, compared to 57% in New York.  And among those eligible for CSR, 82.8% selected silver. That compares to 79% in New York, when buyers eligible for the weakest CSR, those in the 200-250% FPL band, are factored in (just 59% of buyers in this income range bought silver).  While I don't have a breakout for RI buyers under 200% FPL, we can infer that the percentage is even higher than New York's 89%. That inference is bolstered by very low silver selection among those Rhode Islanders who were eligible for premium subsidies but not CSR - just 29.6%, compared to 56.3% in New York.

Rhode Island is a fairly wealthy state; its 2013 median household income, $57,812, is well above the national median ($51,939), and above New York's ($53,8430). Its percentage of gold plan buyers this year  is 13.5%, well above the 9% national average for all states in 2014. Its marketplace seems to have a sharp rich-poor divide, given the high percentage of buyers eligible for CSR. Its marketplace demographics are not particularly representative.

Nevertheless, the wide spread between silver plan takeup among all subsidy-eligible buyers in the state (60%) and all CSR-eligibles (82.8%) provides one more bit of indirect evidence that the silver takeup rate among those under 200% FPL on is very high.  Since 76% of all subsidy-eligible buyers on the federal site bought silver in 2014, it seems almost certain that 90% or more of those under 200% FPL chose silver.
Update: as I've noted previously, while most state-run exchanges had lower silver plan takeup than, New York and Connecticut are exceptions -- and that's not an accident. Both took positive measures, lacking in many state exchanges, to steer CSR-eligible toward silver; most notably, both put silver plans at the top of the menu of available plans. rather than simply ranking plans in order of premium.  A spokesperson for HealthSource RI emails that the RI exchange is also quite proactive in this regard:
we do signal strongly to CSR-eligible people, in the following ways:
·        A pop-up when people are CSR income-eligible, encouraging them to look at silver plans.
·        Listing silver plans first.
·        We created a rate sheet just for CSR plans that clearly lists the 3 levels of CSRs - all silver plans. This is a   significant document that we created this year for the first time.
·        Having our enrollment specialists talk about it.
·        Specific mention of the CSR/Silver connection in our outreach events.

While did not it did not default CSR-eligible shoppers to silver, it warn those who were on the point of buying plans other than silver ones that the plan selected did not include CSR. That seems to have been effective too. Some state exchanges, on the other hand, really fell down on this front.

For many ACA beneficiaries, "Ivy League" benefits?
New data: health exchange design matters
Rational choice in the ACA marketplace
In Mississippi ACA rollout, one large disaster, one small success
News from New York: Most low-income ACA plan buyers chose wisely

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