In Washington State, too many low-income bronze plan buyers

Washington HealthPlanFinder, the state's ACA exchange, has set the standard for enrollment data reporting, providing a more detailed and complete account of private plan buyers' demographics and behavior than any other state to date. Washington is a wealthy state, with a median household income (2013) of $60,106, compared to a national median of $51,939.   Its buyers of private plans on the exchange (known as Quality Health Plans, or QHPs) are accordingly a much wealthier group than the average among the 37 states that used the federal exchange, healthcare.gov.

Only 12.5% of Washington's QHP buyers have incomes under 150% of the Federal Poverty Level (FPL), compared to 24% in those healthcare.gov states that accepted the Medicaid expansion -- and 50% in healthcare.gov states that refused the expansion. (In non-expansion states, eligibility for QHP subsidies began at 100% FPL, versus 138% FPL in expansion states, and those between 100 and 138% FPL swelled the QHP enrollments, accounting for about a third of all enrollments in non-expansion states.) Low takeup in this low-income band perhaps explains in part why Washington has reached just 32% of its target QHP market as calculated by the Kaiser Family Foundation, versus 42% for the nation as a whole. Conversely, Washington has been very successful in expanding its Medicaid rolls. The enrollment report tallies 533,628 "Medicaid expansion adults," far exceeding a 2012 Urban Institute forecast of 330,000.

Too many poor buyers of bronze plans

While Washington's relatively small number of enrollees in the 100-150% FPL income band may be in large part a matter of demographics, there is one way in which the state exchange has seemingly failed lower-income buyers. Takeup of Cost Sharing Reduction subsidies, available only with silver plans and only to buyers with incomes below 250% FPL, is lower in Washington than on healthcare.gov, and much lower than in states like New York and Connecticut that take special measures to highlight CSR for those who are eligible for it.

Unenhanced by CSR, a silver plan has an actuarial value of 70% - that is, it covers 70% of the average user's annual medical costs.  For buyers under 150% FPL, CSR raises the actuarial value of a silver plan to 94%, better than all but the most generous employer-sponsored plans. For those in the 150-200% FPL range, CSR raises AV to a still-strong 87%. At 200-250% FPL it's almost negligible, raising AV to just 73%. In all states that provide income band data, CSR takeup falls off a cliff at 200% FPL. For that reason, I like to look at states' CSR takeup levels for buyers up to 200% FPL, who are leaving a very valuable subsidy on the table if they don't buy silver (and who will face unaffordable deductibles in the $5000-6600 range if they buy cheaper bronze plans).

In Washington, just 71% of current CSR-eligible plan holders are in silver plans, versus 77% on healthcare.gov. Only 77% of Washington buyers under 200% FPL chose bronze, versus about 81-83% on healthcare.gov (HHS provides only partial data on this front; my reasoning for the 81-83% estimate is here).

Healthcare.gov is hardly the gold standard for signpointing CSR, moreover. While the site does provide a pop-up warning to CSR-eligible buyers who make a preliminary selection of a metal level other than silver, it's not a very clear warning, and if the buyer opts to keep shopping in response to the warning, the plan menu defaults to a ranking of plans by premium, cheapest first, i.e., bronze first. New York, Connecticut, and Rhode Island do a better job of steering CSR-eligibles to silver, showing silver plans first to buyers who qualify for CSR. Accordingly, the CSR takeup rates for New York  (2014 numbers) and Washington (2015) make a striking contrast:

Washington QHP buyers

Income level	Silver selections	Total buyers	% silver
Under 100% FPL	3136	4470	70%
100-138% FPL	2118	2559	83%
138-150% FPL	10741	12816 (12.5% under                  150% FPL)	84%
150-200% FPL	35443	46258 (29% total)	77%
200-250% FPL	16369	29845	55%
250-300% FPL	6446	19589	33%
300-400% FPL	6903	22621	31%
Over 400% FPL	2949	10463	28%
0-200% FPL	51438  (32% total)	66103  ((42% total)	77%
0-250% FPL	67807 (43% total)	95948 (61% total)	71%
250% FPL & up	16298	52673  (33% total)	31%
All income groups	86779	158302	55%

New York QHP buyers

Income level	Silver selections	Total buyers	% silver
Under 150% FPL	33354	32867 (9% total)	100% (?)*
150-200% FPL	96357	112294 (30% total)	86%
200-250% FPL	37060	62994
250-300% FPL		35605
300-400% FPL		30128
Over 400% FPL		96357
0-200% FPL	129711 (35% total)	145160 (39% total)	89%
0-250% FPL	166771 (45%  total)	211244 (57% total)*	79% *
250% FPL & up	37060	174184  (47% total)	21%
All income groups	203832	370604	55%

Similar percentages of all buyers in the two states were under 200% FPL and under 250% FPL. New York does a much better job placing buyers under 200% FPL in silver plans, though its sky-high percentage of exchange buyers who earn too much to qualify for subsidies reduces the overall percentage of state residents who accessed CSR. In the 150-200% FPL bracket, where the bulk of both states' buyers who were eligible for "strong" CSR are located, 86% of New York buyers chose silver, versus just 77% in Washington.

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*New York numbers don't quite add up because the numbers of people at each income level and of buyers at each metal level (including CSR levels within silver) are given as rounded percentages, sometimes of all buyers and sometimes of subsidized buyers. These roundoffs create one noteworthy anomaly: the number of buyers of silver plans at the highest CSR level, who by definition have incomes under 150% FPL,is said to be 9% of all buyers (33,354), which is greater than the alleged number of buyers under 150% FPL, said to be 12% of all subsidized buyers (32,867).  Officials at the New York exchange have not been able to explain this anomaly to me. I suspect that the percentage given for buyers under 150% FPL may omit legally present immigrants whose income levels would qualify them for Medicaid (0-138% FPL) but who are shut out of Medicaid by the so-called "5-year bar"; the ACA allows those immigrants to buy subsidized QHPs.

In a second anomaly, the report states that 76% of subsidized buyers, or 208,154 out of 273,888, had incomes under 250% FPL, but elsewhere states that 57% of all buyers, or 211,244 out of 370,604, are under 250% FPL.  It seems that a shade over 3000 buyers, or a bit less than 1%, are being left out of the count in the chart that breaks the subsidized buyers out by income level (p. 4).

Related: Health exchange design matters