Tuesday, June 23, 2015

For ACA marketplaces, the near-poor have been the sweet spot

The just-released National Health Interview Survey for 2014 confirms that the chief beneficiaries of the ACA private plan marketplaces were those defined by the survey as "near-poor," with incomes between 100% and 200% of the Federal Poverty Level (FPL).

The NHIS found that among near-poor adults aged 18-64 (those with incomes from 100-200% FPL),
the percentage who were uninsured decreased from 38.5% to 30.9%, the percentage with public coverage increased from 26.6% to 29.6%, and the percentage with private coverage increased from 36.4% to 41.2% between 2013 and 2014. 
In states that expanded Medicaid, those with incomes up to 138% FPL became Medicaid-eligible -- hence the substantial rise in those in this income group with public insurance. But the jump in private insurance is really substantial, By comparison, private coverage for adults 18-64 with incomes over 200% FPL rose  from 81.2% in 2013 to 83.9%, and for the poor, from 19.0% to 21.9%* (while public coverage for the poor rose from 42.4% to 46.6%).

Private coverage does include insurance provided by an employer. But the jump in private coverage in the 100-200% FPL range must be largely due to the availability of subsidized individual market insurance. Overall, the percentage of adults 18-64 with private insurance rose 3.1 percentage points in 2014, from 64.2% to 67.3%. Plans purchased in the ACA marketplace were held by 2.2% of the population at the time of interview (interviews took place throughout the year). Among the near-poor, the proportion of the newly insured who gain their insurance through the marketplace was likely to be particularly high.

We already know that 100-200% FPL is the sweet spot for the ACA private plan exchanges. While HHS did not break out enrollment figures by income in 2014, the year the NHIS survey was conducted, it did do so in 2015 for the 37 states using healthcare.gov this year. Fully 65% had incomes in the 100-200% FPL range. An analysis by Avalere Health found that the lower the income, the greater the takeup. Avalere found that 76 percent of eligible uninsured residents of healthcare.gov states with incomes in the 100-150% FPL band enrolled in subsidized plans. From 150-200% FPL, takeup drops to 41%, and falls fast and far at higher income levels. The lower the income, the more attractive the ACA's private plan offering. 

Those below 200% FPL are eligible for really strong Cost Sharing Reduction (CSR) subsidies that raise the actuarial value of a silver plan to 94% (for those up to 150% FPL) or 87% (for those from 150-200% FPL). The lower the income, too, the more affordable the silver plan (CSR is only available with silver). Below 138% FPL (where private plans are available only in nonexpansion states), the subsidized premium for the benchmark silver plan in each region is capped at 2% of income; at 200% FPL, it's over 6%. Most buyers under 200% FPL do buy silver and so access CSR (I've estimated 81-83% in healthcare.gov states), but the percentage drops as income rises -- as does purchase of plans generally.

I find it a bit surprising that according to NHIS,  private coverage expanded more in states that expanded Medicaid than in states that did not. In states that refused the expansion, eligibility for subsidized private plans bought on healthcare.gov began at 100% FPL, as opposed to 138% in expansion states, where those below that level became eligible for Medicaid. We know that in 2015, those with incomes between 100-138% FPL in nonexpansion states took up the marketplace offering in droves, accounting for about a third of all enrollees in those states by my estimate (we have numbers for those between 100 and 150% FPL, but not for the should-have-been-Medicaid-eligible subgroup among them, from 100-138%). 

Again, we don't have income breakouts for 2014 enrollees, and there was a huge surge in low-income signups in many nonexpansion states and in Florida in particular in 2015. Nonetheless, the "near-poor" (100-200% FPL) doubtless made up a very large percentage of private plan enrollees in 2014, though  we don't know whether it matched 65% recorded on healthcare.gov in 2015**. But perhaps private insurance gains for the near-poor were as great in nonexpansion as in expansion states -- NHIS does not provide a breakout by income comparing the two state groups.

* To acknowledge a wildcard, the percentage of those with private insurance rose even more sharply in 2014 for those whose income was unknown -- from 59.5% to 67.0%.  8.8% of respondents had unknown incomes. The high percentage with private insurance in this group indicates relatively high incomes. NHIS questionnaires and analysis go to great lengths to divine family income (see p. 39 here), but still some respondents don't provide enough information for a reliable inference to be made.

** Indirect evidence suggests that it did, as the percentage of buyers eligible for any kind of subsidy who selected silver went down in 2015 (from 76% to 74%), and the percentage of bronze plan buyers went up (from 15% to 19%). As noted above, the lower the income, the likelier a silver plan selection. In New York, where 89% of buyers under 200% FPL selected silver in 2014, a Dept. of Health spokesperson told me that over 99% under 150% FPL chose silver (see first footnote at link).

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