Sunday, July 05, 2015

ACA in Mississippi: Low incomes, high silver selection, high attrition -- and no Medicaid

The first thing to note about Mississippi's ACA private plan marketplace enrollment is that attrition after initial signup was terrible. As of the end of open season in mid-February, the state had 104,523 enrollments through; as of March 31, the total had dropped to 80,011, just 77% of the February total. On all 37 states using, 87% of initial enrollees were still aboard by March 31.

The high attrition is particularly distressing in that Mississippi's enrollment population is about as low-income as they come -- and consequently, enrollees' premiums were comparatively low and the actuarial value of their plans quite high. Of those who were enrolled as of mid-February, 89% had incomes under 250% of the Federal Poverty Level* (FPL) and so were eligible for Cost Sharing Reduction (CSR) subsidies if they bought silver plans. Among those eligible, 85% did select silver and so access CSR.

For buyers with incomes below 151% FPL, CSR raises the actuarial value of a silver plan to 94% -- better than most employer-sponsored plans. 60% of Mississippi buyers were below that threshold. Probably 90% or more of them did select silver and so access CSR (CSR weakens at higher income levels, so the takeup rate in the lowest income bracket is surely well above the 85% overall rate.)

Probably somewhere between 40% and 50% of Mississippi private-plan enrollees would have been eligible for Medicaid if the state had not refused the Medicaid expansion originally mandated by the ACA and later rendered optional for states by the Supreme Court. In "expansion" states, residents with household incomes under 138% FPL are eligible for Medicaid - - and accordingly ineligible for private plan subsidies.** In "non-expansion" states, eligibility for premium subsidies begins at 100% FPL; those with incomes below that level are left out in the cold. For those with incomes under 138% FPL (again, probably close to half of Mississippi enrollees), the subsidized premium for the benchmark silver plan in their area is capped at 2% of income. For those with incomes between 138% and 150% FPL, subsidized premiums for the benchmark plan range from 3% to 4% of income.

Approximately half of Mississippi buyers had incomes under 151% FPL and selected silver plans that cost 0-4% of income and had an actuarial value of 94%. We don't know in which income categories the high attrition was concentrated.

According to Kaiser estimates, as of March 31 Mississippi had enrolled 28% of its potential marketplace population. That's pretty low, but it's not radically lower than the 36% national average; twelve states have reached lower percentages of their target populations.

The larger shame in Mississippi is that by Kaiser's estimate 107,000 residents are shut out of any help at all in accessing affordable insurance because of the state's refusal to expand Medicaid.

* Income data was released by HHS this past week.

**Legally present aliens who are subject to the "5-year bar" from Medicaid eligibility -- or longer state bars -- can get premium subsidies no matter how low their income. In Mississippi, 1,944 enrollees had incomes under 100% FPL.

more on ACA private plan buyers' choices in
Rhode Island
New York (2014)
United States

1 comment:

  1. This observation in some ways validates the Medicaid/ Health Exchanges dual system in the ACA. The Health Exchanges may not be best way of providing health insurance to the very low income working poor after all.

    I am guessing that the higher attrition is due to the fact that the incomes of the working poor in Mississippi are very volatile.

    This means that poor states ( like Mississippi) need Medicaid even more than rich states ( like New York , California or Massachusetts). The irony is that it is the poor states that are least willing to expand Medicaid.

    I wonder whether a shift to full permanent federal financing for Medicaid may:
    (i) help reduce the resistance of poor states to an expanded Medicaid; and
    (ii) eliminate the tendency of other states to cut Medicaid funding during economy downturns (exactly the time when its needed the most).