Tuesday, September 08, 2015

The feds are taking cost sharing and premium subsidies away from many ACA private plan enrollees

CMS's latest snapshot of private plan enrollment in ACA marketplaces shows significant attrition, from 10,197,187 total enrollments as of March 31 to 9,949,079 as of June 30, a drop of 2.4%. That's mainly -- in fact entirely -- because of stepped-up enforcement of citizenship or immigration status.

That increased vigilance also explains an apparent anomaly that jumped out at me from the numbers: the drop in plan holders whose plans are enhanced with Cost Sharing Reduction (CSR) subsidies is larger than the drop in enrollment among silver plan holders. Since CSR is available only with silver plans, one might have assumed that a drop in CSR enrollment would simply reflect a drop in silver plan enrollment among those with incomes under 250% FPL, the cutoff for CSR eligibility. Yet CSR enrollment dropped by 278,103 -- 4.8% -- compared to a silver enrollment drop of 142,336 (2.0%).

It turns out that the marketplaces are cracking down on enrollees whose stated income doesn't match other data, presumably mainly from tax returns, and reducing or withdrawing CSR benefits as well as premium subsidies when enrollees don't verify their income claims. That's in tandem with increased enforcement with respect to immigration or citizenship status. Here's the explanation:
In 2015, the Marketplaces have moved to regular monthly action for consumers with unresolved data matching issues who have not provided adequate documentation within 95 days for citizenship or immigration status data matching issues and within 90 days for household income inconsistencies. Consumers who do not submit sufficient documentation to resolve their annual household income data matching issue will have a recalculation of their APTC and/or CSRs based on available tax data. Individuals who have not provided the necessary documentation for their citizenship or immigration status will have their enrollment through the Marketplace terminated. Those individuals whose enrollment through the Marketplace was terminated because of citizenship or immigration status data matching issues are not included in effectuated enrollment totals.

During the time period from April 1, 2015 to June 30, 2015, enrollment in coverage through the Federally-facilitated Marketplaces was terminated for about 306,000 consumers with citizenship or immigration status data matching issues who failed to produce sufficient documentation of their citizenship or immigration status. In addition, during the same time period, about 734,000 households with annual household income inconsistencies had their APTC and/or CSRs for 2015 coverage adjusted.

Overall, as of June 30, 2015 the Marketplace has ended 2015 coverage for approximately 423,000 consumers with 2015 coverage who failed to produce sufficient documentation on their citizenship or immigration status and has adjusted APTC and/or CSRs for about 967,000 households.
Premium tax credit eligibility also dropped more than total enrollment -- 3.8%, from 8,656,210 to 8,329,966. Moreover, a larger number of enrollees had their subsidies changed, presumably downward, than cut altogether.  So the feds, rightly or not, are significantly reducing the aid available to marketplace enrollees. We'll see whether that results in further attrition.

At the same time, the number of people cut from the rolls due to immigration or citizenship status is larger than the total drop in enrollment -- suggesting that off-season enrollment via Special Enrollment Period grants is outstripping voluntary disenrollment.

One more note: all the recorded attrition was in the federal marketplace, healthcare.gov, covering 37 states, where enrollment dropped from 7.5 million to 7.2 million. State marketplace enrollment was unchanged at 2.7 million.

1 comment:

  1. The sheer administrative cost and the "churn" of running a means-tested program are once again in evidence. The number of persons who come on and off Medicaid every month was just astonishing and depressing to me when I did some research on the subject. With a severely means-tested program, the government indeed becomes a 'nanny state' as it relentlessly tracks down your income. The designers of the ACA had no concept of the variance in the way that Americans get incomes, especially at lower income levels.
    Worth reading the marvelous article from Mike Konzcal at the Next New Deal about the lousiness of means-tested programs: