Friday, March 11, 2016

ACA marketplace is pricing out gold and platinum plans, while silver selection stays stable

HHS released its full report* on ACA marketplace enrollment for 2016. My primary interest as usual is in metal level selection. That is, mainly, whether the percentages of buyers selecting bronze plans (with their sky-high deductibles) and silver plans (required to access Cost Sharing Reduction subsidies, available to those with incomes under 250% of the federal poverty level) are shifting significantly.

Overall, metal level selection hasn't changed much since 2015. In all states combined, including those using their own exchanges, 23% bought bronze and 68% bought silver this year, compared to 22% bronze and 67% silver in 2015.

So wait, how did both percentages manage to uptick? That's the first of several points worth noting:
  • The sharp rise in (unsubsidized) premiums in 2016 has priced a lot of people out of gold and platinum plans. In 2015, in all states combined, 7% bought gold and 3% bought platinum. In 2016, 6% bought gold and 2% bought platinum.

  • In the 38 states using HealthCare.gov, silver selection is up from 69% in 2015 to 71% this year. Bronze is flat at 21% this year.

  • In HealthCare.gov states, silver selection among the 85% who qualify for subsidies is up: 77% of subsidy-eligible hc.gov buyers selected silver in 2016, vs 74% in 2015. Here too, the increased silver percentage was at the expense of gold and platinum plans.

  • Interestingly, silver selection was higher among active re-enrollees on hc.gov than among either new enrollees or auto-re-enrollees (those who allowed themselves to be passively re-enrolled in the their 2015 plans).  74% of active re-enrollees selected silver, compared to 69% in the other two categories, 

  • Bronze selection continues to be higher in state-based exchanges (SBEs) than on HealthCare.gov. In the SBEs, 28% bought bronze, and 59% bought silver, compared to a 21%--71% split on the federal exchange. That's mainly because enrollees are wealthier on average in the SBEs, because a) all but one of them have expanded Medicaid, taking the lowest-income potential buyers out of the pool, and b) the SBE states are wealthier overall on average. Their gold and platinum selections are accordingly higher -- 8% gold and 4% bronze. Secondarily, some SBEs do a really poor job highlighting Cost Sharing Reduction (CSR)subsidies, and the need to buy silver to access them, to those who are eligible.

  • Overall, CSR takeup is just about where it was last year. 59% of all enrollees accessed CSR. Last year, the total immediately post-enrollment was 60%, but it fell to 56% by June 30 after HHS matched enrollees' income claims on the ACA applications to income reported on their tax returns.
The good news is that the 2016 price spikes did not push a surge of buyers into bronze plans. The bad news is that too many low income buyers continue to select bronze

* A supplement with more tables is here.

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