Tuesday, April 19, 2016

What kinds of health plans are unsubsidized buyers choosing? A hint from HealthSherpa

Recently, I posted a series of comparisons of the health insurance obtained in the ACA marketplace by enrollees who were a) unsubsidized, b) subsidized, and c) heavily subsidized (i.e. with access to strong Cost Sharing Reduction (CSR) subsidies). In brief, the weighted average actuarial value of plans obtained by subsidized buyers was 81.4%, compared to 68.9% for the unsubsidized.  The perhaps more significant contrast was between those with incomes under 200% of the Federal Poverty Level, where CSR is strong, and everyone else. Average AV for buyers below 200% FPL was 86.3%. Subsidized buyers over 200% FPL obtained coverage only marginally richer than did unsubsidized buyers.

In that post I posited, tentatively, that the 1.4 million unsubsidized buyers who obtained plans on HealthCare.gov might stand in as a proxy for the estimated 9.6 million out-of-marketplace buyers of ACA-compliant plans.  While every buyer on HealthCare.gov and in the 12 state-run marketplaces is tabulated, the out-of-marketplace market is something of a black box.

Now I have a sliver of corroboration from HealthSherpa, a commercial online broker with a sleek interface and easy enrollment process. HealthSherpa is one of dozens of e-brokers authorized to process subsidized marketplace applications, which it does via a dedicated interface on HealthCare.gov (as do other brokers). According to co-founder Ning Liang, HealthSherpa has enrolled some 500,000 people in marketplace plans to date (since 2014). HealthSherpa sells in the 38 states using HealthCare.gov,and recently added  Liang sent me metal level selection data from the most recent 100,000 enrollees, all for 2016.

One surprise is that the vast majority of the 100,000, 88%, are subsidized enrollees. Finding one's way to HealthSherpa implies a certain degree of web savvy, and probably also relative youth, and most young enrollees are subsidy-eligible. So we are dealing with an unsubsidized sample of just 11,812, and all are buying plans available in the ACA marketplace, as opposed to ACA-compliant plans offered exclusively outside the marketplace.

All that said, the metal level selections of the HealthSherpa sample are pretty close to those of the unsubsidized HealthCare.gov enrollees. Here are the numbers for unsubsidized buyers from HealthSherpa:


Actuarial value obtained by 11.8k unsubsidized enrollees on HealthSherpa:

Actuarial
Value
% of unsubsidized
enrollees
90 (Platinum)
  1.60
80 (Gold))
18.79
70 (Silver)
44.18
60 (Bronze)
35.44
57 (Catastrophic)
   - 
68.7% (weighted avg)


Here are the choices of 1.4 million unsubsidized buyers on the federal exchange:

Actuarial value obtained by unsubsidized enrollees on HealthCare.gov

Actuarial
Value
% of unsubsidized
enrollees
90 (Platinum)
  3.3
80 (Gold))
18.5
70 (Silver)
39.0
60 (Bronze)
33.0
57 (Catastrophic)
  6.8
68.9% (weighted avg)


HealthSherpa diverts catastrophic plans directly to HealthCare.gov, so the weighted average AV on the site would be somewhat lower if such sales were included here.

An early sample of 2016 enrollment by eHealth, the largest e-broker, showed a 67.3% weighted average AV among unsubsidized buyers, with a higher percentage of bronze (43%) selection. eHealth will update within the next couple of weeks.

One more note. Ning Liang also sent me a breakout of HealthSherpa's most recent 10,000 enrollees, all or most of whom enrolled outside of Open Enrollment period via Special Enrollment Periods (SEPs) granted to those who undergo a life-changing event, like the birth of a child or a divorce. In that subset, the level of gold selection among 1800 unsubsidized buyers was double -- 36.5%. Small though the sample is, that result  would seem to be in keeping with insurers' contention that SEP enrollees hurt their bottom lines because they needed a disproportionate amount of medical care. Presumably, people more in need of medical care are more likely to find cause to apply for a SEP.

(Post updated, 12:30 p.m. - e.g., confirming that HealthSherpa sample is all 2016, and adding that HS does not do catastrophic plan enrollments.)

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