Average income and reported satisfaction in the ACA marketplace: Kaiser survey revisited

A month ago, the Kaiser Family Foundation's annual survey of enrollees in the individual market for health insurance recorded a marked decline in enrollees' satisfaction, closely correlated with a sharp rise in the percentage of enrollees in high-deductible plans.

As I noted at the time, part of the decline in satisfaction and rise in reported high deductibles was attributable to a change in respondents' income distribution. In 2016, a smaller percentage of respondents had incomes below 250% of the Federal Poverty Level (FPL), which is the eligibility cutoff for Cost Sharing Reduction (CSR) subsidies in the ACA marketplace. Most of that drop was concentrated among those with incomes below 138% FPL, as we'll see below.

Recently, Brian Blase of the Mercatus Center framed the deterioration in coverage and satisfaction reflected in the Kaiser survey in stark visual terms. That sent me back to look more closely at the shift in the income distribution of Kaiser respondents, with the help of some details about the income distribution kindly provided by the Kaiser researchers.  Here, first, is the Mercatus graphic:



While these numbers are all accurately reported they do spotlight the negative. 66% of respondents in ACA-compliant plans  and 68% in marketplace plans rate their coverage good or excellent. That's down, though, from 74% in both categories in 2015.

Here is a Kaiser graphic spotlighting what's presented as a dominant factor in the drop in satisfaction (using deductible as a kind of synecdoche for high out-of-pocket costs):

A good part of the fall-off in those obtaining not-high deductible plans, and so probably of the drop in satisfaction, is attributable to a sharp decline in the percentage of respondents who reported incomes below 138% FPL, from 28% in 2015 to 21% in 2016. The mirror image is in the percentage with incomes over 400% FPL, the cutoff for marketplace subsidy eligibility, which rose from 21% in 2015 to 27% in 2016.  Respondents with incomes under 138% FPL are mostly eligible for the highest level of Cost Sharing Reduction (CSR) subsidies at the lowest price as a percentage of income. A CSR-enhanced silver plan for those under 138% FPL will cost just 2% of income and have a deductible in the $0-500 range.

That said, the percentage of Kaiser respondents in "not-high" deductible plans, defined by Kaiser as below $1500 for an individual or $3000 for a family, fell at almost every income level in the 2016 survey. Here is the breakout for each year for respondents in ACA-compliant plans (including plans bought off-exchange, and so unsubsidized)  The total number of respondents in such plans in each year (excluding those who did not know their deductible) is nearly identical: 565 in 2016, 564 in 2015.

Kaiser Nongroup Survey

Enrollees in ACA-compliant plans, on- and off-exchange

Income as % of FPL	2015: % all enrollees	2016: % all enrollees	2015: % with not-high deductible	2016: % with not-high deductible
<138 fpl="" p="">	28%	21%	77%	62%
138-250%	26%	24%	49%	42%
250-400%	19%	20%	35%	37%
400%+	21%	27%	31%	24%
Unknown	5%	7%	55%	33%
All			51%	39%

In raw numbers, there were 286 respondents in not-high deductible plans in 2015 and just 222 in 2016 (out of 564 and 565 respectively). Correspondingly, there were 159 respondents with incomes under 138% FPL in 2015 and just 118 in 2016 -- while the percentage of those in this income bracket who obtained not-high deductible plans also dropped, from 77% to 62%.

The drop in the overall percentage of low-income enrollees in the Kaiser survey may be partly statistical noise, but it's reflected to a lesser extent in enrollment figures compiled by HHS for the 38 states that use the HealthCare.gov platform.  In those states, 38% of enrollees had incomes in the 100-150% FPL range in 2015, compared to 35% this year (I've adjusted the numbers to account for the 6-7% in each year who did not report income). That's probably due in part to belated Medicaid expansions, as I explained in the prior post about this. Most enrollees with incomes under 138% FPL are in states that refused the Medicaid expansion, where eligibility for premium subsidies in the marketplace begins at 100% FPL rather than the 138% FPL threshold used in expansion states.  The exceptions are enrollees who a) are unsubsidized because an employer offers insurance, or b) legally present noncitizens subject to the federal "5-year bar" from Medicaid eligibility.

The drop in the percentage of low-income respondents who obtained not-high deductible plans, in contrast, does not particularly align with HHS statistics. It may be statistically insignificant -- we're only talking about 118-159 people here. According to the HHS final enrollment report for 2016, the percentage of CSR-eligible enrollees in HealthCare.gov who accessed the benefit, which is available only with silver plans, actually rose in 2016, to 79%. It's probably above 85% for those with incomes under 138% FPL -- generally, the lower the income, the higher the CSR takeup. Anyone under 138% FPL who obtained a CSR-enhanced plan would be in Kaiser's not-high deductible category

On the other hand, there is one Kaiser finding that could partly explain the drop.  In 2016, the percentage of enrollees in the individual market who had access to an employer-sponsored plan rose to 18%, up from 10% in 2015. Perhaps a higher percentage of low income 2016 enrollees are barred from subsidies (including CSR) because of an employer's offer of insurance (which, thanks to the ACA's family glitch, may be affordable for an individual but not her family).

To revert to the big picture, I think it's fair to say that the Kaiser survey makes two points clear. First, deductibles (and out-of-pocket costs generally) rose pretty much across the board, and satisfaction fell accordingly. Second, belated Medicaid expansions are slowly draining the lowest-income enrollees from the marketplace, which raises average deductible and out-of-pocket costs and so puts some downward pressure on reported satisfaction levels.