Tuesday, June 07, 2016

We were young, we bought bronze, we churned....

I've stumbled on what seems like it may be a significant pattern in ACA marketplace enrollment data, but I don't know what it signifies.

It started with a look at detailed data that Covered California has published that focuses on new 2016 enrollees only -- as opposed to all enrollees, including the two thirds of current enrollees who re-enrolled. Earlier this week, I noted with some alarm that bronze plan selection was markedly higher and silver selection lower among the new enrollees than among all enrollees in 2015. Among the new enrollees, 58% selected silver plans and 32% bronze, compared to 65% silver and 25% bronze last year.

Only in passing did I note that according to HHS's national enrollment report, bronze and silver selection in California among all enrollees had only shifted a point this year, to 64% silver/26% bronze. That belatedly set the brain wheel spinning: Re-enrollees must be enrolled in silver at much higher rates than new enrollees.

True. If HHS totals are fully aligned with CoveredCA's tabulation, among California's re-enrollees this year the silver-bronze split is 67-23 -- 18 points wider than among new enrollees.

Here's the math. HHS provides only rounded percentages for metal level selection, so I've rounded the totals derived from their percentages to the nearest hundred. For the re-enrollee totals, I've subtracted CoveredCA's totals for new enrollees from HHS's numbers for all enrollees.

Total enrollment (HHS)                      1,411,664
Bronze total (HHS - rounded %)           367,000    (26%)
Silver total (HHS - rounded %)             903,500    (64%)

New enrollees - total (CC)                    439,400
New enrollees - bronze (CC)                140,200    (31.9%)
New enrollees - silver (CC)                  256,110    (58.2%)

Total re-enrollees                                  972,264
Re-enrollees -   bronze                          226,800   (23.3%)
Re-enrollees -   silver                            647,400   (66.6%)

It's not just in California. HHS data for the 38 states using HealthCare.gov in 2016 suggests that the higher silver selection is concentrated among "active" re-enrollees --  those who logged onto HealthCare.gov, updated their financial information, and actively shopped for a new plan in 2016 (sometimes choosing to remain in their existing plan). Automatic re-enrollees allowed the marketplace to re-enroll them without any action on their own part.

Active re-enrollees' silver selection is five points higher than that of both new enrollees and passive re-enrollees. It's also 5 points higher than silver selection among all HealthCare.gov enrollees in 2015, which also clocked in at 69%.  Why?

13% of active re-enrollees, or about 376,000, switched metal levels. That's 4% of all HealthCare.gov enrollees.  Could their choices drive up the silver selection rate among active re-enrollees? Possibly -- but we don't know, because HHS does not detail what metal levels the switchers abandoned or selected.

Perhaps active re-enrollees are "active" because they need more medical care?  For most high-need enrollees, silver makes sense because Cost Sharing Reduction (CSR) subsidies, available to enrollees with incomes up to 250% of the Federal Poverty Level (FPL), are available only with silver plans. Three quarters of HealthCare.gov enrollees are eligible for CSR.

On HealthCare.gov, new enrollees' silver plan selection rate matches last year's rate for all enrollees. On Covered California, re-enrollees are enrolled in silver plans at far higher rates than new enrollees -- in large part because 88% of re-enrollees remained in their prior plans. Why the plunge in silver selection?

Larry Levitt suggested to me that an "age effect" could be at work. And by St. Basil, Larry is right! Fully 37.9% of California's new enrollees this year are in the 19-34 age range, compared to 26% for all enrollees in 2015.  Bronze takeup vs. silver was particularly high among those in the 26-34 age bracket, where 52% bought silver and 37% bronze.  Combine the two age groups, and the silver-bronze split is 54.9% silver vs. 33.9% bronze. For those aged 45-64, the split is 63.6% silver,  29.1% bronze.

It may also be the case, as I suggested in my prior post about the CA 2016 numbers, that "CSR discounts" narrowed in key California rating areas -- that is, that the price spread between the cheapest silver and benchmark silver plans narrowed, or the spread between cheapest silver and cheapest widened. Those spreads do seem to affect silver takeup rates.

In HealthCare.gov states, bronze takeup for young adults did not vary significantly from the rate for older ones; in fact, it's slightly lower in the two younger age brackets than in the two oldest. Silver selection is slightly below par in the 26-34 age range (69%), mainly due to catastrophic plan selection (3%), which is available almost exclusively to buyers under 30, and high gold selection (6%). But where silver selection is highest, Larry's hunch does hold: just 22% of active enrollees are 18-34 years old, compared to 33% of new enrollees.

There are more questions than answers here. Perhaps re-enrollees will generally have higher takeup than new enrollees in part because bronze plan enrollees are likelier to drop coverage. Probably younger enrollees are likelier to drop coverage, for reasons good and bad. It bears watching.

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