Friday, July 01, 2016

He who buys bronze absconds

In the spring of 2014 my son, knowing he'd enter a graduate program that September, switched his health insurance from COBRA to a bronze marketplace plan. Healthy, he gambled the premium difference between bronze and silver (or bronze and COBRA) against the deductible difference, essentially settling for catastrophic protection for a limited period.

Yesterday I noted that attrition in the ACA marketplace, which is sharpest in the months immediately following open enrollment since 10 percent or more of those who select plans never pay the first premium, is highest among those who enroll in bronze plans.   As of March 31 of this year, while bronze enrollment dropped 15.5%, from 2,873,422 to 2,427,337, silver dropped just 9.3%, from 8,520,787 to 7,721,983. A similar discrepancy was recorded in the spring of 2015.

It turns out that the same pattern held throughout the year in 2015. By December 31, total enrollment was down from 11,688,074 as of  Feb. 22, 2015 (not all of it "effectuated," or paid for in the first month) to 8,780,545, a 24.8% drop. Among bronze plan holders, the drop was 30.5%, versus 23.2% for silver, 18.8% for gold and 18.6% for platinum. Those with gold, hold -- relatively speaking.  And he who buys bronze... absconds.

As bronze plans typically carry deductibles over $6,000, many enrollees may decide that they're not worth the money. But I think it's also likely that those who know they have a short-term need for insurance, like my son, may lean toward bronze, basically holding their breath until employer insurance, or school-based insurance, or a spouse's insurance kicks in.

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