Thursday, August 04, 2016

On-exchange or off-exchange, the unsubsidized seem to make similar choices

Back in April, I set out to compare the coverage obtained by subsidized enrollees in health insurance plans in the ACA marketplace in 2016 with the coverage obtained by unsubsidized buyers. The measure compared was actuarial value (AV) -- the percentage of the average enrollee's annual medical costs paid by the insurer.

Long story short: the average weighted AV for subsidized buyers in the 38 states using HealthCare.gov was 81.4%, right in line with estimated averages for employer-sponsored insurance. For the 15% of HealthCare.gov enrollees who did not qualify for subsidies, average weighted AV was 68.9%. Averages in the state-based exchanges are probably about the same. The more comprehensive coverage obtained by subsidized enrollees stems from the fact that about two thirds of them also access secondary Cost Sharing Reduction (CSR subsidies, available only with silver plans.

I also inferred that the coverage obtained by those who bought ACA compliant plans outside the marketplace was roughly comparable to that obtained by  unsubsidized marketplace enrollees.  And I've just happened on some corroboration.

In June, researchers at the Commonwealth Fund Michael J. McCue and Mark A. Hall compared coverage obtained by enrollees in ACA-compliant plans inside and outside the ACA marketplace.

I should note that Commonwealth's estimates of what kinds of plans people bought inside and out of the marketplace are based on insurers' rate filings, and so on their estimates calculated prior to open enrollment. These estimates overstate gold and platinum purchases in the marketplace, as we now know from CMS enrollment stats. Whether they overstate gold/platinum purchases out-of-marketplace, I can't say. But overall, the out-of-marketplace selections by metal level are similar to those of unsubsidized in-marketplace enrollees as recorded by CMS.

Here is my chart of weighted average AV obtained by unsubsidized HealthCare.gov enrollees, of whom there are about 1.9 million at present:

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)


And here's Commonwealth-s out-of-marketplace estimates for about 2.7 million out-of-marketplace enrollees translated into those terms

Actuarial value obtained by out-of-marketplace enrollees in ACA-compliant plans

Actuarial
Value
% of unsubsidized
enrollees
90 (Platinum)
13.0
80 (Gold))
22.0
70 (Silver)
36.0
60 (Bronze)
27.0
57 (Catastrophic)
  1.0
71.3% (weighted avg)


While there are marked difference in platinum and catastrophic purchases, bronze silver and gold selections, which account for 85-90% of the totals, are pretty close.

Compared to subsidized buyers,  a much smaller percentage of the unsubsidized, who are mostly higher-income, buy silver plans, which are made attractive mainly by the CSR that attaches to them for most subsidy-eligible buyers,  The lower rate of silver level selection among unsubsidized enrollee is offset by their higher uptake of gold and platinum plans, however.

That said, I would guess that the rate filings overestimated platinum purchases out-of-marketplace. Within the marketplace, gold and platinum selection fell 20% from 2015 to 2016, from a combined 10% in 2015 to 8% in 2016. That's probably because silver plan premiums rose more slowly than those at higher levels, a trend that's clearly continuing, and in fact probably writ large, in 2017, when premium increases are steep.

According to Charles Gaba's tracking, the average weighted premium of all plans sold on the exchanges is shooting up about 23% in 2017. According to the Kaiser Family Foundation, however, benchmark silver plans are rising a comparatively modest 9% on average, based on a somewhat limited sampling. Since more than two thirds of marketplace enrollees select silver plans, and most select from the cheapest silver plans available, price competition tends to be more intense at that core metal level.

No comments:

Post a Comment

Share