Yesterday, Drew Altman, president of the Kaiser Family Foundation, published an op-ed in the New York Times in which he reported results of focus groups that KFF conducted with Trump voters in rust belt states who are enrolled in Medicaid and ACA marketplace plans. One set of complaints from marketplace enrollees is worth pondering:
The Medicaid envy expressed by the Kaiser focus group participants has also been recently reported by Olga Khazan at The Atlantic and Tami Luhby of CNN. The sentiment is heavily weighted by political affiliation and often ugly in expression, but it also reflects the hard reality that marketplace coverage deemed affordable by prospective buyers thins out rapidly as income rises. Few marketplace enrollees can afford a metal level higher than silver, and AV 70% (or 73% for those in the 200-250% FPL range) does not reach non-wealthy people's comfort level. The narrow networks that have come to dominate marketplace coverage not only limit the choice of doctors, they increase exposure to balance billing.
Altman does not specify the income level of the people whose complaints about marketplace coverage he relays. Most marketplace enrollees with incomes below 200% of the Federal Poverty Level (that is, a bit more than 60% of enrollees) are largely shielded from high out-of-pocket costs, though not from balance billing, by Cost Sharing Reduction subsidies, which raise AV to 94% or 87% for enrollees below that income threshold. While even the relatively modest copays and deductibles attached to silver plans at this level may feel high to some, Kaiser survey data shows higher satisfaction among those in lower-deductible plans, almost all of which are CSR-enhanced.
As I put it recently, the ACA suffers from a deductible cliff, with all Medicaid beneficiaries and 80% of marketplace enrollees below 200% FPL on the right side of the cliff's edge. Within the marketplace itself, and the wider ACA-compliant individual market, average weighted AV is 17 points higher for enrollees under 200% FPL than for enrollees above that level. That is, average weighted AV is 86% for enrollees under 200% FPL and 69% for enrollees above the line. Put another way, 84% of marketplace enrollees with incomes below 200% FPL are in plans with AV higher than or near the norm for employer-sponsored insurance (roughly AV 82%), but that's true for just 22% of unsubsidized enrollees.
To some degree, this disparity indicates that the marketplace is working as designed. Most poor and near-poor enrollees have lower out-of-pocket costs (if they escape balance billing) than most people in employer-sponsored plans. Take Medicaid expansion beneficiaries and "strong" CSR enrollees together, and about three quarters of those who get subsidized coverage through the ACA have high-AV coverage.
Add in unsubsidized and thinly subsidized buyers in the individual market, though, and the picture is less rosy. The deductible cliff at 200% FPL is probably a a major source of the resentment the ACA evokes in many Americans.
P.S. Medicaid is often stigmatized as "poor people's insurance" -- a stigma often experienced by enrollees in their interactions with providers. I wonder how many of those who express the envy also attach the stigma and would a) be ashamed to show a Medicaid card if they could get one and b) be dismayed by the choice of facility and provider to which Medicaid would limit them.
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* According to MaryBeth Musumeci of the Kaiser Family Foundation, federal law prohibits medical providers who participate in Medicaid from balance billing. As for whether providers working in hospitals that accept Medicaid patients who don't themselves accept Medicaid can balance bill, that may vary according to state law. I'm seeking further clarification on this point.
Related:
ACA afflicted by a deductible cliff
Two major divides in the post-ACA individual market
The ACA and the working class
They spoke anxiously about rising premiums, deductibles, copays and drug costs. They were especially upset by surprise bills for services they believed were covered. They said their coverage was hopelessly complex. Those with marketplace insurance — for which they were eligible for subsidies — saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it.While Medicaid enrollees may have difficulty finding an in-network provider for a given need, they generally not only pay little-to-nothing in premiums and out-of-pocket costs, but also are shielded from balance billing to greater or lesser extent by state law*, Medicaid beneficiaries generally rate their coverage higher than marketplace enrollees -- although, as Altman points out, large majorities of marketplace enrollees also generally rate their coverage at least satisfactory (Trump voters are likely less satisfied than the average). While no one likes a narrow network, it may be the case that what people dislike most is not a narrow choice of providers, but the risk that an out-of-network provider will inflict himself on you, or more exactly, on your checkbook.
The Medicaid envy expressed by the Kaiser focus group participants has also been recently reported by Olga Khazan at The Atlantic and Tami Luhby of CNN. The sentiment is heavily weighted by political affiliation and often ugly in expression, but it also reflects the hard reality that marketplace coverage deemed affordable by prospective buyers thins out rapidly as income rises. Few marketplace enrollees can afford a metal level higher than silver, and AV 70% (or 73% for those in the 200-250% FPL range) does not reach non-wealthy people's comfort level. The narrow networks that have come to dominate marketplace coverage not only limit the choice of doctors, they increase exposure to balance billing.
Altman does not specify the income level of the people whose complaints about marketplace coverage he relays. Most marketplace enrollees with incomes below 200% of the Federal Poverty Level (that is, a bit more than 60% of enrollees) are largely shielded from high out-of-pocket costs, though not from balance billing, by Cost Sharing Reduction subsidies, which raise AV to 94% or 87% for enrollees below that income threshold. While even the relatively modest copays and deductibles attached to silver plans at this level may feel high to some, Kaiser survey data shows higher satisfaction among those in lower-deductible plans, almost all of which are CSR-enhanced.
As I put it recently, the ACA suffers from a deductible cliff, with all Medicaid beneficiaries and 80% of marketplace enrollees below 200% FPL on the right side of the cliff's edge. Within the marketplace itself, and the wider ACA-compliant individual market, average weighted AV is 17 points higher for enrollees under 200% FPL than for enrollees above that level. That is, average weighted AV is 86% for enrollees under 200% FPL and 69% for enrollees above the line. Put another way, 84% of marketplace enrollees with incomes below 200% FPL are in plans with AV higher than or near the norm for employer-sponsored insurance (roughly AV 82%), but that's true for just 22% of unsubsidized enrollees.
To some degree, this disparity indicates that the marketplace is working as designed. Most poor and near-poor enrollees have lower out-of-pocket costs (if they escape balance billing) than most people in employer-sponsored plans. Take Medicaid expansion beneficiaries and "strong" CSR enrollees together, and about three quarters of those who get subsidized coverage through the ACA have high-AV coverage.
Add in unsubsidized and thinly subsidized buyers in the individual market, though, and the picture is less rosy. The deductible cliff at 200% FPL is probably a a major source of the resentment the ACA evokes in many Americans.
P.S. Medicaid is often stigmatized as "poor people's insurance" -- a stigma often experienced by enrollees in their interactions with providers. I wonder how many of those who express the envy also attach the stigma and would a) be ashamed to show a Medicaid card if they could get one and b) be dismayed by the choice of facility and provider to which Medicaid would limit them.
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* According to MaryBeth Musumeci of the Kaiser Family Foundation, federal law prohibits medical providers who participate in Medicaid from balance billing. As for whether providers working in hospitals that accept Medicaid patients who don't themselves accept Medicaid can balance bill, that may vary according to state law. I'm seeking further clarification on this point.
Related:
ACA afflicted by a deductible cliff
Two major divides in the post-ACA individual market
The ACA and the working class
Thanks for this article. It shows the absolute weakness of any means-tested program, as opposed to universal social insurance. A program just for the poor is eventually a poor program.
ReplyDeleteAlso an inefficient program....the ACA is obsessed with tailoring benefits exactly to income, which leads to long enrollment times, and the hideous clawing back of subsidies if one's income in the next year goes up.
In fact you did not mention that Medicaid itself has these repulsive income cliffs, which leads to an astonishing number of Medicaid beneficiaries who cycle on and off the program in the course of just one year.
It would be better to have a modest benefit for everyone, versus something that is free if you are very poor but unavailable if your circumstances improve.