Friday, January 12, 2018

Choosing a metal level in the CSR-addled Maryland marketplace: Not bad, enrollees!

In Maryland's ACA marketplace, as in much of the country, Trump's cutoff of reimbursement to insurers for Cost Sharing Reduction (CSR) drove huge premium increases for unsubsidized buyers -- but also bizarre bargains for the subsidy-eligible.

Throughout the state, all subsidy-eligible* enrollees with incomes below 200% of the Federal Poverty Level (FPL) could obtain an bronze plan for under $20 per month. Most at this income level -- e.g., everyone over 30 -- could get a bronze plan for under $4 per month. In the state's most populous counties, subsidy-eligible buyers could get a gold plan for just a few dollars more than a silver one.  And in several rural counties, an enormously expensive benchmark (second cheapest) silver plan, which determines subsidy size, rendered silver and gold plans as well as bronze plans free for many enrollees.

The effects of these pricing anomalies on the subsidized were mostly beneficial, as you might expect. Discounted (not to mention free) gold plans are a real boon to enrollees with incomes over 200% FPL, for whom silver plans have high out-of-pocket costs (sharply reduced for those up to 200% FPL by strong CSR). And free bronze plans are better than nothing, even with the $6200 deductible they carry in the most populous counties.

But anomalous pricing also can create problems. Some enrollees eligible for strong CSR might be tempted to choose  bronze plans (deductible $6200) over silver (deductible $0). Some enrollees under 200% FPL might also have been tempted by gold plans that cost slightly more than the cheapest silver -- not recognizing that CSR-enhanced silver plans cover more of their out-of-pocket costs than gold (i.e., are just straight-out more valuable).

So how did enrollees' choices shake out? Courtesy of the Maryland Health Connection, I have a breakout of enrollees metal level choices at different income levels, posted below.  And they look pretty good:


A few observations:

1. Subsidized enrollment is up 2% over 2017, notwithstanding a radically shortened enrollment period, an almost total cutoff of federal advertising, and radically reduced federal funding for enrollment assistance.

2. Gold plan enrollment is up almost fourfold, as the exchange itself highlighted in a press release.

3. Among enrollees with incomes up to 200% FPL, for whom CSR makes silver plans the rough equivalent of platinum, CSR takeup is modestly lower than historic national averages. 79% of enrollees under 200% FPL selected silver plans (CSR attaches to silver plans only). Nationwide, the average has historically been in the mid-eighties.

4. CSR takeup is particularly low in the 150-200% FPL band (76%).  Bronze takeup in this income group is not particularly high -- 13% -- notwithstanding that in the populous counties, the cheapest bronze plans are all but free for most in this income band, whereas cheapest silver tops out at about $113 per month.  What skews the average here is high gold takeup (10%). On the face of it, gold doesn't make sense at this income level in the populous counties (e.g., Montgomery, Baltimore, Baltimore City).  The cheapest silver plan, from Kaiser, has a $0 deductible and a $2400 out-of-pocket max; the two cheapest golds, also from Kaiser, are modestly more expensive and have deductibles of $1500 or $1000 and OOP max of $6850.

5. Metal level choices in the 200-250% FPL, in contrast to 150-200% FPL, seem eminently rational. At this income level, CSR is negligible, and gold plans are more valuable than silver. And here gold really took off, accounting for 28% of enrollment vs. 46% for silver  and 24% for bronze. Last year, just 4.7% of all Maryland enrollees selected gold.

The bump-up to gold for people in this income band made good sense in the populous counties. A 40 year-old earning $25,000, a little over 200% FPL, could get the cheapest gold plan for $135 per month, vs. $122 for silver. It has a $1500 deductible, vs. $3500 for silver. And for a few dollars more, a gold plan with a $1000 deductible is available.

6. At the highest subsidy-eligible income levels, 250-300% FPL and 300-400% FPL, gold plan selection outstripped silver ((9874 to 8342) and was close to bronze selection (10,206). These numbers make sense. At 300% FPL ($36,180 for a single person), for a single 40-year old, the cheapest bronze plan is $150 per month, the cheapest silver, $273 (with a $6000 deductible!), and the cheapest gold, $286 (with a $1500 deductible).

On the whole, these metal level selections seem pretty rational as averages. A lot of factors other than premium/deductible go into plan choice, and enrollees doubtless make numerous mistakes. But on the broadest trade-offs, most people seem to get the big picture.

See also:
Subsidized enrollment rose 2% in Maryland in 2018 (Jan. 11, 2018)
Maryland ACA marketplace enrollment spotlights effects of Trump's sabotage (Jan. 8, 2018)
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* A small number of marketplace enrollees with subsidy-eligible incomes pay full freight because they have an "affordable" offer of insurance from an employer, which disqualifies the applicant from a subsidy.


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