Monday, May 07, 2018

Virtually no enrollment loss in state-based ACA exchanges in 2018

I imagine it's been noted before, but states that run their own ACA exchanges collectively had virtually no enrollment losses in 2018, while enrollment in the 39 HealthCare.gov states shrank 5%.

The loss even among unsubsidized exchange enrollees in the state-based exchanges (SBEs) was very slight, just 1% -- compared to 10% in the HealthCare.gov states. After Trump cut off federal funding for Cost Sharing Reduction (CSR) subsidies, most of the SBEs silver-loaded CSR costs on-exchange, and allowed insurers to offer silver plans off-exchange with no CSR priced in (for an explanation, see note below). That includes California, which accounts for almost half of SBE enrollment. It might therefore have been expected that more unsubsidized enrollees in the SBEs would have moved off exchange. And where unsubsidized on-exchange enrollment did drop, it will be hard to determine if many may have enrolled in ACA-compliant plans off-exchange.

Here, via the Public Use Files (20172018) are the percentage changes from 2017 to 2018 in the categories mentioned above.

Enrollment Changes in ACA Marketplace, 2017-2018

All States

Enrollee Status
2017
2018
Change
Total
12,216,003
11,750,175
-4%
Subsidized
10,100,808
  9,781,207
-3%
Unsubsidized
 2,115,195
 1,988,968
-6%

HealthCare.gov States

Enrollee Status
2017
2018
Change
Total
9,201,805
8,743,642
  -5%
Subsidized
7,765,735
7,447,615
 - 4%
Unsubsidized
1,436,070
1,296,027
-10%

 State-based Exchanges

Enrollee Status
2017
2018
Change
Total
3,014,198
3,006,533
  -.02%
Subsidized
2,335,073
2,333,592
  -.006%
Unsubsidized
  679,125
  672,941
-1 %

The enrollment performance for each state is based on a wide variety of factors, including income distribution, the handling of CSR costs after Trump cut off federal reimbursement for CSR, enrollment period length (cut in half in HealthCare.gov states, extended beyond the hc.gov cutoff by the SBEs), outreach and enrollment assistance, and overall premium increases. Comparing SBEs with states using the federal exchange takes you only so far.

Still, the extent to which the SBEs contained enrollment losses in the face of the multi-front assault on the marketplace by the Trump administration and the Republican Congress is striking. Longer enrollment periods, on-exchange silver-loading, more active rate oversight and more state-funded outreach and assistance apparently had a collective effect on enrollment outcomes.

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Note on Effects of CSR funding cut-off 

When Trump cut off federal reimbursement of insurers for the Cost Sharing Reduction subsidies they're legally required to provide to lower income ACA marketplace enrollees who select silver plans (57% of marketplace enrollees in 2017), most states allowed or required insurers to concentrate the cost of CSR in premiums for silver plans only. States in which 70% of individual market enrollees live concentrated the cost of CSR only in silver plans offered on-exchange, allowing for cheaper silver plans to be sold off exchange.

Since ACA premium subsidies are keyed to the price of the benchmark (second cheapest) silver plan in each rating area, subsidies rose to cover inflated silver premiums, generating often dramatic discounts in non-silver plans, i.e. gold and bronze (platinum availability and purchase is negligible). In many states, steep increases in silver plan premiums resulted in zero-premium bronze plans becoming available to many buyers (or nominal $1-3/month premiums), and gold plans that were either cheaper than silver or close in price.

Cheap gold plans were a particular boon to enrollees with incomes between 200% and 400% of the Federal Poverty Level (FPL). These buyers are not eligible for strong CSR, which makes silver plans roughly equivalent to platinum plans for buyers up to the 200% FPL threshold. Normally,  enrollees in the 200-400% FPL range would pay between 6% and 10% of their income (percentage rising with income) for a benchmark silver plan with an actuarial value of 70%, i.e. with an average deductible of around $3600). With CSR priced into silver plans in 2018, gold plans  (80% AV, with an average deductible of around $1100) came within reach of many in this income range.  Gold plan selection quadrupled in Maryland in 2018.

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