Steep enrollment drops in New Jersey's individual market

ACA marketplace enrollment was down 7% in New Jersey as of the end of open enrollment, according to CMS. That's a somewhat steeper drop than the 4% national average and the 5% average among states using HealthCare.gov, but in range.

This week the state Department of Banking and Insurance (DOBI) released first-quarter enrollment results for the entire individual market, off-exchange as well as on-. It shows more severe drops on both fronts -- particularly off-exchange:


New Jersey suffered an average weighted premium increase of 22% in 2018, with steeper increases for market hegemon Horizon Blue Cross. As I noted recently, unsubsidized enrollees didn't get any benefit from silver loading, as there were no discounted silver plans available off-exchange. Unsubsidized enrollees basically had four choices: eat huge premium increases, downshift to bronze, switch to narrow network AmeriHealth, or drop out.

It appears that a significant number of unsubsidized enrollees made that last choice. Off-exchange enrollment was down not only compared to the first quarter of 2017, but compared to the last quarter, when enrollment is at low ebb (overall enrollment is up 6% since Q4 2017, but down 11% since Q1).

Off-exchange enrollment stats are hard to come by, but steep enrollment drops are to be expected.  Matt Fiedler of the Brookings Institute estimated last fall that premium hikes averaging 20.5% nationally in 2017 were likely to reduce overall unsubsidized enrollment by 12.3%. New Jersey's numbers would seem in line with that estimate.

A few notes and question marks regarding both off- and on-exchange enrollment:

ACA heresy at noon

Once upon a midnight* dreary,
While I pondered weak and weary...

over one more quaint and curious wrinkle in ACA enrollment patterns (New Hampshire enrollment was down 6% in 2018, but subsidized enrollment was up 5%!--why?), I saw something that drew me up short.

I was looking at whether silver loading had created off-exchange discounts in silver plans available in New Hampshire. It had, a little. The plans listed below are the two cheapest silver plans on offer in 2018 to an unsubsidized 50 year-old in Manchester. The top plan is available off-exchange only, the second one both off- and on-exchange. But that's by the way.

Virginia's CSR load should be cut more than in half in 2019

David Anderson makes a valuable point about an after-effect of latter day Medicaid expansions like Virginia's -- that is, expansion following Trump's cutoff of federal reimbursement to insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to qualifying ACA marketplace enrollees.  

It's this: now that insurers have to price CSR into premiums, Medicaid expansion will reduce premiums for unsubsidized enrollees by removing much of the CSR load.

Virginia — like many other states — had its insurers load the cost of providing CSR into the premiums for silver plans, which are the plans that set the local benchmark from which all premium subsidies are calculated. This led to a significant spike in silver benchmark premiums. Other plans saw significant but far lower premium increases. On average, CSR workarounds led to an extra $960 to $1,040 in premiums for silver plans.

The data shows us that people who were previously eligible for an ACA health plan and will now be eligible for Medicaid under the expansion were the highest per-capita recipients of the cost-sharing reduction subsidies. As these individuals move to Medicaid expansion, the cost of funding CSR through silver premiums will decline.

As it turns out, we know just about how many current Virginia enrollees with CSR will be eligible for Medicaid if their income doesn't change. CMS data shows that, of Virginia's 400,015 enrollees as of the end of Open Enrollment last December, 222,305 obtained CSR. Of those, 120,898 obtained the highest level of CSR, which raises the actuarial value of a silver plan from a baseline of 70% (which is what silver plans without the CSR load would price for) to 94%.

New Jersey's individual market needs some off-exchange discounts in 2019

Trump's cutoff of federal reimbursement to insurers for Cost Sharing Reduction (CSR) subsidies last fall turbo-charged premium hikes in the individual market in 2018.  Those hikes hit unsubsidized enrollees directly. Yet states that allowed insurers to load the cost of CSR onto on-exchange silver plans only, allowing cheaper silver plans to be sold off-exchange, provided a measure of effective relief to the unsubsidized.

In Philadelphia, an unsubsidized 50 year-old could get the cheapest off-exchange silver plan for $153 per month less ($498/month) than the cheapest on-exchange silver plan (for more closely comparable plans, the spread was $94).  In Baltimore, the cheapest silver plan offered on-exchange for a 50 year-old was $88/month more than the same plan off-exchange ($610 vs. $522).

Not so in New Jersey, where individual market premiums rose a weighted average of 22% in 2018, and still more steeply on market hegemon Horizon Blue Cross's most popular silver plans.* New Jersey did allow "silver loading" -- that is, concentrating the cost of CSR in silver plans only, since CSR is only available in silver plans. But none of the three insurers participating in the state's ACA marketplace offered cheaper silver plans off-exchange, as insurers did in many other states.

In fact, none of the three (Horizon, AmeriHealth, Oscar) sold off-exchange plans that differed in any way from their on-exchange offerings.**

Medicare expansion: An elastic idea for Democrats

Politico's Jennifer Haberkorn reports that Democratic candidates are avoiding the term "single payer" when staking out their healthcare positions. That's not only because Republicans use the term as a bogey signaling socialized medicine and socialism generally (they did the same with the much more conservative ACA).  More substantively:

Early last year, the DCCC shared verbal guidance with candidates and political consultants about the liabilities of supporting single payer, including polls that showed support for the idea declined once voters heard that it would likely come with significant tax increases and the potential loss of private health coverage many Americans have today, according to sources who saw the guidance.

Instead, Democrats are being urged to embrace the term "Medicare for All" -- which, taken literally, is single payer. Some candidates speak more cautiously of "a path to Medicare for all," however -- a term that's justifiably ambiguous. Any path to universal coverage in the U.S. is likely to be long, and include several stages and potential branchings -- including toward a system in which a public program is available to all, but some choose other options. A number of Democratic bills and proposals reflect this reality. In recent years, many forms of Medicare expansion have been proposed. They include the following, ranked from the most limited to the most expansive.

When ACA marketplace coverage is cheaper than Medicaid

In my last post, I noted that thanks to Virginia's decision to expand Medicaid, a bit over 100,000 current enrollees in the state's ACA marketplace (or people similarly situated next year) will be switching over to Medicaid in 2019.  Also, since the Republican-tinged expansion terms include premiums ranging from $1/month to 2% of income for people in the 100-138% FPL, some of these people will actually pay more for Medicaid coverage than they do now for marketplace plans.

David Anderson covered this ground in more detail:

A single 40 year old making 138% FPL who buys the benchmark Silver plan pays 2% of their income in premiums which translates to $28 per month. People who expect to be relatively healthy will often elect to buy the least expensive Silver. The APTC subsidy is fixed so the choice to buy a lower cost Silver plan means the a dollar for dollar reduction in out of pocket premiums. Significant portions of Virginia including greater Richmond, exurban NoVA and central Virginia between I-81 and I-95 have a Silver plan that is at least $28 less than the Benchmark Silver. This means that there is a $0 premium plan available for folks who will now be moving to Medicaid with a 2% premium.

A couple of points of elaboration: first, not everyone in the 100-138% FPL income band (the group that has been eligible for marketplace subsidies pre-expansion) will pay 2% of income. Second, a lot of people in this income range currently pay less than 2% of income but more than $0.  Some have $0 deductibles; some have small ones ($150). Yearly out-of-pocket maximums range from $900 to $2000 -- I imagine maximum OOP at least will be lower in Medicaid.

Virginia Medicaid expansion will cut ACA marketplace enrollment by 100,000-plus

Virginia will enact the ACA Medicaid expansion in 2019 -- it's now law. Hurrah! 400,000 people are expected to gain Medicaid coverage. And that includes about 108,000 people who enrolled in ACA marketplace coverage in 2018 (or rather, those similarly situated next year) -- a bit over a quarter of current enrollment. Judging from enrollment attrition recorded in past years, about 90,000 of the potentially Medicaid eligible are probably enrolled in marketplace plans as of now.

Under the expansion, Virginians with income up to 138% of the Federal Poverty Level (FPL) will be eligible for Medicaid. Pre-expansion (i.e., now), eligibility for marketplace subsidies begins at 100% FPL.  According to CMS public use files, 123,245 enrollees as of the end of Open Enrollment had incomes in the 100-150% FPL range. Most of them -- those with incomes from 100-138% FPL -- will be Medicaid-eligible. 

We know more or less how many. In 2016, the one year in which CMS broke out the 100-138% range separately, 82% of of Virginia enrollees in the 100-150% FPL band proved to be in the narrower "shoulda-been-in-Medicaid" range -- 100-138% FPL. Assuming the same proportions this year suggests 108,000 people who might have enrolled in marketplace coverage in 2019, all other things being equal, who will instead enroll in Medicaid.

About that victory lap, PA Insurance Department....

Yesterday, the Pennsylvania Insurance Department proudly announced that insurers in the state's ACA-compliant individual market requested premium increases averaging 4.9% -- compared to 30.6% last year.

Insurance Commissioner Jessica Altman took a victory lap:

Altman attributes the minimal increases to Pennsylvania’s competitive market and the department’s efforts to maintain enrollment in the individual market despite the federal government’s efforts to shorten the ACA’s open enrollment period and curtail enrollment outreach, while working to achieve affordability for consumers. The Insurance Department launched an outreach campaign to make up for a lack of marketing from the federal government during the 2018 open enrollment season.

The department also worked to make coverage more affordable for more consumers by mitigating the number of individuals subject to premium increases when the federal government eliminated cost-sharing reduction reimbursements. As a result, 396,725 Pennsylvanians selected health plans on the exchange in 2018, only a small decline from the previous year.

It may well be true that state action helped minimize enrollment losses and so stabilize the market to a degree. But on the top line at least, that "small decline" was not so small. CMS enrollment figures show a 9% drop in marketplace enrollment in Pennsylvania in 2018 -- compared to 4% nationwide and 5% in the 39 states (including PA) that use the federal exchange, HealthCare.gov.

ACA sabotage boomerang, type 3

Recently, I tallied the various ways that Republican sabotage of ACA programs has either backfired entirely or created means of mitigating the intended damage.

Very briefly, sabotage jacks up individual market premiums, which creates inflated federal subsidies, which can be leveraged both by individuals (via discounted bronze and gold plans) and states (via federally funded reinsurance or other innovation waiver programs). Two states, New Jersey and Vermont, have also turned effective repeal of the federal individual mandate to their advantage by creating state mandates, capturing a revenue stream while holding premiums down.

Late last week, the Washington Post's James Hohmann highlighted another form of sabotage that may also at least partially boomerang: Work requirements attached to Medicaid for "able-bodied" adults. It would be hard to find a policy more universally denounced by anyone with any professional experience or scholarly purview of Medicaid. The programs are cruel,wasteful and counterproductive; they will likely  reduce both coverage and employment. And yet...

As President Trump steps up efforts to undermine the law, from repealing the individual mandate to watering down requirements for what needs to be covered in "association health plans," the administration’s willingness to let states impose work requirements on Medicaid recipients has paradoxically given a rationale for Republicans to flip-flop on an issue where they had dug in their heels.

The old machine hums on

The way we're rigged emotionally, death and disease are inherently tragic. Yet at some level I am amazed by the durability and self-regulation of the human body. It seems very strange that I'm still in the same machine I was in when my consciousness emerged. On the whole, despite all the niggling pains and promptings that go on all day, I'd say the body interferes very little in that consciousness. Every waking moment you're thinking about something, and in most of that nonstop churning you forget you have a body. That's true even if bodily awareness breaks in every ten minutes for, say, five seconds.