Uninsurance goes upscale: The Census's Health Insurance Coverage Update for 2018

Yesterday the Census Bureau* released its health insurance estimates for 2018. The top line showed a rise in the uninsured population of 1.9 million, or 0.5% -- the first increase since the ACA's main programs launched.

Disturbingly, the number of uninsured children increased by 425,000, or 0.6%, raising children's uninsured rate to 5.5%. That spike would appear to be due mainly to a drop in Medicaid coverage, given that  Medicaid and CHIP coverage for children was down 1.2%; and the overall percentage of children with public health insurance dropped 0.8%, while the percentage of children with private health insurance ticked up 0.2%. There was also, however, a sharp spike in the uninsured rate among children in households with incomes over 400% of the Federal Poverty Level (FPL), from 1.9% in 2017 to 2.6% in 2018 -- accounting for almost half of the increase in uninsured children.

Folks at Georgetown University and the Center for Budget and Policy Priorities will probably dive  into the spike in uninsured children, as they have been doing for at least a year. Here I just want to throw some sidelights on the Census numbers generally.

1. Affluent uninsured population spikes. Notwithstanding a drop of 2 million  (0.7%) in Medicaid enrollment, the sharpest increases in the uninsured were at high incomes. At 300-399% FPL, the insured rate dropped a full percentage point, from 92.9% to 91.9%, and at over 400% FPL, the rate dropped 0.8%, from 97.3% to 96.6%. Together, these two income groups account for 55% of the population. Particularly striking, the number of uninsured at incomes over 300% FPL increased 23.8% (from 6.631 million in 2017 to 8.215 million in 2018).  The spike in uninsured children at high income levels seems congruent with this drop.

When silver loading discounts trump strong CSR (the nonexpansion state "advantage," take 5)

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

This post picks up where the last one left off, further examining potential partial explanations for why ACA marketplace enrollment declines on HealthCare.gov in 2019 were much sharper in states that have expanded Medicaid than in states that have refused the expansion. I raised a question in that post, bolded in the excerpt below.

Enrollment changes by income, HealthCare.gov states
2019 enrollment as a percentage of 2018, as of the end of OE in each year

State group	Total enrollment	100-150% FPL	150-200% FPL	100-200%  FPL	200-400% FPL	Unsubsidized
Expansion*	93%	93%	91%	92%	95%	88%
Nonexpansion	99%	100%	98%	100%	102%	82%

* Excluding Virginia and Maine   Source: CMS state-level public use files 

The enrollment performance gaps at 100-200% FPL and 200-400% FPL are comparable. I would be tempted to suggest that the gap at 100-150% FPL is due to the concentration of low income enrollees in the nonexpansion states (those at 100-138% FPL, who pay less for top-level CSR silver plans than do those at 138-150% FPL), and that the gap at 200-400% FPL is due to stronger silver loading in the non-expansion states. But the large performance gap at 150-200% FPL kind of belies that -- unless, perhaps, silver loading at that income level is pulling more prospective enrollees into free or ultra-cheap bronze plans in the nonexpansion states. In the silver loading era, silver plan selection at 150-200% FPL has dropped from 83% in 2017 (pre silver loading) to 76% in 2019 in HealthCare.gov states. The lure is bronze coverage that is often free at that income level, while benchmark (second cheapest) silver costs about $130/month at 200% FPL. I guess I need to test whether bronze selection in this income band has risen faster in nonexpansion states.

Why 2019 ACA enrollment drops were concentrated in Medicaid expansion states on HealthCare.gov, Take 4

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

In December and January, I took several whacks at explaining why 2019 enrollment losses in the 39 HealthCare.gov states were concentrated in the states that had expanded Medicaid. In those 21 states, plan selections as of the end of Open Enrollment were down 7% from 2018, compared to a 1% drop in 16 states that have refused to expand Medicaid. (I excluded Virginia and Maine, which expanded Medicaid in 2019, affecting enrollment options and results.)

First hypothesis was that the heavy concentration of enrollees in non-expansion states with incomes that would have qualified them for Medicaid in expansion states is especially "sticky." People in this income group (100-138% of the Federal Poverty Level) pay just 2% of income for a benchmark silver plan that comes with the highest level of Cost Sharing Reduction (CSR), raising the actuarial value of a silver plan to 94%, which usually translates to a deductible in the $0-500 range.  About a third of enrollees in nonexpansion states are in this income category. While about 15% of enrollees in expansion states have incomes in the 138-150% FPL range, which qualifies them for the 94% AV silver, they pay 3-4% of income for the benchmark.

Second hypothesis was that silver loading effects are stronger in nonexpansion states, because all those low income enrollees raise the average actuarial value of silver plans (which varies with income). In Florida, the blended AV of all silver plan enrollees is 91.5% in 2019.  (If you're unfamiliar with silver loading, see the note at bottom.)

Recently a third possible factor occurred to me: expansion states have a higher percentage of enrollees with incomes too high to qualify for subsidies, and enrollment losses among the unsubsidized were much steeper in the market as a whole than among the subsidized. This factor did play a role, but it was partly offset by the fact that in this category losses were steeper in nonexpansion states. The higher concentration of unsubsidized enrollees in expansion states cancelled out that advantage, however, so that losses in unsubsidized enrollment took basically equal bites out of total enrollment in both groups.

For further study

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

I'm going to be a little Labor Day weekend lazy here and jot down a few questions I'd like to look into, rather than provide any actual information about them. If you have any answers, please comment!

1. Credential inflation.  My wife, a certified nurse-midwife, rolls her eyes at the increasing impossibility of getting credentialed in her field without a doctorate. She spoke recently to a young labor & delivery nurse who's planning to become a midwife and is facing four years of study and likely debt. Apparently you can't get certified as a midwife in NJ now without doing the doctorate (not a Ph.D.), and that's a nationwide trend. "We have to do it," was the word for a university program director, because all the other nursing specialty and other non-physician medical professions like OT are doing it.

Healthcare reformers can't leave employer-sponsored insurance untouched

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

Presidential candidates and other Democrats who want to patch or build on the ACA rather than create a substantially new system generally neglect, to varying degrees, an attendant problem: employer-sponsored insurance (ESI) is also in dire need of reform.

A Kaiser Family Foundation's report on large employer coverage released this month found that health spending by families in large employer plans has grown twice as fast as wages over the past decade. The employer share of costs in family coverage (premium plus out-of-pocket) has downticked only slightly:  it was 68% in 2008 and 66% in 2018.  But families and employers alike are tapped out: total costs increased 67% over those ten years. The total cost of large group coverage for a family of four now averages $22,000 per year. Reducing healthcare costs is among voters' top priorities.

Beyond the steady-but-high yearly increases recorded by Kaiser, yesterday NYT reporters Reed Abelson and Katie Thomas spotlighted a recent development that could be destabilizing: the proliferation of specialty drugs for rare diseases, which can carry price tags in the millions per patient per year. As Abelson and Thomas note, about 10% of the population is afflicted with rare diseases,  and more than half the drugs approved in 2018 targeted such diseases.

Who pays for astronomically expensive orphan drugs? Some questions prompted by the NYT report

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

The Times' Reed Abelson and Katie Thomas have a major story exploring a key factor in rising healthcare costs: specialty drugs for rare diseases, which increasingly can carry price tags in the millions per patient per year. The trend and the impact are laid out succinctly:

Rare diseases, however, aren’t all that rare. There are an estimated 7,000 of them, and about 30 million Americans have one — roughly the same number of people in the United States with diabetes. And although there are no treatments for most rare diseases, new therapies are coming on the market nearly every month,  with some reaching beyond $2 million a year for a single treatment. Of 59 new drugs approved in 2018, more than half, or 34, were for rare diseases. 

Leaving aside the broad question of how the U.S. might contain costs for these drugs without choking off their development, the story prompted a few thoughts and questions about how these costs are currently distributed, and how that might change. Some factors to consider:

Surprise! New Jersey ACA marketplace outperforms the national market

When CMS reported enrollment totals in the ACA marketplace at the end of Open Enrollment last December, the news for New Jersey was disappointing.

Despite (or per below, partly because of) a 9% average reduction in premiums last year, fruit of a new reinsurance program and a state-enacted individual mandate, on-exchange enrollment dropped 7.1% -- a performance that lagged the national marketplace (down 2.7%) and the 39 states that rely on the federal HealthCare.gov platform (down 3.8%) -- though right at the median for HealthCare.gov states that have expanded Medicaid (and so get less juice from silver loading)*.

When the state released off-exchange numbers in June, the results provided a measure of consolation. Off-exchange enrollment was up 3%, shrinking the total individual market enrollment loss to 4% from Q1 2018 to Q1 2019.

The main cause of the contrary results is not hard to find. Three quarters of on-exchange enrollment in New Jersey is subsidized.  In David Anderson's pithy formulation, "Reinsurance, all else being equal, helps the unsubsidized and hurts the subsidized." That's true of any measure or market force that reduces average premiums. When the benchmark (second cheapest silver) plan premium goes down, subsidies are reduced accordingly, and price spreads between the benchmark and cheaper plans tend to shrink, reducing discounts.

The retentive ACA marketplace, revisited

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

In my last post, I noted that enrollment drops in the ACA marketplace recorded in each year of the Trump era at the end of Open Enrollment more or less evaporate in yearly comparisons of average monthly enrollment, or end-of-year enrollment.

That is, it seems that fewer people in the last two years drop out without paying, and perhaps a higher percentage remain enrolled all year (many people in the ACA marketplace do have good reasons not to remain enrolled all year -- one of the marketplace's vital roles is as a stopgap). That's congruent with another change recorded in 2019: new enrollments down (-15.7%), re-enrollments up (2.3%), as of the end of Open Enrollment.

Why have apparent enrollment drops as of the end of OE in each of the last three years either shrunk or eroded entirely over the course of the year? A few possibilities:

CMS subtext: The ACA marketplace is in recovery

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

The CMS report on long-term enrollment trends in the ACA marketplace has a stark lede:

During two successive years of declining enrollment, from 2016 to 2018, unsubsidized enrollment declined by 2.5 million people, representing a 40 percent drop nationally. 

That's bad. But the report includes data that leads to a clear conclusion: The ACA-compliant individual market has stabilized. It is rife with problems and there are many enrollees whom it does not serve well, but it's passed through a crisis. Consider the following points (some derived from the report, others not):

1. Subsidized enrollment was higher in 2018 than in 2016, generally understood to be the enrollment peak. In fact, total on-exchange enrollment was higher in December 2018 than in 2016. (Off-exchange enrollment, where the bulk of unsubsidized enrollment occurs, did drop sharply in those years.)


2. Subsidized enrollment is higher in 2019 than in 2018, as of February of each year, when all enrollees have had at least one payment due (see CMS's  (2018 and 2019 Effectuated Enrollment Snapshots). 

Is subsidized enrollment in the ACA marketplace really up since 2016?

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

CMS's report on long-term enrollment trends in the ACA marketplace released this week emphasized the 40% drop in unsubsidized enrollment from 2016 to 2018. But the counterpoint came as something of a surprise: subsidized enrollment, according to CMS, is up since 2016.

If you look at the most often cited enrollment numbers for each year -- total plan selections reported by CMS annually at the end of the open enrollment season  -- total subsidized enrollment is down substantially -- 7.1% from 2016 to 2018, and 7.7% from 2016 to 2019. But average monthly enrollment was higher in 2018 than in 2016 -- and probably will be slightly higher this year.

It might appear that retention has improved -- more people stay in their plans for more of the year. But that's not clear, as average monthly enrollment in 2018 is not quite the same measure as in years prior.  Let's look at the numbers: