Wednesday, October 08, 2014

ACA signups: Why is bronze more popular in blue states?

It's good news that more than three quarters of those who bought private health insurance plans on the ACA exchanges selected silver-level plans.  Most of those who qualified for help with premiums also qualified for subsidies reducing deductibles and other out-of-pocket costs.Those subsidies, dubbed Cost Sharing Reduction (CSR) were only available with silver plans.

According to a May 1 HHS issue brief, in the federal marketplace (, only 15% of buyers eligible for any kind of subsidy bought bronze plans, which have lower monthly premiums but higher deductibles and cost-sharing and render a buyer ineligible for CSR.  Presumably an even lower percentage of those eligible for CSR bought bronze -- again, good news.

The percentage of bronze buyers varies considerably by state, however. Just 5% of subsidy-eligible Pennsylvania buyers selected bronze, while in Washington state, 36% did (Washington breaks out buyers' choices by income level).*  Overall, 25% of buyers in the state marketplaces selected bronze, versus 20% in the federal marketplace.  The outliers in the high-bronze column are all states that ran their own marketplaces.**

Those states are blue-to-purple;they're the ones where state government tried to make the ACA work. How did they end up with higher concentrations of bronze buyers?

For the federal marketplace alone, HHS has breakouts of metal choices among subsidized and unsubsidized buyers. The variation among states  is much smaller among subsidized buyers than among all buyers -- another good sign.

Below are lists of states with the some of the lowest and highest percentages of bronze buyers. .I have ordered the federal states according to their percentages of subsidized bronze buyers, since that's the nearest proxy for those who should most likely have avoided bronze. The state marketplaces, marked in yellow, are ranked by the overall percentage of bronze buyers, the only figure available (except in Washington, which provided a more detailed breakout than HHS).  ("% subsidized bronze" means the percentage of all subsidized buyers who selected bronze plans.)

States with lowest percentage of subsidized bronze buyers (federal) or overall (state)

State          % subsidized bronze       % unsubsidized bronze          % overall bronze

PA                 5                                      17                                           8
AL                 6                                      28                                           9
MS                7                                       37                                          8
GA                9                                       25                                        11
AZ               11                                      17                                        12
FL                11                                      31                                        13
MI                11                                      25                                        13

KY               -                                         -                                           13
CT                -                                         -                                           16

States with highest percentage of subsidized bronze buyers (federal) or overall (state)

State          % subsidized bronze       % unsubsidized bronze          % overall bronze

IN                   26                                    42                                           28
IL                   25                                     42                                           29
MT                 25                                     38                                           27
AK                 24                                     44                                           27
OH                 24                                     29                                           25

HI                  -                                        -                                             41
CO                 -                                        -                                             40
WA                -                                        36                                          38
DC                 -                                        -                                             29
CA                 -                                        -                                             25
MN                -                                        -                                             25

Why did some states sell way more bronze?

What accounts for the variation among states?  I do not know. A spot check of price differentials between cheapest bronze and cheapest silver did not show any pattern, though a more detailed analysis might (prices vary by county). States in which there was a concerted effort to reach out to the uninsured do not, on the face of it, show lower bronze takeup -- in fact, the opposite seems true.

There are no publicly available stats breaking out those eligible for CSR, i.e., those with incomes under 250% of the Federal Poverty Level (FPL), except in Washington, where 25% of those so eligible bought bronze.  Even more revealing might be a breakout of those under 200% FPL, since CSR is much more substantial below that level.

In states that refused the Medicaid expansion, eligibility for subsidized private plans began at 100% FPL, instead of the 138% threshold below which buyers were eligible for Medicaid in states that expanded. That may account for high takeup of silver plans in states like Mississippi or Alabama -- though the higher monthly premiums for silver might also be a deterrent for people with such low incomes. Different age distributions among states might be a factor, but I would think a modest one, as metal levels did not vary hugely among age groups.

I spoke to Judith Solomon, Vice President for Health Policy at the Center on Budget and Policy Priorities, about possible factors behind the state-to-state variation. Like Kate Kozeniewski, a navigator I'd spoken to previously, Solomon emphasized the complexity of the choice facing ACA marketplace shoppers, indicating that many would need in-person help to make an optimal choice.

While navigators were more focused in Year 1 on getting buyers through the difficult navigation process than on the nuances of the choices among plans, Solomon suggested, "Anyone who went to an assister would have been clear on the benefits of silver." While certified ACA navigators may have only picked up knowledge about particular plans as they went along, their training drove home the benefits of CSR for buyers eligible for those subsidies.

Solomon noted that because base premium levels are lower for young people, their subsidies are smaller. In fact, in many regions the subsidies zero out at less than 300% FPL. Such relatively affluent young adults might be attracted to bronze plans -- though young adults overall chose bronze less often than older adults. Unsubsidized young buyers might be concentrated in the blue states that built their own exchanges, boosting bronze takeup.

Solomon also pointed out that states that ran their own marketplaces were the ones that availed themselves of federal subsidies for outreach. She singled out Maryland, New York and California as states that deployed significant funds to reach the uninsured. Maryland and California also had high concentrations of bronze buyers, however, while New York was mid-range.

Some speculation on my part: perhaps states that did serious advertising stimulated more people to shop on their own -- and DIY shoppers were more likely to miss the CSR-silver connection. Perhaps, too, the state marketplaces were less effective than in steering those under 250% FPL toward silver -- though Kate Kozeniewski told me that's communication on this front was not obvious or plain-language. One other possibility: some states with Republican governors and legislatures that did little to drive takeup nonetheless have strong nonprofit social service sectors that stepped in the breach. Musing over Pennsylvania's rock-bottom bronze takeup, Solomon noted that the state "had really good programs" -- not only an active nonprofit sector, but a lot of insurance brokers "very engaged in the ACA."

There may be no single dominant factor that accounts for state variation in metal level choice. I hope to pursue the question further.

*According to Washington's state enrollment report, of 116,955  subsidized buyers overall (pg. 2), 41,629 bronze buyers were subsidized (pg. 16). 25% of those eligible for CSR bought bronze -- far too many.

** Hawaii and DC have small overall pools and very high concentrations of subsidy-ineligible buyers, and Hawaii's website was all but inoperative. Washington and Colorado, however, had effective outreach and high takeup and are widely considered ACA success stories. Bronze selection was very high in both.

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