Tapped out in Kentucky: Back story to an ACA hardship case

It's not quite an iron rule, but it's a fair bet: When a newspaper reports an Obamacare hardship tale, involving someone who's bought a private plan that leaves coverage unaffordable, that person bought the wrong plan.

In two front-page stories separated by nine months, one running today, The New York Times' Abby Goodnough has reported the saga of a very sick 60 year-old gentleman, David Elson, who struggles to continue his work installing security systems while suffering from advanced diabetes. In February 2014 Mr. Elson, who says he earns $28,000 "in a good year," somehow ended up enrolling in a health plan with a monthly premium of $350 (after subsidy) and a deductible of $2,600.

There is nothing wrong with the reporting here (in fact it's excellent reporting, nuanced and empathetic). Mr. Elson made the choices described, for the reasons described below. Newspaper space is not infinite. Nonetheless, anyone familiar with the ACA subsidy scale could tell at a glance that he was paying more than he should -- and, as one of his caregivers noted back in March, more than he could afford.

On bronze-smithing the ACA

A couple of days ago I wrote about three conservative ways to change the ACA that would arguably increase viable options for individuals, insurers and (in one case) employers.  It occurs to me that a common thread runs through them all, and that thread may be twined round the heart of a system as invested as ours is in private enterprise, choice and competition.

Here are the three proposals:

1) Allow Cost Sharing Reduction (CSR) subsidies, currently available only with silver plans, to attach also to bronze plans, maintaining a proportionate difference in actuarial value between bronze and silver plans.

2) Allow smaller employers, or possibly even all employers, to fulfill the employer mandate by fully funding employee HSAs linked to HSA-qualified plans available on the ACA exchanges.

How conservatives might amend (rather than destroy) the ACA

The Affordable Care Act is by any rational assessment a conservative plan to expand access to healthcare -- relying in large part on private insurance and competition, devolving oversight and insurance industry supervision to the states, and imposing fiscal 'responsibility' on individuals with incomes as low as 138% of the Federal Poverty Level to contribute to the cost of their healthcare.

Yet conservatives complain bitterly that the private market is not free (i.e., to exclude benefits now deemed 'essential'); that the states are commanded to administer within a federal straitjacket; that the employer mandate will choke off job growth; and that the individual mandate is an unconstitutional impingement on personal liberty.

Looking back at a year of blogging about the ACA's increasingly successful implementation, it occurs to me that I've addressed three possible changes to the law that could reasonably be called conservative. Two increase viable consumer choice within the exchanges; one takes seriously the possibility of replacing the individual mandate, and one would loosen or perhaps partially replace the employer mandate.

Here they are:

New data: health exchange design matters

Why was there such huge variation among states in the proportion of ACA private plan buyers in the first open season who bought bronze plans -- the plans with the lowest premiums and highest deductibles and copays? In Hawaii, 41% of ACA shoppers bought bronze; in Mississippi, 8% did.

Part of the answer, as I've noted before, lies in a state's relative levels of wealth and health. Lower income buyers are eligible for generous Cost Sharing Reduction (CSR) subsidies that reduce deductibles, co-pays and yearly out-of-pocket (OOP) maximums -- but only if they buy silver plans.

Fortunately, most did. If you're sick and poor, a $6,000 deductible is likely to give you pause -- even if the plan is all but free and you don't come in knowing what a deductible is. On Healthcare.gov, only 15% of buyers eligible for any kind of subsidy bought bronze. The percentage is probably considerably lower among those eligible for strong CSR subsidies -- that is, buyers with incomes under 200% of the Federal Poverty Level (data from states that broke out metal level selection by income band, cited below, suggests as much).

Another factor plainly has a strong impact, though, and may account for some wealth/health anomalies in state performance. That's website design. In Connecticut, which had a 2013 median household income of $67,781, second highest in the nation, just 16% of all buyers in the first open season selected bronze. In Colorado, with a median income of $63.371, 40% bought bronze.

That's doubtless because the Connecticut site shows CSR-eligible applicants silver plans first; that is, the menu of plans available to a given user defaults to silver, both in the pre-application "shop-around" feature and in the actual application. The Colorado site, in contrast, does next to nothing to steer CSR-eligible buyers toward silver. The shop-around is cumbersome; the filter by metal level is hard to find (at the bottom of the screen, and you have to scroll back up to activate it). Perhaps more importantly, unlike on Healthcare.gov, applicants who qualify for CSR and make a move to buy a bronze plan receive no warning that they're leaving benefits on the table.

New data from Connecticut

The strongest evidence of the impact of site design comes from data about the choices of buyers with household incomes below 200% FPL (CSR is available but much weaker for those between 200-250% FPL). HHS did not provide this information for the 36 states that used Healthcare.gov in the first open season, and neither did most states. Colorado did, however, and so did New York (median 2013 household income $53,843).  And now, Access Health Connecticut has provided me with CT numbers for the current open season, which began on November 15.

Employers, HSAs and the ACA

Jay Hancock at Kaiser Health News reports that significant numbers of small businesses may stop offering health insurance to their employees, sending them instead to the ACA exchanges. This could be a good thing for employees who earn little enough to qualify for strong ACA subsidies -- win-win for employer and employee at the federal government's expense.

According to the Kaiser Family Foundation, small employers in 2014 paid an average of nearly $5,000 for solo coverage and a bit more $10,000 for a family premium. What if an employer wants to compensate employees for dropping a benefit that constitutes such a large share of their compensation?  There's a problem with straight salary increases: they reduce employees' ACA subsidies and so give a portion of the extra income back. At healthinsurance.org, I examine three scenarios in which a pay hike worth about 70% of a typical employer premium contribution triggers subsidy reductions ranging roughly from about 25-- 80%.

An employer who really wants to help employees can avoid this problem by getting creative about compensation.  One striking way to do so would be to fully fund Health Savings Accounts (HSAs) that employees can use with HSA-qualified plans on the exchanges. Here's how I described the possibility in the healthinsurance.org piece:

Health exchange design has a clear impact on metal level choices

[New data from Connecticut: please read updated version of this post here.]

Why was there such huge variation among states in the proportion of ACA private plan buyers who bought bronze plans -- the plans with the lowest premiums and highest deductibles and copays? In Hawaii, 41% of ACA shoppers bought bronze; in Mississippi, 8% did.

Part of the answer, as I've noted before, lies in a state's relative levels of wealth and health. Lower income buyers are eligible for generous Cost Sharing Reduction subsidies that reduce deductibles, co-pays and yearly out-of-pocket (OOP) maximums -- but only if they buy silver plans. Fortunately, most did. If you're sick and poor, a $6,000 deductible is likely to give you pause -- even if the plan is all but free and you don't come in knowing what a deductible is. On Healthcare.gov, only 15% of buyers eligible for any kind of subsidy bought bronze. The percentage is probably considerably lower among those eligible for strong CSR subsidies -- that is, buyers with incomes under 200% of the Federal Poverty Level.

Another factor plainly has a strong impact, though, and accounts for some wealth/health anomalies. That's website design. In Connecticut, which has a median household income of $67,8k, second highest in the nation, just 16% of all buyers selected bronze. In Colorado, with a median income of $63.4k, 40% bought bronze.

That's doubtless because the Connecticut site shows CSR-eligible applicants silver plans first; that is, the search results default to silver (at least they do in the pre-application shop-around feature; I've been trying to confirm that they do in the actual application process). [UPDATE: an Access Health CT spokesperson has confirmed that the actual application also defaults to silver for CSR-eligible users.] The Colorado site, in contrast, does next to nothing to steer CSR-eligible buyers toward silver. The shop-around is extremely cumbersome; the filter by metal level is hard to find (at the bottom of the screen, and you have to scroll back up to activate it); and unlike on healthcare.gov, applicants who qualify for CSR and make a move to buy a bronze plan receive no warning that they're leaving benefits on the table.

Scalia researched torture's efficacy by watching "24"

Antonin Scalia reacted* to the Senate torture report with a defense of torture, as reported by the AP*:

"Listen, I think it's very facile for people to say, 'Oh, torture is terrible.' You posit the situation where a person that you know for sure knows the location of a nuclear bomb that has been planted in Los Angeles and will kill millions of people. You think it's an easy question? You think it's clear that you cannot use extreme measures to get that information out of that person?" Scalia said.

That jogged a memory. What planted this scenario in Scalia's mind? Hark back to June 2007, via the Wall Street Journal Law Blog:

The Globe and Mail reported that Scalia came to the defense of Jack Bauer and his torture tactics during an Ottawa conference of international jurists and national security officials last week. During a panel discussion about terrorism, torture and the law, a Canadian judge remarked, “Thankfully, security agencies in all our countries do not subscribe to the mantra ‘What would Jack Bauer do?’ ”

Justice Scalia responded with a defense of Agent Bauer, arguing that law enforcement officials deserve latitude in times of great crisis. “Jack Bauer saved Los Angeles . . . . He saved hundreds of thousands of lives,” Judge Scalia reportedly said. “Are you going to convict Jack Bauer?” He then posed a series of questions to his fellow judges: “Say that criminal law is against him? ‘You have the right to a jury trial?’ Is any jury going to convict Jack Bauer?”

Obama: Drop that "Plans for under 100!" pitch

Hey, Mr. President: you may have the right audience here. But you have partly the wrong message:

Obama appeared Dec. 8 on Comedy Central’s “The Colbert Report,” where he took the place of host Stephen Colbert for a regular segment called “The Word” -- retitled “The Decree” for his appearance -- to pitch enrollment to young viewers.

“Most young people can get covered for less than $100,” Obama said, using lines purportedly meant for Colbert. “How is the president going to get that message out to the kids? 

The administration really needs to take down this "plans for under $100!" banner. Here's why: if an adult under age 35 has an income low enough to get a plan with a premium under $100, she almost certainly qualifies for Cost Sharing Reduction (CSR) subsidies that reduce deductibles and copays -- but only if she buys a silver-level plan. Keeping the premium under $100 for a single person in many cases means buying a bronze plan -- and the average deductible on a bronze plan is over $5,000.

Forecast: A lot more Pennsylvanians will buy bronze plans in the ACA marketplace in 2015 than in 2014

Here's a prediction: the percentage of ACA private plan buyers in Pennsylvania who select bronze plans -- the lowest metal level, with the lowest monthly premiums and the highest deductibles -- is going to shoot up in 2015.

In 2014, among states with the lowest percentages of bronze plan buyers in the ACA marketplace, Pennsylvania was something of an anomaly.

Is Medicaid expansion reducing SSI claims? If so, an uninsured diabetic in Tennessee called it

There is some evidence that the ACA's Medicaid expansion may be reducing claims for Supplemental Security Income (SSI). While such claims are dropping across the US as employment picks up, they're dropping somewhat faster in states that opted in to the ACA Medicaid expansion Modern Healthcare's Virgil Dickson reports:

The number of Americans applying for Supplemental Security Income benefits dropped in the first six months of this year compared to the same period last year, and experts are debating whether the decline is partly related to the healthcare reform law's Medicaid expansion to low-income adults.

A total of 1,189,567 SSI disability claims—mostly related to physical or mental disability— were filed in the first six months of 2014, compared with 1,330,169 during the same period last year, a drop of 10.6%, according to data obtained by Modern Healthcare from the Social Security Administration through a Freedom of Information Act request. The total decline in SSI claims in states that expanded Medicaid in the first six months of 2014 was 11.2%, compared with 10.0% in non-expansion states.

Back in June 2012, an uninsured diabetic waiting in line for treatment at a Remote Area Medical clinic in rural Tennessee forecast such a drop to New Republic reporter Alec MacGillis:

Instead of adding copper plans to the ACA marketplace, enhance bronze

One of the relative successes of the ACA's first open season is the high rate at which private plan buyers who were eligible for Cost Sharing Reduction (CSR) subsidies, which attach only to silver plans, did in fact choose silver.

In so doing, they resisted the temptation to pay far less per month for bronze plans, which carry sky-high deductibles and out-of-pocket maximums, unsoftened by CSR. As I've noted before, in the federal marketplace only 15% of buyers eligible for any kind of subsidy (including those who earn too much for CSR) bought bronze plans.

That's kind of surprising, since the premiums for silver plans are quite high for those in the middle income range of CSR eligibility. For a 44 year-old earning $23,000 per year, the benchmark second-cheapest silver plan in 2015 will cost $118, and the cheapest silver is usually only a few dollars cheaper.  The cheapest bronze plan price for this 44 year-old varies widely by state and county, falling most commonly in the $50--$75 range. That price spread between bronze and silver widens with age; a buyer in her 60s at this income level will often pay nothing or next to nothing for a bronze plan, versus the same $118 for silver (the subsidized benchmark price is a percentage of income and doesn't change with age).

I am troubled by the high premiums that low-income people have to pay for silver. $118 per month on an income of under $2,000 per month is quite a swallow. Though paying the extra premium for silver could save the buyer thousands in out-of-pocket medical costs, I'm impressed that so many many had the discipline to do it.  Prompted by a comment by xpostfactoid reader Bob Hertz, I find myself wondering: why do CSR subsidies attach only to silver plans?

What I wanted to ask Kevin Counihan

At a press briefing held yesterday, ACA marketplace CEO Kevin Counihan urged current ACA private plan holders to shop for a new plan, as "more than seven in ten of our customers can find lower prices by shopping."  Good -- the marketplace has gone all-in recently to try to convince existing customers not to renew their current plans without price-checking.

The next part of his message, however, betrays a skewed focus in my view. It's this: “Roughly eight in ten of our customers can get coverage for less than $100 a month after tax credits." That puts the focus unduly on premium, which is tantamount to dangling high-deductible bronze plans in front of low-income buyers.

The fact is, if you have access to a plan with a subsidized premium under $100, you are likely to be eligible for Cost Sharing Reduction (CSR) subsidies that will reduce deductibles and copays. CSR will cut out-of-pocket costs dramatically if your income is under $23,340 for a single person (200% of the Federal Poverty Level), and more modestly if your income is above that but below $29,175 (250% FPL).* But those secondary subsidies are available only with silver level plans, which have higher premiums than bronze.

Using Healthcare.gov's shop-around feature, I spot-checked the highest income that would enable a 44 year-old solo buyer to get the cheapest bronze plan in her zip code for under $100, give or take a dollar or two. In Chicago, it's $25,500. In Miami, it's $26,000. In Dallas, $27,500. In Biloxi, MS, $28,800; in Missoula, Montana, $25,500; in Newark, NJ, $27,700.  All of them are under the CSR threshold.

Older buyers with somewhat higher incomes can get bronze plans for under $100, since  the price spread between bronze silver increases with age.** In the six towns mentioned above, a 64 year-old could slip under the mark with an income ranging from $29,000 (barely CSR-eligible) to $33,500. Still, it's fair to say that the vast majority of buyers who can get a plan for under $100 are CSR-eligible.

It's the wages, stupid

"I'm no economist," to paraphrase Republican presidential hopefuls. But even a casual reader knows that for 35-odd years the lion's share of economic growth has gone to the wealthiest, and that the trend has accelerated in the last decade.

We're told, e.g. by David Leonhardt, that arresting the trend and creating wage growth is a gigantic mystery, and that Democrats, ostensibly the party of the less-than-wealthy, can only nibble around the edges, as with middle class tax cuts. That is, get GDP growth out of near-neutral and wage pressure will rise.

Now cometh billionaire Nick Hanauer, this generation's class traitor extraordinaire, to call bullshit and place the spotlight squarely on labor law and deliberate policy choices that have eroded workers' leverage vs. owners.  His focus is on wages -- specifically, in the piece below, on overtime pay. You can extrapolate and imagine a party that focuses relentlessly on the rules governing pay and workplace rules. I'm quoting an extended chunk here because I want to add my drops to the ocean, i.e. get a few more people to read this:

That high deductible ain't ineluctible

Dulce et decorum est to highlight the plight of low-income ACA shoppers who choose sky-high-deductible Bronze plans on the ACA exchanges. In some states, there are far too many of them.

But if you're going to do this, for God's sake bring into the narrative the Cost Sharing Reduction subsidies that attach to silver plans for low-income buyers, reducing deductibles and copays. For some buyers, the higher (though subsidized) silver premiums are a hard swallow.  But the story is incomplete if you don't lay out the choice. 

"Ware that swinging benchmark!" ACA Auto-renewal peril in Philadelphia

How could an ACA silver plan that cost a low-income family of three in Philadelphia $0 per month in 2014, with a $0 deductible, soar to $196 per month in the coming year?

A shifting "benchmark" silver plan and the disappearance of a large price spread between the benchmark second-cheapest silver and the very cheapest silver -- that's how,

Emily Van Yuga, an ACA outreach and enrollment coordinator for The Health Federation of Philadelphia, explained to me that last year, practically every one of the organization's clients bought that cheapest silver plan. This year, they all have to switch. Fortunately, the state is expanding Medicaid for 2015 (via a "private option" that the incoming Democratic governor, Tom Wolf, has vowed to scrap for traditional Medicaid), and most of the Federation's poor clients will will be eligible.

But the wildly swinging benchmark is a cautionary tale for 2014 ACA plan buyers who want to stay insured via the exchanges in 2015. I've laid it out in some detail on healthinsurance.org.

This is how you let people know what the ACA has to offer

According to a recent Kaiser Family Foundation survey, 53% of the uninsured don't know that the ACA provides financial help to low and moderate-income Americans to help them get insured. Last year, visiting Healthcare.gov or state exchanges didn't always alleviate the ignorance. An April 2014 McKinsey & Co. survey found that two thirds of subsidy-eligible respondents who visited the federal exchange,  remained uninsured and cited unaffordability as the reason did not know that they were eligible for subsidies.

I've asked before how so many visitors to Healthcare.gov could come away not knowing that their coverage would be subsidized. One answer: most did not find their way to the shop-around feature, which enables a user to enter a handful of data points (home location, household members with ages, and household income) and get plan price quotes with the subsidy included (or a notice that the user is likely eligible for Medicaid).  The shop-around was not functional until December 2013 -- and from that point on,while it wasn't exactly buried, it was hiding in plain site among several other potential starting points on the hc.gov home page.

This year it's different. The shop-around itself is streamlined a bit -- but more important, the home page steers users to it. "See plans and prices" is one of just two prominent options on the home page -- the one on the left, where reading starts.  If you pick the other -- "get started" -- you're prompted for your home state, after which you're again presented with a binary choice: see plans and prices, or apply now. "See plans and prices" is a bigger button.

In the same vein, email encouraging shop-around is pushed out to those who have created logins but have not enrolled in a health plan, either last open season or for 2015. I created a login last year, though I get my insurance elsewhere. This afternoon I received an email that looks like this:

View in browser | This newsletter created and distributed by Centers for Medicare & Medicaid Services Cyber Monday: Shop for health plans today This Cyber Monday, don’t forget to shop for health plans on HealthCare.gov. Getting covered may be cheaper than you think and you could be eligible for lower premiums and out-of-pocket costs. Take charge of your health care this holiday season. You’re on your way to the best gift of all – peace of mind for you and your loved ones. Get started today! Just enter your zip code to preview 2015 plans and estimated prices. Remember: Act by December 15 and your new coverage can start as soon as January 1 The HealthCare.gov Team

That big fat button leads straight to the shoparound, which begins with a zip code prompt. If you enter the requested info, you can get subsidy-inclusive price quotes within 30 seconds. That should give some uninsured people at least an understanding that "the government will help pay for coverage for low and moderate income Americans."

Now, if only the hc.gov shop-around would default results to silver for those eligible for Cost Sharing Reduction.  Calling Kevin Counihan....

Connecticut's ACA exchange shows how to communicate with low-income health insurance buyers

In my ongoing quest to figure out why ACA private plan buyers bought low-premium, high-deductible bronze plans in much higher proportions in some states than in others (e.g., 41% in Hawaii, 8% in Mississippi), I have noted that bronze plan takeup correlates roughly, but by no means perfectly, with state median household income and public health measures.

Poorer, less healthy states tend to have lower bronze and higher silver plan takeup -- and that's as it should be. Buyers with household incomes under 200% of the Federal Poverty Level (FPL) are eligible for Cost Sharing Reduction (CSR) subsidies that radically reduce deductibles, copays and maximum yearly out-of-pocket (OOP) costs.  But CSR is only available with silver plans. (A much weaker CSR is available to buyers with incomes between 200 and 250% FPL, only marginally reducing OOP costs below the silver plan standard.)*

The tradeoff for low income shoppers is an often painfully higher monthly premium -- say, $30-$70 more for an individual -- in exchange for potentially thousands of dollars more coverage of out-of-pocket costs. For the most part, lower income shoppers made the right, if difficult, choice. Nationally, just 20% of all buyers on all exchanges chose bronze plans; just 15% of subsidy-eligible buyers in the 36 states on Healthcare.gov last year chose bronze; and the percentage among CSR-eligible buyers was even lower. In low-income Alabama, just 6% of subsidy-eligible plan buyers chose bronze. In Mississippi, just 7% did.

Not all poor states had low bronze takeup, though, and not all rich ones had high takeup. One outlier is Connecticut, the second richest state in the nation, with a 2013 median household income of 67,718. Just 16% of Connecticut buyers selected bronze, putting the state in a four-way tie for 12th-lowest nationally -- i.e., in the lower third of states. The only other relatively wealthy state in the top 16 was New Jersey, with 14% bronze takeup and a median household income of $61,782.

Can the ACA exchanges steer customers away from bad choices?

An important feature on Healthcare.gov -- improved for the new open season, I believe -- could steer significant numbers of users toward plans best suited to their needs -- and perhaps point a way towards solving the "auto-renewal" problem, whereby existing plan holders may face steep price hikes if they fail to comparison -shop.

The feature in question is addressed to those buyers who are eligible for Cost Sharing Reduction subsidies, which lower plan deductibles and out-of-pockets costs for lower-income buyers -- but only if they buy silver-level plans, which will cost them significantly more per month in premiums than bronze-level plans.

Lower income buyers who choose bronze plans, which have lower premiums, can forfeit thousands of dollars' worth of CSR benefits. Fortunately, the vast majority of CSR-eligible buyers do seem to have found their way to silver, notwithstanding premiums that can be tens of dollars per month higher for individuals and over $100 per month more for families.

Dave Chandra, a Senior Policy Analyst at the Center on Budget and Policy Priorities and a Certified Application Counselor, tells me that this year, if an applicant who qualifies for CSR takes steps toward buying a bronze plan (or, less probably, gold or platinum), a prominent pop-up message will warn her that she is eligible for CSR and will forfeit it if she proceeds. Here it is:

Why go for the bronze?

I've devoted a lot of posts to worrying about who bought high deductible bronze plans but shouldn't have, especially those who were eligible for Cost Sharing Reduction subsidies if they bought silver (Fortunately, most CSR-eligible buyers did choose silver.) This evening I have a post up on healthinsurance.org digging into who should buy bronze -- that is, for whom is a plan with, say, a $5,000 deductible at least a rational choice.

One key: in  some states and counties, some bronze plans provide substantial benefits that kick in before the deductible is reached -- say, $20 primary doctor visits or $10 generic drug copays. Another: for the unsubsidized, premiums climb steeply with age, while deductibles and copays remain the same regardless of age. For the rest, I hope you'll take a look.

The ACA and the white working class

When Bill Gardner this morning pointed out, as many have, that Americans approve of the core components of the ACA but disapprove of the law, I expected the corollary to be "slander works," or"it's really hard to communicate how these moving parts fit together," or some combination of the two.

Instead, I was confronted with this chart from a paper by Henry Aaron and Gary Burtless:

Gruber clips inspire powerful condensed defenses of the ACA

On occasion, I've made my case against opinion writers' "paragraph briefs," which make an omnibus case for something by packing disparate and often dubious assertions in comma-separated series.

An often more powerful variant, though still subject to slipping in slugs and ringers, is the link-packed paragraph brief.  These cite an array of evidence in a way that dares the reader not to take the cited authorities on faith -- each of them, maybe a half-dozen, are a click away. Of course, most of us do take most of them on faith most of the time. But the cards are on the table.

The Gruber brouhaha has driven a lot of progressive policy wonks to retrospection -- reviewing the legislative and political history of the ACA while chewing over Gruber's assertions that the process was deceptive and his apparent early impression that federal subsidies to states that built their own exchanges might not be immediately forthcoming.  That process has given rise to what's struck me as two particularly powerful paragraph briefs.

First, Ezra Klein delivers a short legislative history that rebuts the preposterous Halbig/King contention that the ACA's drafters intended to make premium subsidies available only to buyers in state-run exchanges:

Fleshing out a (real) ACA hardship story in the WSJ

It's inevitable that reporters' vignettes about ACA shoppers will often lack context or essential details. Print space is limited, readers' attention is limited,  reporters' time is limited, and protagonists' grasp of their own experience may even be limited.

Still, the back stories are often worth probing (3, 2, 1. 0). Here's one from today's Wall Street Journal, with Louise Radnofsky, Stephanie Armour, and Anna Wilde Mathews reporting on the first day of Open Season II. There's no inaccuracy, but the rate-shock subplot in this brief account does leave a question mark:

The Times wrestles with ACA re-enrollment; I call some fouls

To a point, New York Times healthcare writers (see byline below) did a good job explaining the complexities of the renewal decision facing many buyers of health plans on the ACA exchanges for 2014. But I have three beefs with the front-page presentation.

The first is in the headline (not the reporters' responsibility). The lead that follows clarifies the problem -- but for many, of course, the headline shapes perception:

Cost of Coverage Under Affordable Care Act to Increase in 2015
By ROBERT PEAR, REED ABELSON and AGUSTIN ARMENDARIZ NOV. 14, 2014

WASHINGTON — The Obama administration on Friday unveiled data showing that many Americans with health insurance bought under the Affordable Care Act could face substantial price increases next year — in some cases as much as 20 percent — unless they switch plans.

Unless they switch plans is the key. For the 85% of buyers who qualify for federal subsidies, their costs will not go up at all if they buy the benchmark second-cheapest Silver-level plan, or a cheaper plan -- except insofar as their income rises. Their share of the premium is a fixed percentage of their income. In fact, if their income is flat they may qualify for higher Cost Sharing Reduction (CSR) benefits, since the formula for determining those benefits is adjusted yearly for inflation.

Getting the word to the uninsured: Can Healthcare.gov show the subsidy, pronto?

More than half of the uninsured don't know that the government will help fund their insurance, according to the Kaiser Family Foundation. More than half of the subsidy-eligible who shopped but didn't buy on healthcare.gov didn't recognize that they were eligible for subsidies, according to McKinsey and Company.

A functioning shop-around feature, in which a user punches in location, household members and income and gets price quotes with subsidies included, could be a major weapon against that widespread ignorance. When Healthcare.gov launched, or failed to launch, last fall, it didn't have one. In December a shoparound was up and functioning -- but many folks never saw it; the home page didn't particularly steer you to it.

This year is different. The shoparound showing quotes for 2015 was up before Open Season launched, and you couldn't miss it (good news: now that Open Season has kicked off, that's still true). How effective is it?

I have an article up on Healthinsurance.org that explores its strengths and weaknesses, with expert health. In brief, the good news: you can't miss the shoparound when you visit hc.gov, and if you try it, you can get price quotes in under a minute.  And the bad: the guidance toward silver plans for those eligible for Cost Sharing Reduction subsidies, which are available only with silver, is still weak, and the information about CSR subsidies is incomplete. More generally, the level of decision support is not up to that of select states, like Idaho, the only state to exit Healthcare.gov and launch its own exchange this year.

Is the tax code the best route to attacking wage stagnation?

David Leonhardt identifies stagnant wages as the political issue of our time and the prime mover of Democrats' current woes, as they've been left holding the bag during a period in which median income has fallen. He runs through a list of measures that in part address the problem, of which some (infrastructure) have been blocked by Republicans, others (investment in education) work slowly (if at all), and still others (health reform) have made some headway -- but without much direct or immediate impact on most middle class voters. He then segues to a short-term solution that he suggests might provide at least political relief:

Truly new ideas don’t come along very often in any field, including economics.

So it goes with lifting middle-class incomes. The best hope for doing so, in the immediate future, is probably the oldest and most obvious play in the book: a tax cut.

A few years ago, a middle-class tax cut would have seemed a silly idea. Both Mr. Bush and Mr. Obama had already cut taxes, and the federal budget deficit was enormous. But the deficit has since fallen sharply, thanks in part to lower health costs. Meanwhile, middle- and lower-income families are reaping a disproportionately small share of economic growth. Having the government try to rectify the situation doesn’t sound so silly now — and probably won’t in the 2016 presidential campaign.

Leonhardt admits that the country as a whole is under-taxed, short of revenue for other economy-building action. Hence he suggests pairing a middle class tax cut with a further hike on the wealthy, which of course Republicans will never allow. It's not entirely clear whether he's touting the tax cut because it helps plug the income gap a bit, or because it may stimulate the economy and thus tighten the labor market enough to generate upward pressure on wages. Most likely both.

Healthcare.gov 2.0 is live. A couple of problems...

Healthcare.gov's shop-around feature for 2015 went live last night. While there are some notable improvements, I see a couple of problems that I want to highlight right away.

In the quest to design a website that helps people find the health insurance that's right for them, there's a tension between making the process easy and providing essential information. The new shop-around has come down on the side of "more info" than the prior one. But the info is not always more accessible.

First problem: sometime in the off-season, on the shop-around feature, hc.gov added pop-up definitions of "deductible" and "out-of-pocket maximum" and "co-payments/co-insurance" on all price quotes. Inexplicably, they're gone in the 2015 shop-around.  Maybe they'll be coming online shortly? (Shop-around for the remainder of 2014 is still live if you want to compare.)

Healthcare.gov is already better than it was when Open Season ended

On the eve when Healthcare.gov is scheduled to go live with the shop-around feature for plans available in 2015, here's a spot of good news about how that feature's already been upgraded. This is a pull-out from something I noticed mid-post, and so buried a bit, late last week.

[Update: 2015 shop-around is live now. As HealthSherpa did during the last open season, its starts with a single prompt for a zip code to draw a user in. While it asks for the same info as last season, it breaks the presentation into several screens, probably help people avoid missing key questions. BUT...the mouseovers are gone! Update post here.]

One complaint often voiced about healthcare.gov last year was that important information was not provided in context. For example, when University of Pennsylvania researchers studies the experiences of young,  well-educated users of the site, their first recommendation for improvement was to provide instantly accessible glossary definitions of key insurance terms -- i.e., popup definitions that appear when you mouse over the terms, on the plan price quotes or elsewhere.

The shop-around feature on hc.gov has remained live (though somewhat difficult to find) during the off-season, for the benefit of people eligible for "special enrollment periods" because they've undergone life-changing events such as job loss or divorce or marriage.  And I'm happy to report that at some point in recent months (or weeks), pop-up definitions have appeared. They work on the screen grab below:

Evidence from Kaiser: Most ACA shoppers made informed choices

How well-equipped are America's uninsured to shop for private health insurance in the ACA's marketplace?

The scary news going in was that most of the target population had a poor grasp of fundamental insurance concepts such as "deductible" and "copay." The good news is that most buyers seem to have picked up a working knowledge of the basic tradeoff between monthly premiums and likely out-of-pocket costs by the time they pulled the trigger.

I have noted in multiple posts, summarized here, that the vast majority of lower-income ACA shoppers avoided high deductible bronze plans and availed themselves of the Cost Sharing Reduction  (CSR) subsidies available only with silver plans -- even when, as in Mississippi, the silver plans cost them significantly more per month.  Now, Kaiser Family Foundation survey data, reported this week, suggest that private plan buyers considered deductibles and co-pays almost as important as monthly premiums.

Master saboteurs

You've got to hand it to Mitch McConnell and the Republicans generally: Basically every aspect of their strategy and execution since Obama was first elected has been effective. Poison public perception of effective legislation like the stimulus and the ACA? Check.  Block all constructive legislation since winning the House, and blame Obama for inaction?  Check. Inhibit economic growth with savage austerity during a demand slump?  Check. Outmaneuver the president on budget issues by proving willing, or seeming willing, to shut down the government, default on the national debt, and pull the trigger on spending cuts beyond what anyone would have dreamed a few years ago? Check.  Depopulate the executive branch by slow-walking all appointments (until the filibuster rule change this year)? Check. Disenfranchise hundreds of thousands of black and Hispanic voters with voter suppression measures? Check. Flood the airwaves with dark money supplied by their corporate and ideological masters? Check.

It's all worked. Some say the victories are Pyrrhic and will be short-lived. But if they can keep Obama's approval numbers in the low 40s or worse, and keep economic growth at a steady sputter, they may win control of the only branch and level of government they don't dominate.

Two ways to reform the ACA's free preventive services

The Wharton School's Mark Pauly has co-authored an article (with Duke's Frank A. Sloane and Sean D. Sullivan at U. Washington) arguing that the free preventive care services mandated by the ACA to be covered by all insurance plans should be subject to cost-benefit analysis. Currently they are not; the decisions of the two entities that determine which preventive services must be provided for free  "are based on a comparison of health benefits and risks alone," as Rebecka Rosenquist summarizes on the blog of the Leonard Davis Institute at Penn. She further notes:

Pauly and colleagues note that the groups “have no responsibility for a total expenditures budget for medical services that would constrain their recommendations.” They cite an analysis that shows a 1.5 percent increase in private insurance premiums due to the cost of the US Preventive Services Task Force recommendations. “When they do recommend a new costly vaccine or service, that recommendation usually increases both public and private spending (including insurance premiums).”

Indeed. Outcomes research funded by the ACA should also shape Medicare reimbursements, but demagogic screams about health care "rationing" made that impossible. Recall, too, the outcry in November 2009 when the US Preventive Services Task Force -- one of the two agencies* charged with setting the ACA's free preventive services mandates -- downgraded its mammography recommendation for women under 40, deeming that the decision whether to undergo the test should be based on individual circumstance.  The ACA drafters rushed to mandate free mammograms at any age.

Rational choice in the ACA marketplace

Here's another piece of the puzzle in my quest to figure out why ACA private plan buyers bought low-premium, high-deductible bronze plans in much higher proportions in some states than in others (8% of Mississippi plan buyers selected bronze; 41% of Hawaiian shoppers did). A good predictor is each state's public health profile. (Thanks to Brad G. for putting me on the trail.)

Bronze plans, in which deductibles average over $5,000 per person, are bad deals for people who are likely to make heavy use of medical services. They're also bad deals for low-income buyers, who can access generous Cost Sharing Reduction subsidies that reduce deductibles and co-pays (radically for those with incomes under 200% of the Federal Poverty Level) -- but only if the buyer chooses a silver plan. Low income buyers are often in poor health, and know it. Most ACA buyers have been uninsured and so may have pent-up healthcare needs.

I have previously noted that a very high percentage of buyers eligible for CSR did in fact choose silver plans, and that lower income states did have lower percentages of bronze buyers -- though there are notable exceptions up and down the scale. The same is true for measures of public health in each state. Wealthier states tend to have healthier residents -- though wealth disparities within states can complicate the picture.

In the chart below, I have tabulated three public health measures drawn from the Kaiser Family Foundation's State Health Facts: life expectancy, incidence of  Diabetes, and obesity -- for the ten states with the lowest and highest takeup of bronze plans. The average bronze takeup states in the former group is 14.25% of all plan buyers, and in the latter group, 31.1%.  In all three health measures, the low-bronze-takeup states as a group significantly underperform the high-bronze-takeup group. The income disparity between the two groups is also stark.*

Maybe we should call blue states bronze states

In several posts, I have tried to track how successful the ACA exchanges were in steering lower-income buyers of private plans toward silver plans, the only metal level at which subsidies that reduce deductibles and out-of-pocket costs are available. Low-income buyers of bronze plans, which offer low premiums but sky-high deductibles, forfeit access to these Cost Sharing Reduction (CSR) subsidies, which radically reduce costs for those with household incomes under 200% of the Federal Poverty Level and phase out at 250% FPL.

On the whole, the news is good, though information that correlates metal level selection with buyers' income is sketchy. In New York, the only state that breaks out metal level selection by income bracket, 89% of buyers under 200% FPL chose silver plans and so took advantage of CSR. In the federal exchange, only 15% of buyers who qualified for any kind of subsidy bought bronze plans.

Bronze plan selection varies quite a bit by state, however, for reasons that are hard to tease out.  For starters, more people on average bought bronze in the 14 states (plus D.C.) that built their own exchanges -- most of which are also among the wealthier states.

State per capita income seems to affect metal level selection. interacting with other factors such as premium prices, the quality of outreach to the uninsured, whether the state expanded Medicaid (which takes out potential buyers between 100 and 138% FPL), and the age composition of the buying pool.*

My thanks to a friendly stranger on Twitter who put together a scatterplot correlating state median income and bronze plan selection. That led me to the latest census data on median household income by state. Below, I've matched it up with HHS state-by-state data on ACA buyers' metal level selections.

For ACA buyers at all income levels, here are the bronze takeup rates for the thirteen highest- and thirteen lowest-earning states:

In Mississippi ACA rollout, one big disaster, one small success

Politico's Sarah Varney has a beautifully reported, infuriating account of how Tea Party government in Mississippi sabotaged the state's ACA rollout, leaving Mississippi "the only state in the union where the percentage of uninsured residents has gone up, not down."

The tale has three parts: 1) the state's Tea Party governor elected in 2012, Phil Bryant, undercut and induced the closure of the state's home-built insurance exchange, a project in which the state insurance commissioner (and Haley Barbour crony) Mike Chaney was deeply invested, and which was briefly operative before full ACA implementation. 2) The state refused to participate in outreach to the uninsured and, by closing its exchange, forfeited substantial federal aid for outreach. 3) The state rejected the ACA's Medicaid expansion, which would have extended Medicaid eligibility to an estimated 333,000 uninsured residents. Mississippi was also among the poorest performers in attracting competition to the exchange: most counties had only insurer, Humana, offering plans.

I would add a footnote. Of those three factors, the refusal to expand Medicaid in the nation's poorest state was by far the most consequential.  As part of Healthcare.gov, Mississippi's state exchange did not ultimately perform so badly.  The state exchange enrolled 61,494 people in private plans, 20.6% of the estimated 298,000 uninsured residents eligible to buy insurance on the exchange. That's not great, but it's a higher percentage than that achieved in several states that built their own troubled exchanges, and better than 17 states overall.

Had Mississippi achieved the national average percentage of eligible signups, 28%, another 22,000 residents would be insured. An estimated 138,000 Mississippians, by contrast, fell into the so-called Medicaid gap -- that is, they would have been eligible for the blocked expansion but earn too little to qualify for subsidized coverage on the exchange. Again, 333,000 state residents were estimated to be newly eligible for Medicaid under the expansion. And many states that expanded Medicaid actually exceeded their target enrollments.

What the ACA can't cure

I recently referred to Investor's Business Daily reporter Jed Graham's coverage of the ACA as "adversarial." He objected. I responded, "I don't ignore or minimize ACA flaws but would not object to a characterization of my writing on it as "sympathetic."

That set me thinking about everything that troubles me about the ACA -- or, more accurately, things that trouble me about the US healthcare system that the ACA is unlikely to fix -- though it may help catalyze reform on several of these fronts. Here's the list:

1. All private health insurance in the U.S. is inadequate -- thanks to the shameful out-of-network billing, balance billing, and creative billing by hospitals, physicians and other providers documented in sickening detail by Elisabeth Rosenthal in her Paying Till it Hurts series. We are in the grip of a depraved system in which hospitals often operate as free billing zones and payers' attempts to control costs just generate new loopholes.

2. For the unsubsidized and lightly subsidized, private insurance on the ACA exchanges is too expensive. Or rather, medical care obtained under the insurance is too expensive.  One of the law's strengths is the Cost Sharing Reduction (CSR) that reduces deductibles and out-of-pocket costs for buyers with incomes below 200% of the Federal Poverty Level to levels comparable to those offered in top-grade employer-sponsored insurance (much more modest CSR is offered to those between 200% and 250% FPL).  Those cost control come into play if low income buyers choose silver plans (fortunately, most do) and if  they are not hit by the kind of out-of-network and balance billing that Rosenthal documents. Those above 200% FPL, however, have to choose between high monthly premiums and often sky-high deductibles, average over $5,000 for bronze plans (which may be tempting to many at the upper range of subsidy eligibility).

Ebola's Information Paradox, Part II: Do we hear?

Looking back to a devastating Cholera outbreak in a poor neighborhood of London in 1854, Steven Johnson notes that "it took two entire weeks before the press began treating the outbreak as a major news event for the city."  A hundred and sixty years later, we're safer (although more fearful) because news travels faster:

Compare this pattern of information flow to the way news spreads now. On Thursday, Craig Spencer, a New York doctor, was given a diagnosis of Ebola after presenting a high fever, and the entire world learned of the test result within hours of the patient himself learning it. News spread with similar velocity several weeks ago with the Dallas Ebola victim, Thomas Duncan. In a sense, it took news of the cholera outbreak a week to travel the 20 blocks from Soho to Fleet Street in 1854; today, the news travels at nearly the speed of light, as data traverses fiber-optic cables. Thanks to that technology, the news channels have been on permanent Ebola watch for weeks now, despite the fact that, as the joke went on Twitter, more Americans have been married to Kim Kardashian than have died in the United States from Ebola.

Well yes, wonderful. But how long did it take for news of a deadly, fast-developing epidemic in West Africa to bubble up into full public consciousness in the United States? The psychological quarantining of a poor region in the grip of a terrible affliction persists.

A surprise (to me) regarding Medicaid eligibility under the ACA

I learned an interesting fact about the ACA from Kaiser's Larry Levitt on Twitter today.

It's well-known to ACA watchers that a low-income worker whose employer offers insurance deemed "affordable" according to ACA formula cannot buy subsidized private coverage on the exchanges. What I suspect is less well-known, and what Larry spelled out, is that the availability of employer-sponsored insurance does not negate Medicaid eligibility for someone whose household income is low enough to qualify for Medicaid.

I agree

with this Dish reader:

I choose to believe that Obama will not adopt Bush administration interpretation of torture treaty obligations, will not adopt a West African travel ban, and will not go deep into Syrian quagmire.

Maybe “hope” is a better word.

Re Sully's closer: "I’m hoping too. And doing what little I can to help make it so": When I read the Times article claiming that Obama is "considering reaffirming the Bush administration’s position that the treaty [UN Convention Against Torture] imposes no legal obligation on the United States to bar cruelty outside its borders," I knew exactly what Sullivan's response would look like.  And that the White House would know too. And that Sullivan speaks for Obama's base on this front, or at least a large part of it. For whatever that's worth.

NYT spotlights plight of ACA bronze plan buyers, leaves out vital context

[first posted 10/18]

The Times has a front-page story today, by Abby Goodnough and Robert Pear, that highlights the plight of ACA private plan buyers who bought plans with such high deductibles that they are foregoing needed treatment.  This is a real problem -- bronze plans in particular have terribly high deductibles, averaging $5,000 per individual -- but vital context is missing. Here's the framing:

About 7.3 million Americans are enrolled in private coverage through the Affordable Care Act marketplaces, and more than 80 percent qualified for federal subsidies to help with the cost of their monthly premiums. But many are still on the hook for deductibles that can top $5,000 for individuals and $10,000 for families — the trade-off, insurers say, for keeping premiums for the marketplace plans relatively low. The result is that some people — no firm data exists on how many — say they hesitate to use their new insurance because of the high out-of-pocket costs.

The first thing to note is that low-income ACA shoppers were generally not subject to these high deductibles. Low-income marketplace shoppers should generally not be buying bronze plans  -- not only because the deductibles are higher than those of silver-level plans, but because the silver plans alone come with Cost Sharing Reduction (CSR) subsidies. These reduce deductibles and maximum out-of-pocket costs for buyers with household income below 250% of the Federal Poverty Level (FPL). CSR subsidies are really large for buyers under 200% FPL, giving silver plans actuarial values comparable to those of the most generous employer-sponsored plans for those in that income range. The Goodnough-Pear story does explain CSR, but deep in the story, following four hard-case individual narratives.

Bronze plans had relatively low takeup in the ACA's first open season. According to HHS statistics, just 20% of users in all marketplaces (state-run as well as healthcare.gov) bought bronze plans. Since 33% of buyers who earned too much to qualify for subsidies bought bronze, less than 20% of the subsidy-eligible must have done so.

The ACA marketplace and the toilet paper aisle

My last post was in protest to a New York Times front-page article that highlighted the very real plight of ACA private plan buyers who were forgoing needed medical care because they'd bought high-deductible, mostly bronze-level plans. My beef was that the article omitted important context, e.g., that only 20% of ACA shoppers selected bronze and that the vast majority of low-income buyers who were eligible for Cost Sharing Reduction (CSR) bought silver plans that allowed them to access those important secondary subsidies.

I also suggested that the four individual narratives in the piece should not be taken at face value -- in particular, the plight of one woman who had selected a bronze plan with a $6,000 deductible but was plainly eligible for CSR that would have brought the deductible down to $500 at worst and as low as $25, depending on what plan she chose. This woman plainly made the wrong plan choice -- in itself a significant problem, but not one that the Times article addressed.

I want to focus here on a second brief narrative in the Times story, in which the woman in question was somewhat higher-income and so faced a tougher choice, with less obviously attractive options. Here's the tale:

CMS warns current ACA enrollees to shop anew.

I am glad to note that CMS, in its outreach to current enrollees in ACA plans, is shifting its emphasis away from auto-enroll and toward encouragement to shop for the best deal.

When current enrollees log onto healthcare.gov  after the 2015 marketplace opens on November 15, their new applications  will be pre-filled with their latest information from 2014. That's good. CMS also provides a good deal of information in fairly simple terms in this 5-step instruction sheet. Also good. It begins with a useful warning:

REVIEW - PLANS CHANGE, PEOPLE CHANGE. Every year, insurance companies can make changes to premiums, cost-sharing, or the benefits and services they provide. Review your plan’s 2015 coverage to make sure it still meets your needs and you’re getting the best plan for you. 

What the outreach does not do is explain that a person's current plan may lose "benchmark" status if new (or revamped) entries undersell it -- and if so, the subsidized enrollee will be on the hook for the whole difference between the cost of the benchmark plan and her current plan. That's because subsidy levels are tied to the  price of the benchmark -- the second cheapest silver plan in a given area. If you buy that plan, your share of the premium will be a fixed percentage of your income. If your plan costs more than the benchmark, you pay the difference. That difference may be especially large for older buyers, for whom the unsubsidized premium can be up to three times as large as the premium for a younger buyer.

I can see why CMS might calculate that a "benchmark gap" is too complex a concept to explain in written materials. Encourage people to compare, and they should see the difference between the cost of their current plan and cheaper options.  I'll leave it to online "product scientists" or market psychologists or others with data and experience to judge whether that's the right call. 

Grazing in the gaffeteria

Kevin Drum meditates on "the usual preoccupation that political reporters have with process over substance":

For example, Steve Benen notes today that Kentucky Democrat Alison Lundergan Grimes recently dodged "a straightforward question about whom she voted for in the 2012 presidential election" and got hammered for it. But in Iowa, when Ernst refused to say if she wants to shut down the Environmental Protection Agency or what she'd do for those who’d lose health care coverage if Obamacare is repealed, the reaction was mostly crickets.

News from New York: Most low-income ACA private plan buyers chose wisely

Recent readers know that I've been trying to get a bead on how many lower-income buyers of private health insurance plans on ACA exchanges bought bronze plans and so forfeited Cost Sharing Reduction (CSR) subsidies that reduce deductibles and out-of-pocket costs. CSR, on offer to those with household incomes below 250% of the Federal Poverty Level (FPL), is available only with silver plans.

In the federal exchange, covering 36 states, 76% of ACA private plan enrollees who qualified for premium subsidies bought silver plans. Not all of them also qualified for CSR, and so it seems likely that a higher percentage of those who did so qualify bought silver. In the federal exchange, which accounted for about two thirds of all plans sold, just 15% of subsidy-eligible buyers chose bronze plans, which carry the highest deductibles and out-of-pocket (OOP) costs.

Three states that I know of, Washington, Colorado and New York, have published data breaking out buyers' metal-level selections according to specific income levels. New York and Colorado are the only states I know of that report specifically, albeit indirectly, on the choices of buyers with household incomes under 200% of the Federal Poverty Level (FPL), the cutoff for really substantial CSR. Colorado is an outlier with a very high bronze takeup, to be dealt with in a future post. The news out of New York, in contrast, is quite good on this front, though a bit tricky to tease out.*

Tax code progressivity isn't everything. But the top line matters

"Don't soak the rich," Edward D. Kleinbard admonishes U.S. policymakers in today's Times. Countries with less progressive tax systems than the U.S., which tax everyone more and spend more on social services and other public goods, do a better job of reducing inequality (and fostering citizens' welfare) than the U.S. does. Lower income citizens get disproportionately more value from government spending, and an adequate tax base must be broad-based.

I take the point -- made with equal force two days ago by Vox's Cathie Jo Martin and Alexander Hertel-Fernandez [update: Mike Konczal and Matt Bruenig both demonstrate the alleged US progressivity is an illusion -- see below]. But there's a counterpoint. The U.S. may have a more progressive tax system and skimpier social welfare than the wealthy countries of Europe -- that's a longstanding reality. But all these countries have moved in the same direction over the past thirty years, and all have suffered widening income inequality. Here's Thomas Piketty's explanation:

Footnote to a Kliff note

Walmart announced earlier this week that it would stop offering health insurance to 30,000 employees who work less than 30 hours per week. Sarah Kliff points out that many of them will be better off on ACA plans:

Think of the 36-year-old Walmart employee here in Washington, D.C. who works 29 hours per week at the company's average wage of $12.73 per hour. She earns just about $19,000 annually if she works every week of the year.

If Walmart doesn't offer her insurance, the Kaiser Family Foundation's subsidy calculator shows that she qualifies for a $1,751 subsidy from the federal government to help buy coverage on the exchange. With that financial help, she can buy insurance for as little as an $7 per month. As a low-wage worker, she gets some of the most generous financial help.

But if Walmart does offer her coverage, it becomes her only option. She doesn't qualify for federal help and the $7 plan disappears. Walmart's plan, meanwhile, is way more expensive. The average premium there works out to $111 per month.

For many Walmart part-timers, the ACA offers an even better deal than this snapshot shows.  In addition to a premium subsidy that covers three quarters of the monthly premium, this person (if single) is eligible for generous Cost Sharing Reduction (CSR) that dramatically reduces her deductible and maximum out-of-pocket (OOP) costs. DC is not on healthcare.gov, so I checked what would be on offer if she lived in Fairfax, Virginia. There, she could choose a silver plan that costs $64 a month, with a $600 deductible and a $2250 OOP max -- or a plan that costs $74 per month but has no deductible and a $2250 OOP max.

Paul Krugman agrees with me

Back when  Paul "the stimulus was too small!" Krugman was in full Cassandra mode, just after the November 2010 shellacking, I took issue with one of his numerous whacks at Obama:

...take this sideswipe at the stimulus in Krugman's latest crie de coeur about the Fed's refusal to raise its inflation target:

...fearing opposition in Congress, the Obama administration offered an inadequate plan, only to see the plan weakened further in the Senate. In the end, the small rise in federal spending was effectively offset by cuts at the state and local level, so that there was no real stimulus to the economy.

Wasn't one of the core purposes of the stimulus to offset spending cuts by state and local governments? That's what stimulus does -- offset drops in demand. Of course, Krugman believes that there was too little state aid, along with too little of everything, in the Recovery Act, and naturally a stimulus should do more than offset other government spending cuts. But still, offsetting those cuts is a "real stimulus to the economy." The Recovery Act unquestionably preserved hundreds of thousands of state and local government jobs, and GDP would have been lower if this hadn't been done.

This may seem a semantic quibble. But it's a symptom, I think, of an oversimplified narrative. Krugman has implied elsewhere that the right-sized stimulus would have set the economy roaring back to life (as has Martin Wolf). To what degree is that credible? If Obama had asked for $1.2 trillion and got $950 billion, what's the math on the counterfactual? Unemployment at 8.3%?  And the effect of such a drop on the electorate? I confess it could be substantial. But there's an awful lot of what-ifs there, beginning with the premise that a substantially larger stimulus could have got through the Senate. And the narrative leaves out some externalities, such as the Euro sovereign debt crisis, which seemed to stop a decent-looking recovery in its tracks. Not to mention the credible possibility, forecast now by a growing number of economists and business leaders (e.g., here and here), that a substantial recovery may be on the horizon now. 

Some time in 2012, Krugman had a change of heart about Obama, and now he is out with a defense of Obama's record just as a host of ex-cabinet members and in-office Democrats is piling on (he himself notes the irony in this). Now behold his retrospective view of the (still too-small) stimulus:

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 (healthcare.gov), 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?

ACA Signups: "Over 9.5 million served"?*

Charles Gaba has been tracking ACA enrollments during the off-season, as he did during open season. He estimates that approximately 9,000 people per day are signing up for private plans via "special enrollment" periods, with net attrition of about 2% per month as people drop plans for a variety of reasons.

Tonight Gaba estimates that there have been about 9.5 total private plan (QHP, for Qualified Health Plan) signups to date That's a number that most people will mentally offset, as HHS recently announced that about 7.3 million are currently enrolled in QHPs. Perhaps a bit less than half of that 2.2 million difference is comprised of people who never paid, the rest dropping plans at various points.

It's natural and to a degree fitting to focus on the number of current enrollees. That number is important in that a) the ACA has a long way to go to full takeup -- CBO forecasts 25 million exchange users by in 2018 --  and b) the states' risk pools need to maintain critical mass to establish a viable market. Still, the total number served since the outset -- discounting, perhaps, most of those who never paid -- is also significant.

Buying a health plan: Don't try this at home?

In a recent post, I cheered a bit while noting that most ACA marketplace users who should have bought silver-level health plans did in fact buy silver plans.

That is, most people whose income qualified them for subsidies reducing their plan deductibles and out-of-pocket costs -- subsidies available only with silver plans -- did buy silver. Somewhat less than 20% of those eligible for Cost Sharing Reduction (CSR) bought bronze plans, which have higher deductibles and copays and disqualify a buyer from CSR..

Perhaps a 15-20% "bad choice" rate is too high. After speaking with ACA navigator Kate Kozeniewski of Resources for Human Development (RHD), however, I had to wonder why the numbers weren't worse.

Premiums reign supreme

I asked  Kozeniewski, a program coordinator who helped oversee assistance provided to 45,000 people in Pennsylvania while directly assisting hundreds herself, whether clients generally understood the importance of CSR.

"We found across the board that people were not aware that cost sharing was not available to them unless they chose a silver plan," Kozeniewski said. Almost invariably, she said, people would look at the lowest monthly premium available (as reduced according to their income) and say,"This seems like it's within my budget, so I'll start here, and if this works, this is fine."

Having some health insurance is better than having none. But American insurance...

Those of us engaged in the long struggle to pass and implement the ACA have (not wrongly) fixated on how vital it is to have health insurance, and we've been cheered by the roughly 25% reduction in the nation's uninsured in the ACA's first year. We've also celebrated the ACA's ending of arbitrary policy rescissions, yearly and lifetime coverage caps, medical underwriting, and plans lacking essential benefits like childbirth and drug treatment.

Some coverage is better than none. But recent good reporting is also highlighting the extent to which much if not most health insurance in America remains inadequate, exposing plan holders to sometimes substantial, sometimes damaging and sometimes ruinous costs. The incidence of such exposure may be rising rather than falling, as employers continue to offload the cost of care onto employees.

Did too many low income ACA shoppers buy bronze plans?

Modern Healthcare's Virgil Dickson reports on a weak link in ACA coverage:

Obamacare enrollees are straining the finances of community health centers around the country, some health center leaders say.

The issue is that many lower-income patients with insurance coverage through the federal and state exchanges bought bronze-tier plans with lower premiums but high deductibles, coinsurance and copayments and no federal cost-sharing subsidies. When these patients face high out-of-pocket costs for care that falls below the deductible, they can't afford it. 

Deductibles on bronze plans average $5000 per person nationwide. In some regions, those high-deductible plans provide office visits and generic drugs at moderate co-pays before the deductible kicks in; in others, they don't. Lots of bronze plans really just provide catastrophic coverage with the ACA's mandatory free preventive care services -- substantial but not matching everyone's top needs by any means -- tossed in.

Silver (only) bullet: the lesser-known ACA subsidies

Low income people who qualify for private-plan subsidies under the ACA-- that is, those who earn too much to qualify for Medicaid but less than 250% of the Federal Poverty Level (FPL)-- should not, for the most part, be in bronze plans.  Recognizing that deductibles in the thousands are not viable for people at these income levels (138%--250% FPL), the ACA provides Cost Sharing Reduction (CSR) subsidies -- but only with silver plans (which have lower deductibles and copays than bronze to begin with). If you don't buy silver, no CSR fo you.

The CSR subsidies are particularly generous under 200% FPL, covering 94% of an average user's costs for those earning up to 150% of the Federal Poverty Level (FPL), 87% for those earning 151-200% FPL, and a more modestly boosted 73% for those between 200% and 250% FPL.

Most who should have bought silver bought -- silver

The good news is that overall, the marketplace worked more or less as intended, in that 76% of subsidy-eligible buyers on healthcare.gov bought silver plans, according to an HHS May 1 report. Of those who didn't, perhaps a higher percentage had incomes between 250%--400% FPL, which would at least mean that they weren't leaving CSR on the table.  Just 20% of users in all marketplaces (state-run as well as healthcare.gov) bought bronze plans, and since 33% of buyers who earned too much to qualify for subsidies bought bronze, somewhat less than 20% of the subsidy-eligible must have done so. I would hope, again, that the percentage of CSR-eligible buyers who bought bronze is lower still.

Repetition again*

I share in the general admiration for the tour de force in gotcha editing pasted below the jump -- so much so that I've added its author to my blogroll.  But of course I want to add my two cents.

Elisabeth Rosenthal exposes hospitals as free-billing zones

I stand back in awe from the healthcare reporting of The New York Times' Elisabeth Rosenthal, who since June 2013 has been exposing in front-page blockbuster after blockbuster the rampant greed and depraved price-gouging endemic to the US healthcare system. Her nine-part "paying till it hurts" series, indexed here, is worthy of a Pulitzer. It should galvanize the country as Silent Spring or The Other America did.

Rosenthal's latest exposes many hospital ORs as free-billing zones in which an array of doctors, physical therapists and other service providers can insinuate themselves in a procedure without the patient's prior knowledge or consent, whether they're in the patient's insurance network or not -- and then relentlessly pursue either the insurer or the patient or both for their exorbitant billings.

The most egregious example Rosenthal spotlights is when neurosurgeons or orthopedists call in out-of-network surgeons to assist -- who bill at out-of-network rates, to the tune of $117,000 in the headline case.  Then there's the smaller-scale gouging:

Unexpected fees are routinely generated outside the operating room as well. On the wards, a dermatologist may be called in to examine a rash and perform an expensive biopsy. The person in scrubs who walks a patient to a bathroom for the first time after hip surgery may turn out to be a physical therapist billing $400.

Rosenthal's fully-documented examples will make you afraid ever to set foot in a hospital -- unless perhaps you're on Medicare with full-bore Medigap insurance. A few policy takeaways from this tale of systemic depravity: