1.9 million private plan enrollees on Healthcare.gov would have been eligible for Medicaid if their states had accepted the expansion

In a post on healthinsurance.org, I report that almost 2 million of the private plan enrollees on Healthcare.gov would have qualified for Medicaid if their states had embraced the ACA Medicaid expansion.

That is, about a third of the six million-plus private plan enrollees in non-expansion states and about 22% of all ACA private plan signups would have been in Medicaid if the Supreme Court had not made the expansion optional or if every state had embraced it voluntarily. In that case, there would probably be fewer than 10 million signups in the "Qualified Health Plans" (QHPs) offered on the exchanges today.

In their furious rejection of everything associated with the ACA, and cruel denial of insurance to millions of their constituents, red state governors and legislatures gave the QHP markets in their states a vital boost.

In the healthinsurance.org post, I explore the weakness in exchange offerings that these statistics imply. In brief, because exchange offerings are so much cheaper and offer such dramatically better coverage at the lower end of the subsidy-eligible income range, takeup is dramatically better among the lowest-income eligible uninsured than among the uninsured in higher subsidy-eligible income bands, as Avalere recently concluded.

Here I just want to add some support to my calculation that about 1.9 QHP enrollees in non-expansion states had incomes in the 100-138% FPL range, which would have put them in the Medicaid pool in expansion states.

In Washington State, too many low-income bronze plan buyers

Washington HealthPlanFinder, the state's ACA exchange, has set the standard for enrollment data reporting, providing a more detailed and complete account of private plan buyers' demographics and behavior than any other state to date. Washington is a wealthy state, with a median household income (2013) of $60,106, compared to a national median of $51,939.   Its buyers of private plans on the exchange (known as Quality Health Plans, or QHPs) are accordingly a much wealthier group than the average among the 37 states that used the federal exchange, healthcare.gov.

Only 12.5% of Washington's QHP buyers have incomes under 150% of the Federal Poverty Level (FPL), compared to 24% in those healthcare.gov states that accepted the Medicaid expansion -- and 50% in healthcare.gov states that refused the expansion. (In non-expansion states, eligibility for QHP subsidies began at 100% FPL, versus 138% FPL in expansion states, and those between 100 and 138% FPL swelled the QHP enrollments, accounting for about a third of all enrollments in non-expansion states.) Low takeup in this low-income band perhaps explains in part why Washington has reached just 32% of its target QHP market as calculated by the Kaiser Family Foundation, versus 42% for the nation as a whole. Conversely, Washington has been very successful in expanding its Medicaid rolls. The enrollment report tallies 533,628 "Medicaid expansion adults," far exceeding a 2012 Urban Institute forecast of 330,000.

Too many poor buyers of bronze plans

While Washington's relatively small number of enrollees in the 100-150% FPL income band may be in large part a matter of demographics, there is one way in which the state exchange has seemingly failed lower-income buyers. Takeup of Cost Sharing Reduction subsidies, available only with silver plans and only to buyers with incomes below 250% FPL, is lower in Washington than on healthcare.gov, and much lower than in states like New York and Connecticut that take special measures to highlight CSR for those who are eligible for it.

"Obamacare, Obamacare! stay a little. Ha!*

As Greg Sargent never tires of reminding us, Republicans have been promising an ACA replacement plan for 50 months now and haven't been able to deliver. Ergo, Sargent asserts, claims by Republican legislators that they are developing a plan to replace the ACA and keep premium subsidies flowing should the Supreme Court rule for the plaintiffs in King are a ruse, designed to convince swing justices that chaos won't erupt if the court invalidates subsidies credited through the federal exchange.

That is probably at least partially true, as Republicans have long proven themselves unable to unite behind a plan that would replace a large portion of ACA benefits while creating different winners and losers. But there are plans and plans (and motives and motives), and elected officials don't yank away existing benefits lightly. While Republicans may well be paralyzed by a Supreme Court decision that gives them what they say they want, there are elements in the plans they're floating that could find their way, sooner or later, into a post-King settlement.  Republicans' lack of unity could lead them to punt, perhaps declaring victory with relatively modest gains while restoring most of the status quo.

Most interesting in this regard are Republican proposals to freeze or patch the the current system while they devise a fix. Here's how one very sympathetically worded account describes such a measure:

Israelis read Obama right. Well, half right.

I have been arguing that the Obama administration's promise to reassess its approach to the Israeli-Palestinian conflict in light of Netanyahu's late-election disavowal of a two-state solution is not an expression of pique but the seizing of an opportunity. A report from the New York Times' Jodi Rudoren suggests that a lot of Israelis agree with me:

Several Israeli analysts said the administration’s criticism of Mr. Netanyahu seemed like a pretext for a longstanding plan to change the United States’ policy of protecting Israel in international forums, which the administration has said it will reassess. Others suspect a ploy to undermine Israel’s lobbying efforts against the American negotiations for a nuclear accord with Iran.

I don't know that there was a longstanding plan; policymaking is usually more reactive than people assume. But any rational U.S. actor (see Baker, James) would look for an opportunity to alter the U.S.'s one-sided relationship with Israel -- the U.S.'s near-total absence of leverage, the political imperative to provide unconditional support no matter how thoroughly Israel undercuts U.S. policy, the impossibility of imposing consequences such as limiting aid or joining the rest of the world in condemning Israeli settlement activity.

I see Giora Eiland, a former Israeli national security adviser (cited by Rudoren), as half right here:

Chastising Netanyahu: Fury or cold calculation?

Characterizing the Obama administration's reaction to Netanyahu's late-election comments denigrating Arab voters and promising to prevent formation of a Palestinian state, the New York Times' Jodi Rudoren and Julie Davis echo a comment them in asserting

the White House issued a new signal that it remained furious with Mr. Netanyahu for campaign comments that also appeared to close the door on a two-state solution to the Palestinian conflict.

and

there was no sign of any softening from the administration over its anger with Mr. Netanyahu over his comments about the Palestinian question.

Perhaps Obama, Kerry et al really were personally incensed by Netanyahu's comments. I've read at least one account quoting anonymous sources who claimed they were. Perhaps they find it useful to project "fury."  But I see the reaction more as seizing an opportunity than as an expression of pique.

On U.S. support for Israel, Obama is turning the battleship a few degrees

As Obama discussed U.S. policy with respect to Israel in his recent sit-down with Huffington Post's Sam Stein, there were a couple of surprise turns -- at least, surprising to me as a transcript reader.

First, this:

OBAMA: Well, I had a chance to speak to Prime Minister Netanyahu yesterday, congratulated his party on his victory

'Congratulated...his party.' Not Netanyahu himself, not for the campaign he ran. Every word that Obama has said in response to Netanyahu's late-stage campaign comments and the election results has been calibrated to pressure the prime minister to prove by deeds, not words, that he is walking back his campaign promise to forestall a Palestinian state on his watch. Congratulation of the party, rather than the man, arguably advances that aim: "So we’re evaluating what’s taking place. I think Prime Minister Netanyahu still has to form a government; we’ll be in close consultation with them."  On the plus side, Netanyahu's surprise success came at the expense of parties on his right, so should he reverse tone and course he has some room to maneuver.

No one expects him to, though. Which leads to the second surprise turn of a sentence:

Obama's America, and mine

Not to be narcissistic or nuttin', but Obama's celebrated "we are..." riff at Selma, which widened the circle of national inclusion to encompass the Lost Boys of Sudan and (implicitly) undocumented immigrants crossing the Rio Grande, as well as "the Tuskeegee Airmen, Navajo code-talkers, and Japanese-Americans who fought for this country even as their own liberty had been denied," reminded me of a children's poem I wrote in the mid-nineties. It reflects a children's book canon (and a little extracurricular YA reading at the end) from the sixties and early seventies that perhaps Obama shared in part:

American Child 

I've heard a lot of stories, I'm from everywhere.

I'm Abe Lincoln splitting logs, one swing for each,

Alone, speechifying the squirrels.

I'm a redbacked Hebrew slave, gathering straw

Under a red Egyptian sun.

I'm the old slave Joe, head bending low,

Crossing cottonfields, heading home.

I'm an Indian girl, gathering berries,

Administration rebuke to Netanyahu name-checks those "indissoluble bonds"

Obama often alludes to "indissoluble" or "unbreakable" bonds between the U.S. and Israel. I've long thought this unseemly, a dangerous sign of unconditional support. If the United Kingdom went fascist in ten years, would our bonds with that longtime ally be indissoluble? Relations between countries should never be unconditional (though arguably, I guess, "bonds" could endure when political alliances fray).

It's worth noting that in rebuking Netanyahu's election rhetoric seeming to delegitimize the Arab vote and disavowing commitment to a Palestinian state,  the Obama administration name-checked those "bonds":

“The United States and this administration is deeply concerned about rhetoric that seeks to marginalize Arab-Israeli citizens," Earnest told reporters aboard Air Force One. "It undermines the values and Democratic ideals that have been important to our democracy and an important part of what binds the United States and Israel together.”

More substantively, Earnest implied that the basis in international law for the U.S.'s constant protection of Israel in the U.N. is also cracking:

Medicaid expansion means a richer QHP buyer pool on ACA exchanges

In my close look at silver plan selection in 2015 among healthcare.gov customers who were eligible for Cost Sharing Reduction (available only with silver plans). I expressed some disappointment that CSR takeup had apparently dipped a bit on the federal exchange from 2014 to 2015 (HHS did not provide CSR takeup numbers for states operating their own exchanges). Disappointment on that particular point may have been misplaced.

While I continue to believe that too many low income ACA private plan buyers selected bronze plans, CSR takeup probably did not decline from 2014 to 2015. In fact, since silver plan selection across all exchanges ticked up a bit, from 65% in 2014 to 67% in 2015, CSR takeup probably did too.

My perception that CSR takeup dropped on healthcare.gov in 2015 stemmed from a drop in silver plan selection from 76% to 74% by buyers eligible for any kind of subsidy --including those eligible for premium subsidies but not CSR. But that drop may just reflect a shift in the composition of the market using healthcare.gov -- specifically, it may reflect a higher percentage of customers in healthcare.gov states being placed in Medicaid in 2015. This happened because two states that dropped their own exchanges and joined healthcare.gov in 2015, Oregon and Nevada, had expanded Medicaid, while three other states on the federal platform implemented the Medicaid expansion at some point during 2014 (Michigan and New Hampshire) or as of Jan. 1, 2015 (Pennsylvania).

The poorer the buyer pool, the higher the CSR takeup

States that expanded Medicaid generally have lower CSR takeup because their buyer pool for private health plans is wealthier. In states that refused the expansion, the buyer pool starts at 100% of the Federal Poverty Level (FPL); in states that embraced the Medicaid expansion, it starts at 138% FPL. In hc.gov states that refused the Medicaid expansion, consequently, an astounding 50% of private plan buyers had household incomes under 150% FPL; in expansion states, just 25% had incomes below that level.

Minnesota's "public option"

Ever since I read in fall 2013 that ACA bronze plan deductibles average over $5,000 per person, I have been concerned about the availability of such essentially catastrophic coverage at tempting low premium prices to low income ACA buyers -- who we now know are the vast majority of ACA private plan buyers (83% of buyers on healthcare.gov have household incomes under 250% of the Federal Poverty Level).

Hence my preoccupation with Cost Sharing Reduction subsidies, available only with silver-level plans, which reduce out-of-pocket costs to less prohibitive levels.  A silver plan has an actuarial value of 94% for buyers under 150% FPL and 87% for those at 200-250% FPL. But silver plans are expensive for low income people. The benchmark second-cheapest silver plan costs 4% of income for buyers with incomes in the  138-150% FPL range and about  6% for buyers with incomes at 150-200% FPL. That's a lot --  $118 per month for a single person earning $23,000. And  a plan at that price may still carry a per-person deductible as high as $1,500 for those in the 150-200% FPL range.

The ACA allows for a more truly affordable option, but only one state has taken it -- in fact, has long had it. That's Minnesota, which since 1992 has had a program similar to Medicaid, MinnesotaCare, serving residents with incomes up to 200% FPL.  As of Jan. 1, 2015, MinnesotaCare was approved as a Basic Health Plan (BHP) under the ACA -- that is, a state-run plan serving residents with incomes between 138%  and 200% FPL (those below 138% qualify for Medicaid, known in Minnesota as Medical Assistance). Under ACA rules, the federal government pays 95 percent of the ACA subsidies to which enrollees in the plan would have been entitled if they enrolled in private QHPs.

A reduced ACA spending projection that no one should celebrate

Early this month the Congressional Budget Office released an updated ACA baseline that once again reduced projected spending from 2015-2025, to general celebration. Among the items forecast to cost less were Cost Sharing Reduction (CSR) subsidies that reduce deductibles and out-of-pocket costs for low income buyers. Projected CSR spending was forecast at $136 billion over ten years, down $11 billion from from a prior reduction forecast just this January, which CBO based on data suggesting that more low-income buyers than HHS had previously expected were buying bronze plans "that minimize their monthly premium payments, even if the amounts they ultimately pay for health care (including out-of-pocket payments) exceed what they would pay under silver plans."

This particular line item is no cause for celebration. Those costs are simply being shifted to low-income buyers who fail to avail themselves of CSR by buying silver-level plans on the ACA exchanges.

CBO's latest reduced CSR forecast might float on a raft of fresh data released by HHS on March 10 about 2015 enrollment in private health plans offered on ACA exchanges. The percentage of buyers choosing silver plans -- which must be purchased to access CSR -- is down a bit since 2014, from 69% to 67%,  and the percentage of bronze plan buyers is up, from 20% to 22%. On healthcare.gov, among subsidy-eligible buyers, bronze plan selection rose from 15% in 2014 to 21% this year. That's not good, since bronze plans carry average per-person deductibles of over $5,000 and the vast majority of buyers on healthcare.gov, the federal exchange, have incomes under 250% of the Federal Poverty Level (FPL).

Bronze plan buyers with incomes under 250% FPL are leaving a valuable benefit on the table, as CSR attaches only to silver plans.  CSR subsidies reduce deductibles and out-of-pocket expenses massively for those under 200% FPL, more weakly for those in the 200-250% FPL range.

As readers of this blog know, I have gone to considerable effort to divine CSR takeup rates -- particularly for buyers under 200% FPL, for whom the benefit most strongly boosts the relative value of silver. Evidence has been fragmentary, as in the past HHS did not break out metal level selection by income band, though a handful of states did.

Now HHS has provided income level information, though not specific breakouts of metal level selection by income band. The data for the 37 states using healthcare.gov as I read it is a bit disappointing for two reasons: 1) silver plan selection among subsidy-eligible buyers went down from 2014-2015, and 2) silver selection among buyers eligible for CSR in the 37 states using Healthcare.gov is lower than I had inferred for buyers under 200% FPL -- about 81--83% rather than 88-90%. I had based that inference largely on 2014 data published by the state-run exchange in New York, which seemed to me for reasons explained below likely to be comparable to healthcare.gov on this front,   About half that difference is probably due to the uptick in bronze plan selection in 2015, the other half in differences between the New York market and that of the healthcare.gov states.

The numbers

In the 37 states using healthcare.gov in 2015, a (to me) astonishing 83% of buyers for whom HHS has income data had incomes under 250% FPL and so were eligible for CSR if they bought silver. (HHS has income data for 94% of buyers, 8.31 million out of 8.84 million. Larry Levitt of the Kaiser Family Foundation speculates that the "unknowns" likely earn too much to qualify for subsidies, an assumption adopted here. Hence that 83% (of 8.31 million) suggests 6.89 million buyers under 250% FPL.)  60% of all buyers, or 5.3 million, accessed CSR. That is, about 77% of CSR-eligible buyers (5.3m out of 6.9m) bought silver plans and so accessed CSR.

Timothy Jost Discusses an ACA Provision that Should Kill the King Suit

In the vast web of the ACA, there is only one provision that directly identifies the federal exchange as a creditor of subsidies. That provision is cited in the government's brief but did not come up in oral argument last week. It is one that should put to rest the claim -- acknowledged as a possibly winning argument by Justice Kennedy  -- that the ACA unambiguously authorizes the crediting of subsidies through the state exchanges alone.

I spoke on March 6 to Timothy Stolzfus Jost, a law professor at Washington and Lee University, about this provision, which he first highlighted in September 2011, immediately after one of the King masterminds, Jonathan Adler, published the nucleus of the King case. The exchange was prompted by an  IRS rule, proposed in August 2011 and finalized in May 2012, that authorized the federal exchanges to award premium subsidies.

How to love America, by Barack Obama

Obama gave another great speech on race today, on the Edmund Pettus Bridge in Selma on the 50th Anniversary of "Bloody Sunday. He told a story of America that he's always told, but he expanded its range and spoke with a steely urgency that bespoke battles fought and still to come.

He echoed Lincoln, as he likes to do, and he answered his stupidest critics as he defined in his own way what it means to love America, and he sought to recommit his fellow citizens to fulfill the promise of the nation's founding documents, reiterating his favorite theme: faith in the power of democracy to continuously create a more perfect, never perfected union. He laid out his most inclusive vision ever of who built America and who America is for and who America is.

He echoed and updated Lincoln in (at least) three ways. He borrowed Lincoln's diction of dedication at Gettysburg while explicitly extending the concept of devotion to heroes of peace -- and in particular, of nonviolent resistance -- as well as to heroes of war. And as he always does, channeling Lincoln, he cast that heroism as a devotion to fulfilling the ideals expressed in the nation's founding documents. And as Lincoln did at Gettysburg, he sought to inspire those listening to emulate those commemorated in their devotion to extending the promise of freedom and opportunity to all.

Here is the expanded concept of heroism:

And now for something completely frivolous..

This tweet by ER doc Seth Trueger, pointing to a blog post by ACA stats guru Charles Gaba, got me feeling singy, as Winnie-the-Pooh would put it:

how many types of health insurance are there in the US now? by @charles_gaba; @louisenorris @_kjkelly @xpostfactoid1 http://t.co/rjQpNHfp9P
— Seth Trueger (@MDaware) March 7, 2015

Resulting in this serial-tweet nonsense:

How many roads must man walk down
before you call him insured?
How many frivolous suits must fail
before health reform is secured?
How many deaths will it take till we know
our health system still isn't cured?
The answer, my friend,
is forecast by Sean Trende,
the answer is forecast by Sean Trende.

You don't think Trende belongs here? He wanted to come in, as Pooh would say.

Nicholas Bagley parses the oral arguments in King v. Burwell

Over at healthinsurance.org, I have an interview up with Nicholas Bagley, post-morteming today's oral arguments in King v. Burwell, the lawsuit aiming to gut the ACA exchanges. Bagley,  a former appellate attorney at DOJ and currentl health law professor at the University of Michigan, is co-author of two amicus briefs in support of the government in King, both addressing issues that Anthony Kennedy probed in some depth in today's hearing.

Kennedy lifted the spirits of ACA supporters early on by questioning whether the plaintiffs' claim that the law aimed to essentially force states to form their own health exchanges by not authorizing premium subsidies to be credited through the backup exchange would render the law unconstitutionally coercive.That was the upshot of one Bagley brief. But he then turned around and suggested that the law might be, in effect, both unambiguous (in denying credits through the federal exchange) and (potentially) unconstitutional.

Much later, Kennedy explored a more obscure point. While the Supreme Court generally holds that if a law is ambiguous, the courts should defer to the interpretation of the agency charged with implementing it, that might not be the case here:

Well, Ezra Klein, Republicans may not have "plan" to save insurance markets after King. But they may deal

Republican Senators Orrin Hatch Lamar Alexander John Barrasso are out today with a lightly sketched "plan" to salvage premium subsidies credited through the ACA's federal exchange if the Supreme Court rules for the plaintiffs in King v. Burwell.  The proposal closely resembles the  possible post-King negotiation that former HHS Secretary Michael Leavitt outlined to me. Here's Hatch et al:

First and most important: We would provide financial assistance to help Americans keep the coverage they picked for a transitional period. It would be unfair to allow families to lose their coverage, particularly in the middle of the year....

Second, we will give states the freedom and flexibility to create better, more competitive health insurance markets offering more options and different choices. Republicans understand that what works in Utah is different from what works in Tennessee or Wyoming. We want to give states the time and flexibility to design health-care systems that work for them, not for the bureaucrats in Washington.

People who live in states that have state exchanges will continue to be subject to Obamacare’s costly mandates and rules, along with the subsidies. But their states could also have the benefit of our solution. Every state would have the ability to create better markets suited to the needs of their citizens.

And here's Leavitt last week:

Republican can do what they will to American healthcare -- by accepting the Affordable Care Act

Ask Republicans how they will reform the health insurance market if they succeed in repealing the Affordable Care Act and you will not get a substantive "replace" plan. You will, however, hear three desiderata: 1) give states more control of their insurance markets; 2) give insurers more freedom to design plans outside ACA-imposed constraints; and 3) give consumers in the individual insurance market more choice (though the ACA marketplace shelves in most regions at present are not what you would call bare).

If Republicans were sincere about changing the market in this direction, they would have enormous leverage to do so, both by working within the ACA's essentially federalist (or "state-deferential") structure and by negotiating changes to the law that Democrats would surely accept in exchange for an end to dead-end opposition.

Let's count the ways that Republicans in state government and Congress could shape the health insurance markets to their liking, starting with the tamest and moving toward the most aggressive.