Wednesday, June 03, 2015

New data on Cost Sharing Reduction in ACA marketplaces

The latest ACA enrollment snapshot from CMS shed some new light on the extent to which ACA private plan buyers accessed Cost Sharing Reduction (CSR) subsidies. CSR reduces deductibles, copayments and maximum out-of-pocket costs for plan buyers with incomes under 250% of the Federal Poverty Level (FPL) -- but only if they buy silver plans (and forego the often much cheaper bronze plans).

CSR takeup is especially important for buyers under 200% FPL, because below that income level it raises the actuarial value of a silver plan from 70% to 94% (for buyers under 150% FPL) or 87% (for buyers in the 150-200% FPL range). At 200-250% FPL, CSR weakens, raising the AV just 3 points to 73%. Silver plan selection accordingly drops suddenly at 201% FPL.

The new report doesn't deliver any great surprises on the CSR front, but it does for the first time provide overall CSR numbers for the 13 states plus D.C. that run their own exchanges. The percentages of buyers accessing CSR in state-based marketplaces (SBMs) have always been lower than in the states using, for several reasons

  1. All the SBMs except Idaho have expanded Medicaid, which means that subsidized private plan eligibility begins at 138% FPL rather than 100% FPL.  The lower the income, the higher the CSR takeup rate - especially below 138% FPL, where the benchmark silver plan premium can't exceed 2% of income.
  2. States with SBMs are generally wealthier, so a lower overall percentage of private plan enrollees are eligible for CSR.
  3. Several SBMs do a much poorer job than of highlighting CSR for those eligible -- though conversely, several SBMs do a better job than on this front.

All that said, here are some new facts, along with some extrapolation from info that was in HHS's March report but not updated in this one.

1) In states using (federal facilitated marketplaces, or FFMs) 60% of enrollees accessed  CSR -- 4,550,205* out of a total enrollment of  7,524,234.  In the SBMs, 49% accessed CSR -- 1,300,731 out of 2,662,964.

 2) We learned in March that 78% of FFM enrollees had incomes under 250% and so were eligible for CSR. (to be exact, HHS reported that 83% of all enrollees for whom financial data was available had incomes below 250% FPL, but that comes to 78% of all enrollees. Almost of all the half million-plus enrollees for whom the data was unavailable earned too much to qualify for subsidies.) Given the new FFM total enrollment figure (7,524,234), we can surmise that a bit shy of 5.9 million were CSR eligible. Of those, 4,550,205 (coincidentally 78%) accessed CSR.

3) In the SBMs, we don't know the percentage of enrollees with incomes under 250% FPL. A tentative surmise is that the whole SBM market resembles that of FFM states that expanded Medicaid, for which HHS provided stats in March. If so, about 69%, or 1,83 million, are CSR eligible. That would suggest that 71% of CSR-eligible buyers in the state exchanges bought silver and accessed CSR.

4) I suspect that the percentage of enrollees under 250% FPL in SBM states is lower than 69%, as those states are wealthier on average than the FFM states that expanded Medicaid. The percentage of buyers in the 200-250% range, where silver plan selection falls off, may also be higher. New York reported the percentage of those in the 200-250% FPL range in 2014 at 23%,, compared to 14% in FFM states in 2015 (the FFM figure was not given in 2014). New York's median income is moderately above the national average but below the average for SBM states.

5) The prior point suggests that overall CSR takeup in SBM states is a bit higher than 71%, and that the "spread" between overall CSR takeup and CSR takeup under 200% FPL (where it's most compelling) is wider in SBM states. That's the case in New York, where in 2014 overall CSR takeup was 79%, while takeup for those under 200% FPL was 89% (the state broke out metal level selection by income). In FFM states, which have proportionately more low-income buyers, the spread is narrower -- probably closer to five points than ten. We don't know for sure, because HHS does not break out metal level selection by income band.

6) In states that have broken out metal level selection by income level (that I know of),  CSR takeup among buyers at 200-250% FPL ranges from 50% (Colorado) to 59% (New York)**. On that basis, knowing the overall percentage of FFM state enrollees between 200-250% FPL (14%), I calculated in March that about 81-83% of FFM state enrollees under 200% FPL bought silver and accessed CSR. That calculation holds now, as the overall percentage of CSR takeup (78%) is almost the same now as then. It's probably a bit lower in SBM states -- how much lower I can't really say.

7. The percentage is too low, CSR at 200-250% FPL is too weak, and out-of-pocket costs for those from 250-400% FPL are too high.  All that said, over 80% of buyers under 200% FPL have better coverage (or at least higher-AV coverage) than most Americans who are insured by their employers. Add in the 10% of ACA private plan buyers who bought gold or platinum plans, and about 60% of all buyers have plans with an actuarial value over 80%.

* Update 6/12 - I originally mis-typed this as 4,500,205 -- corrected now. Percentage was right.

** Update 6/12: In Connecticut in 2015, 64% of buyers in 200-250% FPL range bought silver. But Connecticut does an exceptional job steering CSR-eligibles toward silver.


  1. At $17,235 of annual income, for a single person, the CSR/Silver combo is more or less Medicaid.
    At $22,980 of income, the combo is about the same as most employer plans in about 1990 --a $250 deductible.

    As you note, that is an awfully thin segment of beneficiaries in most states. The ACA was sold as something far more generous to the middle class.

  2. Oh dear - sixteen states and DC have state-based Exchanges. Fourteen of those SBMs use their own Internet portals, while the other three use The reason that I am such a pest on this point is that the King challengers have encouraged conflation of the Exchanges with the Imternet portals in order to buttress their claim that the Exchanges are primarily e-commerce sites, and only secondarily conduits for tax credits and CSR subsidies. The reverse is true, of course.