Wednesday, July 29, 2015

New York's ACA exchange publishes takeup rates for Cost Sharing Reduction

NY State of Health, the state's ACA health insurance marketplace, released detailed enrollment data today (hat tip to who else but Charles Gaba?). With regard to my own little preoccupation -- the degree to which those private plan buyers eligible for Cost Sharing Reduction (CSR) subsidies access the benefit by buying silver plans -- New York is (as far as I know) the first state to do the basic math for me:
The majority of QHP consumers who completed the enrollment process and were eligible for APTC with cost-sharing reductions chose Silver plans in which they can use costsharing reductions. Among those eligible for cost-sharing reductions, enrollment in Silver plans was higher for those eligible for greater levels of subsidy. Ninety-seven percent of those eligible for costsharing reductions at the 94 percent actuarial value level enrolled in a Silver plan, compared with 83 percent at the 87 percent actuarial value level, and 62 percent at the 73 percent actuarial value level. Overall, 78 percent of those who are eligible for cost-sharing reductions, enroll in a Silver plan with that benefit. The remaining 22 percent enroll in different metal levels. These trends are consistent with the
2014 open enrollment period, when overall, only a slightly higher share of cost-sharing reduction eligible enrollees—80 percent—enrolled in these products. 
Last year, I had to tweeze these numbers out of the NY enrollment report myself.  Since they redounded to the state's credit, and a NYSOH spox confirmed them for me, I'd like to think I gave them a nudge toward highlighting the takeup themselves this time around.

The overall 78% takeup rate is close to the aggregate 77% for the 37 states using But New York has actually been more successful than most states in getting CSR to those for whom it's most valuable. As the summary above indicates, the benefit weakens radically for those with incomes that put them at the upper end of CSR eligibility -- that is, those with incomes between 200 and 250% of the Federal Poverty Level (FPL). They're the ones for whom CSR raises the silver plan actuarial value to just 73% from a baseline of 70% -- and only 62% of them selected silver. In contrast,  fully 97% of those with incomes under 150% FPL (the AV 94% level) chose silver.  But New York has a much lower percentage of buyers under 150% FPL than the average -- and a much higher percentage of buyers in the 200-250% FPL range, where the benefit is weak and takeup is low.

That's because three quarters of private plan buyers were in states that have refused to expand Medicaid. In those states, eligibility for subsidized private plans (and so CSR) begins at 100% FPL, while those with incomes below that level are left out in the cold. In expansion states, those with incomes under 138% FPL get Medicaid; below that level, they're ineligible for private plan subsidies. Hence, in the 21 nonexpansion states, 47%* of buyers had incomes under 150% FPL, and just about 12% had incomes in the 200-250% FPL range. In New York, just under 10%** of 415,352 total plan buyers had incomes under 150%, FPL and 23% were between 200% and 250% FPL. Meanwhile, the NYSOH enrolled more than 1.5 million New Yorkers in Medicaid.

In New York, 86% of buyers with incomes under 201% FPL -- where CSR is really strong -- selected silver plans and accessed CSR. We don't know the corresponding percentage in states. But given what we do know about their income distribution, and about takeup rates for those at the upper end (200-250% FPL) in states that do break out metal level selection by income, I've estimated that about 81-83% of buyers under 201% FPL accessed CSR.

On likely reason why CSR takeup has been high in NY is that as in Connecticut and Rhode Island, applicants who are determined to be CSR-eligible are shown silver plans first when they view available plans. That doesn't happen on

Low-income buyers who forgo CSR mostly end up in cheaper bronze plans, which have an actuarial value of just 60% (versus 87% or 94% for silver for those under 200% FPL) and high deductibles -- over $5,000 in most states, though a relatively low $3,000 in New York. For low income people, that's underinsurance. New York does have relatively high takeup rates for gold (10%) and platinum (12%) plans, though presumably almost all buyers are in higher income brackets.

New York has also announced that in 2016 it will provide insurance seekers with incomes between 100% and 200% FPL with a Basic Health Plan -- a kind of Medicaid-plus, with very low premiums and copays. That means that about half of current private plan holders will exit the marketplace, rendering the CSR takeup issue almost moot -- and possibly providing challenges with regard to maintaining a vibrant private plan marketplace. But coverage will be more comprehensive and cheaper for low income enrollees.
*   HHS lists the percentage of those under 151% FPL  (including those under 100% FPL) as 50%, not 47%, and of those in the 200-250% FPL band as 13%, not 12%. But those percentages exclude about 300,000 for whom income is unknown -- almost all of whom must have had incomes above subsidy level and so not bothered to report it.

** Corrected, 7/31; I originally had 12% here.

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