Thursday, September 03, 2015

The ACA's uncertain shield against underinsurance: A CSR compendium

Note, 2/16/18: This post, and the index of posts it introduces, originated long before the legal challenge to federal CSR reimbursement began to directly affect policy and the shape of the ACA marketplace. The focus until the 2016 election was mainly on CSR takeup and the factors that affected it. In 2017, Trump's threats to cut off CSR reimbursement, executed in October, reshaped the ACA marketplace, driving up costs for the unsubsidized while providing windfalls for many of the subsidy eligible. That is a separate story, and posts relating to those effects are listed in a new section at the top of the index.

Updated 10/9/15, 4/6/16, 4/14/17

Cost Sharing Reduction (CSR) subsidies are the ACA marketplace's best defense against underinsurance for private plan buyers. That's why I've been so interested in who accesses or fails to access CSR and why -- and why takeup varies widely from state to state.

Thanks to CSR, half of marketplace enrollees obtain coverage that covers a higher percentage of the average enrollee's costs than the average employer-provided plan. That is, about 49% of enrollees are enrolled in CSR-enhanced silver plans that raise the plan's actuarial value -- the percentage of the average user's costs covered by the insurer --  to either 94% or 87% (see The Rosetta Stone of CSR takeup*).  The average in employer sponsored insurance is about 82%, or at least it was as of 2011, according to a Kaiser analysis. Another 5% of enrollees are in gold or platinum plans, with AV 80% and 90% respectively [paragraph added 4/14/17].

Below is an index of my posts examining the factors affecting CSR takeup, along with some posts questioning whether the benefit ought to be restructured.  I've done a fair number of single-state snapshots, and they're listed separately at bottom. The top two posts focused on California highlight price sensitivity; the Connecticut, New York, Maryland, Rhode Island Washington posts show how website design can shape the choice; and the posts on southern states mostly illustrate that lower income buyers, for whom the CSR benefit is strongest and the cost of silver lowest, are likeliest to access CSR.

Overall, according to the most recent enrollment figures for 2015, 56% of marketplace private plan buyers in all states accessed CSR (Update, 4/14/17: 58% in 2017).  About 85% of them reported a household income under 201% of the Federal Poverty Level (FPL) and so received a strong version of the benefit, raising the actuarial value of their silver plans to 94% (up to 150% FPL) or 87% (151-200% FPL). Another 7% of all buyers bought gold (AV 80%) and 3% bought platinum (AV 90%) plans. 21% bought bronze plans (AV 60%) with their sky-high deductibles, usually ranging from $5,000-6,600 per person. (Update: in 2017, the breakout was 4% gold, 1% platinum, 71% silver and 23% bronze.)

Here's a sampling of my posts on the subject.

Effects of Trump's CSR cutoff (added 2/16/18, updated 4/27/18)

If Seema Verma bans silver loading, how many marketplace enrollees will suffer? (4/12/18)

Choosing a metal level in the CSR-addled Maryland marketplace (1/17/18)

For whom the bronze bell tolls in the ACA marketplace (11/16/17)

Hey, Republicans: Auto-enrollment is within reach (11/10/17)

Free bronze or CSR-boosted silver? The choice in 5 top ACA marketplaces (11/4/17)

CSR windfall: Will it have a bronze or gold cast? (10/27/17)

Bronze and gold discount plans in California, 2018 (10/20/17)

States vary in response to CSR uncertainty (with David Anderson, Charles Gaba and Louise Norris) (10/11/17)

Covered California to midde-class enrollees: There may be gold in them thar hills (10/7/17)

Go ahead, Trump, cut off CSR payments -- starting in 2018 (7/20/17)

National CSR takeup (and implications)

"Strong" CSR takeup dropped modestly on in 2018 (4/3/18)

On, CSR takeup rose steadily 2015-2017 (2/15/18)

The real cost of benchmark silver for BCRA enrollees (7/1/17)

ACA vs. AHCA: Total subsidized shares of costs at different income levels and ages (3/19/17)

The Rosetta Stone of CSR takeup (1/9/17)

ACA afflicted by a deductible cliff (12/21/16)

Cutting off CSR subsidies will hit red state enrollees especially hard (12/5/16)

Two major divides in the post-ACA individual market (4/1/16)

Supporting the biggest decision for ACA marketplace shoppers (11/3/15)

How bronze plans offer fool's gold to the Treasury (11/1/15)

Surprise! When silver plans are cheaper, more people buy them (10/24/15)

Addled by the metal level (10/5/15)

"Are marketplace plans affordable?" - on Commonwealth Fund survey (9/28/15)

The feds are taking CSR and premium subsidies away from many enrollees (9/8/15)

Five factors shaping CSR takeup on ACA exchanges (9/1/15)

A quibble with Avalere over CSR takeup (8/20/15; updated, 9/3/15)

Is Obamcare's bronze trap widening? (on (8/12/15)

Income levels and CSR takeup in states that refused Medicaid expansion (8/23/15)

When silver is worth more than gold or platinum (on 6/12/15
     addendum: On ACA exchanges, silver is usually not silver (6/12/15)

New data on cost-sharing reduction in ACA marketplaces (6/3/15)

Scrap the ACA's dual subsidy system? (Re CSR proposal from Richard Mayhew) 4/24/15

Affordable insurance vs. affordable healthcare (4/1/15)

A reduced ACA spending projection that no one should celebrate (3/12/15)

Add CSR to bronze plans 12/6/14

Rational choice in the ACA marketplace (12/2/14)

State Marketplace CSR profiles

Alabama (2015)

California - CSR takeup as influenced by bronze-silver price spreads (2015)

California - Santa Cruz vs. Monterey case study (2015)

California - CSR takeup (2015)

California  - rate increases and CSR (2015)

Connecticut (2015)

Connecticut (2014 - includes first half of open season for 2015)

Florida (2015)

Maryland 2018 (six posts; index at bottom of the one at the link)

Maryland 2015

Maryland (2014 - includes first half of open season for 2015)

Mississippi (2014)

Mississippi (2015)

New York (2015)

New York (2014)

Rhode Island (2014 - includes first half of open season for 2015)

Washington (2015)

* The CMS breakout of enrollment by metal level, including CSR level, as of April 2016 shows that 85% of CSR enrollees are at levels with AV 94% or 87%.  In 2017, 58% of enrollees have CSR-enhanced plans -- so, just under half have "strong" CSR. While the "Rosetta Stone" shows 52% of enrollees in plans with AV 94% or 87%, the percentage is lower in states that run their own exchanges. That's because all but one of them have expanded Medicaid and so have far fewer low-income marketplace enrollees at AV 94%. Also, the "Rosetta Stone" was engraved after first-quarter attrition was recorded, and it seems that a disproportionate number of those who dropped coverage early did not have CSR-enhanced plans.


  1. Thanks as always for your excellent detail work.
    I just cannot get my eyes off that figure of 200% of poverty as the cutoff for CSR benefits. If I remember correctly, that corresponds to an annual income of about $22,000 for a single person.
    If Obama had stood up in 2009 and said, "We have a health insurance reform that will give comprehensive insurance to persons under $22,000, either through Medicaid expansion or the back-door subsidies of tax credits and the CSR," there would have been polite response from the left and probably not much more.
    Instead, the millions of workers who make over $22,000 and do not have a generous employer had some hope that the ACA would help them too.
    But they lost out when the deficit hawks in both parties held the ACA to a relatively low budget target.
    Obama figured that half a loaf was better than none at all, and history may in fact prove him right.
    I wish that Sanders and Clinton would state far more directly that they want to expand the CSR's.

  2. There is not much writing about the CSR on the net (many of the best articles and interviews are from you)...........

    So I have a few questions:

    a. Who thought up the CSR idea?

    b. What were the cost estimates (I have seen estimates of $17 billion a year, which seems very high)

    c. Why were CSR's cut back at about $18,000 of income for a single person?

    It feels like CSR's were a backdoor federal expansion of Medicaid. If numerous darn states are holding Medicaid at 100% of poverty (or less), then let's smuggle something close to Medicaid into a federal program that states need not improve.

    As a result, CSR's have the virtue of Medicaid -- helping those in need -- but also the terrible vice of Medicaid, which is the harsh 'cliffs' where the benefit disappears, and the pulling back of benefits if one's income goes up very slightly.

    The obsessive need to tie benefits to exact income is what caused the ACA to have terrible website performance in the first place. Now we have the obsessive pullback of benefits if a tax return does not equal projected income.

    Universal programs are far more desirable than need-based programs. The ACA is just one more reminder of this, not that we needed another reminder.

    Incidentally, a few of the Republican alternatives to the ACA have flat universal tax credits that might be based on age, or are just plain flat.
    Even a broken clock is right twice a day, and these reforms make initial sense to me!