Saturday, October 03, 2015

Mysteries of the Maryland Marketplace

(Update post here)

As I've noted before, Connecticut's ACA exchange has been a market leader in steering private plan buyers whose incomes qualifying them for Cost Sharing Reduction (CSR) subsidies into silver-level plans (CSR is available only with silver). Also noted, back in January: When Maryland cloned Connecticut's technology and web interface in 2015, silver plan takeup improved.

Now, Maryland Health Connection, the state's ACA exchange, is reporting a market-leading level of silver plan selection among CSR-eligible buyers -- that is, buyers with incomes up to 250% of the Federal Poverty Level (FPL).  Nationally, about 76% of private plan enrollees who qualify for CSR buy silver plans and obtain the benefit (coincidentally, CSR-eligibles also make up about three quarters of all marketplace customers). Yesterday, Maryland announced that 86% of CSR-eligible enrollees in the state bought silver and accessed the benefit.

That's all the more the more striking in that just 62% of all buyers on the Maryland exchange selected silver, versus 68% nationally. The numbers indicate:
  • Maryland is a wealthy state, with lots of buyers who earn too much to qualify for CSR. In fact its median household income is the highest in the country in a 3-year average from 2012-2014, according to the Census. 
  • The site's CSR "pointing" is effective -- mainly by showing silver plans first to CSR-eligibles (see Charles Gaba for a detailed look at how the site highlights CSR).
That said, there are some peculiarities in Maryland's enrollment figures, and also one in the functioning the Maryland Health Connection's "shoparound" feature, which provides price quotes to anyone who enters a handful of data points (county, ages of all people in household, and household income). Regarding the numbers, here is a breakout the exchange sent to me, showing metal selection at each income level (not provided: the number of enrollees at each level):

<100 nbsp="" td=""> 2 9 83 4 3 100
≥100 - ≤138%  2 36 44 12 5 100
>138 - ≤150%  3 8 86 2 1 100
>150 - ≤200% 1 8 88 2 1 100
>200 - ≤250%  1 11 84 2 2 100
>250 - ≤300%  1 21 69 6 3 100
>300- ≤400% 2 32 51 11 4 100
> 400% 3 39 36 15 8 100
Unknown 8 42 22 19 10 100
Total 2 24 62 8 4 100
The first oddity is a very low level of silver selection among buyers with incomes in the 100-138% FPL range.  That is likely a very small number of enrollees [NO - see updated here], since eligibility for subsidies generally begins at 139% FPL, and those below that level qualify for Medicaid. The exception is legally present immigrants and residents subject to a 5-year bar from Medicaid eligibility -- they are eligible for tax credits from 0-400% FPL.  In states that expanded Medicaid, about 2% of enrollees are under 100% FPL; the percentage from 100-138% FPL would likely be smaller.

The more striking oddity is a very high silver selection rate in the 200-250% FPL band, and comparatively low takeup at 138-150% FPL.  In most states, CSR takeup is highest at the lowest eligible income levels and drops off steeply in higher income bands.

Most states don't break out metal level selection by income level, but among those that do, the highest silver selection percentage I've seen previously for the 200-250% FPL band is 64%, in Connecticut (which, again, created the web design that Maryland has adopted).

CSR takeup usually falls off at higher income levels because a) the benefit weakens as income rises and b) the percentage of income required to pay the silver plan premium also rises with income. For buyers up to 150% FPL, CSR raises the actuarial value of a silver plan from a baseline of 70% (for silver with no CSR) to 94%. For those with incomes from 151-200% FPL, CSR raises silver to AV 87%. For those from 201-250% FPL the benefit fades out almost entirely, raising AV to just 73%. Meanwhile, a benchmark silver plan premium is 3% of income for someone earning 138% FPL -- and 8% at 250% FPL.

How does this subsidy scale play out in Maryland's Montgomery County, the county with the most private plan enrollments?  For a single 40 year-old earning $17,000, the benchmark silver plan costs $55 per month and has no deductible; primary care visits are free. A bronze plan can be had for $1 a month, but with a deductible of $4,000.  At an income of $23,000 (a tad under 200% FPL), the benchmark silver premium is $120, again with a zero deductible.  The bronze plan with the $4k deductible will cost $54 month. At  $25,500, well within the 200-250% FPL band where CSR is weakest, the benchmark silver plan premium is $150 and the deductible is $900. The bronze plan with the $4k deducible is $84/month.

That deductible at the weakest CSR level is lower than in most locales nationwide, which may partly explain the high takeup in the 200-250% FPL -- though a $4k deductible with bronze is also lower than what's available in most markets.

I used an income of $25,500 to illustrate the weakest-level CSR because of a peculiarity in the Maryland exchange's shoparound -- it looks awfully like a malfunction, but I won't call it one until I hear back from exchange folk.  In 2015, 250% FPL for a single person is $29,175 -- but the Maryland shoparound cuts CSR off at $25,733. At that level, the notice that you're eligible for CSR disappears, and the copayment quotes for silver are unenhanced by CSR. -- the deductible for the benchmark silver plan jumps to $1700 (though the cheapest silver plan shows a deductible of $1300). Again, that looks awfully like an error to me, but I'll await explanation.

To review, it's odd that Maryland's silver plan selection rate is so high at 200-250% FPL, odd that it's not proportionately higher at 139-150% FPL, and odd that the shoparound cuts CSR off at about 220-230% FPL. But it's good news that most who qualify for CSR access  it-- and solid evidence that site design matters.

Footnote: Connecticut appears to have higher CSR takeup among buyers under 201% FPL (89%) but lower overall CSR takeup, thanks to Maryland's sky-high silver selection in the 200-250% FPL bracket. Connecticut's overall CSR takeup rate is 81%.

UPDATE: The Maryland exchange provided me with raw numbers for metal level selection in each income category - discussion here

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