When I looked over HHS's enrollment report for the 2016 ACA marketplace back in March, I seem to have neglected a key point: takeup of Cost Sharing Reduction (CSR) subsidies rose this yearin the 38 states using HealthCare.gov.
That is, the percentage of those enrollees whose incomes qualified them for CSR bought silver plans rose by two percentage points. CSR is available only with silver plans, so those who buy bronze (or, far more rarely, gold or platinum or catastrophic) plans forgo the benefit. CSR reduces an enrollee's out-of-pocket payments for medical care -- radically for those with incomes up to 200% of the Federal Poverty Level, weakly for those in the 200-250% FPL range. Eligibility ends at 251% FPL.
The uptick in CSR takeup should have been obvious, since silver plan selection among all HealthCare.gov enrollees regardless of income level rose from 69% in 2015 to 71% in 2016. But the overall percentage of enrollees who obtained CSR dropped from 60% at the end of open season 2015* to 59% this year, so I missed the takeup rate increase in those actually eligible for the benefit.
Actual takeup could rise while the overall percentage of enrollees with CSR fell because HealthCare.gov enrollees were slightly wealthier on average this year, so a slightly reduced percentage of enrollees were CSR-eligible. In 2015, 83% of enrollees who reported income had incomes below 251% FPL. This year, 81% were below the threshold. Further, the percentage of those who did not report income rose, from 6.0% to 7.6% -- and the majority of those who did not report income probably earned too much to qualify for any subsidy.
The upshot: in 2016, 79% of HealthCare.gov enrollees who reported incomes below 251% FPL accessed CSR. About 7.2 million reported incomes below that threshold, and 5.68 million of them enrolled in CSR-enhanced plans.
The reduced percentage of enrollees who are eligible for CSR is probably due to belated Medicaid expansions in Pennsylvania and Indiana, and, to a lesser extent, in Alaska and Montana. While the PA and IN expansions were effective in early 2015, it took some time for low income private plan enrollees to transition to Medicaid. Since eligibility for private plan subsidies begins at 100% FPL in nonexpansion states, as opposed to 139% FPL in expansion states, belated Medicaid expansions drain some of the lowest income enrollees out of the private plan pool That makes this year's increased CSR takeup rather surprising, as in general, CSR takeup diminishes as income increases. The benchmark silver plan costs 2% of income for those under 139% FPL, compared to 3-4% for those in the 138-150% FPL range.
Enrollment data released by Covered California, the state marketplace, casts an interesting sidelight on CSR takeup. In addition to breaking out metal level selection by income, CoveredCA reports the number of people at each income level who obtained no subsidy at all, neither premium support nor CSR. The most common reason that a low income enrollee would remain unsubsidized is that someone in the household had access to employer-sponsored insurance -- a particularly cruel exclusion in cases where the family glitch renders coverage unaffordable. In California, 2% of enrollees with incomes up to 250% FPL were ineligible for subsidies.*
If that percentage is similar in HealthCare.gov states, then CSR takeup among those actually eligible for the benefit would be 81%. Moreover, as I've often noted, CSR takeup is much higher among enrollees with incomes up to 200% FPL, where the benefit is really strong, than among those in the 200-250% FPL, where it's close to negligible. Among those up to 200% FPL, takeup in HealthCare.gov states is probably at least 85%.
This needs a proofread and a bit of elaboration, but I have to run! Will update later. Update, 5:45: The post really was something of a mess. Apologies! I've clarified and elaborated.
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* Low income California enrollees who did not get any subsidy were heavily concentrated at the lowest income level, 0-138% FPL. As I explained in a recent post about California enrollment in 2016:
That is, the percentage of those enrollees whose incomes qualified them for CSR bought silver plans rose by two percentage points. CSR is available only with silver plans, so those who buy bronze (or, far more rarely, gold or platinum or catastrophic) plans forgo the benefit. CSR reduces an enrollee's out-of-pocket payments for medical care -- radically for those with incomes up to 200% of the Federal Poverty Level, weakly for those in the 200-250% FPL range. Eligibility ends at 251% FPL.
The uptick in CSR takeup should have been obvious, since silver plan selection among all HealthCare.gov enrollees regardless of income level rose from 69% in 2015 to 71% in 2016. But the overall percentage of enrollees who obtained CSR dropped from 60% at the end of open season 2015* to 59% this year, so I missed the takeup rate increase in those actually eligible for the benefit.
Actual takeup could rise while the overall percentage of enrollees with CSR fell because HealthCare.gov enrollees were slightly wealthier on average this year, so a slightly reduced percentage of enrollees were CSR-eligible. In 2015, 83% of enrollees who reported income had incomes below 251% FPL. This year, 81% were below the threshold. Further, the percentage of those who did not report income rose, from 6.0% to 7.6% -- and the majority of those who did not report income probably earned too much to qualify for any subsidy.
The upshot: in 2016, 79% of HealthCare.gov enrollees who reported incomes below 251% FPL accessed CSR. About 7.2 million reported incomes below that threshold, and 5.68 million of them enrolled in CSR-enhanced plans.
The reduced percentage of enrollees who are eligible for CSR is probably due to belated Medicaid expansions in Pennsylvania and Indiana, and, to a lesser extent, in Alaska and Montana. While the PA and IN expansions were effective in early 2015, it took some time for low income private plan enrollees to transition to Medicaid. Since eligibility for private plan subsidies begins at 100% FPL in nonexpansion states, as opposed to 139% FPL in expansion states, belated Medicaid expansions drain some of the lowest income enrollees out of the private plan pool That makes this year's increased CSR takeup rather surprising, as in general, CSR takeup diminishes as income increases. The benchmark silver plan costs 2% of income for those under 139% FPL, compared to 3-4% for those in the 138-150% FPL range.
Enrollment data released by Covered California, the state marketplace, casts an interesting sidelight on CSR takeup. In addition to breaking out metal level selection by income, CoveredCA reports the number of people at each income level who obtained no subsidy at all, neither premium support nor CSR. The most common reason that a low income enrollee would remain unsubsidized is that someone in the household had access to employer-sponsored insurance -- a particularly cruel exclusion in cases where the family glitch renders coverage unaffordable. In California, 2% of enrollees with incomes up to 250% FPL were ineligible for subsidies.*
If that percentage is similar in HealthCare.gov states, then CSR takeup among those actually eligible for the benefit would be 81%. Moreover, as I've often noted, CSR takeup is much higher among enrollees with incomes up to 200% FPL, where the benefit is really strong, than among those in the 200-250% FPL, where it's close to negligible. Among those up to 200% FPL, takeup in HealthCare.gov states is probably at least 85%.
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* Low income California enrollees who did not get any subsidy were heavily concentrated at the lowest income level, 0-138% FPL. As I explained in a recent post about California enrollment in 2016:
A note on California's low silver plan selection rate in the 0-138% FPL range: Because California accepted the ACA Medicaid expansion, eligibility for premium subsidies begins at 139% FPL for most residents -- below that level, the applicant qualifies for Medicaid. There's an exception for legally present noncitizens who are barred from Medicaid: the ACA allows applicants in that category to obtain private plan subsidies even if their income is below 139% FPL. Unlike in most of the U.S., however, legally present immigrants in California whose income qualifies them for Medicaid are not subject to a "5-year bar." Still, a third of California private plan enrollees below that income threshold did not qualify for premium subsidies (or CSR), compared to less than 2% of enrollees in higher CSR-eligible income brackets.Unfortunately, the small subset of unsubsidized low-income enrollees is a black box in HealthCare.gov, as well as in most state-based marketplaces.
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