Monday, October 24, 2016

See plans and prices -- and get buttonholed for Cost Sharing Reduction -- on has launched its "shop-around" feature for 2017 -- that is, the screen where you can enter a few basic facts about yourself and then preview plans and prices, with your subsidy built into the price estimate.

As in past years, the shoparound has been redesigned. The new design has plusses and minuses in my view. As always, my primary focus is on how well the app communicates about Cost Sharing Reduction (CSR) subsidies, which are available only with silver plans, and only to people with a household income up to 250% of the Federal Poverty Level (FPL).

CSR radically lowers deductibles and copays for buyers with incomes up to 200% FPL and offers a more marginal benefit to those in the 200-250% FPL range. Because the benefit comes only with silver plans, the silver level provides the best value in absolute terms to CSR eligibles.

Because it makes silver plans more valuable than gold plans for anyone with an income up to 200% FPL, CSR is inherently counterintuitive. And because silver plans cost more than bronze, they are easy to miss when plans are ranked by premium, lowest first.

Some state-run ACA marketplaces "default to silver" for CSR-eligible shoppers -- that is, they automatically show silver plans first in the display of available plans. appears to have thought long and hard about doing this. Current CEO Kevin Counihan ran Connecticut's ACA marketplace, which has "defaulted to silver" since its launch in 2014. Connecticut has had an unusually high CSR takeup rate.

What decided for 2017 was a kind of optional default to silver. If you're CSR-eligible, the screen below appears before you move on to view available plans (apologies for the cut off phrase at top: it should read "only if you pick a silver plan"):

Since this screen is meant to highlight the benefits of CSR, there's a disconnect in fronting the "estimated total yearly costs." That estimate derives from a prior screen, in which you forecast whether you'll need a low, medium or high level of medical care. The estimate above is for a "low" user.

There may be an appropriate place for that information, but this is not it. What's not highlighted is the radical difference in bronze vs. silver deductibles and copays -- a disproportionate difference, thanks to the CSR subsidy added to silver alone. The light-text explanation at bottom appears to fly in the face of the cost estimate -- which of course presumes that the buyer will be a light user as expected. Risk is left out of the equation implied by the bolded text, as is the extra value added by CSR.

A second flaw is in the contrast of the average premium at each metal level. That average can be skewed by some very expensive options. Most marketplace enrollees consider only the cheapest plans available at each metal level.  In this zip (07079) and income level $23k), the cheapest-plan contrast for a 40 year-old would be between a bronze plan at $69 per month with a $3,000 deductible and a silver plan at $104 with a $300 deductible. That would make a more compelling and coherent contrast:

The good news is, I got that comparison from the shop-around's excellent "compare plans" feature. But I had to first pick through the bronze selections to find the first silver (which, to make matters more confusing, was cheaper than several bronze plans in this zip code). The contrast of CSR-enhanced silver with bronze should be clearer in the intro screen.

A third flaw is that if you go back and edit your information, for example to change the income estimate, you don't get the CSR filter screen the second time around.  You just get plans ranked by premium, and the only alternative filter available at first blush is to rank them by deductible, which can yield off-putting results if there are gold plans at premiums that quintuple lower-cost bronze or silver.

There is in fact an additional "refine results" filter that enables screening for a host of options, but it's in a different color and took me several passes to notice it (I can be a very thick user, but I'm sure I'm not alone in that).

As in previous years, once you've input your basic information and before the screen discussed above appears there's an overview screen that also provides an explanation of CSR. But it's  in light type at the bottom of the page, very subordinate to the centerpiece focused on the tax credit:

The broader shoparound tradeoff is between keeping it short and simple, so that users get a quick view of what they're likely to pay, or slowing the process by adding more information, such as plans that cover the shopper's drugs and have her doctors and hospitals in-network.  This year's shoparound takes  a bit longer to get through  than last year's, which was slower than 2015's. Added this year is a filter to indicate whether one is eligible for subsidies at all, e.g., whether the user has an offer of affordable insurance from an employer, which renders him subsidy-ineligible.

In my view that is a worthy feature, as are the drug and doctor filters, and, if properly contextualized, the total cost estimator, which varies according to whether the user anticipates low, medium or high use of medical services. But I wonder whether a two-tier process mightn't be appropriate. In 2015, you could view plans and prices, with your subsidy priced in, within 30 seconds of visiting the home page.Perhaps the shoparound should start with the most basic info -- zip code, household members with their ages, and family income -- give the price quotes, and then prompt for the additional info in a second stage.  In particular, I'm wary of total cost estimators, which tend to push the cost of unexpected accident or illness out of view. I think the results should be carefully hedged, perhaps with views of what you'll pay under alternative scenarios.

Still, the current shoparound gets you results reasonably fast, and I can't say it ignores CSR, the workings of which are notoriously difficult to communicate. We'll see how it works out for users.

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


  1. Good article, two quick reactions:

    a. I thought that CSR's were somewhat vulnerable due to the current lawsuit. I guess that the ACA team can still promote them, I mean they are the best story they've got.

    b. All day long middle class people visit my agency and are far removed from CSR's. I am probably too sensitive, but I would be almost ashamed to promote near-free health care for the poor and extortionate rates for others. I dislike almost all means-tested programs. See Mike Konszal on the difference between neo liberal reforms and true social insurance. I will find a citation and drop it into the blog here.

    1. Hi Bob: 3 thoughts:
      1) Marketplace is so unworkable without CSR, I don't think anyone is seriously planning for a world without it. Assuming Hillary wins, the suit won't prevail.

      2) Minnesota is in a particularly acute meltdown, isn't it? Just why appears to be something of a mystery.

      3) CSR is of minimal relevance in Minnesota because MinnesotaCare gets almost all the CSR-eligibles. At 200-250% FPL, CSR is negligible.

  2. here is what I wanted to add.......

  3. The Minnesota crisis came about as follows.
    The carriers ended 2015-16 with about a 125% loss ratio.
    In other words, for a $4,000 premium they paid out $5,000 in claims.

    The math is unpleasant but not complex.
    If they raise premiums to $6,000 and claims climb a little bit to $5,200, they have a little margin though not that much.

    I suspect that the Minnesota Care plan which we both like might be taking healthy young people away from the carriers. No good deed goes unpunished in the individual health market.