Sunday, May 27, 2018

Trump's CSR cutoff boosted ACA enrollment in the 300-400% FPL income bracket

This is to follow up, x-post, on a factoid I noted early this month: while enrollment in HealthCare.gov states was down 5% overall in 2018, and down 7.5% among those with incomes up to 200% of the Federal Poverty Level (FPL), it was up among wealthier subsidized enrollees. All of the absolute gain came in the 300-400% FPL range.

Enrollment at 200-400% FPL in HealthCare.gov States


Year
200-250% FPL
250-300% FPL
300-400% FPL
Total 200-400% FPL
2017
1,312,520
752,403
786,678
2,851,601
2018
1,277,488
747,165
867,198
2,891,851


That's actually quite striking. In the prior post, I noted
If enrollment in the 200-400% FPL range had been down 7.5% in 2018, as it was in the 100-200% FPL bracket, there would be 254,000 fewer enrollee in HealthCare.gov states than there are now. If the impact in the states that run their own marketplaces was proportionate, that suggests 342,000 fewer enrollees had the federal government continued to reimburse insurers for CSR.
Most of that gain attributable to silver loading occurred in the 300-400% FPL income bracket. If enrollment in this bracket were down 7.5%, there would be 140,000 fewer enrollees in HealthCare.gov states (and probably about 188,00 fewer nationwide).

The difference is almost certainly due to the silver loading of CSR costs (see note below), which created discounts in bronze and gold plans that chiefly benefit those with incomes above 200% FPL (below that level the free CSR benefit outweighs the gold/bronze discounts).  So let's look at metal level selection in the 300-400% FPL bracket in 2017 and 2018.

Note: CMS broke out gold selection in 2018 but not in 2017. So the 2017 "gold" line  is derived by subtracting bronze, silver and 1% of enrollment at this level (approx 7900) for catastrophic and platinum,  which together totaled 1 % of enrollment across all income levels [updated 8/9/18].

Enrollment by metal level at 300-400% FPL in HealthCare.gov States

Year
Total bronze
% bronze
Total silver
% silver
Total gold
% gold
Total
2017
316,400
40%
409,600
52%
 52,500
 7%
786,678
2018
466,000
54%
284,400
33%
116,200
13%
867,198

Enrollment totals at the metal levels are derived from whole-number percentages provided by CMS.
Source: CMS State Level Public Use Files, 2017 and  2018.

Bronze enrollment in this income bracket was up by about 150,000 (47%) in 2018, and gold was up by about 64,000 - well more than double.  Silver was down 125,000.

Takeup of subsidized marketplace plans has always been poor in the upper ranges of income eligibility. The bronze/gold discounts made available by Trump's cutoff of federal funding for CSR plainly improved takeup in the upper income range.

There is another factor in the enrollment spike at 300-400% FPL. A higher percentage of enrollees in this income bracket was probably subsidized in 2018 than in 2017. That's because of the huge spike in premiums in 2018. In previous years, younger enrollees in particular with incomes as low as 250% FPL did not qualify for subsidies, because unsubsidized premiums required of them an "affordable" share of income (almost 10% in the 300-400% bracket).

This year, the impact of slipping just below the subsidy line was magnified by the bronze/gold discounts. An older buyer in particular who might have had just a $10/month subsidy for a benchmark silver plan might find a much more dramatic discount in bronze or gold.

--
Note on Effects of CSR funding cut-off 

When Trump cut off federal reimbursement of insurers for the Cost Sharing Reduction subsidies they're legally required to provide to lower income ACA marketplace enrollees who select silver plans (57% of marketplace enrollees in 2017), most states allowed or required insurers to concentrate the cost of CSR in premiums for silver plans only. States in which 70% of individual market enrollees live concentrated the cost of CSR in on-exchange silver plans only, allowing for cheaper silver plans to be sold off exchange.

Since ACA premium subsidies are keyed to the price of the benchmark (second cheapest) silver plan in each rating area, subsidies rose to cover inflated silver premiums, generating often dramatic discounts in non-silver plans, i.e. gold and bronze (platinum availability and purchase is negligible). In many states, steep increases in silver plan premiums resulted in zero-premium bronze plans becoming available to many buyers (or nominal $1-3/month premiums), and gold plans that were either cheaper than silver or close in price.

Cheap gold plans were a particular boon to enrollees with incomes between 200% and 400% of the Federal Poverty Level (FPL). These buyers are not eligible for strong CSR, which makes silver plans roughly equivalent to platinum plans for buyers up to the 200% FPL threshold. Normally,  enrollees in the 200-400% FPL range would pay between 6% and 10% of their income (percentage rising with income) for a benchmark silver plan with an actuarial value of 70%, i.e. with an average deductible of around $3600). With CSR priced into silver plans in 2018, gold plans  (80% AV, with an average deductible of around $1100) came 

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