Thursday, June 07, 2018

Virginia Medicaid expansion will cut ACA marketplace enrollment by 100,000-plus

Virginia will enact the ACA Medicaid expansion in 2019 -- it's now law. Hurrah! 400,000 people are expected to gain Medicaid coverage. And that includes about 108,000 people who enrolled in ACA marketplace coverage in 2018 (or rather, those similarly situated next year) -- a bit over a quarter of current enrollment. Judging from enrollment attrition recorded in past years, about 90,000 of the potentially Medicaid eligible are probably enrolled in marketplace plans as of now.

Under the expansion, Virginians with income up to 138% of the Federal Poverty Level (FPL) will be eligible for Medicaid. Pre-expansion (i.e., now), eligibility for marketplace subsidies begins at 100% FPL.  According to CMS public use files, 132,245 enrollees as of the end of Open Enrollment had incomes in the 100-150% FPL range. Most of them -- those with incomes from 100-138% FPL -- will be Medicaid-eligible. 

We know more or less how many. In 2016, the one year in which CMS broke out the 100-138% range separately, 82% of of Virginia enrollees in the 100-150% FPL band proved to be in the narrower "shoulda-been-in-Medicaid" range -- 100-138% FPL. Assuming the same proportions this year suggests 108,000 people who might have enrolled in marketplace coverage in 2019, all other things being equal, who will instead enroll in Medicaid.

While the ACA marketplace will thus take a 1% enrollment hit nationally, HHS ASPE research indicates that expansion should improve the risk pool in Virginia's individual market. Controlling for a range of other factors, CMS concluded that failure to expand Medicaid raised premiums in nonexpansion states by 7%.

The Virginia marketplace needs some relief: it suffered huge premium increases last year, with average premiums rising from $405 to $648 per month. Insurers have requested further steep increases in many parts of the state in 2019. Charles Gaba calculates a weighted average requested increase of 13.4%; Louise Norris provides detail about the distribution of the increases (or requested increases) in both years. Perhaps the anticipated decrease in poorer and therefore likely sicker enrollees will lead to some downward revisions.

Generally, low income enrollees report higher satisfaction in Medicaid than in marketplace coverage, which has higher out-of-pocket costs, as well as premiums of up to 2% of income for a benchmark silver plan for those with incomes up to 138% FPL. Those advantages may be negated, however, by the work requirements, premiums and copays that were the price extracted for expansion by Virginia's now razor-thin Republican majorities in both houses of the legislature. The premiums are up to 2% of income -- the same level as a benchmark silver plan in the marketplace for those in the 100-138% FPL range. The work requirement for non-disabled and otherwise nonexempt enrollees will ratchet up over time from 20 to 80 hours per month of paid work or other qualifying "community engagement." While many in the 100-138% FPL range (formerly eligible for marketplace subsidies) likely do earn income, reporting requirements may prove onerous to many.

UPDATE, 6/8: I was just planning to check to what extent the roughly 100,000 Virginians with incomes in the 100-138% FPL range who are currently enrolled in CSR-enhanced silver plans (94% AV) may be paying less than 2% of income, right down to zero. But David Anderson beat me to this.

Update II: This post looks at the cheapest silver plans currently available to Virginia marketplace enrollees who are likely to be eligible for Medicaid in 2019.

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