A CMS misinformation byte is getting into the woodwork

Axios today reports on the Kaiser Family Foundation's latest data note on individual market enrollment. The main takeaway is that unsubsidized enrollment is down by two million in 2018: brutal premium hikes are driving the unsubsidized out of the individual market.  I was brought up short, however, by this offsetting claim:

Subsidized enrollment grew by about 500,000 people.

Kaiser here is retailing CMS's comparison of effectuated enrollment as of March 2017 and March 2018, tallying those who enrolled on-exchange paid their premiums in February.  These snapshots show total on-exchange enrollment at 10.6 million in March 2018 and 10.3 million in March 2017, and subsidized enrollment at 9.2 million in 2018 vs. 8.7 million in 2017.

As I noted three weeks ago, that comparison is erroneous:

Covered California's silver loading enrollment boost mirrors HealthCare.gov's

Recently I noted that 2018 enrollment losses among subsidized buyers on HealthCare.gov were concentrated at lower income levels, i.e., 100-200% of the Federal Poverty Level(FPL). At the upper range of subsidy-eligible incomes, 200-400% FPL, enrollment actually rose slightly -- or more precisely, dropped very slightly at 200-300% FPL, and rose significantly at 300-400% FPL.

The reason is not hard to find. Discounts in bronze and gold plans generated by Trump's cutoff of direct reimbursement to insurers for Cost Sharing Reduction (CSR) subsidies, available only with silver plans, made marketplace offerings more attractive to those in the 200-400% FPL range than in past years (see note below for an explanation of how this worked). For enrollees in the 100-200% FPL range, in contrast, CSR remained strong enough to outweigh those new discounts in other metal levels, so the marketplace value proposition remained more or less status quo ante. On HealthCare.gov, the percentage of enrollees in the 100-150% FPL income range who selected silver plans actually rose slightly, to from 89% to 90%, while at 150-200% FPL silver selection shrank fairly modestly, from 83% to 78%.

For enrollees in the 200-400% FPL range, improved affordability in metal levels other than silver seems to have largely offset the effects of a shortened enrollment period, radically reduced federal spending on marketing and enrollment assistance, confusion sewn by Trump's declaration that the ACA is dead, and pending repeal of the individual mandate (not effective until 2019 but very much in the news before and during open enrollment).  The 7.5% enrollment drop at the 100-200% FPL income level shows the more or less full imprint of those factors.

California's ACA marketplace, Covered California, is an alternative universe where different results might have been expected. In California, the marketing commitment remained strong, plan designs are standardized, regulatory oversight and competition are robust, premium increases in the last two years were about half the national average, and a highly structured silver loading strategy was put in place early and publicized.  Consequently, effectuated enrollment on Covered California as of March 2018 is up 4% over March 2017, whereas enrollment in the country as a whole is down 2%.*  Off-exchange enrollment stayed steady in California, whereas it dropped 20% nationally in 2017, according to CMS, and likely further in 2018, as unsubsidized enrollees bore the full brunt of premium hikes that reached about 50% in two years.

Nonetheless, subsidized enrollment in California shows a similar pattern to subsidized enrollment on HealthCare.gov. While the year-over-year change is better for California at every income level, showing improvement in all but one (150-200% FPL), the pronounced enrollment performance gap between those eligible for strong CSR and those who are not (and to whom gold and bronze discounts were therefore more consequential) more or less mirrors the gap in the HealthCare.gov.

True Image/pictured lies: The CMS attack on ACA navigators

The Kaiser Family Foundation has done in-depth spadework to debunk CMS's Trumpishly false basis for gutting funding for the ACA navigator program, publishing rebuttal reports in 2017, when federal funding was cut from $63 million previously allocated to $36 million in actual grants, and again this month, when the grants for 2019 were slashed to a nominal $10 million.

Not to rehash the Kaiser case in detail, I want to widen the perspective a bit -- to situate navigator programs within the full array of nonprofit ACA assistance programs that evolved out of the original navigator mandate, and to spotlight the scope of Medicaid enrollment assistance left out of CMS's assessment of navigator performance.

No, CMS, ACA marketplace enrollment isn't up this year, and doesn't justify navigator funding cuts

To justify gutting funding for the navigators who help low income people enroll in health insurance subsidized by the ACA (Medicaid as well as marketplace), CMS is turning a bogus talking point it concocted last year inside out. Here's the current claim, as reported by KHN's Phil Galewitz:

CMS also notes that after last year’s navigator funding was reduced, the overall enrollment in Obamacare plans increased slightly (when counting people who paid their first month’s premiums) to 10.6 million people.

Comparing 2017 and 2018 totals at the end of open enrollment  (before many enrollees have paid their first premium), total ACA marketplace enrollment was down 4% this year. CMS's comparison above uses the totals from the "effectuated enrollment snapshots" from 2017 and 2018, which tracked how many people were enrolled (and had paid their first premiums) as of February in each year. The reported total at that point was 10.3 million in 2017, vs. 10.6 million this year.

As Charles Gaba pointed out last year (and revisits here), however, the 2017 "snapshot" exaggerated early attrition by failing to take into account the fact that those who enrolled between 1/15 and 1/31 (the final day of OE in 2017) did not have payments due until March 1.  There were 539,352* enrollees in that time frame.  None of them could effectuated their coverage for February, which is the population counted in the "snapshot." If those enrollees effectuated coverage at the same rate as enrollees before 1/15 (88.5%), there were 10.8 million who had effectuated or would soon effectuate as of the time of CMS's tally. That total outstrips this year's by 2% .**

Some CMS-y data for the ACA marketplace

Update, 8/12/2018: The data error spotlighted here has been corrected. The state-level PUF (link in text below) published by CMS now lists California CSR enrollment as of the end of Open Enrollment 2018 as 666,053, not 939,688. That's close to my estimate below of 668,557. As noted below, Covered California had confirmed to me that they sent the wrong figure to CMS and were working to update. CC now informs me that they submitted the updated figure on July 31.

The correction changes the national CSR enrollment count to 6,028,558 from  6,302,193. That's 51.3% of all marketplace enrollment (as noted below), not 53.6%. Apparently, though, CSR enrollment as a percentage of all enrollment had upticked back to 53% (or 52.7% to be more exact) as of the March effectuated enrollment snapshot (also linked to below).
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The Public Use Files for ACA marketplace enrollment published annually by CMS provide useful detailed breakouts of enrollment in various categories, but they're not error-free.

Having recently compared the rates at which subsidized and unsubsidized enrollees dropped out early in 2018 (mainly by never paying their first premium), I thought I'd look at the attrition rate for those who obtain Cost Sharing Reduction (CSR) subsidies. And I happned on a large error in the reported total of CSR enrollees in California.

According to the 2018 state-level PUF, 939,688 of California's 1,521,524 enrollees as of the end of Open Enrollment obtained CSR. That's a high but not impossible percentage. But...only 853,787 California enrollees are listed as having chosen silver plans. And CSR is available only with silver. I am told by Covered California, the state's ACA exchange, that CoveredCA submitted the incorrect data figure for that cell to CMS and is working to correct it.

Sabotage triage: New Jersey's instructions to individual market health insurers

It's hard to keep up with Trump administration sabotage of the ACA marketplace. Credit New Jersey's Dept. of Banking and Insurance (DOBI) with doing what it can to help health insurers cope.

In light of CMS's abrupt and capricious suspension of risk adjustment payments* to marketplace insurers in response to what should have been a minor legal glitch, DOBI has moved the deadline for individual market insurers to file rate requests from tomorrow (July 11) to July 18. DOBI has also instructed insurers to take two contingencies into account: the possibility that risk adjustment payments will remain suspended, and the likelihood that CMS (yes, the same CMS that planted the risk adjustment IED late last week) will approve the state's waiver application for federal funding for a reinsurance program, submitted on July 2.

The guidance issued today instructs insurers to file rate requests that a) assume risk adjustment payments will continue for 2019, and b) do not take the possibility of reinsurance into account. But insurers are also instructed to a)  discuss the potential impact on rates if risk adjustment payments were to be discontinued for 2019, and b) file alternative rates that assume the reinsurance program will be in place in 2019, under the terms proposed in the state's waiver application.

Unsubsidized ACA marketplace enrollees drop out early

Early this week, CMS reported that unsubsidized enrollment in ACA-compliant plans dropped 20% in 2018, while subsidized enrollment dropped just 3%. I pointed out that on-exchange unsubsidized enrollment dropped much more modestly, just 6%. That bespeaks a still steeper drop in off-exchange enrollment, suggesting that some previous off-exchange enrollees may have moved on-exchange in 2018 -- some obtaining subsidies, others not.

Today Charles Gaba notes that while unsubsidized on-exchange enrollment did not drop precipitously this year, first-month attrition among the unsubsidized who enrolled on-exchange was massive -- in a year in which overall attrition appears lighter than usual (over 80% of on-exchange enrollees are subsidized). While only 5.6% of subsidized enrollees are reported to have dropped coverage as March 15, 29%* of unsubsidized enrollees did.  This may not be surprising in a year in which premiums rose an average of 27%, largely as a result of Republican sabotage (cutoff of direct CSR reimbursement, radical cuts in enrollment assistance and advertising, weak enforcement of the individual mandate).

While the attrition among the unsubsidized this year is startling, it continues a pattern. Far higher percentages of unsubsidized than subsidized enrollees also dropped out in 2017 and 2016, rising each year. At the same time, attrition among subsidized enrollees dropped each year.

Six ways New Jersey is fighting off Obamacare sabotage

Since Trump's inauguration, the ACA marketplace has undergone multiple waves of sabotage from the administration and the Republican Congress. Leaving aside some short-term hits, such as the cutoff of advertising at the end of Open Enrollment for 2017, these are the structural elements:

• Radical reduction in federal funding for enrollment assistance and advertising
• Cutoff of direct federal reimbursement to insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to low income enrollees (now priced into premiums)
• Effective repeal of  the individual mandate, which requires those for whom coverage is deemed affordable to obtain it or pay a penalty (Republican Congress zeroed out the penalty)
• Regulatory promotion of a parallel market in medically underwritten short-term plans and association health plans -- measures designed to worsen the risk pool in the ACA-compliant market.

The ACA was designed to promote state innovation and autonomy, within fairly firm boundaries. While those boundaries have been breached on multiple fronts, states still have leeway to stay within them or actively reconstitute them. Meanwhile, thanks to the failure of Republicans' repeal legislation, federal funding for the core programs remains in place -- and has even been inefficiently enhanced, via the CSR funding cutoff, since reimbursing CSR is more cost-effective for the federal government than paying premium subsidies inflated by CSR.

It strikes me that New Jersey is unique in the degree to which it has acted to fend off the sabotage. Going into 2019 enrollment, the state has:

Time for New Jersey's Health Insurers to Do Their Part to Counter ACA Sabotage

New Jersey's legislature, governor and Department of Banking and Insurance (DOBI)) have acted swiftly and decisively to protect the state's individual market for health insurance from several rounds of Republican sabotage.

On May 30, Governor Murphy signed into law two bills designed to hold down individual market premiums. The first created a state "individual mandate" -- a  requirement that those for whom affordable insurance is available obtain it or pay a tax penalty -- to replace the federal mandate that the Republican Congress repealed as part of its tax bill last September. The second measure directed DOBI to seek federal funding for a reinsurance program that would restrain premium increases.  DOBI submitted its proposal on July 2,  designed to reduce premiums by 15% per year compared to what they would have been without the reinsurance.

Both of those measures benefit insurers as well as consumers -- the mandate by keeping healthier enrollees in the risk pool, the reinsurance program by reducing insurers' risk.  Now it's time for health insurers to do their part -- by structuring their offerings to maximize federal subsidies and hold unsubsidized buyers harmless from a prior round of Trump administration sabotage.

Off-exchange ACA enrollment dropped 20% in 2017. Why did unsubsidized on-exchange stay stable?

In October 2017, Matt Fiedler of the Brookings Institute estimated that premium hikes averaging 20.5% nationally in the ACA-compliant individual market in 2017 were likely to reduce unsubsidized enrollment by 12.3%.

Today, CMS is out with a report claiming that unsubsidized enrollment dropped 20% nationally in 2017. Average monthly enrollment among the unsubsidized was down 1.3 million. Subsidized enrollment was down just 3%, despite Republican repeal threats and a late cutoff of advertising (along with active denigration of the offerings) by the Trump administration. The subsidized were insulated from the premium hikes; the unsubsidized of course were not.

One peculiarity: all of the drop in unsubsidized enrollment was apparently off-exchange. In fact, unsubsidized enrollment on HealthCare.gov and the state exchanges rose slightly in 2017, from 2.1 million to 2.2 million (though the "unknown" subsidy status of 83,516 enrollees all but closes the gap).