GAO highlights the silver load offset to HHS sabotage

The GAO's report on HHS's performance in managing Open Enrollment for 2018 on HealthCare.gov hits HHS hard for dereliction of its duty to maximize enrollment in the ACA marketplace. The report lambastes HHS for using bad data to gut navigator funding; for ignoring performance data while constructing a bogus rationale for gutting advertising; and for refusing to set enrollment targets that would enable the agency to target efforts where performance was lagging.

These failures, the report asserts in measured bureaucratese,

could affect HHS's ability to meet its objective, such as its objectives of improving Americans' access to healthcare.

Unspoken is that policies instituted by HHS leadership did advance Trump's goal: to highlight and exacerbate the flaws of a program created by Democrats.

The report also includes stats that highlight the effects of "silver loading" the cost of Cost Sharing Reduction (CSR) after Trump cut off direct reimbursement of insurers for that mandatory benefit, forcing them to price it into premiums. Since CSR is available only with silver plans, most states allowed insurers to price it into silver plans only. Since premium subsidies are keyed to a silver benchmark, silver loading increased subsidies, creating discounts in bronze and gold plans. Here is a graphic representation of the discounts thus created:

Premiums paid by subsidized enrollees decreased by 36% for bronze plans and 39% for gold, compared to 13% for silver. That sheds some light on the metal level choices at different income levels that I've highlighted elsewhere.

For most enrollees with incomes up to 200% of the Federal Poverty Level (FPL), the value of CSR -- a free benefit attaching only to silver plans --  outweighed the bronze and gold discounts, notwithstanding that bronze plans were effectively free to a large number of those below this income threshold. Bronze plans generally carry deductibles over $6,000, whereas deductibles for CSR-enhanced silver generally range from $0-500 for those with incomes up to 150% FPL and from $500-1000 for those in the 150-200% FPL range. Silver plans for those with incomes up to 200% FPL also have higher actuarial values than gold plans. There was accordingly little change in metal level choices at this income level.

Metal level selections in 100-200% FPL income range in HealthCare.gov states

Year	% Bronze	% Silver	% Gold*
2017	11%	87%	2%
2018	13%	85%	2%
change	+2%	-2%	0%

What movement there was occurred at 150-200% FPL,where silver selection dropped from 83% in 2017 to 78% in 2018. Free or very cheap bronze may have lured an extra 100,000 or so out of CSR.

The story was very different at the upper range of subsidy eligibility. Among those with incomes of 200-400% FPL, there was a substantial exodus to bronze and gold.

Metal level selections in 200-400% FPL income range in HealthCare.gov states

Year	% Bronze	% Silver	% Gold*
2017	34%	60%	5%
2018	45%	43%	12%
change	+11%	-17%	+7%

*The state PUFs break out gold by income in 2018 (to track effects of silver loading) but not in 2018, when percentages are reported for bronze and silver only. Overall, however, catastrophic and platinum plans accounted for approximately 1% of enrollment on HealthCare.gov in 2017.  To estimate gold totals for 2017, I subtracted bronze and silver from total enrollment at each metal level, then subtracted another 1%.

In the 100-200% FPL income range,  there was little shift in metal level selection because there was little change in what was on offer to enrollees. There, enrollment dropped 7.5% in HealthCare.gov states in 2018. At 200-400% FPL, in contrast, the new discounts were a lure, and enrollment rose 1.4%.

Subsidized enrollment by income range, 2017 vs. 2018, in HealthCare.gov states

Year	100-200% FPL	200-400% FPL
2017	5,258,797	2,851,601
2018	4,865,014	2,891,851
Change 2017-2018	-7.5%	+1.4%

The contrast highlights the effects of the cuts in navigator funding, advertising, and enrollment season length spotlighted by the GAO report.