Wednesday, August 08, 2018

Unsubsidized on-exchange enrollment is also shrinking fast

Off-exchange enrollment in ACA-compliant plans is contracting sharply. The Kaiser Family Foundation reports that average monthly enrollment in off-exchange ACA-compliant plans was down 25% from 2016 to 2017. Further, all off-exchange enrollment (including in grandfathered and grandmothered pre-ACA plans) was down 38% from the first quarter of 2017 to the first quarter of 2018. It's not yet possible to break out the drop in ACA-compliant off-exchange plans alone, but it's likely close to that 38% top line.

Wow.  The Kaiser study also shows that the average individual market premium rose from $339 in 2016 to $490 in 2018 -- a 45% increase* over two years. That's driving a lot of unsubsidized people out of the market.

It's known, but has not been much emphasized, that the drop in unsubsidized enrollment through the ACA exchanges, is also sharp. Kaiser shows a drop from 1.6 million to 1.4 million in effectuated enrollment from March 2017 to March 2018. And as I noted recently, Kaiser chose not to estimate an undercount in CMS's report of effectuated enrollment in 2017 (the undercount is acknowledged in an endnote).

That undercount can be estimated.  The "snapshot" of enrollment effectuated in February 2017 left out 539,352 enrollees whose first payments were not due until March 1, of whom about 477,000 probably effectuated coverage, based on the reported overall percentage of enrollees who effectuated coverage. Of those, I estimate about 76,000 were unsubsidized (since that was the case for 16% of all enrollees), raising the 2017 unsubsidized total to 1.7 million and the enrollment drop to about 17%.  At the same time, subsidized enrollment upticked slightly in 2018, from about 9.1 million to 9.2 million.

The takeaway, again: unsubsidized on-exchange enrollment dropped about 17% from Q1 2017 to Q1 2018. Some of that loss of about 300,000 migrated into subsidized enrollment, as premium hikes rendered more people in the 300-400% FPL income range eligible for subsidies. Enrollment in that income bracket was up fully 10%, by over 80,00 in states, as I noted here. In California, enrollment at 250-400% FPL was up 9%, by about 30,000.

The ACA-compliant market is rapidly condensing toward the subsidized,  and, thanks to silver loading, also tilting toward the somewhat more affluent subsidized, who are also somewhat older. Those trends will likely continue in 2019 as year-long short-term plans come online, though in scattered states reinsurance programs may put a brake on attrition among the unsubsidized.

* Silver loading is also driving a lot of people into bronze and gold plans. Benchmark silver plan premiums rose more than 60% from 2016 to 2018, compared to 45% for plans people actually bought.

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