Tuesday, October 30, 2018

Silver loading 2019: What's on offer in the nation's highest-enrollment counties

The ACA marketplace is, as David Anderson says, a county-by-county story. Markets vary widely, or wildly, by location, sometimes down to the zip code. The variation grew positively freakish after Trump cut off CSR reimbursement and insurers responded by silver-loading -- that is, concentrating the cost of CSR in silver plans only (see below for an explanation).

There are counties (like Alfalfa in OK) where anyone with an income under 400% FPL can get a gold plan (deductible $200) for free, but where a 40 year old with an income just over the line will pay $433 per month for the cheapest bronze plan (deductible $5,000). There are counties where no one with an income over 200% FPL can get a silver plan with a deductible lower than $4,000 (Penobscot, Maine). There are counties where premiums for the unsubsidized are relatively low but silver loading has yielded no significant discounts in bronze or gold (Essex, NJ). There are counties where a large gap between the cheapest and benchmark (second cheapest) silver plan render CSR-enhanced free or close to it to most with CSR-eligible incomes, but with no affordable gold plans for those eligible for weak CSR or no CSR (Atkinson, Georgia).

This is all testament to the flawed design and inadequate funding of the ACA marketplace, as well as to the sabotage inflicted on it in the Trump era and prior. Compare Medicare/Medicare Advantage, where a monster public option, heavier and more uniform subsidies, tight constraints on provider payment rates in the private plans, and better benefit standardization create a market that's confusing enough and has large coverage gaps for many but still provides more uniform, adequate and affordable coverage than does the marketplace. (Though the marketplace actually offers more comprehensive coverage to those with incomes under 200% FPL who access CSR.)

All that said, there's a sort of broad middle of silver loading effect, in which bronze and gold plans are cheaper relative to silver than they were pre-2018. For a solo 40 year-old with an income of $24,000, or a bit under 200% FPL, a mid-range silver load effect might create a spread of over $100 per month between the cheapest bronze plan and benchmark silver ($129 per month at this income) and of less than $30 per month between the benchmark and the cheapest gold plan, i.e. up to around $160/month.

That's based on a spot check of the counties with the highest enrollment nationwide, listed below. Totals are as of the end of Open Enrollment 2018.  Since Covered California's county-level breakout is from March, and reflects 7% attrition since the end of OE, I adjusted the California counties' numbers up accordingly (dividing the totals by .932 in case you're keeping score at home).

Counties with highest ACA marketplace enrollment, 2018
As of the end of Open Enrollment 2018

County
enrollment
Los Angeles, CA
423,126
Miami-Dade, FL
394,677
Broward, FL
234, 419
Harris, TX
229,493
Orange, CA
145,150
Orange, FL
133,742
Cook, IL
133,122


These counties represent 14.4% of enrollment nationwide.

Below are the metal level spreads in zip codes in these counties. As Covered California splits Los Angeles into two rating areas, I've included zip codes from both. Conversely, as far as I can tell Miami-Dade and Broward counties in Florida have identical offerings, so I've provided just one combined listing for them. In Cook County IL I came across divergent offerings, so I've posted for two zip codes. There may be variants within other counties as well.

While the gold premiums are not so significant at an income of $24,000, where silver-enhanced CSR has a higher actuarial value than gold, those spreads are proportionate and become significant at 201% FPL  ($24,281), where CSR weakens sharply and silver falls below gold in value.

Premiums that seem to me to reflect silver loading are marked in red.

Metal level price spreads (solo premium per month), 2019
Single 40 year old, income $24,000
Benchmark (second cheapest) silver plan premium at this income: $129/month

County
Zip code
Cheapest bronze
Cheapest silver
Cheapest gold
Los Angeles, CA (R. 15)
90639
$54
$128
$143
Los Angeles, CA  (R. 16)
91343
$ 9
$107
$122
Miami-Dade & Broward, FL
33012
$15
$121
$158
Harris, TX
77083
$22
$121
$212
Orange, CA
92619
$ 1
$113
$161
Orange, FL
92615
$ 0
$123
$188
Cook, IL
60433
$31
$108
$157
Cook, IL
60647
$73
$112
$187

Of the eight high-enrollment rating areas listed here, six show significantly discounted bronze and six show significantly discounted gold. The discounts are not as dramatic as many that were spotlighted last year, or that are on offer elsewhere this year -- David Anderson has reported that over 1000 counties this year have gold plans that are cheaper than the silver benchmark, vs I think 500-600 last year (that was in a tweet I can't easily locate; Anderson has mapped the gold-vs.-benchmark spreads here). Also not reflected here are the plan variables that can make free or very cheap bronze a reasonable bet for some enrollees -- e.g., generic drugs and/or doctor visits not subject to very high bronze deductibles, which some of the bronze plans quoted above provide and some do not.

In any case, silver loading is alive and well, and in fact extended to more states than in 2018, and may continue to offset fresh rounds of Republican sabotage, such as the enhanced short-term plan market and repeal of the individual mandate penalty.

--
Note: What is silver loading?

Silver loading refers to concentrating the cost of CSR (footed by the federal government as stipulated by the ACA until Trump stopped payment in October 2017) in the premiums of silver plans, since CSR is available only with silver plans. Since premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver plan benchmark (the second cheapest silver plan), inflated silver premiums create discounts for subsidized buyers in bronze and gold plans. And in states that allowed insurers to offer silver plans off-exchange with no CSR load, unsubsidized enrollees were protected from CSR costs, theoretically at least.

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