Thursday, December 20, 2018

A key factor in state-by-state enrollment performance on

Okay, a rather elemental discovery regarding ACA marketplace enrollment for 2019, which was down 4.2% overall in 39 states using

Courtesy of Charles Gaba, here is the enrollment performance by state, 2019 vs. 2018, with a little coloring book intervention of mine in the far-left column. What distinguishes the highlighted states?

Yup...the highlighted states expanded Medicaid.

In non-expansion states, over one third of enrollees have incomes that would have qualified them for Medicaid in an expansion state -- that is, incomes between 100% and 138% of the Federal Poverty Level (FPL). In that income bracket, a benchmark silver plan costs 2% of income, or $28 per month at most. Enhanced by Cost Sharing Reduction, that plan has an actuarial value of 94%, which translates to an average deductible of $239 in 2019 -- coverage far more comprehensive than most Americans get from their employers.

It would appear that retention is quite strong in this nonexpansion-state-only income bracket. In expansion states, CSR-enhanced 94% AV silver is available to enrollees with incomes in the 139-150% FPL range, but enrollees pay 3-4% of income for benchmark silver, and enrollees in this rather narrow income band make up a much smaller percentage of overall enrollment. As income rises, marketplace offerings degrade -- to many people earning, say, $30,000, a benchmark silver plan costing them $207 per month, with a deductible likely in the $3000 range, does not look so attractive. Takeup of marketplace plans has always decreased with income.

In Florida, which accounts for 19% of enrollment, fully 46% of enrollees had incomes under 139% FPL in 2016, the only year in which HHS gave broke out enrollment in the 100-138% FPL bracket. Enrollment in Florida is up 3.2% this year.  Of course the state-by-state correlation in states between enrollees in the 100-138% FPL range and enrollment performance in the Trump era is far from absolute -- many other factors are at play in state markets. But the correlation is significant.

With the exception of Idaho, the twelve states that run their own exchanges (SBEs, or state-based exchanges) have all expanded Medicaid. And yet enrollment in those states is likely to remain flat this year, outperforming the states, as they did in 2017 and 2018. That's all the more impressive given their lack of the sticky 100-138% FPL income strata. The enrollment gap between SBE vs. FFE (federally facilitated exchange)  states attests, among other things, to the importance of enrollment assistance and outreach, which CMS has gutted in the states using the federal exchange. The state-based marketplaces have their own advertising and outreach budgets and for the most part have maintained those efforts. As David Anderson and I noted earlier this year, the enrollment performance of California in 2018 compared to the FFE states highlights the likely impact of CMS's advertising and outreach cuts.

There's more interesting work to be done here regarding the relative impact of carrots (generously subsidized health plans) and sticks (the individual mandate) on ACA marketplace enrollment. On one hand, the relative enrollment resilience in nonexpansion states points toward the power of really affordable comprehensive insurance, while the steep enrollment drop in expansion states perhaps shows the real impact of mandate repeal. On the other hand, the superior performance of SBEs indicates that active insurance market oversight, investment in outreach and enrollment assistance, and a governmental will to make the marketplace work also have a significant impact.

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