Friday, January 04, 2019

New Jersey's disappointing 2019 ACA enrollment: Some perspective

Policymakers in New Jersey were disappointed by enrollment in the state's ACA marketplace in 2019, which came in 7.1% behind 2018 enrollment. In the 39 states using HealthCare.gov, the federal exchange, enrollment was down 3.8%, and in the 12 states (plus DC) that have their own exchanges, it's likely to come in flat (enrollment is not over in several of them).

The state had acted swiftly in the first half of 2018 to pass a state-based individual mandate and get a reinsurance program enacted by legislation  and approved/funded by CMS. As a result, premiums were down an average of 9% in 2019, and 22% below where they would have been had no action been taken.

But base premiums affect only unsubsidized buyers, and in 2019 premiums in New Jersey were actually higher than in 2018 for most subsidized enrollees, as benchmark silver plan premiums, which determine subsidies dropped further than the average for all plans. For a 40 year-old with an income of $30k, the cheapest bronze plan cost 12-22% more in 2019 than in 2018 (varying by region) -- that is, $13-$25 more per month. Cheapest silver was also up slightly in most of the state.  There's some hope that off-exchange enrollment will show some improvement, as that's where the benefit from lower premiums comes home. We'll know when the state publishes first-quarter off-exchange enrollment in the spring.

For what it's worth, Jersey's enrollment performance is smack in the middle of the cohort that may be most relevant: states that enacted the ACA Medicaid expansion but did not create their own exchanges and instead rely on HealthCare.gov. For reasons that remain somewhat murky, the expansion states on HealthCare.gov accounted for almost all the net enrollment loss, lagging not only states that run their own marketplaces but also nonexpansion states on HC.gov.  Collectively 2019 enrollment in nonexpansion states on HC.gov was less than 1% below the 2018 total -- whereas in the expansion states on the platform (excluding Virginia and Maine, expanding in 2019), enrollment was down 7%.

Here's how enrollment shook out for states on HealthCare.gov that had expanded Medicaid as of 2018.*

Enrollment performance, 2019 vs. 2018:
Expansion states on HealthCare.gov


       STATE                        2018                       2019                     2019 vs. 2018

Hawaii
19,799
20,193
102%
Arkansas
68,100
67,413
99%
Alaska
18,313
17,805
97%
North Dakota
22,486
21,820
97%
Arizona
165,758
160,456
97%
Montana
47,699
45,374
95%
Oregon
156,105
148,180
95%
Kentucky
89,569
84,620
94%
Pennsylvania
389,081
365,888
94%
Michigan
293,940
274,058
93%
Illinois
334,979
312,280
93%
New Jersey
274,782
255,246
93%
Iowa
53,217
49,210
92%
Delaware
24,500
22,562
92%
Nevada
91,003
83,449
92%
New Mexico
49,792
45,001
90%
New Hampshire
49,573
44,581
90%
Ohio
230,127
206,871
90%
Indiana
166,711
148,404
89%
Louisiana
109,855
92,948
85%
West Virginia
27,409
22,599
82%


New Jersey policymakers and activists may be disappointed that the state individual mandate apparently did not have its intended effect -- though we don't know what enrollment would have looked like in its absence. But the state suffers not only from the moderate premium hikes for subsidized buyers but from a lack of discounts generated by silver loading** that partially offset losses in 2018 and 2019 in many other states. That is, bronze plans are not particularly cheap, let alone free as they are for most low income enrollees in many states (or parts of states), and gold plans remain out of reach for most enrollees (whereas in many states they are cheaper than silver plans, or close in price).

Again, the state market's one advantage this year is reduced base (unsubsidized) premiums, which may drive improvement off-exchange -- or among the on-exchange unsubsidized, which we'll know when CSM releases a final report that breaks out enrollment by income. 

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* I've omitted Virginia, which enacted an expansion effective this month, for which eligible people could enroll throughout open season, and Maine, where the incoming governor has just instructed her government to begin enactment, and where expectation of that step may have depressed enrollment.

** Silver loading refers to concentrating the cost of CSR subsidies (directly reimbursed to insurers 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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