CSR takeup bends slightly under silver load at incomes up to 200% FPL

Subscribe to xpostfactoid via box on right (requires only an email address; you'll get 2-3 emails per week on average)

For ACA marketplace enrollees with incomes up to 200% of the Federal Poverty Level (FPL), silver-level plans are almost always the wisest choice. Through 2017, silver plans were priced as if they had an actuarial value of 70%, compared to 60% for bronze plans and 80% for gold. The Cost Sharing Reduction (CSR) subsidy, however, raises the AV of a silver plan to 94% for those with incomes up to 150% FPL, and to 87% for those with incomes in the 151-200% FPL range. Insurers were reimbursed separately for CSR, and it wasn't priced into premiums.

That changed when Trump cut off direct CSR reimbursement in October 2017. In 2018, CSR was priced into premiums -- in most states, into silver premiums alone. By 2019, almost all states allowed this "silver loading." Since ACA premium subsidies are designed so that the enrollee pays a fixed percentage of income for a silver benchmark plan, inflated silver premiums boost subsidies and so create discounts for subsidized buyers in bronze and gold plans. But these discounts are not enough to offset the value of the CSR that's available up to 200% FPL.

The story is quite different at 201-250% FPL, where CSR is weak, raising the AV for silver plans to just 73%. In that income range, gold and bronze plan discounts often do outstrip the value of CSR -- almost as strongly as they do at incomes above 250% FPL, where the silver AV is 70%.

Through two years of silver loading, CSR takeup has remained strong at incomes up to 200% FPL, while it's fallen sharply -- and quite rationally -- at incomes from 201% FPL up.  This despite the fact that a very large percentage of enrollees with incomes up to 200% FPL can get a bronze plan for free, thanks to silver loading. Also despite the fact that CMS has cut federal funding for enrollment assistance by 84% since 2017. That has doubtless hurt total enrollment at incomes under 200% FPL.

Enrollment in 2019 in the 39 states using the federal HealthCare.gov platform continued trends begun in 2018: a relatively modest erosion in CSR takeup at 151-200% FPL and a continued sharp drop at 201-250% FPL.  Enrollment drops have been sharpest at 151-200% FPL, whereas they've been mitigated by silver loading discounts at 201-250% FPL and offset entirely at 250-400% FPL, at which levels enrollment has risen for two years straight.

Here's what's happened to silver enrollment in HealthCare.gov states over the past two years.

Metal Level Selections at Different CSR-eligible Income Levels (% FPL)

HealthCare.gov states

                              2017

                              Strong CSR                     Weak CSR                

Metal level	100-150%	151-200%	201-250%
bronze	9.2%	14.5%	27.1%
silver	89.3%	83.2%	67.6%
gold	<  1%	1-2%	4-5%

                              2018

                              Strong CSR                     Weak CSR                

Metal level	100-150%	151-200%	201-250%
bronze	9.9%	18.2%	36.5%
silver	89.7%	78.4%	53.4%
gold	0.09 %	2.5%	9.5%

                              2019

                              Strong CSR                    Weak CSR                

Metal level	100-150%	151-200%	201-250%
bronze	10.4%	20.6%	40.9%
silver	88.3%	76.3%	45.9%
gold	1.1%	2.9%	12.6%

Here's the enrollment and silver selection pattern for those eligible for strong CSR, at 100-200% FPL*

Silver Plan Selection at 100-200% FPL

HealthCare.gov states

Year	Total enrolled	Silver enrolled	Percent silver
2017	5,258,797	4,574,172	87.0%
2018	4,865,014	4,152,230	85.4%
2019	4,712,094	3,944,471	83.7%

This year, as in 2018, enrollment in HealthCare.gov states was down at incomes ranging from 100-250% FPL, up at incomes from 251-400% FPL, and down really sharply among those who don't qualify for subsidies.  This year, the drop at lower incomes was less sharp than in 2018, as was the rise at 250-400% FPL. 

A caveat: about half the drop in enrollment at 100-150% FPL this year is attributable to Virginia's late embrace of the Medicaid expansion, which rendered those at 100-138% FPL, previously eligible for marketplace subsidies, eligible for Medicaid. Enrollment in the 100-150% FPL band in Virginia dropped by 39,000 in 2019, accounting for about half the overall drop for the 39 hc.gov states at that income level. Excluding Virginia, the drop was just 1%.

Enrollment losses overall have been sharpest among the unsubsidized -- partly because sharp premium increases in 2018 in particular pushed more people at 300-400% FPL in subsidy eligibility (a major reason for the enrollment boost in that income band). Unsubsidized enrollment in HealthCare.gov states dropped from 1,436,070 in 2017 to 1,296,027 in 2018 and to 1,086,403 in 2019 -- a 24% drop in two years.

The resilience of CSR in the face of the effects, intentional and unintentional, of Trump administration sabotage, is rather impressive, as is the resilience of marketplace enrollment generally. But the downward drift on both fronts is steady and significant.

 ------

 * About 3% of HealthCare.gov enrollees have incomes below 100% FPL -- mostly legally present noncitizens who are time-barred from Medicaid enrollment. The ACA made people in that situation eligible for marketplace subsidies at incomes all the way down to $0.