New Jersey off-exchange enrollment rose in 2019: Did cheap off-exchange silver help?

Good news for New Jersey's individual market for health insurance: while on-exchange enrollment, announced late last December, was down a disappointing 7%, those losses were partly offset (as some observers had hoped) by off-exchange enrollment gains announced today:


Why was enrollment down on-exchange, and up off-ex?  In brief: the state's swift action in 2018 to stand up a reinsurance program and pass a state individual mandate resulted in an average premium decrease of 9%, That drop did not help the large majority of on-exchange enrollees who obtained premium subsidies. As I explained last January:

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

The drop did help unsubsidized enrollees, however. And as DOBI notes today, the unsubsidized had some motive to migrate off-exchange:

For 2019, the department encouraged health insurance carriers selling plans in the individual market to offer a lower cost silver plan off the Marketplace (off the exchange), to provide lower cost options for those who do not qualify for federal tax subsidies. Two carriers offered the off marketplace only silver plan. Figures show that enrollment increased in the off the Marketplace plans compared to last year.

To unpack that: when Trump cut off direct federal reimbursement to insurers for Cost Sharing Reduction subsidies in October 2017, New Jersey, like most states, allowed insurers to price CSR into silver plans only, since CSR is available only in 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. To hold unsubsidized enrollees harmless, many states further encouraged insurers to offer off-exchange silver plans with no "silver load."

New Jersey's Dept. of Banking and Insurance did this for the first time in 2019, or at least publicly encouraged insurers to do so for the first time (see statement given to me here), and AmeriHealth and Oscar took the cue, so that unlike in 2018, cheaper CSR-free silver plans were available off-exchange. For an unsubsidized 46 year-old, AmeriHealth offered an off-exchange silver HSA plan for $359 per month; its cheapest on-exchange silver plan was $381/month.  Oscar offered an off-ex silver plan at $408 per month for a 46 year old, while its cheapest on-ex silver plan was $536/month. Horizon, which dominates the off-ex New Jersey market, dropped its silver plan premiums, but offered no off-exchange discounts.

Notably, AmeriHealth and Oscar picked up share off-exchange in 2019. Here's the comparison:

And here is the contrast in contracts (not total enrollments) by metal level selection - Q1 2019 vs. Q1 2018. Gold enrollment in New Jersey is low, under 2% on-exchange and 7% off-ex, and enrollment by insurers other than Horizon, AmeriHealth and Oscar is negligible.

Off-exchange Contracts by Metal Level,  Q1 2018 v. Q1 2019

Bronze and silver contracts, three top insurers

Insurer	Bronze 2018	Bronze 2019	Bronze Change 2018-19	Silver 2018	Silver 2019	Silver Change 2018-19
AmeriHealth	3152	3241	2.8%	3883	6331	63.0%
Horizon	9672	8579	-11.3%	28530	28351	-   .01%
Oscar	705	808	14.6%	146	687	370.5%

Silver enrollment has historically been dominant in New Jersey's off-exchange market, and remains far more so than in most states. In 2019 it rose still higher, from 65.3% of contracts to 68.5%. Horizon's share of off-exchange silver contracts dropped from 86.2% in Q1 2018 to 79.8% in Q1 2019. On-exchange, total silver enrollment dropped from 75.6% of all contracts in Q1 2018 to 74.6% in Q1 2019, suggesting a possible migration of unsubsidized enrollees off exchange. Noteworthy is AmeriHealth's 63% increase in off-ex silver contracts year-over-year, along with Oscar's rise from negligible to a significant, if small, share of the silver off-ex market.

It does seem that off-exchange discounted silver plans offered by AmeriHealth and Oscar may have drawn some unsubsidized enrollees off the exchange in 2019 -- and that premium drops in 2019 helped the off-exchange market, which rose 3% after dropping 14% in 2018.

Here are the full metal level by contract totals, on- and off-exchange, in Q1 2018 and Q1 2019. 

--
Updated/corrected: originally I had a contrast between Q4 2018 and Q1 2019, replaced here Q1 year-over-year.