CSR attrition vs. silver loading stimulus, 2017-2019

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In my last post, I noted that in the Trump era, ACA marketplace enrollment has shifted toward the middle of the income distribution. While enrollment has cratered for the unsubsidized, and eroded by 16% since 2016 among low income enrollees (100-200% FPL, in HealthCare.gov states), it's stayed basically flat at the upper end of the subsidy-eligible income scale, 201-400% FPL.

In brief, the market got much worse for the unsubsidized, as premiums spiked 21% in 2017 and 26% in 2018, and marginally worse for low income enrollees, as out of pocket costs rose yearly in plans with fixed actuarial values. It got better, however, for many enrollees in the 200-400% FPL income range, since a) rising premiums made more people at the upper end of the range subsidy eligible, and b) Trump's cutoff of direct CSR reimbursement for insurers in fall 2017 induced "silver loading" that created discounts in bronze and gold plans (see note below if you're unfamiliar with silver loading).

For enrollees with incomes up to 200%, silver plans are enhanced by strong Cost Sharing Reduction (CSR) subsidies that keep deductibles below $1000 and maximum annual out-of-pocket costs below $2,600 (usually lower). Over 80% of enrollees with incomes below this threshold select silver plans and obtain CSR. For them, the core financial terms offered by the marketplace haven't changed dramatically, though out-of-pocket costs (e.g., average deductibles) have risen each year. For enrollees in the 200-400% FPL range, bronze and gold plan discounts created by silver loading have improved the value proposition from 2018 forward.

As it turns out, in the 39 states using the federal HealthCare.gov platform, the drop in enrollment since 2017 in plans with strong CSR among those with incomes below 200% FPL is nearly equal to the increase in enrollment in bronze and gold plans at 200-400% FPL.  While enrollment at 0-100% FPL has dropped 10% in this period, overall enrollment at 200-400% FPL has been virtually flat. The increases in bronze/gold enrollment represent a shift out of silver, indicating the availability of discounted gold and bronze.

Changes in CSR enrollment at 0-200% FPL & bronze/gold enrollment at 200-400% FPL

HealthCare.gov states, 2017-2019

Year	Total enrollment	Strong CSR  enrollment (94% or 87% AV)	Bronze enrollees 200-400% FPL	Gold enrollees 200-400% FPL	Gold+Bronze enrollees 200-400% FPL
2017	9,201,805	4,630,986*	969,190	303,989	1,273,179
2019	8,411,614	3,913,893	1,428,582	629,651	2,058,233
2019 v. 2017	-790,191	-717,090	+459,392	+325,662	+785,054

Source: CMS state-level public use files

There's no causal relationship between the drop in strong CSR enrollment (close to the drop in enrollment below 200% FPL generally) and the increase in bronze and gold enrollment at 200-400% FPL. This is simply to illustrate that silver loading discounts, coupled with increased subsidy eligibility at (mostly) 300-400% FPL, roughly offset the enrollment losses at lower income levels. As illustrated in the prior post, the share of total enrollment at 200-400% FPL, where bronze and gold discounts are most salient, has risen about 4 percentage points since 2016.

[Update, 8/15: CMS data on average monthly enrollment in each year appears to suggest that apparent year-over-year enrollment drops among the subsidized as of the end of Open Enrollment may have evaporated (in 2018, and perhaps 2019) as the year progressed. See the next post.]
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Note: Silver loading is the byproduct of Trump's October 2017 cutoff of direct federal reimbursement to insurers for the Cost Sharing Reduction (CSR) subsidies they are required to provide to low income marketplace enrollees who select silver plans. Faced with the cutoff at the brink of open enrollment for 2018, most state insurance departments allowed or encouraged insurers to price CSR into silver premiums only. Since premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver plan benchmark, inflated silver premiums create discounts for subsidized buyers in bronze and gold plans.

* CMS broke out total enrollment at each level of CSR (94%, 87% and 73% AV) in 2018 and 2019, but not in 2017, when only the total number of CSR enrollees was provided.  To estimate the number of "strong" CSR enrollees in 2017 (those with incomes up to 200% FPL), I used the percentages of silver enrollment at each CSR income bracket (0-150% FPL, 151-200% FPL and 200-250% FPL) and subtracted the percentage at 200-250% FPL from the CSR total. That is, I took 84% of the CSR total of 5,513,078.