Friday, November 29, 2019

Just how poor is ACA marketplace takeup?

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If you hadn't looked at the Kaiser Family Foundation's Marketplace Enrollment as a Share of the Potential Population for a while, or the variant for subsidy-eligible enrollment, you would get the impression that the takeup of marketplace offerings has fallen sharply.

That's true, among the unsubsidized, who accounted for 42% of marketplace enrollment in 2016 vs. just 27% this year (see Figure 3 here).  And the picture has never been pretty. But marketplace failure is not as dire as these charts might lead you to believe. And the apparent falloff in enrollment takeup among the subsidy-eligible is an illusion, born of changing methodology and snapshots of different points in the yearly enrollment cycle.

The Kaiser charts that were live through 2017 (and maybe later) reflected enrollment as of March 31, 2016, i.e. after CMS's first-quarter effectuated enrollment snapshot for that year, at which point 87% of those who had selected plans as of the end of Open Enrollment had effectuated (and maintained) coverage. Reported takeup among the population estimated to be eligible for subsidies was 64%. Takeup among all who were eligible for marketplace coverage (i.e., lacking access to employer coverage or public programs like Medicaid and Medicare) was estimated at 40%.  In the current charts, based on enrollment in December 2018, takeup among the subsidy-eligible is estimated at 46%, and among all who might buy marketplace plans at 34%. 

Yow. But...

For starters, Kaiser's estimates of total takeup among those potentially eligible -- unsubsidized as well as subsidized -- do not include those who buy ACA-compliant plans off-exchange, as a majority of unsubsidized enrollees do.  Add 4.8 million off-exchange enrollees to the 2016 total, and 2.1 million to the December 2018 total (the latter is Kaiser's estimate for Q1 2019), and the total takeup figures rise to 58% for March 2016 and 41% in December 2018. Regardless of any measurement anomalies,  the huge dropoff in off-exchange enrollment is by any measure the most significant change, along with the drop of unsubsidized on-exchange enrollment -- from 2016 to 2018 (or the present).

Next, the currently live snapshot is as of December 2018. Enrollment attrition progresses throughout the year, but it's moderated considerably in recent years, which widens the contrast between December 2018 and March 2016. In December 2018 total marketplace enrollment stood at 10,279,194; in March 2018, it was 10,643,786. The drop from March to December was 3.4%. In 2016, the March - December enrollment drop was 17.8%.  Enrollment in December 2018 was actually higher than in December 2016 -- 9,170,812 vs. 9,115,154.

Most important to the overall reported percentages, between 2016 and 2018 Kaiser, following changes to the Census surveys of Americans' insured status, increased its estimates of the eligible population.  In 2016, the total population "potentially eligible" for marketplace coverage was estimated at 27.4 million, and the potentially subsidy-eligible population at 14.7 million. In December 2018, the corresponding estimates were 30.6 million and 19.3 million.

The Dec. 2018 (and current live) estimate of the potentially subsidy eligible population, 19.3 million, seems high, as it suggests 10.45 million subsidy-eligible uninsured.  A Kaiser estimate dated only 2017 pegs the subsidy-eligible uninsured at 8.21 million. Put that estimate together with subsidized enrollment in March 2019 -- 9.25 million -- and you'd get 53% for the percentage of the potentially subsidy-eligible who are enrolled in the marketplace. Add in another 800,000 enrollees in the Basic Health Programs operating in New York and Minnesota, which afford Medicaid-like coverage to a subpopulation in ACA subsidy range (those with incomes ranging from 138-200% FPL), and takeup (of marketplace or BHP coverage) rises to 55% (though takeup is better in the BHPs, since coverage is much more affordable).

[UPDATE, 12/14: Yesterday Kaiser released a new report on the uninsured, which pegs the 2018 total of those eligible for marketplace subsidies at 9.2 million. To the extent that estimate is accurate, subsidized marketplace takeup in 2018 would stand at 49%, not 46%.   The Kaiser chart takes the subsidized enrollment total, 8.89 million, from CMS's mid-year 2018 tally. The mid-year 2019 total, just released this week, is 8.87 million subsidized.

A few takeaways here. First, the nearly 50% drop in unsubsidized ACA-compliant off-exchange enrollment from 2016 to 2019 - from 6.7 million to 3.4 million -- is really terrible and amounts to more than 10% of the target marketplace population. It's perhaps reflected in the most recent Census estimates of Americans' health insurance enrollment, which indicated a spike in the uninsured population at higher income levels.

Second, for all the political and operative tumult in the marketplace, subsidized enrollment has changed very little since 2016.*  Third, estimating the subsidy-eligible uninsured is really tricky, while counts of marketplace enrollment are a moving target (an alternative measurement, average monthly enrollment for each year, has its own problems, including changes in the open enrollment period). Finally, by any measure marketplace enrollment has not been adequate to the task, mainly because ACA subsidies are not adequate to the task.

*  Apparent yearly drops in total marketplace enrollment from 2017-2019 have been largely offset by improved retention compared to the 2014-2016 period. Possible factors include silver loading, which made bronze coverage free for hundreds of thousands of enrollees and gold coverage a much better value than previously; the shorter enrollment period implemented in states in 2018, as late enrollees may be the most ambivalent; repeal of the individual mandate, which also weeds out the less motivated; and the maturing of a stable core of enrollees who rely on the marketplace for coverage for an extended period.

Is subsidized enrollment in the ACA marketplace really up since 2016?

1 comment:

  1. Thanks for the summary.
    What do we know about the 8 million plus who are eligible for subsidies but do not buy insurance?
    Are they all up in the 300% of poverty range, where there are no CSR benefits? Can we assume they are all healthy?
    This number is larger than I thought.