Eye of the hurricane? The ACA marketplace in 2020

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While open enrollment in the ACA marketplace has 1-7 days to run in a handful of state-based exchanges (SBEs), and other SBEs haven't reported their data, the overall picture is clear: enrollment in 2020 was essentially flat. Enrollment in the 38 states using HealthCare.gov was down 1.4%, while enrollment in the 13 SBEs will be up 2.6%, leaving total enrollment down 0.3%, according to Charles Gaba's projection.

The big picture is perhaps relatively simple. Premiums were down slightly on average; insurers did not register major impact from the zeroing out of the individual mandate in 2019; the market in aggregate was stable.  But the ACA marketplace is really 50 marketplaces -- or thousands, if you count each rating area -- and a lot of change is bubbling under the surface, from Medicaid expansions in red states to new state-based subsidies in blue states.  Nationally, too, the initial tally sparks several questions:

Frederick Isasi: Three healthcare trends, three power struggles

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At Families USA's Health Action conference last week, FUSA executive director Frederick Isasi, in a presentation for attending media, identified three healthcare trends for 2020.  It struck me that at the heart of each enumerated "trend" is a looming political battle, each of them central to the U.S.'s current existential struggle between oligarchy and renewed democracy. Let's look at each in turn.

1. Value. Describing Americans' demand for "value" in healthcare, Isasi was not speaking primarily about "value-based care," i.e. outcomes-based alternatives to fee-for-service payment. He focused rather on out-of-control prices paid to providers that are rendering care unaffordable to tens of millions. He pointed out that healthcare costs have climbed 600% in the last 40 years and nearly tripled as a percentage of GDP, rendering care unaffordable for tens of millions.  "Almost half of Americans say they have trouble affording healthcare," he said. "People are more scared of paying for getting sick than they are of getting sick."

As to the cause of runaway costs, Isasi blamed the market power of the various healthcare industries: "it's a highly subsidized sector with almost no government oversight." The struggle to hold down costs is less technocratic than political: forcing powerful industries to accept curbs on their pricing power.  Potentially enabling that struggle is a sea change in public attitudes: While coverage has eroded in recent years, Isasi noted, the ACA has wrought a sea change in Americans' expectations: "acceptance of the right to access is a new societal norm."

At Health Action 2020: Once more unto the breach, dear friends

I've had my yearly fix from Health Action 2020, Families USA's annual conference for healthcare advocates, policy people, scholars, and, most importantly I think, front-line ACA enrollment counselors.

I attended my first Health Action conference in January 2017, days after Trump was "sworn," aka perjured, into office. Republicans were promising swift ACA repeal -- "repeal and delay" was their watchword of the moment, meaning they would sunset the marketplace and Medicaid expansion swiftly and fill in the details later. The conference was composed of several hundred people devoted to preventing that. "Our action should lead to their inaction," declared incoming FUSA president Frederick Isasi. And mirabilis, that's exactly what happened.

In 2017 I felt keenly that the conference was run and attended by people who had devoted years or decades to expanding healthcare access in the U.S. -- all now faced with the prospect that their work would be unraveled. I wrote about an emanation of collective strength, institutional and individual, from the participants.  And this year I kept flashing back.

Since the impeachment process got into gear this year, I have often felt that American democracy is going down. It's terrifying to watch the entire Republican party fall in behind Trump to neuter Congress's power to hold a corrupt would-be autocrat accountable for on-the-record abuse of power.  Once again, the people on the stage and in the room reminded me that despite the grave threat to democracy posed by a party in power that's given up on democracy, the country has huge reserves for resistance: people who know how to be free; institutions that know how to wield political influence in service of the common good; courts that at least sometimes uphold the rule of law.

No mandate penalty, no problem? The jury's still out

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The Kaiser Family Foundation is peerless as a source of data and analysis of the ACA marketplace, and indeed of all U.S. healthcare markets. So it's probably foolish of me to question a simple, unequivocal and important conclusion by KFF president and CEO Drew Altman. Still...

Altman, who has a regular column conforming to Axios' radically short format, begins his latest with this declarative:

The Affordable Care Act’s insurance market has not been materially affected by the elimination of the individual mandate penalty.

Evidence: premiums are down in 2020, marketplace insurers are profitable, the risk pool has not apparently worsened, enrollment is more or less stable, and the Medicaid expansion appears to have been "largely unaffected."

That's a lot of evidence in short space. The marketplace, and the Medicaid expansion are clearly functioning without the mandate. But still, I think it's too soon to declare the effect of zeroing out the mandate negligible.  Caveats:

Juice it, Jersey: What silver loading anemia looks like

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I have noted before that New Jersey's implementation of an individual mandate and a reinsurance program in its ACA marketplace in 2019 illustrates the tradeoffs involved in reducing premiums in the ACA marketplace. In brief: unsubsidized premiums down, subsidized premiums up.

I have also noted that in New Jersey, silver loading is underpowered -- that is, it has produced weaker-than-average discounts in bronze plans and no discounts in gold plans, which accounted for an anemic 2% of enrollment in 2019.

Last week, David Anderson and Coleman Drake published a study indicating that the widespread availability of free bronze plans, a major byproduct of silver loading*, has had a particularly strong impact on enrollment.  The authors noted that this effect is conspicuously lacking in Jersey, and suggested a reason:

New Jersey restricts cost-sharing variation within metal levels. In 2019 New Jersey bronze plans were required to have an actuarial value of 64 percent—higher than the 58.5 percent minimum allowed by federal law. This regulation limited the financial exposure of existing enrollees by preventing them from selecting plans with higher cost sharing. However, it also limited the premium spread between the benchmark silver plan and bronze plans, which reduced the availability of zero-dollar premium plans in the state and thereby reduced enrollment. A trade-off thus exists between reducing enrollees’ financial exposure by increasing minimum actuarial value levels and increasing insurance coverage via the zero-price effect.

Has silver loading reduced mortality?

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In early 2017, the IRS sent letters to 3.9 million taxpayers who had paid the ACA's individual mandate penalty in 2015, encouraging the recipients to obtain health insurance and avoid the penalty.  A study of the results* published last month found that 1) those who received the letter were 1.3 percentage points likelier to enroll in coverage in the year following than penalty payers who did not receive it, and 2) that receiving the letter reduced mortality  over the next two years among 45-64 year-olds -- by about six deaths per ten thousand, a significant result.

Drilling into the data-set of millions, the authors infer that in this heart attack and cancer-prone age group, "each month of coverage (on average) reduces baseline mortality among those who enroll in coverage by approximately 2.4%." As to how insurance might have this effect among 45-64 year-olds who lacked coverage in the previous year, the authors posit:

For coverage to reduce mortality over this time horizon, it must affect conditions that: (1) can cause death quickly if left untreated or unmanaged, and (2) for which treatment or management can prevent or delay mortality. For example, individuals lacking health insurance may delay seeking care when experiencing symptoms of acute conditions (e.g., heart attack or stroke), and such delays increase the likelihood of short-term mortality (Smolderen et al., 2010; Medford-Davis et al., 2016)... Separately, obtaining coverage may reduce mortality by causing the diagnosis of certain chronic conditions for which treatment has rapid protective effects. For example, cardiovascular drugs have been observed to reduce mortality from heart disease within months of beginning treatment.

While attracting young adults into the ACA marketplace would improve the risk pool and so put downward pressure on premiums, attracting older adults saves lives. It is likely that silver loading, the pricing practice that's generated windfall discounts in bronze and gold plans in the ACA marketplace since 2018, has boosted enrollment more among older enrollees than among younger ones.

Is "free" a magic word in the ACA marketplace?

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Healthcare scholars David M. Anderson and Coleman Drake have published a study that analyzes the impact of free bronze plans, which became available to millions of prospective ACA marketplace plans in 2018, on enrollment.

Ubiquitous free bronze is one result of "silver loading," 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 (the second cheapest silver plan), inflated silver premiums create discounts for subsidized buyers in bronze and gold plans. As a result of silver loading, $0-premium bronze plans available to millions.

Perhaps the most striking finding in Anderson and Drake's paper is the sheer ubiquity of free bronze plans, particularly for enrollees over age 45 (since premiums rise with age, and the benchmark plan costs subsidized enrollees a fixed percentage of income regardless of age, older enrollees have larger subsidies to cover plans that cost less than the benchmark). The authors divined the availability of free bronze by matching enrollment data, which CMS breaks out by county, income, age and metal level in the 38 states that use HealthCare.gov, with pricing data, which CMS also provides. 

Free bronze, they found,was available in 2019 to almost every marketplace enrollee with an income below 150% of the Federal Poverty Level (FPL) -- that is, to about 3 million enrollees in HealthCare.gov states, more than a third of all enrollees. It was available to most enrollees at 150-200% FPL, and to a large majority of enrollees over age 45 in the 200-250% FPL income bracket.