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.

Whatever the cause, marketplace enrollment has skewed older since silver loading began.  In 2017, in the 39 states using the federal exchange, HealthCare.gov, 27.4% of enrollees were age 55 or older. In 2019, 29.3% of enrollees were over 55.

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 are designed so that the enrollee pays a fixed percentage of income for the second-cheapest silver plan in their area (the "benchmark"), inflated silver premiums create discounts for subsidized buyers in bronze and gold plans.

Since premiums rise with age, but subsidy-eligible enrollees of the same income pay the same premium for the benchmark regardless of age, subsidies are much larger for older enrollees than for younger ones. While silver loading has made zero-premium bronze plans available to most marketplace enrollees with incomes below 200% of the Federal Poverty Level, the availability of free bronze extends further up the income scale for older buyers, as a study published this week by David Anderson and Coleman Drake documents. Zero-premium bronze is available, they estimate, to just 16% of 25 year-old enrollees with incomes in the 200-250% FPL range, but to 55% of 45 year-olds and 80% of 60 year-olds. Even at the top of the subsidy-eligible scale, 250-400% FPL, free bronze is available to 52% of 60 year-olds.

The benefits of silver loading have accrued mainly to enrollees with incomes above 200% FPL. Below that level enrollees have mostly stuck with silver plans, because the value of CSR, available only with silver plans, outstrips the value of silver loading discounts. While bronze plans generally carry deductibles north of $6,000, CSR keeps deductibles under $1000 below the 200% FPL threshold. At 200-400% FPL, in contrast, enrollees have flocked to discounted bronze and gold. The movement is most pronounced at 300-400% FPL:

Enrollment at 300-400% FPL 2017-2019 - Subsidy-eligible Income Levels

HealthCare.gov States

Year	Total bronze	% bronze	Total silver	% silver	Total gold	% gold	Total
2017	316,400	40%	409,600	52%	52,500	7%	786,678
2019	506,610	58%	210,295	24%	144,850	17%	870,637

While total enrollment as of the end of Open Enrollment season** dropped by about 9% from 2017 to 2019 in HealthCare.gov states, silver loading appears to have largely offset these losses at higher incomes (and to a lesser extent, at 150-200% FPL as well):

Enrollment by Income  2017-2019 - Subsidy-eligible Income Levels

HealthCare.gov States

Year	Total enrollment	100-150% FPL	150-200% FPL	200-250% FPL	250-300%  FPL	300-400%  FPL	Other  FPL*
2017	9,201,805	3,208,242	2,050,555	1,312,520	752,403	786,678	1,091,407
2019	8,411,614	2,914,593	1,797,501	1,243,762	749,637	870,425	835,696
Change 2017-2019	-9%	-9%	-12%	-5%	Flat	+11%	-23%

Source: CMS State-level Public Use Files (both charts).  "Other FPL" includes those who provided no income information and those with incomes below 100% FPL or above 400% FPL. Most are subsidy-ineligible. Unsubsidized enrollment has plummeted since 2016, on- and off-exchange.

In 2019, silver loading boosted enrollment in HealthCare.gov states by about 500,000, according to one estimate. The beneficiaries have likely skewed toward older enrollees.

Because the ACA marketplace is undersubsidized, one population's loss often tends to be another's gain. Lower base (pre-subsidy) premiums benefit the federal Treasury and unsubsidized buyers, but tend to make coverage more expensive for subsidized buyers, including by reducing silver loading discounts.  A benefit structure skewed in favor of older subsidized buyers hurts the risk pool and so tends to raise premiums. But older adults benefit more from coverage, on average, than younger adults.  If most prospective buyers found benchmark coverage affordable and attractive, discounts or the lack thereof would not matter so much. But takeup of ACA coverage among the subsidy-eligible is barely 50%, if that high.  In this environment of scarcity, silver loading has probably reduced mortality.

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* Health Insurance and Mortality: Experimental Evidence from Taxpayer Outreach, by Jacob Goldin, Ithai Z. Lurie, and Janet McCubbin. NBER Working Paper 26533

**  Improved retention in 2018-19 largely offset these apparent losses, and enrollment in this period was flat in the 12 state-based marketplaces.