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In the current crisis, as millions lose employer-based insurance, the fine points of ACA marketplace enrollment back in Open Enrollment for 2020 are not going to get anyone's pulse racing.
That's especially true since the 2020 marketplace was quite stable. Enrollment nationwide was essentially flat; unsubsidized premiums were down slightly; and silver loading effects (discounts in bronze and gold plans, explained below) fluctuated within states and rating areas but did not change much on net.
Nonetheless, significant trends that surfaced in 2017 and were intensified by silver loading from 2018 forward continued. Silver plan selection continued to erode, though gold selection remained flat: the marketplace is "bronzing," which means more people are in plans with very high deductibles, averaging over $6,000 for a single person.
The exodus out of silver plans is driven largely but not exclusively by silver loading, the market's reaction to Trump's cutoff in October 2017 of direct federal reimbursement of insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to enrollees with incomes below 250% of the Federal Poverty Level (FPL) who select silver plans. Regulators in most states responded by allowing or encouraging insurers to concentrate the cost of CSR in the premiums of silver plans. Since premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver benchmark (the second cheapest silver plan), inflated silver premiums create discounts for subsidized buyers in bronze and gold plans. Silver loading began in 2018, accelerated in 2019, and weakened slightly in 2020.
At incomes over 200% FPL, the move away from silver plans makes sense, since discounted bronze and gold plans generally deliver more actuarial value for the premium dollar. This is true even at the 200-250% FPL, where CSR exists but is very weak, raising silver plan AV to just 73% from a no-CSR baseline of 70% AV.
At incomes up to 200% FPL, however, the value of CSR (provided at no extra cost to enrollees) generally outstrips the value of bronze/gold discounts and renders care far more affordable to low income buyers than bronze or even gold plans. CSR raises silver plan AV to 94% at incomes up to 150% FPL and to 87% in the 150-200% FPL income range. The percentage of income required for a benchmark silver plan rises with income, from 2% of income for those with incomes up to 138% FPL to 6.5% at 200% FPL. Erosion of silver plan selection has been sharp at 150-200% FPL; it continued in 2020.
All charts below are derived from CMS's state-level Public Use Files for the ACA marketplace. Results are for the 38 HealthCare.gov states, which accounted for 72.6% of total enrollment in 2020.
Erosion of silver plan selection in the "strong CSR" income ranges continued.
At incomes at the upper end of subsidy eligibility, 200-400% FPL, silver selection has been halved since 2017 and dropped sharply this year. Gold enrollment was flat in 2020, however -- the shift was into bronze.
At 150-200% FPL, silver plan takeup has dropped more than 10 percentage points since 2017, from 83.2% in that year to 72.9% in 2020.
At 100-150% FPL the drop has been less pronounced, from 89.3% in 2017 to 86.8% this year. And at 201-250% FPL, where CSR is negligible, there's been a real exodus.
2020
This is the case in Nebraska and Kansas, two states with high gold takeup at low income levels. In Omaha, NE, the cheapest gold plan for a 40 year-old with an annual income of $18,000 is $10/month, with an $850 deductible and an annual out-of-pocket maximum of $7,400. The cheapest silver plan at this age/income is $51/month, but with a $0 deductible and an OOP max of just $1,000. Similarly, in Wichita, KS, cheapest gold at this age/income is $16/month, with a $550 deductible and $7,200 OOP max. Cheapest silver is $47/month, deductible $0, OOP max $1,400. In both cases, the premium difference may be a good deal relative to the deductible difference, but the risk exposure embedded in the gold OOP max is huge for a low income person.
The premium for CSR-enhanced silver is a bridge too far for too many low income enrollees, particularly in the 150-200% FPL range. At 200% FPL ($24,980 for a single person), benchmark silver tops out at $135 per month for a solo coverage. But the out-of-pocket exposure at other metal levels is inappropriate for low income enrollees. The erosion of silver selection at incomes up to 200% FPL translates to an increase in underinsurance.
*Apparent enrollment shrinkage year by year is less than meets the eye, for several reasons: 1) late Medicaid expansions in Louisiana, Virginia, Maine and Utah have pulled enrollees out of the marketplace, as enrollees in those states with incomes in the 100-138% FPL range became eligible for Medicaid; 2) Nevada established a state-based marketplace for 2020, exiting HealthCare.gov; and 3) retention throughout the year has improved in recent years. Overall, since 2016, subsidized enrollment is up slightly, while unsubsidized enrollment (mainly off-exchange) has dropped nearly by half, and enrollment in state-based marketplaces is up slightly, while enrollment in HealthCare.gov states is down about 12% (discounting losses driven by Medicaid expansions).
Related:
CSR takeup bends slightly under silver load (April 2019)
Silver loading and 2019 enrollment: A compendium
In the current crisis, as millions lose employer-based insurance, the fine points of ACA marketplace enrollment back in Open Enrollment for 2020 are not going to get anyone's pulse racing.
That's especially true since the 2020 marketplace was quite stable. Enrollment nationwide was essentially flat; unsubsidized premiums were down slightly; and silver loading effects (discounts in bronze and gold plans, explained below) fluctuated within states and rating areas but did not change much on net.
Nonetheless, significant trends that surfaced in 2017 and were intensified by silver loading from 2018 forward continued. Silver plan selection continued to erode, though gold selection remained flat: the marketplace is "bronzing," which means more people are in plans with very high deductibles, averaging over $6,000 for a single person.
The exodus out of silver plans is driven largely but not exclusively by silver loading, the market's reaction to Trump's cutoff in October 2017 of direct federal reimbursement of insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to enrollees with incomes below 250% of the Federal Poverty Level (FPL) who select silver plans. Regulators in most states responded by allowing or encouraging insurers to concentrate the cost of CSR in the premiums of silver plans. Since premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver benchmark (the second cheapest silver plan), inflated silver premiums create discounts for subsidized buyers in bronze and gold plans. Silver loading began in 2018, accelerated in 2019, and weakened slightly in 2020.
At incomes over 200% FPL, the move away from silver plans makes sense, since discounted bronze and gold plans generally deliver more actuarial value for the premium dollar. This is true even at the 200-250% FPL, where CSR exists but is very weak, raising silver plan AV to just 73% from a no-CSR baseline of 70% AV.
At incomes up to 200% FPL, however, the value of CSR (provided at no extra cost to enrollees) generally outstrips the value of bronze/gold discounts and renders care far more affordable to low income buyers than bronze or even gold plans. CSR raises silver plan AV to 94% at incomes up to 150% FPL and to 87% in the 150-200% FPL income range. The percentage of income required for a benchmark silver plan rises with income, from 2% of income for those with incomes up to 138% FPL to 6.5% at 200% FPL. Erosion of silver plan selection has been sharp at 150-200% FPL; it continued in 2020.
All charts below are derived from CMS's state-level Public Use Files for the ACA marketplace. Results are for the 38 HealthCare.gov states, which accounted for 72.6% of total enrollment in 2020.
Overall, gold enrollment remained flat in 2020, while bronze upticked significantly.
Metal Level Selection, 2017-2020
HealthCare.gov states
Year
|
Total enrolled*
|
Bronze
|
Silver
|
Gold
|
2017
|
9,201,905
|
21.5%
|
74.2%
|
3.3%
|
2018
|
8,743,642
|
28.0%
|
65.1%
|
6.0%
|
2019
|
8,411,614
|
30.3%
|
61.4%
|
7.5%
|
2020
|
8,286,871
|
33.0%
|
58.8%
|
7.4%
|
Erosion of silver plan selection in the "strong CSR" income ranges continued.
Silver Plan Selection
at 100-200% FPL
HealthCare.gov states
Year
|
Total enrolled
|
Silver enrolled
|
Percent silver
|
2017
|
5,258,797
|
4,574,172
|
87.0%
|
2018
|
4,865,014
|
4,152,230
|
85.4%
|
2019
|
4,712,094
|
3,944,471
|
83.7%
|
2020
|
4,725,360
|
3,864,275
|
81.8%
|
At incomes at the upper end of subsidy eligibility, 200-400% FPL, silver selection has been halved since 2017 and dropped sharply this year. Gold enrollment was flat in 2020, however -- the shift was into bronze.
Enrollment by metal level at 201-400%
FPL
HealthCare.gov States
Year
|
Total bronze
|
% bronze
|
Total silver
|
% silver
|
Total gold
|
% gold
|
Total
|
2017
|
969,190
|
34%
|
1,706,780
|
60%
|
173,881
|
6%
|
2,851,601
|
2018
|
1,299,845
|
45%
|
1,251,385
|
43%
|
337,995
|
12%
|
2,891,851
|
2019
|
1,428,582
|
50%
|
986,957
|
35%
|
427,824
|
15%
|
2,863,824
|
2020
|
1,518,120
|
55%
|
795,248
|
29%
|
404,302
|
15%
|
2,737,184
|
At 150-200% FPL, silver plan takeup has dropped more than 10 percentage points since 2017, from 83.2% in that year to 72.9% in 2020.
Enrollment by metal level at 151-200% FPL
HealthCare.gov states
Year
|
% bronze
|
% silver
|
% gold
|
2017
|
14.5%
|
83.2%
|
1-2%
|
2018
|
18.2%
|
78.4%
|
2.5%
|
2019
|
20.6%
|
76.3%
|
2.9%
|
2020
|
23.9%
|
72.9%
|
2.9%
|
2017
Strong CSR Weak CSR
Metal level
|
100-150%
|
151-200%
|
201-250%
|
bronze
|
9.2%
|
14.5%
|
27.1%
|
silver
|
89.3%
|
83.2%
|
67.6%
|
gold
|
< 1%
|
1-2%
|
4-5%
|
2018
Strong CSR Weak CSR
Metal level
|
100-150%
|
151-200%
|
201-250%
|
bronze
|
9.9%
|
18.2%
|
36.5%
|
silver
|
89.7%
|
78.4%
|
53.4%
|
gold
|
0.09 %
|
2.5%
|
9.5%
|
2019
Strong CSR Weak CSR
Metal level
|
100-150%
|
151-200%
|
201-250%
|
bronze
|
10.4%
|
20.6%
|
40.9%
|
silver
|
88.3%
|
76.3%
|
45.9%
|
gold
|
1.1%
|
2.9%
|
12.6%
|
Strong CSR Weak CSR
Metal level
|
100-150%
|
151-200%
|
201-250%
|
bronze
|
12.1%
|
23.9%
|
41.3%
|
silver
|
86.8%
|
72.9%
|
39.6%
|
gold
|
2.4%
|
2.9%
|
12.6%
|
Notably, an uptick in gold plan selection at 100-150% FPL in 2020 accounts for most of the silver selection drop in that income band this year. In some states and regions, the cheapest gold plan can be considerably cheaper than the cheapest silver plan -- a result of silver loading that should be more prevalent.
----
*Apparent enrollment shrinkage year by year is less than meets the eye, for several reasons: 1) late Medicaid expansions in Louisiana, Virginia, Maine and Utah have pulled enrollees out of the marketplace, as enrollees in those states with incomes in the 100-138% FPL range became eligible for Medicaid; 2) Nevada established a state-based marketplace for 2020, exiting HealthCare.gov; and 3) retention throughout the year has improved in recent years. Overall, since 2016, subsidized enrollment is up slightly, while unsubsidized enrollment (mainly off-exchange) has dropped nearly by half, and enrollment in state-based marketplaces is up slightly, while enrollment in HealthCare.gov states is down about 12% (discounting losses driven by Medicaid expansions).
Related:
CSR takeup bends slightly under silver load (April 2019)
Silver loading and 2019 enrollment: A compendium
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