Is the ACA marketplace catching a surge in entrepreneurship?

Subscribe to xpostfactoid

The Wall Street Journal's Josh Mitchell and Kathryn Dill report that the pandemic has triggered a surge in self-employment and small business formation:

The number of unincorporated self-employed workers has risen by 500,000 since the start of the pandemic, Labor Department data show, to 9.44 million....Entrepreneurs applied for federal tax-identification numbers to register 4.54 million new businesses from January through October this year, up 56% from the same period of 2019, Census Bureau data show.

That surge underscores the value and good timing of the boosts to premium subsidies for plans sold in the ACA Health Insurance Marketplace provided by the American Rescue Plan Act, enacted in March 2021. Those subsidy increases brought the ACA much closer to fulfilling its promise of providing affordable insurance to those who lose or leave their jobs and so lose access to employer-sponsored plans, which insure the majority of working age Americans.

From verb to noun, on the rebound

Subscribe to xpostfactoid

Some time early in our relationship, my wife set down a plate or cup in front of me and said with indulgent and somewhat satiric glee, "you sit down an have an enjoy."

I thought that was hysterical for some reason, and it's been a watchword in our house for 40 years. I often try to fathom why it seems so funny, and get a grip on the intuition that led Cindy to manufacture a noun, enjoy, by accenting the first syllable of a common verb. My lingering association is with "escape" in Arlo Guthrie's Alice's Restaurant, below (reproducing Guthrie's pronunciation):

Almost a quarter of all emergency SEP enrollees in ACA marketplace should have been in Medicaid

Subscribe to xpostfactoid

For years, we have had to infer what percentage of ACA marketplace enrollees in states that have refused to enact the ACA Medicaid expansion have incomes below 138% FPL -- the Medicaid eligibility threshold in expansion states. It's a very large percentage, but as CMS's enrollment reports usually break out income in increments of 50 FPL percentage points, e.g., 100-150% FPL, it has to be inferred.

Just once, in 2016, CMS did provide enrollment results by state for the 100-138% FPL income range as well as for the broader 100-150% FPL bracket. In nonexpansion states, the former was about 85% of the latter. For years since, I've used 85% as a benchmark to estimate down from 100-150% FPL for the "should-have-been-in-Medicaid" cohort.

The final enrollment report for the 2021 emergency Special Enrollment Period, which ran from Feb. 15 to Aug. 15 in the 36 HealthCare.gov states, provides a tantalizing hint: 33% of all enrollment in those states was in the 100-138% FPL bracket. (All nonexpansion states use HealthCare.gov.) But what percentage of those were in the 13 states that had not expanded Medicaid as of the SEP period? (I'm including Oklahoma, which opened the Medicaid expansion gate on July 1 of this year.) 

Signposting likely Medicaid eligibility without muddling the message

Subscribe to xpostfactoid

The Missouri Medicaid expansion  -- mandated by referendum, denied funding by the state legislature, and enacted only after the Missouri Supreme Court so ordered -- is off to a slow start, with the administration of Republican Governor Mike Parson declining to do much outreach. Enrollment of those rendered newly eligible by ACA expansion criteria began on October 1.

News of the slow start led me to check whether HealthCare.gov has been retooled to tell Missouri visitors who use the site's see plans and prices tool that they're likely eligible for Medicaid if they input an income below the eligibility threshold. HealthCare.gov is not the primary means by which people enroll in Medicaid, but it's a "no wrong door" channel.

Yes, HealthCare.gov has has been updated. That's not surprising -- it's had to absorb about a dozen late Medicaid expansions.  But the check underscored to me that messaging on the site for those likely eligible for Medicaid (in all expansion states) could be clearer.  

Here's what you see if you input an income below the eligibility threshold (here, $17,000 for a solo applicant in zip code 63111 in St. Louis): 

The broker's tale: Louise Norris on skewed incentives in the ACA marketplace

Subscribe to xpostfactoid

As noted in last week's post, the ACA exchanges rely heavily on health insurance brokers and agents to help people sort their options and enroll in ACA-compliant individual market plans. Almost half of enrollments on the federal exchange, HealthCare.gov, which currently serves 33 states, are enrolled by brokers and agents. The same is true for Covered California, the largest state-based exchange -- which, unlike HealthCare.gov,* has maintained a consistent commitment to making the marketplace work as designed since its launch in fall 2013.

The reliance on brokers was inevitable, given the complexity of marketplace offerings (check out the 221 plans on sale in Miami, the nation's largest ACA marketplace, in 2022) and the pre-existing pool of expertise, commercially funded, that brokers constituted prior to ACA launch.  And while brokers have played a vital role,** the ACA failed to align their incentives in such a way as to ensure that their participation would be an unmixed blessing. Among the problems:

• Not all insurers that participate in the ACA exchanges pay commissions to brokers. Commissions have fluctuated quite a bit over the seven years of the marketplace's existence, as well as by state, region, and individual insurer.
  
  
• The lightly regulated market for so-called Short Term Limited Duration plans fostered by the Trump administration (which rendered them neither short-term nor of limited duration, if there's a difference) pays much higher commissions than the ACA-compliant market, but serves few enrollees' best interests. STLD plans are medically underwritten, riddled with exclusions and coverage gaps, prone to balance billing, and pay as little as half of premium revenue to cover enrollees' medical claims. ACA-compliant plans are required to maintain a minimum "medical loss ratio" (MLR) of 80% -- that is, pay out at least 80% of premium revenue in claims.

How do ethical brokers deal with these conditions, and how could incentives be better aligned? To address those questions I queried Louise Norris, co-owner with her husband Jay Norris of a health insurance brokerage serving individual market customers in Colorado.

Happy day(s) are here again?

Subscribe to xpostfactoid

As Biden's poll numbers sag, complaints are rife in my liberal Twitter bubble that the media casts current economic news in a bad light, with inflation trumpeted ahead of other pretty good fundamentals on the employment and growth front. 

We all think the refs are biased against us, and maybe they are. But with those complaints furnishing some corner of my mind, I just happened on a Wall Street Journal home page, which, if only momentarily, snapshots some pretty good economic (and geopolitical) news on balance. Take it for what it's worth. (Flashback: "green shoots" of spring 2009, oy gevalt...)

Under Biden, HealthCare.gov maintains its Trump era tilt toward commercial insurance brokers

Subscribe to xpostfactoid

11/19: See update at bottom:  Healthcare.gov put out an email today that leads with nonprofit assisters

Obtaining health insurance from publicly supported programs in the U.S. is a complex process, necessarily supported by a variegated ecosystem of enrollment assisters.  For people under age 65, nearly 50,000 commercial health insurance brokers and agents are registered (as of 2020), along with about 30,000 nonprofit enrollment assisters (as of 2016), many of the latter supported by federal or state funding.

Enrollment of the under-65 population that lacks access to employer-sponsored insurance depends on both commercial and nonprofit assisters, who have different and to some extent complementary strengths and weaknesses. 

HealthSherpa shows how to shrink the coverage gap

Subscribe to xpostfactoid

As I have noted repeatedly (1, 2, 3) the ACA's notorious coverage gap -- the unavailability of subsidized insurance for adults with incomes below 100% FPL in states that have refused to enact the ACA Medicaid expansion -- is exacerbated by ignorance. 

Few low income applicants in the 11 remaining "gap" states* know that they must estimate a minimum income for the coming year to qualify for coverage. HealthCare.gov, the application venue for all applicants potentially subject to the gap, does not spell out in the application or in the plan preview tool that a minimum income is required. People who are told that they do not qualify for aid because their income is too low are rightly incredulous.

Since fall 2018, however (during Open Enrollment for 2019), HealthSherpa, a commercial online health insurance brokerage used by thousands of brokers, has spelled out that vital information. 

Premiums down, out-of-pocket costs up up up: The post-ARPA case for maximal silver loading

Subscribe to xpostfactoid

I have repeatedly made the case that CMS should follow the lead of several states and mandate strict silver loading* in the ACA marketplace-- that is, require insurers to consistently price gold plans below silver plans, since the average actuarial value of silver plans is higher than the mandated AV for gold plans (80% -- i.e., the plan is designed to cover 80% of the average enrollee's costs). 

In recent posts, I have spotlighted New Mexico's maximized mandatory silver loading: in 2022, the state required insurers to price silver plans as platinum-equivalent, since silver plans are platinum-equivalent for enrollees with incomes below 200% FPL ($25,7600 for an individual in 2022).  The regulation is designed to be a self-fulfilling prophecy: if gold plans are priced well below silver, no one with an income over 200% FPL should buy silver plans.  In 2022, gold plans are in fact priced well below silver plans throughout New Mexico.

Since silver loading began in 2018, the main case for maximizing it has simply been that the ACA marketplace has always been under-subsidized, and a state or CMS can alleviate high enrollee costs without help from Congress. That case may appear less urgent after the American Rescue Plan Act (ARPA), enacted this past March, sharply increased premium subsidies. The draft Build Back Better bill would extend those subsidy boosts through 2025.

But the case for strict silver loading remains strong. While ARPA reduced premiums, it did not reduce out-of-pocket costs, and these have risen relentlessly at each metal level, driven by medical inflation, which is always higher in the commercial market.  Strict silver loading is a way to roll back that rise for enrollees with incomes above 200% FPL; it's a kind of back-door CSR for enrollees above that income level. (Moreover, the BBB bill is not a done deal, 2025 is not the end of time, and strict silver loading would mitigate a far-from-unlikely expiration of the subsidy boost.)