The ACA as pandemic safety net, Chapter 2 (2021)

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As xpostfactoid is devoted mainly to tracking the implementation and metamorphosis of the Affordable Care Act, for the past two years I've focused mainly on ACA programs' performance as a safety net during the pandemic, as millions of people lost job-based health coverage for varying lengths of time. 

In 2020, the uninsured rate appears to have remained basically flat, though pandemic-related surveying challenges rendered Census and NHIS findings somewhat tentative. In 2021, the uninsured rate may actually prove to have downticked a bit, once the data is in. By kludgy American standards, the health insurance safety net -- Medicaid and the ACA marketplace -- have performed well, bolstered by several doses of emergency legislation and administrative action:

• The Families First Act, which added six percentage points to the federal government's share of Medicaid costs -- contingent on states pausing Medicaid "redeterminations" and disenrollments for the duration of the COVID-19 emergency (still in effect).
• Belated ACA Medicaid expansions that went live in Idaho, Utah and Nebraska in 2020 and in Oklahoma and Missouri in 2021.

At healthinsurance.org: Closeup of the ACA enrollment surge of 2021-2022

At healthinsurance.org, I have a post up this morning reviewing the surge in ACA marketplace enrollment  triggered by the pandemic and further spurred by the major boost to premium subsidies provided through 2022 in  the American Rescue Plan Act enacted last March.  

Long story short: from mid-December 2019 to mid-December 2021, plan selections during the annual Open Enrollment Period increased by 29% in the 33 states currently using HealthCare.gov, and most likely by about 25% for all states (final enrollment figures for the OEP are usually released in March). 

• Two thirds of the enrollment gains are in states that have refused to enact the ACA Medicaid expansion.
• Some new enrollees in those states may have climbed over the 100% FPL minimum income threshold for ACA subsidy eligibility. 
• Many new enrollees are getting free silver plans with strong Cost Sharing Reduction 
• Enrollment increases in the current OEP build on and extend the gains during the emergency Special Enrollment Period that ran from Feb. 15 through August 15 in HealthCare.gov states.
• The strong enrollment gains should compel Democrats to extend the ARPA subsidy boosts, which expire after this year.

I hope you'll give it a read.

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Two thirds of ACA enrollment growth is in 11 nonexpansion states. Nearly half is in Florida and Texas

CMS announced today that plan selections for 2022 in the ACA marketplace have reached an all-time high of 13.6 million. That's up from 12.0 million as of the end of Open Enrollment (OE) for 2021, a 13% increase so far. [Update: Per Charles Gaba, the total as of Dec. 15 last year was 11.6 million, as most of the 15 SBEs' Open Enrollment seasons did not end on Dec. 15. See note at bottom]

As in last year's OE and this year's emergency SEP, enrollment growth was overwhelmingly concentrated in states that have refused to enact the ACA Medicaid expansion. Enrollment increased by 1.7 million in 33 states using HealthCare.gov, the federal exchange -- and 1.3 million of that increase was in the 11 remaining holdout states (excluding Wisconsin, which has no coverage gap), a 25% year-over-year increase in those states. Enrollment in Florida and Texas increased by 900,000.  

Over two years, from OE for 2020 to OE through Dec. 15 for 2022, enrollment in these 11 states has increased by 1.8 million, or 38%.

Is enrollment surge on GetCoveredNJ driven by off-exchange migration? Maybe not.

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Liberty State Park, Jersey City, NJ

New Jersey's Department of Banking and Insurance (DOBI) reports that enrollment in health plans on GetCoveredNJ, the state's ACA exchange, was up more than 25% as of December 5 compared to the same time last year. That may be the largest one-state year-over-year surge during an Open Enrollment season in which enrollment was up about 9% nationally as of Dec. 8. 

New Jersey has a large off-exchange individual market, which in 2020 accounted for 30% of enrollment in ACA-compliant plans (94,885 out of 316,580 total enrollments as of Q1 2020). The surge in on-exchange enrollment may provide a hint as to the extent of migration from off-exchange to on-exchange driven by the American Rescue Plan Act's removal of the income cap on subsidy eligibility. Since April of this year, premiums for the benchmark (second cheapest) silver plan have been capped at 8.5% of income, regardless of how high the income is. New Jersey, moreover, layers its own supplemental subsidy on top of the federal APTC. At high incomes, NJ kicks in $100/month per person, up to an income of 600% FPL. This subsidy, like the federal one, is only available on-exchange.

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If BBB remains blocked and ARPA subsidies go poof, what can CMS do to mitigate the damage?

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In the wake of Manchin's weekend declaration that he won't vote for the Build Back Better bill,  I am sure I'm not alone in choosing to hope that this is not game over, that some fragments of Biden's domestic agenda will become law. Still, it's time to face the strong possibility that the major temporary subsidy boosts in the ACA marketplace enacted in the American Rescue Plan Act will expire, and that the marketplace will revert to its under-subsidized pre-ARPA state in 2023.

It's time, then, to recall the various ways the administration can boost affordability in the marketplace without legislation, leaving coverage less affordable than it is now, but more affordable than it was before March 2021, when ARPA was enacted. 

Swinging benchmarks, meaningful difference, market stability and market chaos

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My last post focused on the steep premium hikes that can hit ACA marketplace enrollees if they passively let themselves be auto-reenrolled in their current plan for the year following. In brief: if the benchmark (second cheapest silver) premium shrinks (say, because a new discount insurer enters the market), so does the subsidy. If the enrollee's current plan premium in turn increases, it's a double whammy. 

The major increase in ACA marketplace subsidies enacted when the American Rescue Plan Act (ARPA) passed in March 2021 does not alter this dynamic. If the benchmark silver plan is available to you for free -- as it is now for some two million enrollees -- and your silver plan premium exceeds the benchmark by $139 per month, you'll pay... $139 per month. Louise Norris shows an even more extreme example of a one-year premium increase for a subsidized enrollee.

In fact, large benchmark swings may be more common this year than in years past. Insurer participation in the ACA marketplace has surged this year, probably prompted by the ARPA subsidy boosts, which followed several years of price stability and profitability. CMS reports that the average enrollee has between 6 and 7 insurers to choose from in 2022, compared to between 4 and 5 in 2021 -- an increase of 44% if you take the midpoint (6.5 vs. 4.5).  Among the insurers expanding their footprint in 2022 are discounters Bright, Centene, Friday, and Molina. The average benchmark premium dropped 3% nationally, according to the Kaiser Family Foundation.

A parallel problem, adding to the confusion inherent in marketplace structure for those who do check out their options, is an overabundance of plan choice. In 2022, the number of plans available to the average marketplace enrollee soared from 61 to 108 -- a 77% increase. In Dallas, 164 plans are available on-exchange. In Miami, 263.

Longer Open Enrollment period in ACA marketplace provides a fail-safe for enrollment errors

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Health insurance broker Jenny Chumbley Hogue, based near Dallas, highlights one good thing about the longer Open Enrollment Period for the ACA marketplace enacted by the Biden administration (OE is now running through January 15 rather than December 15):

Thank goodness OEP extended to 1/15 so we can correct the issues. @charles_gaba @LouiseNorris @AlekaGurel @xpostfactoid @SheronESidbury

— Jenny Chumbley Hogue (@kgmom219) December 13, 2021

That is: Marketplace enrollees who passively let themselves be auto-re-enrolled for 2022 in their current plan, and get shocked in January by a sliding benchmark that raises their premiums (sometimes dramatically), can now choose a cheaper plan before January 15 and suffer only one month at the higher premium, rather than being locked in for twelve months.

At an income of $25,000 for a couple -- just under 150% FPL -- the benchmark (second cheapest) silver plan is free in 2021 and 2022, thanks to the subsidy boosts created by the American Rescue Plan Act, enacted in March 2021 (the ARPA Jenny Hogue refers to in the tweet). That is, at least two silver plans are free for any individual or family with an income up to 150% FPL. 

This year, the cheapest silver plan in Dallas was the Blue Cross plan shown below. But see what happens to a pair of 63 year-olds in Dallas who renew that plan in 2022:

ACA enrollment gains in OE 2022 may just consolidate gains from the emergency SEP

CMS's Week 5 snapshot of ACA marketplace enrollment during the Open Enrollment season for 2022 shows an all-state enrollment increase of 8.5% over Week 5 for 2021, according to Charles Gaba's calculation. (Gaba adjusts the growth rate reported by CMS to account for the fact that this year's data reflects 34 days of enrollment, vs. 35 days at this point last year.)

While extrapolations in mid-OE are always dicey, that rate of increase has held fairly steady, and I'll venture to point out that gains in this range would basically consolidate the large enrollment increases effectuated during this year's emergency Special Enrollment Period, which ran from February 15 to August 15 on HealthCare.gov, the federal exchange, and for varying extended periods on 15 state-based exchanges. The emergency SEP was essentially a second Open Enrollment period.

The enrollment gains during the current OE, as during the emergency SEP and OE for 2021, are heavily concentrated in states that have not enacted the ACA Medicaid expansion and have a consequent "coverage gap" - -that is, no subsidized health insurance available for most adults with incomes below 100% of the Federal Poverty Level, the threshold for marketplace subsidy eligibility.  As reflected in the table below, 72% of net enrollment gains nationally from February through August of this year were in the nonexpansion states (excluding Wisconsin, which offers Medicaid to adults with incomes up to 100% FPL and so has no coverage gap). For that reason, I have focused on the nonexpansion states to compare apparent enrollment gains at present with those logged in the emergency SEP.  

Few Medicare enrollees pay huge prescription drug costs out of pocket

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The scaled-back prescription drug cost control measures belatedly added to the Build Back Better bill include a $2,000 annual cap on out-of-pocket costs for enrollees in Medicare Part D.

That's a vital reform, since Medicare enrollees' exposure to drug costs is currently open-ended, and can run to many thousands for the most expensive drugs, e.g., for cancer or rare diseases. 

But the complex Part D payment formula can leave some observers with the impression that more enrollees are paying astronomical costs than is the case. Specifically, references to amounts paid by all payers in each of the first three coverage phases often give the impression that those total costs are paid by enrollees. Such confusion appears to have recently reached the White House:

Talk to me if you became self-employed during the pandemic

Last week I noted that the subsidy increases in the ACA marketplace provided last spring by the American Rescue Plan Act (ARPA) were well-timed to catch a surge in self-employment and small business formation triggered by the pandemic.

Thanks to the subsidy boosts, the ACA marketplace is much closer than ever before to fulfilling the ACA's foundational promise of freeing Americans from "job lock" -- dependence on employers for health insurance. 

I would like to speak to people who have become self-employed or started businesses since the pandemic struck and looked to the ACA marketplace (or Medicaid) for health insurance -- successfully or unsuccessfully. I would also welcome hearing from people who were already insured through the marketplace and experienced changes once the ARPA subsidies were enacted in April/May 2021 (or July, for those who qualified for free silver plans because they had received unemployment insurance income this year).

If you'd like to tell me your experience, please email me: adsprung at gmail. Please refer anyone whose experience you think might be relevant. Thanks!

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Pointing low-income ACA marketplace shoppers toward Cost Sharing Reduction

As I noted in my last post, the American Rescue Plan Act's boosts to ACA marketplace subsidies seem to have reversed a years-long slide in "CSR takeup" among low-income enrollees. That is, during the emergency Special Enrollment Period that ended this past August 15, about 90% of enrollees with incomes below 200% of the Federal Poverty Level selected silver plans and accessed strong Cost Sharing Reduction (CSR), up from about 77% in the last Open Enrollment period. CSR is available with silver plans only. At incomes up to 200% FPL, it raises the value of a silver plan to the rough equivalent of platinum at no extra cost to the enrollee.

The surge in silver selection at low incomes this spring and summer was only logical, since ARPA made a benchmark silver plan free at incomes up to 150% FPL, and available for no more than 2% of income at incomes up to 200% FPL ($25,520 for a single person in 2021).  At incomes below 200% FPL, CSR reduces deductibles and out-of-pocket maximums to a small fraction of those prevalent in bronze plans (the median deductible obtained by 2.1 million enrollees on HealthCare.gov during the SEP was $50; bronze deductibles average nearly $7,000).  Free bronze plans used to be a serious temptation at incomes between 150-200% FPL in particular; now, not so much.

Since bronze plans are now almost always "dominated" by silver plans at incomes up to 150% FPL, and almost always a poor choice up to  200% FPL, I thought I'd check the degree to which the ACA exchanges - -HealthCare.gov, now serving 33 states, and 18 state-based exchanges (including D.C.'s) steer low-income enrollees toward silver plans. 

ARPA subsidy boosts in ACA marketplace reduced underinsurance, reversing a 'slide to bronze' at low incomes

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When the premium subsidy enhancements for the ACA marketplace that became law when the American Rescue Plan passed were first published in early February of this year, my first thought was that no one with an income below 200% FPL should ever buy a bronze plan again:

If the subsidy enhancements become law while the emergency SEP [Special Enrollment Period, running from Feb. 15 to Aug. 15 on HealthCare.gov] is still open, bronze plan enrollment at incomes under 200% FPL should go to zero. At incomes up to 150% FPL ($19,140 for a single person), silver coverage will be free. At 200% FPL ($25,520 for a single person), benchmark silver will cost $43 per month. That expense doesn't feel like nothing at that income, but the average deductible for silver at that income level ($800) is about one ninth of the average bronze deductible ($6,921). The out-of-pocket maximum for bronze plans is usually close to the highest allowable, $8,550 for a single adult.  For silver at incomes up to 200% FPL, it's $2,850, and usually well below that, averaging $1,189 at incomes up to 150% FPL and $2,528 at 150-200% FPL. 

Well, those subsidy boosts did go into effect during the emergency SEP, helping to drive a major surge in off-season enrollment. Nationally, 2.8 million people newly enrolled in ACA marketplace plans from Feb. 15 to Aug. 15, 2.1 million of them in the 36 states using the federal exchange, HealthCare.gov. And while selection of plans at metal levels other than silver at low incomes did not go zero during the SEP, it did go way down, reversing a troubling trend.  The ARPA subsidies are reducing underinsurance.