ACA marketplace enrollment up 45% in two years in nonexpansion states

The final snapshot for the Open Enrollment Period on HealthCare.gov and ten state-based exchanges is in. We're almost done, though eight SBEs are still open. Already, enrollment in marketplace plans is up 21% over OEP 2021, to a record-breaking 14.5 million nationally, well above the previous high of 12.7 million in 2016.

Two caveats. First, when the Trump administration cut OEP in HealthCare.gov to six weeks (Nov. 1 - Dec. 15) and gutted advertising and enrollment assistance in HealthCare.gov states, while plan selection in OEP dropped, attrition also dropped -- that is, the percentage of people who never paid their first premium went way down. Early effectuated enrollment went from 85% of OEP plan selections in 2016 to 94% in  2021. A longer OEP and heavier outreach apparently attracts more marginal enrollees -- though with benchmark silver plans now free up at incomes up to 150% FPL and cheaper at all incomes, attrition may not drop to pre-2017 levels. 

Second, the steep premium hikes of 2017 and 2018 decimated off-exchange enrollment in ACA-compliant plans, which dropped from 5.0 million in Q1 2016 to 2.1 million in Q1 2019, by KFF's estimate. All told, individual individual market enrollment may be about where it was at the 2016 peak.

On climbing out of the ACA coverage gap

The latest quarterly estimates of health insurance coverage from the National Health Interview Survey (NHIS) show a drop in the uninsured rate for all ages from 9.7% in Q2 2021 to 8.9% in Q3. That's probably not statistically significant. The confidence intervals largely overlap;  quarterly rates bounce around quite a bit; they are "published prior to final data editing and final weighting"; and response rates have been affected by the pandemic.

That said, the changes among adults aged 18-64 in the lowest income segment -- those with incomes below the Federal Poverty Level -- may be worth pausing over:

Fixing the ACA’s Medicare Glitch

By Louise Norris and Andrew Sprung

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It's my pleasure to team up in this post with Louise Norris, a health insurance broker and ACA chronicler extraordinaire at healthinsurance.org and verywell.com. At those two sites, Louise has effectively created a constantly updated encyclopedia of the ACA, covering a host of enrollment situations, regulations, marketplace features, and histories of each state marketplace. She has done similar work about Medicare at Medicareresources.org.

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For most Americans, enrollment in Medicare is cause for celebration. At last: affordable, reliable insurance you can’t lose. Medicare enrollment can entail some complex determinations (do I qualify for any Medicare Savings Programs?) and decisions (Medigap or Medicare Advantage?) For many seniors, too, the burden of premiums and out-of-pocket expenses is heavy. Still, by American standards, Medicare is reliable and affordable.

For “near-elderly” couples (under age 65)  who are insured through the Health Insurance Marketplace established by the Affordable Care Act, however, the transition of the elder spouse into Medicare can bring sticker shock and extra expense. That’s because ACA premium subsidies are designed so that enrollees pay a fixed percentage of household income for the benchmark (second cheapest) silver plan in their area – and they pay the same percentage (reduced through 2022 by the American Rescue Plan enacted in March 2021) regardless of how many people need insurance. 

A couple that was paying 8% in premiums for a benchmark silver plan to cover both of them will still pay 8% of income when only one of them is covered in the marketplace. When one of them transitions to Medicare, they will pay the marketplace premium plus the Medicare premium. In the illustration below, they will pay somewhere between 11% and 14% of income in premiums to cover them both, depending on whether the Medicare enrollee opts to buy a Medigap policy.

When an average deductible goes up, and a median deductible goes down, what shakes?

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An ASPE brief released by HHS today, highlighting the relatively low out-of-pocket costs available to low-income ACA marketplace enrollees who enroll in silver plans with Cost Sharing Reduction (CSR) subsidies, centers on a rather strange claim: 

Median and average deductibles, after CSRs, differ substantially among HealthCare.gov enrollees. The median deductible decreased from $1,000 to $750 between 2017 and 2021 (prior to implementation of the American Rescue Plan (ARP), while the average deductible increased from $2,405 to $2,825. The difference between median and average deductibles is primarily driven by the fact that the majority of enrollees are eligible for and select CSR-silver plans; the average deductible is driven up by the smaller share of enrollees enrolled in plans without CSRs.

Why is there now a "smaller share of enrollees enrolled in plans without CSRs"? It's not because low income enrollees selected silver plans at a higher rate in 2021 than in 2017 - - the opposite is true. Let's dig in.  

It's important to keep in mind the different levels of CSR. At incomes up to 150% FPL($19,140 for an individual in 2022), CSR raises the actuarial value of a silver plan to 94%; at incomes from 150% to 200% FPL ($25,520), to 87%, and from 200% to 250% FPL ($31,900), to 73%, only negligibly above baseline silver AV of 70%, which attaches to silver plans for enrollees with incomes above 250% FPL. 

1. Why did the median deductible go down while the average deductible went up? The average deductibles for CSR plans with an AV of 94% (CSR94) and 87% (CSR87) did go down a bit, while average silver plan deductibles at other income levels rose, as did gold and platinum deductibles. For CSR87, the average went down from $661 in 2017 to $530 in 2021, according to the ASPE brief.  But total enrollment in CSR94 and CSR87 plans does not quite reach the median in any year.

Breaking the BHP ring fence: New York's Hochul proposes Essential Plan eligibility to 250% FPL

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This significant tidbit, gleaned from New York Governor Kathy Hochul's State of the State Address, was reported in yesterday's Politico Pulse newsletter:

...Hochul proposed raising income eligibility for New York’s Essential Plan — which provides health insurance to New Yorkers who don’t qualify for Medicaid — from 200 percent of the federal poverty level to at least 250 percent, pending federal approval. The policy is estimated to reduce the number of uninsured New Yorkers by at least 14,000 and make health care more affordable for at least 92,000 people.

This initiative is not mentioned in the published text of Hochul's speech. I can't find any further written trace of it.  To extend eligibility beyond the current 200% FPL income threshold would appear to require the filing of a state ACA innovation waiver requesting federal approval.  [Update: this language is in the State of the State Book, page 34. The NY Dept. of Health confirms that the state will have to submit an innovation waiver proposal, and adds that there will be more detail in the executive budget proposal.]

If the proposal pans out, it could pave a state route to essentially replacing -- at least in large part -- the ACA marketplace with a program more cost-effective for enrollees and governments alike.

Surprise billing protection is here! The promise (and a few limitations) of the No Surprises Act

The No Surprises Act -- federal legislation protecting most enrollees in most health plans from most surprise billing -- went into effect on January 1. Good news!

To review briefly, enrollees in employer-sponsored plans -- including self-funded plans -- and ACA-compliant individual market plans (as well as grandfathered pre-ACA plans)  cannot be billed more than their in-network share of costs for:

• Emergency care, including post-emergency stabilization care, at out-of-network facilities or from out-of-network providers at in-network facilities.
  
• Non-emergency care provided by out-of-network providers at in-network facilities or in support of an in-network lead provider. For example, anesthesiologists, radiologists, assistance surgeons etc. cannot balance-bill for their services provided by an in-network surgeon.
• Air ambulances -- among the most notorious balance-billers for tens of thousands of dollars. Ground ambulance charges are not protected.

The U.S. being the U.S., there are some definite and potential holes in the new protections (ground ambulance charges being the most obvious and salient). Enforcement falls to a tangle of federal and state agencies, depending in part on whether the health plan is self-funded and whether the state in which a violation occurs proves to "substantially enforce" the law (if not, HHS is a fallback). The Kaiser Family Foundation maps out that potential maze. On the plus side, CMS has stood up an online consumer complaint form on its info page about the new protections.