Whither the off-exchange individual market? Tea leaves in New Jersey

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One open question created by the American Rescue Plan Act's boost to ACA marketplace subsidies is the extent to which off-exchange enrollment in ACA-compliant plans has migrated to the exchanges. A related question is how many people who would have been ineligible for subsidies and uninsured pre-ARPA (or insured in noncompliant plans) were drawn into the exchanges.

New Jersey, one of the few states that tracks off-exchange enrollment on a quarterly basis and has a large off-exchange enrollment cohort, will eventually provide an interesting sampling. Unfortunately, the off-exchange tally is at present only complete through Q4 2020. But the state's on-exchange enrollment reports provide some hints, explored below. 

New Jersey launches year-round marketplace enrollment at incomes below 200% FPL

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My last post delved into CMS's motives and goals in establishing continuous year-round enrollment for ACA marketplace enrollees with income up to 150% FPL, as long as benchmark silver coverage remains free to that income level.

New Jersey has gone the feds one better, today announcing year-round enrollment on GetCoveredNJ, the state exchange, for enrollees with income up to 200% FPL ($25,760 annually for an individual; $53,000 for a family of four). 

Various state-specific conditions suggest motives for going that high:

1. Supplemental state subsidies provided in New Jersey make silver coverage free all the way to the 200% FPL threshold. In finalizing its rule establishing continuous enrollment to 150% FPL, CMS suggested (pp. 91-92 here) that limiting the open enrollment to those for whom benchmark coverage is free limits the risk of adverse selection. For that reason, CMS conditions extending the continuous SEP beyond this year on extension of the enhanced subsidies provided through 2022 by the American Rescue Plan.

2. New Jersey is one of a handful of states that imposed a state-level individual mandate after the Republican Congress zeroed out the penalty for the federal mandate. There has been a degree of buyer's remorse about the mandate among progressive groups. It was enacted in 2018 to partly fund a state reinsurance program (about two thirds-funded by the federal government), which reduced premiums for unsubsidized (i.e., mostly affluent) enrollees. Most people who pay the mandate penalty are low income. Continuous enrollment, along with the targeting of uninsured taxpayers described below, would reduce low-income exposure to the mandate.

Why HealthCare.gov is offering year-round enrollment at low incomes

CMS has soft-launched a new "monthly special enrollment period" (SEP) for health insurance seekers with incomes below 150% of the Federal Poverty Level in states that use the federal exchange, HealthCare.gov. This new rule, finalized last fall, effectively creates continuous enrollment for the lowest-income enrollees. At present, the SEP can be accessed by calling the HealthCare.gov help center (1-800-318-2596); it will be available online on HealthCare.gov by late March. State-based exchanges can implement this continuous enrollment at their option. 

Louise Norris covers every nuance of the rule's operation here. I will focus on CMS's stated motives and goals, and the likely impact.

The rule stipulates that the monthly SEP will only be operative as long as benchmark silver coverage remains free to enrollees with income up to the 150% FPL threshold. Boosts to ACA marketplace subsidies provided by the American Rescue Plan Act (ARPA) created that free coverage through 2022. While Democrats clearly intended and have been expected to extend the ARPA subsidies beyond this year, that is no longer certain now that the Build Back Better legislation has stalled.

Continuous enrollment in coverage available free at low incomes is of a piece with Medicaid enrollment practices, as well as with enrollment in the Basic Health Programs established under the ACA by Minnesota and New York. BHPs offer free or low-premium coverage with low-out-of-pocket costs -- rather like Medicaid -- to residents with incomes up to 200% FPL. 

In its September 27, 2021 update to ACA rules, CMS spelled out the rationale for the new monthly low-income SEP. The broad context, cited in the executive summary, is President Biden's January 28, 2021 Executive Order 14009, “Strengthening Medicaid and the Affordable Care Act," which declares:

millions of people who are potentially eligible for coverage under the ACA or other laws remain uninsured, and obtaining insurance benefits is more difficult than necessary. For these reasons, it is the policy of my Administration to protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American. 

Flowers in the graveyard: Health Policy Valentines 2022

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U.S. healthcare policy is no rose garden, but this year's HealthPolicyValentines salute a few sweet blossoms. That's notwithstanding the staggering failures of policy -- in many cases malevolent and corrupt -- that have swelled the pandemic death toll to an unfathomable 900,000.

         *     *     *

I'm in love with a cold hard fact:
We've enacted the No Surprises Act.

         *     *     *

Affordable Care?
Yes, we can!
Thanks to the American
Rescue Plan.

A massive boost to subsidies meant
enrollment up twenty-one percent.

In New Mexico, a Midas touch has a double edge

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Let's take one more look at enrollment results in New Mexico's ACA marketplace, where extreme silver loading rendered average lowest-cost gold plan premiums 14% lower than those of lowest-cost silver plans, and gold plans were available well below the cost of a benchmark silver plan statewide (excepting those for whom silver plans also were free, or had single-digit premiums).

The unadulterated good news was for enrollees with incomes above 200% of the Federal Poverty Level, more than two thirds of whom chose gold plans, while only about 13% choose bronze. That's a real advance.

The good news at incomes below 200% FPL was that just 4% chose bronze plans, which carry deductibles usually in the $7,000 range for an individual.  Most of those who selected bronze at low income levels may have been subsidy-ineligible, usually because of an employer's offer of insurance. That's generally the case for a small percentage of enrollees with incomes in subsidy range.

The not-so-good news is that 31% of enrollees with incomes in the 138-200% FPL range chose gold plans, although silver plans have a higher actuarial value than gold plans at incomes below 200% FPL, reflected most dramatically in annual maximum out-of-pocket cost (MOOP) caps that can't go higher than $2,900, vs. a maximum allowable MOOP of $8,700 for gold plans. 

In 2022, New Mexicans grabbed the gold in the ACA marketplace

Back in mid-October, I devoted a handful of posts (1, 2, 3) to New Mexico's great ACA marketplace experiment: instructing insurers to price silver plans as platinum-value in 2022 -- that is, as if no one with an income over 200% FPL would buy a silver plan. Below that income threshold, silver plans, enhanced by strong Cost Sharing Reduction (CSR), actually are platinum-equivalent, having an actuarial value of 94% (at incomes up to 150% FPL) or 87% at 150-200% FPL). The instructions were adhered to: throughout the state gold plans offered for 2022 were priced well below the benchmark silver plan.

The results were largely as planned, and can fairly be deemed a success. At incomes over 200% FPL, two thirds of enrollees chose gold plans, compared to 35% last year. At incomes in the 138-200% FPL range, comprising most enrollees eligible for strong CSR,  65% of enrollees chose silver plans -- and just 4% chose bronze, generally a bad choice for low income people, with single-person deductibles averaging about $7,000.  Among all enrollees, 57% chose gold plans.

Enrollment was up modestly, from 42,984 in Open Enrollment 2021 to 45,973 this year, a 7% increase. That's below the 11.5% average increase this year for states that have expanded Medicaid, as New Mexico has. But New Mexico launched a new state-based exchange, bewellnm, in the Open Enrollment Period for 2022, and that transition has often triggered enrollment losses for other states.

Here are the metal level choices broken out by income (courtesy of bewellnm, at the first link above):