Wednesday, March 23, 2022

In ACA marketplace in 2022, too much underinsurance (bronze plan selection) at low incomes

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We have had plenty of time to celebrate the 21% surge in ACA marketplace enrollment, most likely triggered primarily by the major boosts to premium subsidies provided last March by the American Rescue Plan Act (ARPA). Now, with CMS's Public Use Files tracking marketplace enrollment for 2022 released on the ACA's 12th anniversary, it's time for some disappointment.  

In the 33 states, for which CMS provides detailed plan selection breakouts, the ARPA subsidy boosts did not reduce underinsurance as much as might have been expected during the Open Enrollment Period (OEP) for 2022.  That is, silver plan selection at low incomes (up to 200% FPL), where Cost Sharing Reduction (CSR) makes silver plans far and away the best value for almost all enrollees, modestly reversed a four-year slide, but not nearly as much as might have been expected. 

In states this year, 60% of enrollees had incomes below 200% FPL, and 80% of them selected silver plans. 

Enrollment by metal level at low incomes states

100-150% FPL


% bronze

% silver
















SEP 2021(0-150%)


93.0% (estimate)




151-200% FPL


% bronze

% silver



















Sources: CMS state-level public use files and 2021 SEP final enrollment report

At the lowest income level at which subsidies are normally available, where the benchmark silver plan is now free, silver plan selection in 2022 was lower than in any year except 2021. At the next income level (150-200% FPL), CSR takeup was higher in 2020 and every year prior (including 2014-16, not shown) than in 2022, notwithstanding that benchmark silver cost about $130/month at 200% FPL in 2020, compared to $43/month this year.

From 2018 through OEP 2021, bronze plan selection at low incomes increased every year in part because silver loading, the marketplace response to Trump's cutoff of direct reimbursement of insurers for CSR, made bronze plans free to a majority of buyers with income below 200% FPL. ARPA mostly wiped out that net-of-subsidy premium advantage for bronze plans at low incomes, however. 

ARPA made a benchmark silver plan with the highest level of Cost Sharing Reduction (CSR) free to enrollees with incomes up to 150% FPL ($19,320). Silver plan deductibles at that income level average  $146 (KFF) and have a median of $0. At 150-200% FPL, benchmark silver costs 0-2% of income (topping out at $43/month for a solo enrollee), and CSR reduces deductibles to an average of $756. Bronze deductibles average  $7,051. Silver plans have an actuarial value of 94% at incomes up to 150% FPL and 87% at 150-200% FPL, compared to 60% AV for bronze plans and 80% AV for gold plans. 

I expected a strong surge in CSR takeup because the less-detailed enrollment stats that CMS provided after the emergency Special Enrollment Period that ran from Feb. 15-Aug. 15, during most of which time the ARPA subsidies were in place, did indicate such a surge. During the SEP, 54% of enrollees in states obtained the two highest levels of CSR (94% or 87% AV), compared to 46% in Open Enrollment  Period for 2021.  In OEP 2022, however, the percentage obtaining these CSR levels dropped back to 48%. In the emergency SEP, CMS reported that 45% of enrollees had incomes below 150% FPL, and 41% obtained silver plans with an AV of 94% , available only at incomes up to 150% FPL.*

On the other hand, I noted earlier this month that silver plan selection at low incomes during OEP 2022 rose more modestly in California, more in line with the results released today.

Why would a person to whom a free silver plan with a deductible in the $0-500 range is available  choose a free bronze plan with a deductible usually in the $7,000-8,700 range (and a commensurate difference in out-of-pocket maximums)? In some cases, a desired insurer's silver plan (e.g., with a superior provider network) might be priced well above benchmark, while its bronze plan might be available free or at very low cost. 

There is also a modest trend toward lower deductibles in bronze plans: this year, 10% have $0 deductibles. But a bronze plan's much lower actuarial value -- 60% vs. 94% for silver plans at incomes up to 150% FPL -- means the higher out-of-pocket costs are otherwise distributed, e.g., in very high hospital copays and highest allowable out-of-pocket maximums.

But 14% bronze plan selection in a cohort for whom silver plans are available free bespeaks a lot of confusion and poor choices. does signpost the extra value added by CSR fairly heavily. The site invites those eligible for CSR to view silver plans first. If that invitation is disregarded, however, the default plan menu ranks plans in order of lowest unsubsidized premium, which generally means a long line of free bronze plans are at the top of the plan menu. A shopper might never get to the silver plan display unless she filters for it or scrolls a long way. The sometimes-insane proliferation of plans in many markets in the last couple of years -- 231 are available in Miami -- adds to the potential confusion.

This year, for the first time since 2016, CMS broke out enrollment totals and metal level selection at incomes below 100% FPL, and also in the 100-138% FPL bracket. The latter bracket is mostly composed of enrollees in states that have refused to enact the ACA Medicaid expansion, which extends Medicaid eligibility to 138% FPL. Silver plan selection was not much different at 100-138% FPL (84.4%) than at 100-150% FPL (84.9%). 

In nonexpansion states, 83% of enrollees in the 100-150% FPL category were also in the 100-138% FPL bracket -- that is, they would be in Medicaid if their state had enacted the expansion. That's 41% of enrollees in those 12 states, just shy of 3 million enrollees in total (Charles Gaba has the breakouts). About 438,000 of them are in bronze plans. I think it's fair to infer that the vast majority of them shouldn't be.

Just 1.4% of enrollees in states (146,297) reported incomes below 100% FPL, the minimum threshold for subsidy eligibility for most enrollees. The exception to that eligibility threshold is legally present noncitizens subject to a federal 5-year bar from Medicaid eligibility (or longer bars in some states), who are eligible for subsidies at incomes below 100% FPL. Most but by no means all enrollees with incomes below 100% FPL are in that category. Annual breakouts from Covered California indicate that about a third of enrollees below 100% FPL may be subsidy-ineligible (though this year was an exception in California; almost all enrollees below the Medicaid threshold were subsidy eligible in 2022). In this small category, just 57.8% of enrollees selected silver. The percentage is probably far higher for the subsidy-eligible in this income group. But silver plan selection may have been relatively low among the subsidy-eligible too.

The Biden administration should make higher silver plan selection at low incomes a priority in 2023. As I suggested when assessing CSR takeup in California, a warning at this level of visibility may be in order:

Simply defaulting to silver plans -- showing them first to enrollees who qualify for strong CSR** unless the user overrides the default -- may be more effective. At present, comes fairly close to such a default, but there's a lot going on on the page in question and plenty of opportunity to go in a different direct (note menu beginning with bronze plans at bottom, along with the various button choices at top). 

Update, 3/24/22: Cynthia Cox points out that the always-high percentage of enrollees who are re-enrolling suggests a potential drag on the rate of change for metal level selection. Only 23% of enrollees in states are new. On the other hand, more than half (55%) are "active re-enrollees" who updated their information and positively either chose to remain in the same plan or choose a new one.  In Covered California, which breaks out metal level choice among new enrollees, silver plan selection has historically been lower among new enrollees than among re-enrollees.  And in fact, looking deeper into the PUF cross tabs, a lower percentage of new enrollees in states (44.0%) than re-enrollees (48.0%) are in silver plans with AV of 94% or 87%. It's possible though that the overall income mix varies somewhat between new and returning enrollees -- metal level selection is not broken by income and new/returning status together.

P.S. (3/24/22): For enrollees with income under 150% FPL, CMS has instituted a "monthly special enrollment period," i.e., effective continuous year-round enrollment. That includes the right to switch plans, and specifically to switch from other metal levels into silver. As of the end of OEP, 618,575 enrollees with incomes under 150% FPL were enrolled in bronze plans, and all but a handful, perhaps 98%, are subsidy-eligible, and so eligible for free silver plans. Part of the stated rationale for the continuous enrollment was to support a sustained marketing and outreach campaign to reach low- income enrollees, who tend, CMS specifically noted, to be low-information and often of limited English proficiency. emails those who created a login on the site continuously with marketing information and enrollment pitches. There's an opportunity, then, to invite low-income bronze enrollees to consider switching metal levels, and to explain why that's almost certainly a good idea. See the next post for more on HHS's stated mission and the opportunity to run a "switch" campaign.


* A small percentage of enrollees below that threshold are generally ineligible for subsidies, so perhaps 44% of enrollees were subsidy-eligible and had income below 150% FPL, suggesting silver plan selection of about 93%.

** A weak form of CSR is available at 200-250% FPL, but so negligible as to be eclipsed in value in many if not most locations by the discounts in bronze and gold plans generated by silver loading.

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