How not to explain ACA metal levels (and, I hope, how to)

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I have a post up at healthinsurance.org that aims to guide ACA marketplace shoppers in selecting the metal level (bronze, silver, gold, very occasionally platform) that works best for them. My opener was the product of a lot of trial and error:

When shopping for a health plan in the ACA marketplace, it’s important to recognize that while Bronze, Gold and Platinum plans have the same value no matter who is shopping, the value of Silver plans varies with income. Accordingly, the metal level that will best suit your needs is also likely to vary with income.

That basic fact is a given to anyone who's studied the marketplace and so may seem obvious. But it's counterintuitive, and it's the single most salient fact about metal level selection.  HealthCare.gov's guide to the metal levels all but completely obscures it (and many other guides follow suit):

The "upper coverage gap" in nonexpansion states has likely shrunk dramatically since 2019

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In early 2021, the Kaiser Family Foundation published an updated analysis of the ACA coverage gap -- that is, the plight of low-income adults shut out of Medicaid in the twelve states that have refused to enact the ACA Medicaid expansion. While focused mainly on adults with income below 100% of the Federal Poverty Level -- those who qualify for no government help obtaining health insurance in nonexpansion states -- the analysis also included an estimate of the number of uninsured in the 100-138% FPL income range in each of these states. 

That population, which would be eligible for Medicaid had these states enacted the expansion, is eligible for premium subsidies in the ACA marketplace. In this income range, silver plans are enhanced by Cost Sharing Reduction that raises the actuarial value of a silver plan to 94%. Until March 2021, a benchmark silver plan cost 2% of income for enrollees with income up to 138% FPL. Nonetheless, KFF estimates indicated that almost half of adults in this income range in nonexpansion states were uninsured as of the end of the 2020 Open Enrollment Period.

Enrollment in this income bracket in nonexpansion states has surged since OEP 2020, however. It* increased by 17% during OEP 2021, doubtless spurred by the pandemic and its disruptions to employment and income (including supplemental unemployment income that may have pushed many people over the 100% FPL eligibility threshold).  It surged by another 24% in 2022, this time spurred in part by subsidy increases provided through 2022 by the American Rescue Plan, which made benchmark silver coverage free at this income level.

How Republican lawmakers in Texas made their peace with (don't call it) Obamacare

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 ...not entirely, as they still refuse to enact the ACA Medicaid expansion, which would have the largest impact.  But still, remarkably, the Texas legislature unanimously passed a bipartisan bill designed to improve the state's ACA marketplace. I have told the political tale in The American Prospect.

Specifically, the enacted bill directs the Texas Department of Insurance to undertake 'focused rate review' of plans offered in the marketplace -- a decade after ceding that function to CMS. It directs the Department to “focus its rate review in a manner that uniformly maximizes the benefits of silver loading, making coverage more affordable.” That is, to make gold plans cheaper than silver, and increase discounts in bronze plans.

The rub-your-eyes aspect of this, to my mind, is that the bill's Republican sponsor in the Texas House, Tom Oliverson, now talks about the ACA marketplace in terms that Max Baucus might have envisioned certain Republican senators using in 2009, when he and other Democratic old bulls of the Senate dreamed of a bipartisan bill: 

Auto-upgrading in Covered California

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Music auto-enrolled

Back in early March, looking at Covered California's enrollment breakouts before CMS released detailed marketplace enrollment data for all states, I expressed some disappointment that the enhanced subsidies provided by the American Rescue Plan  Act did not have a stronger impact on silver plan selection at low incomes. 

Under ARPA, the two cheapest silver plans in any rating area are free at incomes up to 150% FPL. At incomes up to 150% FPL, Cost Sharing Reduction (CSR), available only with silver plans, reduces the silver plan single-person medical deductible to $75 in California's standardized plans, compared to $6,300 for ordinary bronze plans (with a $500 drug deductible) and $7,000 for HDHP bronze. The out-of-pocket maximum for silver plans at this income level is $800, versus $8,200 for bronze and $7,000 for HDHP bronze. Silver benefits at this income level. are also superior to gold plans (OOP max $8,200) and platinum plans (OOP max $4,500).

In Open Enrollment 2022, 10% of California enrollees* in the 138-150% FPL category chose metal levels other than silver.  While that may seem like a modest percentage, it's not when you consider the extent to which CSR at this income level increases silver plan value beyond that of plans offered at any other metal level, including platinum. In California in 2022, silver selection at this income level was three percentage points higher than in 2021 and just one percentage point higher than in 2020.

The lack of a strong increase in silver plan selection when silver plans were available free is all the more surprising in light of a fact I didn't know when I wrote the prior post. In advance of Open Enrollment for 2022, Covered California, the state exchange, implemented a new policy, enabled by the ARPA subsidy boosts, whereby

Bronze enrollees eligible for the highest level of cost-sharing subsidies are autorenewed in a silver plan — allowing them to access cost-sharing assistance — with the same insurer and provider network for a $0 premium, if available.

Placeholder: silver loading in Texas

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I've had a pretty long blogging hiatus, and that's in part because I've been working on a longer piece about Texas -- Texas! -- passing a law directing the state department of insurance to take on active rate review in the ACA marketplace and in fact "focus its rate review in a manner that uniformly maximizes the benefits of silver loading."  

Mirabilis! The law has been fleshed out in a proposed rule, and in 2023 gold plans in Texas will be priced well below silver plans. 

The high-income surge in ACA marketplace enrollment: nonexpansion state edition

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Enrollment in the ACA marketplace increased by 21% in the Open Enrollment Period for 2022, compared to OEP 2021. The main cause was almost surely the boost to premium subsidies provided through 2022 by the American Rescue Plan Act, which reduced the percentage of income required to buy a benchmark silver plan in every income category and removed the income cap on subsidy eligibility, formerly 400% of the Federal Poverty Level (FPL).

My last post focused on the income distribution of the enrollment increases. In percentage terms, increases were concentrated at high incomes, though the raw number of new enrollees in the 100-150% FPL, by far the largest income bracket, was far higher than in higher brackets. In this post, we'll add the distribution in the twelve states that still have not enacted the ACA Medicaid expansion, where half of enrollees have incomes in the 100-150% FPL range. Those twelve states account for slightly more than half of ACA marketplace enrollment, as some 40% of their marketplace enrollees would be in Medicaid had these states enacted the expansion.

ACA marketplace enrollment surged at high incomes in 2022

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Enrollment in the ACA marketplace has historically -- and appropriately -- been weighted toward people in low-income households. Lower income workers are less likely to have access to affordable employer insurance. While just 17% of the U.S. population is in households with income between 100 and 200% of the Federal Poverty Level (FPL), 52% of marketplace enrollees nationally had income in that range as of the end of the Open Enrollment Period (OEP) for 2021. In the twelve states that have still refused to enact the ACA Medicaid expansion, where most adults with income below 100% FPL have no access to subsidized insurance, more than half of enrollees have incomes below 150% FPL.

The American Rescue Plan Act, passed in March 2021, boosted premium subsidies in the ACA marketplace at every income level, removed the former income cap on subsidy eligibility (400% FPL), and made silver plans with strong Cost Sharing Reduction free at incomes up to 150% FPL, as well as much cheaper than previously in the 150-200% FPL income bracket (0-2% of income instead of roughly 4-6% for a benchmark silver plan).  During the emergency Special Enrollment Period that ran through half of 2021, fully 45% of enrollment in the 36 states then using the federal exchange, HealthCare.gov (where enrollment is dominated by the nonexpansion states) had income below 150% FPL. About 62% were below 200% FPL. Enrollment growth in OEP for 2021 (before the ARPA subsidy boosts were enacted) was also concentrated in nonexpansion states and heavily weighted toward low incomes in those states.

Given this history, as enrollment surged during the Open Enrollment Period for 2022, I was blithely confident that growth was concentrated at low incomes. I was wrong.  Texas health insurance broker Jenny Hogue was onto something:

Jenny Chumbley Hogue

@kgmom219 Replying to  @xpostfactoid

In my little corner of Texas, its not the 100%'ers that moved back, its the people who were getting killed with the subsidy cap pre-ARPA. A lot of conversations started with "is it true I can get a subsidy if my wife and I make more than $70K?".

CMS's invitation to low-income bronze enrollees to switch to silver

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About 620,000 ACA marketplace enrollees with income in the 100-150% FPL range have enrolled in bronze plans. Having just implemented continuous year-round enrollment for people with income up to 150% FPL, CMS is openly -- in fact expressly -- inviting these bronze plan enrollees to switch to silver. I have a post at healthinsurance.org amplifying this invitation:

At incomes up to 250% FPL, Silver plans are enhanced by cost-sharing reduction, which reduces out-of-pocket costs. CSR is particularly strong at incomes up to 150% FPL, where it reduces the average deductible to $146 and the average annual out-of-pocket maximum – the most an enrollee will pay for in-network care – to $1,208. Bronze plans – in prior years usually the only free option – have deductibles averaging $7,051 and OOP maxes usually in the $7,000-8,700 range.

The post further notes that CMS rulemaking is explicitly tailored to steer low-income enrollees into silver plans, quoting the finalization of the rule establishing the year-round enrollment at income up to 150% FPL: