xpostfactoid: 2023

Friday, March 24, 2023

Too many low-income ACA marketplace enrollees are forgoing high-CSR silver

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Today is the ACA’s 13th birthday, and CMS released its final enrollment report and detailed enrollment data for the 2023 Open Enrollment Period (OEP) in a celebratory vein. The good news: Enrollment nationally overall is up 13% year-over year and 36% since 2021, after two years with premiums subsidies substantially boosted by the American Rescue Plan Act of March 2021. (As I noted here when OEP was mostly completed, enrollment growth is heavily concentrated in the twelve states that had not enacted the ACA Medicaid expansion as of OEP 2023.) New enrollment increased by 21%.

In OEP 2022 — the first OEP in which there was no income cap on subsidy eligibility — enrollment growth was highest at high incomes. In marked contrast, this year it’s concentrated at low incomes. In the 33 states that use HealthCare.gov (which include all of the twelve states that haven’t expanded Medicaid), enrollment at incomes between 100% and 150% of the Federal Poverty Level (FPL) increased from 32% of all enrollment in 2022 to 37% this year, rising 20.4%, from 4,640,092 in OEP 2022 to 5,588,315 million in 2023.

Why are certain U.S. healthcare system dysfunctions not endemic in other countries? Or are they?

I’ve just finished reading the eminent healthcare economist Uwe Reinhardt’s last and posthumously published book: Priced Out: The Economic and Ethical Costs of American Health Care. Reinhardt passed away at age 80 in November 2017; the analysis in Priced Out of the Affordable Care Act and Republicans’ failed 2017 repeal/replace attempts continues to within months of his lamented death from sepsis.

The book, a characteristically caustic and ironic overview of the politics and economics of healthcare delivery in the United States, brings into sharp focus the core themes of Reinhardt’s scholarship and writing. Key takeaways:

Republicans want to ration healthcare by ability to pay, but they won’t say it. The U.S. is the only developed country in the world that does not explicitly commit to providing equal access to healthcare for all (with some allowance for concierge service on a pay-for basis for the wealthy, which Reinhardt regarded as tolerable).
The U.S. multi-payer system, in which each insurer negotiates its own prices, is insanely wasteful. Reinhardt pegged the cost of all the wrangling between providers and payers at close to $200 billion per year.
It’s the prices, stupid*: Prices for medical services and drugs that are more than double norms in peer countries are also attributable in large part to our divide-and-conquer multi-payer system.
No single-payer soup for you, U.S.: While Reinhardt helped design a well-regarded single payer system in Taiwan, and regarded single payer as one viable model for universal healthcare, he repeatedly asserted that the U.S. political system was too corrupt to manage it: industry would use its funding leverage to demand unsustainably high payment.

While these themes were familiar to me from Reinhardt’s prior writings (e.g., regular contributions to the New York Times’ old Economix blog) a few throwaway lines made me wonder why some U.S. dysfunctions that are not solely attributable to our failure to standardize prices are not shared by peer countries, or at least not to the same degree.

Some archaic messaging on the ACA exchanges

Selecting a health plan in the ACA marketplace is often a ridiculously complex task. Many markets now offer dozens of plans at each metal level, widely varying in deductible and out-of-pocket maximums. In those markets a single insurer may offer six or eight or twelve plans in a given metal level, salami-slicing not only deductibles and OOP maxes, but co-pays and coinsurance for each service, and with a wide variety of services not subject to the deductible (mostly in silver and gold plans, though bronze plans often exempt some or even all doctor visits and generic drugs from the deductible). Cross-cutting these varieties in payment design are wide differences in network adequacy

CMS and various state exchanges (e.g., Washington’s) are moving to rein in this metastasizing of “choice,” introducing standardized plans, and limiting the number of nonstandard plans insurers can offer. In the meantime, decision-support tools and messaging on the online exchanges can help, or fail to help, optimize choice.

That’s especially true for the single most consequential choice for more than half of enrollees: whether to select a silver plan and so avail themselves of the Cost Sharing Reduction (CSR) benefit that attaches to silver plans, and only silver plans, for low-income enrollees — those with income up to 250% of the Federal Poverty Level.

A broker briefing on OEP 2023 in the ACA marketplace

ACA marketplace enrollment is up 13% nationally in 2023; 19% in the 33 states using the federal exchange, HealthCare.gov states; 23% in states that have not expanded Medicaid (all of which use HealthCare.gov), and 32% in Texas. Who’s buying in? In advance of the detailed enrollment data that CMS typically releases in spring, I spoke to health insurance brokers based in Texas and New Jersey.

High-income enrollees entering the marketplace

I touched base first with Dallas-area health insurance broker Jenny Hogue, president and CEO of KG Health Insurance, who had noted on Twitter in late 2021 that a number of higher-income people who had been priced out of the ACA marketplace before the American Rescue Plan Act removed the income cap on subsidy eligibility were buying in. Jenny’s perceptions were borne out by 2022 enrollment data, which showed enrollment at income over 400% FPL had more than doubled year-over-year in HealthCare.gov states, including Texas. I wanted to know if the surge was continuing this year.

Legislative and administrative love (and its opposite): Health Policy Valentines 2023

I can’t believe that this my tenth year offering up #HealthPolicyValentines — a tradition kicked off by Emma Sandoe, the country’s leading Medicaid enthusiast, in 2012, when she was a CMS spokesperson. Emma is now a Medicaid official in North Carolina, no doubt deeply invested in a not-so-funny legislative rom-com as the state House and Senate struggle to align not-quite-compatible bills to enact the ACA Medicaid expansion. The NC House may deliver the ultimate #HealthPolicyValentine this week, passing its expansion bill on V-Day itself.

I have no such substantive gifts to offer, but I can celebrate some goodies served up by legislators (federal and state) and administrators in the last year. Let the doggerel begin.

* * *

Roses are red,
Violets are blue.
I got no surprise bills
in 2022.

Roses are expensive,
Dandelions are free.
I'll get no surprise bills
in 2023.

In the U.S., alas,
there’s always an asterisk,
so an ambulance remains
a major financial risk.

* * *

Progress is fragile,
progress is slow,
but the uninsured rate’s
at an all-time low.

Alas, costs keep rising
so we needn't ask why
the underinsured rate's
at an all-time high.

* * *

Congress showered cash
but states must play their part (um…)
to provide young moms and babes
a year’s coverage postpartum.

* * *

Love to CMS
for reducing the immensity
of Medicare Advantage
coding intensity.

* * *

Love (and its opposite) in the states

In New Mexico, for sure,
but I didn't expect this:
Strict silver loading
enacted in Texas.

* * *

Some states will be cruel,
some states will be kind
when the starting whistle blows
for the Medicaid unwind.

* * *

100% FPL
is the cruelest of gates,
but Obamacare's on fire
in nonexpansion states.

Perhaps those excluded
have grown sick of rejections
and learned to adjust
their income projections.

* * *

In our founding fathers’ house
there’ll be one more mansion
when NC enacts
the Medicaid expansion.

* * *

New Jersey got it done --
that is, built the apparatus
to cover kids regardless
of immigration status.

* * *

New York,
defrosting pork,
and seasoning it well,
will cook the Essential Plan
to 250 FPL

* * *

Glutton for punishment? Browse my Health Policy Valentines archives: Flowers in the graveyard (2022), Institutional edition (2021), But love grows old and waxes cold (2020), The Water is Wide: Health Policy Valentines (2019), HPV (2018), Love Knows No Repeal (2017), Love in the Time of Obamacare (2016), love, 2015, and Romance of the Rose, Health Policy Edition (2014).

Why ACA marketplace enrollment surged at incomes above 400% FPL in 2022: A Houston illustration

Attention xpostfactoid readers: All subscriptions are now through Substack alone (still free). I will continue to cross-post on this site, but I've cancelled the follow.it feed (it is an excellent free service, but Substack pulls in new subscribers). If you're not subscribed, please visit xpostfactoid on Substack and sign up!

In 2022, the first plan year in which the enhanced ACA marketplace subsidies created by the American Rescue Plan Act (ARPA) were available in the Open Enrollment Period, enrollment at incomes above 400% of the Federal Poverty Level more than doubled in the 33 states using HealthCare.gov. Pre-ARPA, enrollees with income above 400% FPL were ineligible for premium subsidies; ARPA removed that eligibility cap.

I have a post up at Healthinsurance.org that charts the enrollment increase at high incomes in HealthCare.gov states in 2022 and the ARPA impact on premiums at high incomes in Houston in 2023. Just to tease here, a couple of charts:

How deep is public support for a broad public option in health insurance?

In polling about U.S. healthcare, the prospect of a “public option” for health insurance, open to all Americans regardless of whether they have access to employer-sponsored insurance, generally scores high. Here is the top-line response to a Kaiser Family Foundation tracking poll conducted in January 2020:

Looking beneath the hood of that apparent relative consensus, a research team led by Adrianna McIntyre of Harvard’s Chan School of Public Health conducted a poll in November/December 2020 that probed attitudes toward government that underlie responses to health reforms including a public option — specifically, a Medicare buy-in for people under age 65. The researchers published an analysis* in Milbank Quarterly this month. While top-line results were similar to KFF’s, the researchers note:

An overwhelming majority of Democrats (86%) report believing that it is the government’s responsibility to ensure universal health insurance coverage; only 11% of Republicans hold the same view. Most Democrats (71%) also report that they would prefer a health insurance system run mostly by the government, while a similar share of Republicans (78%) would prefer a system based mostly on private health insurance. Two-thirds of Democrats (67%) believe the federal government should be more involved in health care in the future, but over half of their Republican counterparts (56%) believe it should be less involved. Prior work has also found that while a large majority of Democrats (65%) believe the government would do a better job than private health insurance plans at reducing the nation’s health care costs, significantly fewer Republicans (25%) hold that view.

What's going on in the state-based marketplaces, cont.

My last post put a spotlight on lagging enrollment growth in the ACA’s 18 state-based marketplaces (SBMs). Enrollment in the SBMs appears on track to drop 2.8% year-over-year, from 2022 to 2023, while enrollment in the 33 states using HealthCare.gov (FFM states) looks to increase by 19.6%. While enrollment growth throughout the pandemic years has been concentrated in states that have refused to enact the ACA Medicaid expansion, enrollment in the 21 FFM states that have expanded Medicaid is up 10.3% year-over-year — perhaps the most pointed contrast with the SBM states. Longer term, while growth in the current SBEs is up 6.4% since 2020, the all-state increase during those pandemic years is 43.3%.

Let me say at the outset before diving in below that I think in my last post I may have got the emphases wrong, in that greater market penetration in SBM states in years prior to the pandemic may be a major factor. As of 2021, the uninsured rates in the SBM states were significantly lower, not only than in states that have not expanded Medicaid as you would expect, but also than in expansion FFM states. The same is true of the Kaiser Family Foundation’s estimates of the percentage of subsidy-eligible state residents who enrolled in marketplace coverage in each state in 2020. Moreover, in 2022, drops in the state unemployment rate were steeper on average in SBM states than in FFM states. That suggests a reduced pool of people needing marketplace coverage. On the other hand, UI rates remain higher on average in SBM states than in FFM states.

With the exception of Idaho, the states running their own SBMs are “blue” states that have invested considerable effort, and often state funds, in making their marketplaces as affordable and accessible as possible. They have variously implemented state-funded supplemental subsidies, individual mandates (requiring state residents to obtain insurance or pay a penalty), reinsurance programs, public option plans, standardized plans, active oversight of participating insurers, and strict silver loading (requiring insurers directly or indirectly, to price gold plans below or on par with silver) — not to mention the trouble and expense of launching and administering an exchange.

Conditions in every state are different, and the SBEs, as noted in the prior post, outperformed the HealthCare.gov states during the pre-pandemic Trump years and had proportionately smaller uninsured populations going into the pandemic. Nonetheless, the weaker enrollment growth over several years in the SBEs is worth scrutinizing. If it persists, state governments intent on improving their marketplac

What's going on in the state-based marketplaces?

While enrollment in the ACA marketplace as a whole in the Open Enrollment Period for 2023 is on pace to finish about 13% higher than in OEP 2022, enrollment in the eighteen states that run state-based marketplaces (SBMs) is on course to come in about 3% below the OEP 2022 total.

As my last post emphasized, enrollment growth throughout the pandemic has been overwhelmingly concentrated in states that have refused to enact the ACA Medicaid expansion. In those states, about 40% of enrollees would be eligible for Medicaid if their states had enacted the expansion, and the American Rescue Plan Act made a benchmark silver plan free to almost all of them. As of this past week’s enrollment snapshot, enrollment in the twelve current nonexpansion states is up 23% year-over-year.

But enrollment in twenty-one expansion states that use the federal HealthCare.gov platform is also up by 10%. That throws the apparent enrollment decrease (barring last-minute surges or Week 9 reporting lags) in the SBMs into sharp relief and has marketplace watchers scratching their heads. (See the bottom of this post by Charles Gaba for breakouts of 2023 enrollment to date by exchange type.)

In fact, throughout the pandemic years, enrollment growth in the states currently running their own marketplaces has collectively lagged far behind growth in the overall market. Enrollment in these eighteen states is up 6% since OEP 2020, compared to 43% for the marketplace as a whole.

ACA marketplace enrollment in nonexpansion states is up 73% since 2020

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CMS dropped its next-to-last snapshot of ACA marketplace enrollment for 2023 today. Enrollment remains on pace for a 13% year-over-year increase.

Charles Gaba has year-over-year breakouts for each state as well as for HealthCare.gov states, state-based exchanges (SBEs), and states that have refused to enact the ACA Medicaid expansion (or, in the case of South Dakota, not yet enacted an expansion that will kick off this summer). Salient facts among those breakouts:

Enrollment in the 18 SBEs is down slightly (2.8%).
Enrollment in all states that have enacted the ACA Medicaid expansion is up 2.6%
Enrollment in 12 nonexpansion states is up 23.4%.
Enrollment in Texas is up 32% — probably triggered in part by a state law effectively requiring insurers to price gold plans lower than silver plans.

I don’t think we’ve fully fathomed the enrollment growth in nonexpansion states during the pandemic years. Since the end of the Open Enrollment Period for 2020, which ended December 15, 2019 in HealthCare.gov states (e.g., in all nonexpansion states), enrollment in the twelve states that have not enacted the expansion to date has increased by 73%. By the end of Open Enrollment on January 15, the increase will probably top 75%. Florida and Texas alone have added more than 2.4 million enrollees in those three years. The twelve states together have added 3.6 million enrollees and account for 55% of enrollment nationally.

Evolving choice in the ACA marketplace

Over the years, I have devoted many posts to tracking the percentage of low-income ACA marketplace enrollees who avail themselves of the strong Cost Sharing Reduction (CSR) available with silver plans at incomes up to 200% FPL by choosing silver plans. TLDR: the percentage is high, but not high enough.

Since October 2017, I have also devoted many posts to tracking the effects of silver loading. In that month, recall, Trump cut off direct reimbursement of insurers for the value of CSR and thus ushered in silver loading era — that is, pricing the value of CSR directly into silver plans alone (since CSR is available only with silver plans), creating discounts in bronze and gold plans (see note at bottom*). Trends to watch have included

Silver plan selection at incomes above 200% FPL, where CSR is weak-to-nonexistent. TLDR: it fell off a cliff in 2018 and years following.
Gold plan selection at incomes above 200% FPL. TLDR: it’s far higher than pre-2018, but not high enough.
The relentless math that pushes most enrollees (including me) with income above 200% FPL into bronze plans (notwithstanding deductibles averaging more than $7,000), except in states where gold plans are priced below benchmark silver.
Gold plan selection at incomes over 200% FPL in states where gold plans are consistently available at premiums below that of the benchmark silver plan, either by state government design or through insurers’ pricing decisions. TLDR: Gold selection in those states very high, and roughly proportional to the degree of gold discount.

The broad parameters of rational choice in metal levels have been clear since 2018, and a majority of enrollees, albeit too small a majority, have hewn to them. Usually, the optimal choices are silver at incomes up to 200% FPL, bronze at incomes above 200% FPL, and gold where silver loading or insurer choice (often monopoly or dominant-insurer choice) make gold affordable. Two recent factors that have had an impact: 1) the American Rescue Plan Act’s subsidy boosts, which made silver an easier reach for some enrollees at all income levels, modestly boosting silver selection in 2022; and 2) a growing trickle of states requiring insurers to price gold plans below benchmark.

Here is how metal level choice shook out in the 33 states using HealthCare.gov** (the federal exchange, as opposed to a state-based exchange) in 2022. For the first time, CMS in 2022 included income categories above 400% FPL, reflecting ARPA’s removal of the former 400% FPL income cap on subsidies. I have excluded enrollees with income below 100% FPL, where a relatively high percentage of unsubsidized enrollees somewhat scrambles choices. Those enrollees who did not report income are also excluded.

Looking Backward: 2023--2014 in the ACA marketplace

This morning I happened on a January 2014 post of mine that engaged the question of whether the ACA marketplace structure might foster productive state experimentation over time. Austin Frakt engaged the question and usefully compressed my forecast as follows:

First a ground pre-prepped for de facto compromise has been laid — in the state exchanges. […] [S]tarting in 2017, states can apply for waivers by submitting alternative plans that purport to meet the ACA’s coverage benchmarks (in 2011, Obama pronounced himself willing to move the waiver start date to 2014 []). On the Medicaid front, the Obama administration has shown itself willing to accept a wide range [of] conservative experiment[s]; the same will doubtless prove true for the exchanges if any GOP-run states want to try. The ACA might be viewed as a multi-state laboratory waiting to happen — with no need for knock-down-drag-out fights in Congress. Governors willing to deal in good faith can work quietly with HHS — or hand-in-glove, if a Republican becomes president in 2017.

It took a failed Republican repeal attempt and years of regulatory sabotage from the Trump administration to get us there (along with the 2017 start date for state "innovation waivers"), but we're at a point where state experiments are proliferating — in at least one blood-red state as well as in blue. Consider:

xpostfactoid

Friday, March 24, 2023

Too many low-income ACA marketplace enrollees are forgoing high-CSR silver

Thursday, March 09, 2023

Why are certain U.S. healthcare system dysfunctions not endemic in other countries? Or are they?

Monday, March 06, 2023

Some archaic messaging on the ACA exchanges

Monday, February 27, 2023

A broker briefing on OEP 2023 in the ACA marketplace

Monday, February 13, 2023

Legislative and administrative love (and its opposite): Health Policy Valentines 2023

Thursday, February 02, 2023

Why ACA marketplace enrollment surged at incomes above 400% FPL in 2022: A Houston illustration

Saturday, January 28, 2023

How deep is public support for a broad public option in health insurance?

Friday, January 20, 2023

What's going on in the state-based marketplaces, cont.

Saturday, January 14, 2023

What's going on in the state-based marketplaces?

Wednesday, January 11, 2023

ACA marketplace enrollment in nonexpansion states is up 73% since 2020

Monday, January 09, 2023

Evolving choice in the ACA marketplace

Monday, January 02, 2023

Looking Backward: 2023--2014 in the ACA marketplace