Enrollment at ages 65 and up in the ACA marketplace has nearly tripled since 2017

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Medicare, no -- coverage, yes?

My last two posts (1, 2) investigated a practice, first countenanced and then codified by New Jersey insurance regulators, allowing ACA marketplace insurers to denude enrollees over age 65 of most of their coverage by presuming them eligible for Medicare unless they proved otherwise, e.g., by applying for Medicare while knowing they were ineligible. (Seniors who have not paid U.S. payroll taxes for at least 10 years or not been married to someone who has, e.g., many older immigrants, are not eligible for free Part A Medicare and are eligible for ACA marketplace subsidies if their income qualifies them.) Prompted by resulting mainstream news coverage, NJ’s Department of Banking and Insurance (DOBI) has ordered individual market insurers to cease this theft of coverage.

As DOBI disclosed that individual market insurers in the state have been presuming Medicare eligibility in senior enrollees at least since 2016, I took a look at how many enrollees might have been affected. Along the way, I noted a statistical oddity: by 2023, enrollment in the over-65 age group had more than doubled since 2017, from 3,943 to 8,929 (a precise age breakout is not provided for 2016). Total enrollment in all age groups in the state increased just 16% from 2017 to 2023, from 295,067 to 341,901.

That prompted me to look at national enrollment in the 65+ age group over the same span. Enrollment in this (small) age group has almost tripled since 2017, while overall enrollment is up 34%, from 12.2 million in 2017 to 16.4 million in 2023. The data source in the table below is CMS’s State-level Public Use Files.

ACA Marketplace Enrollment at Ages 65 and Up, 2017-2023

Year	Total Enrollment (all ages)	Enrollment Age 65+	% of Total Enrollment Age 65+
2017	12,216,007	107,661	0.88
2018	11,780,175	131,611*	1.12
2019	11,444,141	145,307	1.27
2020	11,409,447	150,725	1.32
2021	12,004,365	187,333	1.56
2022	14,511,077	235,603	1.62
2023	16,357,030	287,715	1.76

* The 2018 PUF provides Age 65+ enrollment totals for all states, but marks the national total NR.

What might explain this disproportionate increase in enrollment in the highest age bracket? I don’t know. It does seem likely, however, that two changes in subsidy structure in the ACA marketplace since 2017 may have played a role.

1. Silver loading. In October 2017, Trump abruptly cut off direct reimbursement of insurers for the value of the Cost Sharing Reduction subsidies that attach to silver plans (and only silver plans) for enrollees with income up to 250% of the Federal Poverty Level (FPL). The move was not unexpected, and most states allowed or required insurers to price the value of CSR directly into silver plans in 2018. Since premium subsidies, designed so that the enrollee pays a fixed percentage of income, are set to a silver plan benchmark (the second cheapest silver plan), inflated silver premiums effectively create discounts for subsidized buyers in bronze and gold plans. Since unsubsidized premiums rise with age (premiums for a 64 year-old are triple those for a 21 year-old), the effect is more intense for older enrollees, as “spreads” between the benchmark and cheaper plans rise with the premium.

As a result of silver loading, the number of enrollees who could obtain a bronze plan for zero premium expanded dramatically, beginning in 2018. The higher the enrollee’s age, the higher the income at which free plans were (and are) available.* In advance of the 2018 enrollment year, the first in which silver loading was practiced, the consultancy Oliver Wyman charted the wide availability of free bronze plans at high incomes and advanced age.

2. ARPA subsidy enhancements. The American Rescue Plan Act, enacted in March 2021, increased marketplace subsidies at every income level and removed the notorious income cap on subsidy eligibility, previously set at 400% FPL (in 2021, $51,040 for a single person and $68,960 for a couple). In August 2022, the Inflation Reduction Act extended the ARPA subsidy boosts through 2025. Here too, subsidy enhancements have a more intense effect as age rises, at least for plans that cost less than the benchmark. Free bronze plans are doubtless now available to most legally present U.S. residents over age 65 who lack access to Medicare. Silver plans with strong CSR are available free to all enrollees with income up to 150% FPL, and for no more than $45/month per enrollee for those in the 150-200% FPL range (the cheapest silver plan may offer a small or not-so-small discount on CSR relative to the benchmark plan).

Via HealthSherpa, here are the highest income levels at which free plans are available to 64 year-olds in a selection of major U.S. cities. Premiums at age 65+ are the same as at 64. 

Free Plan Availability in Major U.S. Cities for single enrollee, age 64 and up, 2023

City	Highest income for free bronze	Highest FPL % for free bronze
Los Angeles, CA (90011)	$38,300	281% FPL
Phoenix, AZ (85011)	$38,600	284% FPL
Atlanta, GA (30310)	$42,100	310% FPL
Chicago, IL (60606)	$43,800	322% FPL
Miami, FL (33129)	$48,200	355% FPL
Dallas, TX (75088)	$48,800	359% FPL

 Silver loading and the ARPA subsidy boosts stimulated enrollment at all income levels. The effects of both intensify as age rises. While other factors (accumulating word of mouth?) may have stimulated senior enrollment in the marketplace, enhanced subsidies seem likely to have been a factor.

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*In some states and regions, silver loading made gold plans cheaper than silver (as CSR-enhanced silver at incomes up to 200% FPL has a higher actuarial value than gold), dramatically boosting gold plan discounts and enrollment. In fact, since most enrollees in silver plans do obtain the higher levels of CSR (raising actuarial value to 94% or 87%, compared to 80% for gold), gold plans should be priced below silver. As insurers tend to underprice silver — still the dominant metal level (since most enrollees are CSR-eligible) and the benchmark-setter — some states have more strictly required insurers, by legislation and/or regulation, to price silver plans higher than gold plans. New Mexico and Texas have the strictest requirements in this regard.

Photo by Kampus Production