Trump's cutoff of federal reimbursement to insurers for Cost Sharing Reduction (CSR) subsidies has led to two pricing anomalies in the ACA marketplace that have rightly gotten a lot of attention: gold plans that are cheaper than silver plans (or close to it) in some regions, and bronze plans that are free for large swaths of the subsidy-eligible population.
The gold and bronze discounts* available in many regions of the country are an unmixed blessing for subsidized buyers with incomes above 200% of the Federal Poverty Level (FPL), who are eligible either for no CSR or very weak CSR. The blessing is more ambiguous for buyers with incomes below 200% FPL, however, because for them CSR, which is available only with silver plans, remains a major secondary subsidy. For these buyers, silver plans are priced as if they have an actuarial value of 70% (that is, are designed to cover 70% of the average user's medical costs) but, enhanced by CSR, have AVs of 94% (for buyers up to 150% FPL) or 87% (for those in the 150-200% FPL range). That translates to an average deductible of $255 (for 94% AV) or $809 (for 87% AV), compared to over $6,000 for bronze plans.
That bargain remains in place. But silver plans can be quite expensive for low income enrollees. The premium for a benchmark silver plan ranges from 2% of income for those in the 100-138% FPL income bracket to 6.3% for enrollees at 200% FPL. The benchmark premium at 200% FPL comes to $127 per month in 2018.
Will the outsized bronze plan discounts available in many places this year tempt a lot CSR-eligible buyers into bronze plans?** In 2017, over 85% of enrollees with incomes up to 200% FPL selected silver plans and accessed CSR in the 38 states that use the HealthCare.gov federal exchange.
To gauge whether discount bronze is likely to take a big bite out of CSR takeup this year, let's look at the choices facing CSR-eligible enrollees in counties with the most marketplace enrollees. In 2017, these were
Miami-Dade, FL 387,848
Los Angeles, CA 380,520
Broward, FL 240,984
Harris, TX (Houston) 240,064
Cook, IL (Chicago) 144,418
The gold and bronze discounts* available in many regions of the country are an unmixed blessing for subsidized buyers with incomes above 200% of the Federal Poverty Level (FPL), who are eligible either for no CSR or very weak CSR. The blessing is more ambiguous for buyers with incomes below 200% FPL, however, because for them CSR, which is available only with silver plans, remains a major secondary subsidy. For these buyers, silver plans are priced as if they have an actuarial value of 70% (that is, are designed to cover 70% of the average user's medical costs) but, enhanced by CSR, have AVs of 94% (for buyers up to 150% FPL) or 87% (for those in the 150-200% FPL range). That translates to an average deductible of $255 (for 94% AV) or $809 (for 87% AV), compared to over $6,000 for bronze plans.
That bargain remains in place. But silver plans can be quite expensive for low income enrollees. The premium for a benchmark silver plan ranges from 2% of income for those in the 100-138% FPL income bracket to 6.3% for enrollees at 200% FPL. The benchmark premium at 200% FPL comes to $127 per month in 2018.
Will the outsized bronze plan discounts available in many places this year tempt a lot CSR-eligible buyers into bronze plans?** In 2017, over 85% of enrollees with incomes up to 200% FPL selected silver plans and accessed CSR in the 38 states that use the HealthCare.gov federal exchange.
To gauge whether discount bronze is likely to take a big bite out of CSR takeup this year, let's look at the choices facing CSR-eligible enrollees in counties with the most marketplace enrollees. In 2017, these were
Miami-Dade, FL 387,848
Los Angeles, CA 380,520
Broward, FL 240,984
Harris, TX (Houston) 240,064
Cook, IL (Chicago) 144,418
