Silver loading and 2019 enrollment: A compendium

Well, we've had a few months to digest how open enrollment for 2019 went down in the ACA marketplace. Recently, it's been borne in on me that silver loading effects intensified in 2019; that they should intensify further; that this process should continue to improve marketplace offerings, all other conditions remaining stable (quite an if...)'; and that regulators can help this process along.

Chewing over the data has sent me back to my own posts about 2019 enrollment; as usual, I'd forgotten much of what I'd written. For my own sake if no one else's, here's an index of posts about 2019 enrollment data and/or silver loading worth returning to, for me at least. I'll update as more are added.

A couple of takeaways (or spoilers): 1) nonexpansion states on HealthCare.gov had smaller enrollment losses than expansion states on the platform -- almost certainly a silver loading effect; 2) silver loading intensified in 2019; 3) silver loading has quite a ways to go. especially in New Jersey.

Note to self: there are posts about 2019 enrollment that are not included here, because they don't address silver loading.

The posts:

A key factor in state-by-state enrollment performance on HealthCare.gov

Okay, a rather elemental discovery regarding ACA marketplace enrollment for 2019, which was down 4.2% overall in 39 states using HealthCare.gov.

Courtesy of Charles Gaba, here is the enrollment performance by state, 2019 vs. 2018, with a little coloring book intervention of mine in the far-left column. What distinguishes the highlighted states?

Is New Jersey's unsubsidized marketplace enrollment migrating off-exchange?

Politico and Modern Healthcare have both wondered why ACA marketplace enrollment for 2019 is down in New Jersey, as in most of the 39 states using HealthCare.gov. As MH's Shelby Livingston put it, New Jersey "did everything right" to boost enrollment -- swiftly passed a state individual mandate and implemented a reinsurance program that brought 2019 premiums an average of 9% below 2018 levels. Yet 5 weeks into Open Enrollment for 2019, enrollment is down 13% compared to 2018. In all 39 HealthCare.gov states, it's down 10.4%.

One hope is that lower premiums are driving more enrollees whose incomes are too high to qualify for subsidies into the off-exchange ACA compliant market. There should be at least some movement in that direction, for two reasons.

First, benchmark silver plan premiums dropped a long way -- 15% in much of the state. Consequently, fewer people with incomes at the upper end of subsidy eligibility qualified for subsidies this year, because the unsubsidized premium cost less than the "affordability" threshold, 9.86% of income at 300-400% FPL. In 2018 in New Jersey, 37,991 enrollees as of the end of Open Enrollment had incomes in the 300-400% FPL range.

Second, this year New Jersey's Department of Banking and Insurance actively encouraged insurers to use on-exchange-only "silver loading" (see note below) to offer cheaper silver plans off-exchange only. AmeriHealth and Oscar responded. AmeriHealth's three cheapest silver are offered off-exchange only; the cheapest one, a narrow network HSA, costs a 46 year-old $108 per month less than the cheapest on-exchange silver.  Oscar's cheapest off-exchange silver plan is $39 per month less for a 46-year old than its cheapest on-exchange silver.  And in Jersey, an unusually high percentage of off-exchange enrollees do choose silver -- 65% in 2018.

As of the end of Open Enrollment for 2018, New Jersey had 62,360 unsubsidized enrollees on-exchange. Some of those enrollees, plus a significant share of the 38k in the 300-400% FPL band, may have some incentive to move off-exchange.

A closer look at off-exchange enrollment in New Jersey, however, suggests that such movement may be limited.

In ACA marketplace, more discount counties -- but which counties count?

Taking the country as a whole, are ACA marketplace offerings more or less attractive to prospective enrollees, subsidized and unsubsidized, in 2019 than in 2018?

The question takes on urgency as a lag in on-exchange enrollment persists into week 4 of Open Enrollment for 2019. In the 39 states using HealthCare.gov, enrollment is down 11% compared to this time last year. If plan offerings are roughly equal in value to last year's, depressed enrollment could easily be accounted for by repeal of the individual mandate penalty, establishment of a parallel lightly regulated, medically underwritten "short-term plan" market, and further drastic cuts to federal spending on enrollment assistance and advertising. Still, in 2018 the windfall bargains generated by silver loading (see note at bottom) partly offset the prior round of Trump administration sabotage, and the question lingers whether something similar may happen this year.

Some top-line facts may suggest that marketplaces are offering better value to more people in 2019 than in 2018. Unsubsidized premiums are down slightly on average. More states are silver loading, creating discounts in bronze and gold plans and/or encouraging insurers to offer off-exchange silver plans with no CSR load. The number of counties where a gold plan is available for less than the benchmark silver plan has increased from 595 in 2018 to 1136 in 2019. And the Kaiser Family Foundation reports that free bronze plans are available to subsidized enrollees at every subsidy-eligible income level in more counties in 2019 than in 2018.

There are counties and counties, however. One county may have 10 million people; another, 95. The Kaiser report includes a map that color-codes counties where free bronze is available to a 40 year-old with an income of $30,000 for the first time in 2019  A mouseover reveals that most of those counties are rural.

Silver loading 2019: What's on offer in the nation's highest-enrollment counties

The ACA marketplace is, as David Anderson says, a county-by-county story. Markets vary widely, or wildly, by location, sometimes down to the zip code. The variation grew positively freakish after Trump cut off CSR reimbursement and insurers responded by silver-loading -- that is, concentrating the cost of CSR in silver plans only (see below for an explanation).

There are counties (like Alfalfa in OK) where anyone with an income under 400% FPL can get a gold plan (deductible $200) for free, but where a 40 year old with an income just over the line will pay $433 per month for the cheapest bronze plan (deductible $5,000). There are counties where no one with an income over 200% FPL can get a silver plan with a deductible lower than $4,000 (Penobscot, Maine). There are counties where premiums for the unsubsidized are relatively low but silver loading has yielded no significant discounts in bronze or gold (Essex, NJ). There are counties where a large gap between the cheapest and benchmark (second cheapest) silver plan render CSR-enhanced free or close to it to most with CSR-eligible incomes, but with no affordable gold plans for those eligible for weak CSR or no CSR (Atkinson, Georgia).

This is all testament to the flawed design and inadequate funding of the ACA marketplace, as well as to the sabotage inflicted on it in the Trump era and prior. Compare Medicare/Medicare Advantage, where a monster public option, heavier and more uniform subsidies, tight constraints on provider payment rates in the private plans, and better benefit standardization create a market that's confusing enough and has large coverage gaps for many but still provides more uniform, adequate and affordable coverage than does the marketplace. (Though the marketplace actually offers more comprehensive coverage to those with incomes under 200% FPL who access CSR.)

All that said, there's a sort of broad middle of silver loading effect, in which bronze and gold plans are cheaper relative to silver than they were pre-2018. For a solo 40 year-old with an income of $24,000, or a bit under 200% FPL, a mid-range silver load effect might create a spread of over $100 per month between the cheapest bronze plan and benchmark silver ($129 per month at this income) and of less than $30 per month between the benchmark and the cheapest gold plan, i.e. up to around $160/month.

A glance at silver loading in Covered California 2019

Covered California is up and running for 2019; its 3-month enrollment period has begun. This time last year, with silver loading a brand new thing, I charted the cheapest bronze, silver and gold plans in a sampling of the 19 California rating areas, specifically Los Angeles Regions 15 and 16 (CA's most populous); San Francisco/Region 4; Santa Cruz in Region 16; and the always-anomalously priced, lightly populated Imperial County in Region 13.

In all the sample cases for 2018, the spread between the cheapest bronze and the cheapest silver plan widened in comparison to 2017, and the spread between cheapest silver and cheapest gold narrowed. That's the result of silver loading. For the enrollment population as a whole, accordingly, bronze plan selection upticked from 27% to 29% and gold doubled, from 5% to 10%.