A narrow look at the broad middle of the ACA marketplace

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 This is a rather unilluminating post.  Are you still here?

I have been expecting to see more discounts in gold plans this year than in prior years, given CMS's report showing that lowest-cost gold plan premiums in 20201 are down an average of 6% from the year prior, while lowest-cost bronze and silver plans are down just 1%.  Yesterday's sampling of premiums in the 10 counties with the highest enrollment nationally offered some evidence in favor, albeit with really cheaply gold concentrated mostly in Texas' largest markets, Harris County (Houston) and Dallas.

As a followup, I took a look at middling markets -- literally: zip codes where enrollment was at the median for all 27,365 zip codes in the U.S. That is, 13 zip codes that each had 239 on-exchange enrollees. These markets are scattered through the country's broad middle (four were in Tennessee, but the plan offerings varied considerably among them). Population ranged from 3800 to 11,300.

The one consistent pattern was an increase in participating insurers -- often resulting in higher premiums for lowest-cost plans. Market watchers know that new competition is more likely to weaken discounts for subsidized enrollees than to improve them, and that's the case here (though new entrants may provide important new options where provider networks are concerned).  On average, lowest-cost bronze and silver premiums for subsidized enrollees in these markets rose from 2020 to 2021. Lowest-cost gold was all over the map, but also rose a bit.

Cheaper gold in the ACA marketplace's high-enrollment counties

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Last week, CMS reported that in 2021, average premiums in HealthCare.gov states are dropping for the third straight year. I noted that since lowest-cost gold plans were dropping an average of 6%,  compared to a 1% drop for lowest cost silver and bronze, we should see steeper discounts in gold plans this year. 

Perhaps, that is, the markets will move a bit closer to the gold-cheaper-than-benchmark-silver norm envisioned by the prophets of silver loading prior to Trump's cutoff of direct CSR funding in October 2017 (see this post for an explanation). 

That appears to be the case, to judge by premium changes in the ten U.S. counties with highest marketplace enrollment in 2020. Enrollment in these 10 counties accounts for 17% of all enrollment nationally.

ACA marketplace 2021: Cheap gold proliferates

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In October 2017, when Trump cut off direct federal reimbursement of ACA marketplace insurers for the Cost Sharing Reduction subsidies they are obliged to provide to low income enrollees who select silver plans, he boasted that he'd destroyed Obamacare. The likely effect, however, had been anticipated at least since January 2016: inflated silver premiums triggering deep discounts in bronze and gold plans, stimulating enrollment. 

Briefly: CSR raises the actuarial value of a silver plan from its baseline 70% to 94% for enrollees with incomes up to 150% of the Federal Poverty Level and to 87% at incomes from 150-200% FPL. Gold plan AV is 80%. When CSR, available only with silver plans, is priced into silver plan premiums, that inflates subsidies, which are set to a silver plan benchmark and designed so that the enrollee pays a fixed percentage of income. That creates discounts for subsidized buyers in bronze and gold plans.

The prophets of silver loading, however, expected deeper discounts in gold plans than we've gotten so far. Here's what Linda Blumberg and Matt Buettgens of the Urban Institute anticipated in January 2016:

In addition, as discussed, the increase in silver plan premiums means that the premium for silver plan (70 percent actuarial value) coverage becomes higher than the premium for gold plan (80 percent actuarial value) coverage. This means that individuals above 200 percent of FPL can obtain higher-value plans at a lower cost if they shift from silver to gold plans. Consequently, virtually all tax credit–eligible individuals with incomes above 200 percent of FPL move to gold plans; their tax credit, computed using the second-lowest-cost silver plan, goes further when used for a gold plan.

ACA marketplace enrollment, 2018: Answers and questions

In 2018, ACA marketplace enrollment dropped 5% in the 39 states using the HeathCare.gov and 4% nationally. The more detailed data that CMS compiles for the HealthCare.gov states (accounting for three quarters of all enrollees) show that enrollment dropped most sharply at the lowest income levels -- where, thanks to Cost Sharing Reduction (CSR) subsidies, the most comprehensive coverage is available.*

Here's the breakdown of enrollment by income level in 2018 vs. 2017** on HealthCare.gov.

Enrollment by Income Level on HealthCare.gov, 2018 vs. 2017

	Total enrollment	100% to 150% FPL	150% to 200% FPL	200% to 250% FPL	250% to 300%  FPL	300%- 400%  FPL	Other FPL*
2018	8,743,642	2,979,236	1,885,778	1,277,488	747,165	867,198	986,777
2017	9,201,805	3,208,242	2,050,555	1,312,520	752,403	786,678	1,091,407
2018 as % 2017	95.0%	92.9%	92.0%	97.3%	99.3%	110.2%	90.4%

 * "Other FPL" is comprised mostly of unsubsidized enrollees. About one quarter are likely enrollees with incomes under 100% FPL, most of whom are likely legally present noncitizens time-barred from Medicaid, who are subsidy-eligible.

Why was enrollment down sharply at 100-200% FPL, down modestly from 201-300% FPL, and up at 300-400% FPL? The higher the income, the more definite the answers.

ACA heresy at noon

Once upon a midnight* dreary,
While I pondered weak and weary...

over one more quaint and curious wrinkle in ACA enrollment patterns (New Hampshire enrollment was down 6% in 2018, but subsidized enrollment was up 5%!--why?), I saw something that drew me up short.

I was looking at whether silver loading had created off-exchange discounts in silver plans available in New Hampshire. It had, a little. The plans listed below are the two cheapest silver plans on offer in 2018 to an unsubsidized 50 year-old in Manchester. The top plan is available off-exchange only, the second one both off- and on-exchange. But that's by the way.