Fixing the ACA’s Medicare Glitch

By Louise Norris and Andrew Sprung

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It's my pleasure to team up in this post with Louise Norris, a health insurance broker and ACA chronicler extraordinaire at healthinsurance.org and verywell.com. At those two sites, Louise has effectively created a constantly updated encyclopedia of the ACA, covering a host of enrollment situations, regulations, marketplace features, and histories of each state marketplace. She has done similar work about Medicare at Medicareresources.org.

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For most Americans, enrollment in Medicare is cause for celebration. At last: affordable, reliable insurance you can’t lose. Medicare enrollment can entail some complex determinations (do I qualify for any Medicare Savings Programs?) and decisions (Medigap or Medicare Advantage?) For many seniors, too, the burden of premiums and out-of-pocket expenses is heavy. Still, by American standards, Medicare is reliable and affordable.

For “near-elderly” couples (under age 65)  who are insured through the Health Insurance Marketplace established by the Affordable Care Act, however, the transition of the elder spouse into Medicare can bring sticker shock and extra expense. That’s because ACA premium subsidies are designed so that enrollees pay a fixed percentage of household income for the benchmark (second cheapest) silver plan in their area – and they pay the same percentage (reduced through 2022 by the American Rescue Plan enacted in March 2021) regardless of how many people need insurance. 

A couple that was paying 8% in premiums for a benchmark silver plan to cover both of them will still pay 8% of income when only one of them is covered in the marketplace. When one of them transitions to Medicare, they will pay the marketplace premium plus the Medicare premium. In the illustration below, they will pay somewhere between 11% and 14% of income in premiums to cover them both, depending on whether the Medicare enrollee opts to buy a Medigap policy.

ACA Hunger Games, Part II

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I'd like to revisit the "hunger games" scenario for legislation to improve the ACA posited in the last post. In brief: assume that Democrats, forced to accommodate their most conservative members to get all 51 of their Senate votes on board for any legislation passed through reconciliation, pare back the broad expansion of premium subsidies for ACA marketplace coverage they've proposed elsewhere -- e.g., in candidate Biden's health care plan and in the House-passed Affordable Care Enhancement Act of 2020 (ACEA). If forced to scale back, should they:

a. Concentrate on the currently unsubsidized, for whom coverage is often truly unaffordable, capping premiums for a benchmark plan as a percentage of income (e.g., 8.5% as in the ACEA, but probably higher)?

b. Concentrate on lower incomes, where takeup among the subsidy-eligible has been poor? (See the last post for the ACEA subsidy scale and how it compares to current law.)

c. Spread whatever enhanced subsidy money they can muster across all income groups?

The ACA marketplace is damaged and taking new hits...but it's not a high risk pool and probably won't be

Update, 3/8/18: Various analyses are now predicting steeper premium hikes and coverage losses than I anticipated here, resulting from the combined effects of mandate repeal and greenlighting of short-term and AHP plans. See Urban Institute, 2/26, and Covered California, 3/8.
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Since it first hit email boxes a few months (or maybe a year-plus?) ago, Vitals, Axios' healthcare e-newsletter, has beguiled its way into a first read. Editor Sam Baker, and Axios generally, have taken the holy grail (or shibboleth) of contemporary prose, concision, to a new level, sating our short attention spans while salting news aggregation with interpretation.  I find the trademark "be smart" tagline a touch patronizing, but the substance of that signposted takeaway is nearly always on point.

That said, I'm going to quibble with today's lead storylette, with a point behind the quibble that goes beyond Axios, I think.

The news item is HHS's proposed rule to allow loosely regulated short-term health plans to be sold for terms as long as a year rather than three months, the limit that went into effect last April. Since short-term plans are cheap, medically underwritten and not bound to cover Essential Health Benefits, they are poised to attract healthier buyers. With this rule, Trump's HHS punches one more hole in the ACA risk pool

Here's my quibble. According to Sam Baker, The ACA-compliant individual market is "sliding deeper into something a lot more like a makeshift high-risk pool, in which healthy people are absent and the government simply pays to cover sick people." I think that's overstated.

Compromise maybe a little? Urban Institute's Blumberg and Holahan on what's next for the ACA

In August 2015, Urban Institute healthcare scholars Linda Blumberg and John Holahan acknowledged that ACA marketplace subsidies were too skimpy to do all they were intended to and came up with a comprehensive proposal to enrich them.  In January 2016, staring down the barrel of Republican repeal vows, they remixed those improvements in a compromise package that included several concessions to conservative priorities. These included:

• Repeal the employer mandate (requiring employers with more than 50 employees to offer insurance or pay a penalty)
• Repeal and replace the individual mandate  (with a premium penalty for those who did not maintain continuous coverage)
• Examine the Essential Health Benefits and look for responsible ways to lighten them
• Allow states to drop the income threshold for Medicaid eligibility to 100% of the Federal Poverty Level (FPL). At present, the threshold is 138% FPL in states that have accepted the ACA Medicaid expansion. 

As I noted recently, these concessions were embedded with offsets: reinsurance to mitigate the premium hikes likely to be triggered by individual mandate replacement, and lower out-of-pocket costs to cushion the substitution for enrollees in the 100-138% FPL range of private insurance for Medicaid (richer subsidies across all income levels would also offset the ill effects of a weaker mandate substitute).

Careful with that study! A second look at enrollment decisions in Covered California

A study of the buying decisions of enrollees in California's ACA marketplace, Covered California, in 2014, suggests that a lot of people left benefits on the table:

The Affordable Care Act includes financial assistance that reduces both premiums and cost-sharing amounts for lower-income Americans, to increase the affordability of health insurance coverage and care. To receive both types of assistance, enrollees must purchase a qualified health plan through a public insurance exchange, and those eligible for the cost-sharing reduction must purchase a silver-tier plan. We estimate that 31 percent of individual-market enrollees in California who were likely eligible for financial assistance purchased plans that were not silver tier or that were not sold on the state’s exchange and thus missed opportunities to receive premium or cost-sharing assistance or both. Lower-income enrollees who chose plans not eligible for subsidies had two to three times higher odds of reporting difficulty paying premiums and out-of-pocket expenses during the year, compared to those who chose eligible plans. Regardless of how the structure of the individual market evolves in the coming years, efforts are likely needed to steer lower-income enrollees away from financially suboptimal plan choices.

The study, just published in Health Affairs, lead author Vicki Fung of Harvard and Mass General, is based on  survey responses from 2103 enrollees and has some very interesting results regarding the difficulty (or lack thereof) that enrollees experienced paying premiums and out-of-pocket expenses at different income levels and benefit levels. But while the authors are quite thorough in enumerating the study's limitations, some caveats are worth elaborating.* In brief: CSR takeup is higher at income levels where the benefit is strong, and many of those deemed potentially eligible for subsidies are not in fact eligible.

Let's look more closely at the more specific claims.

Give PriceCare to the not-poor

As I noted last week, Tom Price's 2015 ACA repeal-and-replace bill, dubbed the Empower Patients First Act, is a grossly inadequate offering for the 20-plus million mostly poor and near-poor people who have so far gained health insurance through the Affordable Care Act.  Its limited premium subsidies for shoppers in the individual market, adjusted for age but not income, would leave coverage unaffordable for most of the 9 million subsidized enrollees in the ACA marketplace. Worse, by repealing the ACA's Medicaid expansion, it would un-insure virtually all of the roughly 12 million who have gained coverage through the ACA's expansion of eligibility.

Price's EPFA does, however, provide significant aid to those who earn too much to qualify for ACA marketplace credits -- which includes some younger buyers with incomes as low as 250% FPL and a considerable number in the 300-400% FPL range. Insurance seekers who are subsidy-ineligible (or close to it) but not wealthy fare worst under the ACA, as the Urban Institute's Linda Blumberg and John Holahan have highlighted:

Price's subsidies would cover, on average, about 40% of the premium for the average benchmark silver plan offered in the ACA marketplace, and a higher percentage of the premium for the skimpier plans that would be on offer in the deregulated individual market his replacement bill would create. Coupled with an HSA, and possibly with full tax deductibility for any plan purchased in the individual market (as Trump's campaign website proposed), and with continuous coverage protection, it's a program that could work for the modestly affluent (at least, with some compromise preserving essential health benefits as a broad outline while giving states more autonomy to flesh them out).

Tom Price will probably cut your health insurance subsidy in half

Last week, I noted that the federal government pays a bit more than two thirds of total medical costs for the average traditional Medicare enrollee. That is, the government pays about 85% of the premium(s) for insurance that covers a bit more than 80% of the average user's annual medical costs (that latter percentage is known as a health plan's actuarial value). Subsidies for those who chose Medicare Advantage plans are comparable.

In a followup post, applying the same calculation to subsidized enrollees in the ACA marketplace and prospective enrollees in HHS Secretary nominee Tom Price's ACA repeal-and-replace plan, I came up with the following total subsidy values:

Traditional Medicare:  85% of premium paid for AV 81% coverage = 69% of costs

Subsidized ACA marketplace: 73% of premium paid for AV 81% = 59% of costs (highly variable)

Tom Price ACA replacement: 59% of premium paid for AV 60% coverage = 35% of costs

25% premium hikes "just a flesh wound," say some Democrats

As the steep premium hikes in the individual market for health insurance have become official and specific, some progressives are comforting themselves with the thought that the market's 8-9 million unsubsidized enrollees constitute just 3% of the U.S. population. That's a silly frame.

If the ACA marketplace and larger individual market were firing on all burners, according to Kaiser Family Foundation estimates*, it would serve 27.4 million people, slightly more than half of them subsidized. That's about 60% of the population the ACA was designed to serve most directly b two means:  the Medicaid expansion (envisioned to newly insure about 17 million) and reform/subsidization of the individual market. A core purpose of the law was make the individual market accessible and affordable to all who needed it. That was always going to include 8-10 million people who don't qualify for subsidies -- not all of whom earn over 400% FPL (some have an employer's offer of insurance that they find unaffordable, though the law doesn't deem it so).

About a fifth of the law's current direct "beneficiaries" are unprotected from premium hikes averaging 25% overall and 22% in benchmark silver plans, the best measure of what those seeking decent insurance will be forced to pay. In some states, average increases are far worse -- 45% in Illinois, 57% in Arizona and Minnesota, 76% in Oklahoma. Note that two of those states are blue states, committed to making the law work. If hikes at this year's levels are more than a one-year correction, they're unsustainable.

In which Obama feels the pain of the price tag he imposed on the ACA

In an interview with Jonathan Chait, President Obama rather casually ticked off his first priority for shoring up the ACA:

In my mind the [Affordable Care Act] has been a huge success, but it’s got real problems. They’re eminently fixable problems in terms of strengthening the marketplace, improving the subsidies so more folks can get it, making sure everybody has Medicaid who was qualified under the original legislation, doing more on the cost containment. But you hit a point where if Congress just is not willing to make any constructive modifications and it’s all political football, then you’re getting a suboptimal solution. 

By now, the imperative to enrich the marketplace subsidies is a matter of consensus among progressive healthcare scholars and officials. Out-of-pocket costs are just too high for prospective enrollees with incomes over 200% of the Federal Poverty Level (FPL)*, the cutoff for strong Cost Sharing Reduction (CSR) subsidies, and premium subsidies leave buyers paying too high a percentage of their income -- between 6.4% and 9.7% of income for those in the 200-400% FPL range. In August 2015, Urban Institute scholars Linda Blumberg and John Holahan put out a detailed proposal for subsidy enrichment that included raising the actuarial value of the benchmark plan to 80% from the current 70% , with richer CSR extending further up the income ladder, as well as capping premiums at 8.5% of income for all income levels. Hillary Clinton's rather vague proposal for subsidy enrichment is apparently based on Blumberg and Holahan's. ACA improvement proposals by Timothy Jost and Harold Pollack and Sabrina Corlette and Jack Hoadley also prominently feature subsidy boosts.

The inadequacy of marketplace subsidies was evident to progressives from the beginning. Complaints began when Max Baucus's Senate Finance Committee released its bill in fall 2009, with a subsidy schedule that was far skimpier than that of the House bill.** In his 2011 book about the battle to pass the ACA, Richard Kirsch, national campaign manager from 2008-12 for Health Care for America Now (HCAN), an  umbrella group formed by unions and progressive nonprofits to advocate for universal health care, pins responsibility for the skimpy subsidies primarily on Obama:

HHS markets to the lower income brackets

I have complained more than once about HHS's mantra that most ACA marketplace shoppers can find a plan for under $75 per month. My beef has been that the message overemphasizes premium price at the expense of balancing premium with out-of-pocket costs. That's particularly perverse since most shoppers have to buy silver plans to access Cost Sharing Reduction subsidies that render silver a better value than bronze.

Well, CMS is at it again, and in light of the marketplace's recent travails -- insurer losses, insurer exits, premium price spikes -- I was struck by another problem with the "most can get plans for under $75" assurance.

Today HHS released a brief emphasizing that since 85% of HealthCare.gov enrollees qualified for premium tax credits in 2016, that same overwhelming majority will be protected from premium price hikes in 2017. The premise is simple: if you're subsidy-eligible, you pay a fixed percentage of your income for the benchmark silver plan in your area, regardless of its sticker price. When prices rise, subsidies rise, and the spread between benchmark silver plans and cheaper bronze plans will widen slightly, slipping slightly more applicants in under the $75 and $100 thresholds.* Hence this highlight:

In a hypothetical scenario in which all Marketplace qualified health plan premiums
were to increase by 25 percent from 2016 to 2017:
          o 73 percent of consumers could find coverage for $75 or less.
          o 78 percent of consumers could find coverage for $100 or less.

Okay, but all this "most-people" messaging also brings home the fact that HHS anticipates marketplace enrollment remaining concentrated in lower income brackets -- mainly under 200% of the Federal Poverty Level (FPL). In 2016, somewhere between 61% and 66% of HealthCare.gov enrollees had incomes below that level.   HHS estimates that 70% of enrollees could have bought plans for under $75 per month, which suggests that about 70% had incomes under, say, 220% FPL.**

Clinton's ACA subsidy sweeteners: Something for everyone

Of the roughly 24 million people whose health insurance is currently subsidized as a result of the Affordable Care Act*, over 80% have incomes below 200% the Federal Poverty Level (FPL).

About 14 million more people are enrolled in Medicaid than would have been had there been no ACA. They live in households with incomes below 138% FPL.  Of approximately 9 million subsidized enrollees in private plans sold in the ACA marketplace**, about 60%, or 5.4 million, have incomes under 200% FPL.

If banks are where the money are, the poor and "near-poor," as The CDC's National Health Interview Survey (NHIS) defines people in the 100-200% FPL range, are where the uninsured are most concentrated. A third of the U.S. population lives in households with incomes under 200% FPL. In 2013, just prior to ACA implementation, 55% of the uninsured had incomes below that level, according the most recent update of the Census Bureau's Current Population Survey. As of the first three quarters of 2015, according to the NHIS, the uninsured rate among those under age 65 had been cut by 35% for the poor (under 100% FPL) and by 38% for the near-poor (100-200% FPL).

Those with incomes over 200% FPL were not that far behind: the uninsurance rate for those above that income level fell by 30% from 2013 to 2015, according to the NHIS (from 9.6% to 6.7%).  But that may be a result more of stick than carrot: the tax penalty for remaining uninsured is quite stiff for higher earners. Among those in the upper range of ACA subsidy eligibility, 200-400% FPL, takeup has been poor. Above 200% FPL, subsidies require enrollees to pay between 6.4% and 9.7% of their incomes for benchmark silver plans. Cost Sharing Reduction subsidies fade to insignificance above 200% FPL and phase out entirely at 251% FPL, leaving silver plan holders with high deductibles and out-of-pocket costs.

Here comes Aunt Hillary's cavalry 

The concentration of ACA benefits on the poor and near-poor probably underlies the law's low approval ratings.  Enter Hillary Clinton's wish list. Her proposed package of supplements and sweeteners to ACA subsidies has something for people at all points in the income distribution, very much including those at the top of it (my emphasis below):

Hawaii's ACA enrollment mystery

In the 38 states using HealthCare.gov, the federal ACA marketplace, just 3% of enrollees have incomes below 100% of the Federal Poverty Level (FPL), a threshold below which most applicants are ineligible for premium subsidies.  In Hawaii, 29% of enrollees have incomes under 100% FPL. No other state has more than 4% of enrollees in that income category. What gives?

Under the ACA, legally present noncitizens who are barred from Medicaid are eligible for private plan premium subsidies even if their income is below 100% FPL.  The 1996 welfare reform legislation barred legally present noncitizens from federally-funded Medicaid eligibility if they had been in the country less than five years.  While subsequent legislation gave states the option of covering children and pregnant women with a federal contribution, the bar is still in place for most adults.

While those subject to the five-year bar (or even longer-term bars passed by some states) make up the bulk nationally of subsidized ACA enrollees under 100% FPL, there are other categories of legally present noncitizens barred from federally funded Medicaid. Hawaii home to a substantial share of one such group: Pacific islanders who are legally present under the Compact of Free Association. (COFA) which governs relations between the U.S. and three Pacific Island Nations -- the Federated States of Micronesia, the Marshall Islands, and Palau. The federal government will not fund Medicaid for COFA residents.

Ignorance vs. unaffordability among the uninsured

As the ACA's third Open Season for private health plan enrollment draws to a close, enrollments are flatlining, and at a low level. Barring an enormous last-minute surge, it looks like HHS's preseason lowball estimate, with a midpoint of about 12.6 million total enrollments by Jan 31, will be on target.

At the same time, the Kaiser Family Foundation's latest health tracking poll indicates that most of the uninsured who are eligible for aid  have not been contacted and/or don't know what aid is available:

In terms of enrollment engagement and efforts to get coverage, most of the uninsured say they have not been contacted about signing up for coverage (67 percent) or that they have not tried to get more information on their own (57 percent). More specifically, most uninsured say they have not taken steps to figure out if they are eligible for the two main coverage expansions under the ACA — Medicaid and financial assistance to purchase health insurance through the healthcare marketplaces. Over 7 in 10 saying they have not tried to figure out if they qualify for Medicaid (72 percent) or for financial assistance to purchase health insurance (79 percent) in the past 6 months.

Those numbers give a somewhat exaggerated impression, as only 49% of the uninsured are eligible for Medicaid or private plan tax credits, and 10% of those are children eligible for CHIP. Still, many prior surveys -- e.g., by the Urban Institute and McKinsey & Co. -- have focused on the aid-eligible uninsured and found that majorities don't know what's on offer. Further, a previous Kaiser survey found that large numbers of the aid-eligible uninsured who did explore obtaining insurance received the false impression that no aid was available (I explored several ways that may happen here).

Higher health plan prices may bring *more* young buyers into the exchanges

In its latest ACA enrollment snapshot, CMS is touting an increased percentage of younger enrollees compared to last year.

As of the Dec. 17 deadline to obtain coverage beginning Jan. 1, enrollees under age 35 comprised 35% of all HealthCare.gov customers, compared to 33% in the year prior (that includes children, who last year accounted for about 7% of enrollees on the federal exchange). Among new enrollees only, 41% are under 35 this year, compared to 38% last year.

The modest de-aging of the risk pool is good news, and, according to Sarah Kliff, relieves a worry:

Obamacare premiums went up a lot faster for 2016 coverage (the year this current open enrollment covers) than they did for 2015. That created some worry that young people might not sign up in high numbers. Because younger people tend to have fewer medical needs, they tend to be more price sensitive and willing to forgo coverage in the face of a premium spike.

It's possible, though, that the price spike actually brought more young customers into the marketplace.

How bronze plans offer fool's gold to the Treasury

I have more than once expressed frustration that HHS, when urging the uninsured to buy health plans in the ACA marketplace, emphasizes low premiums at the expense of good coverage. For example, CMS's snapshot of plan prices for the Open Season beginning today leads like this:

The next Open Enrollment period for the Health Insurance Marketplace begins on November 1, 2015 for coverage starting on January 1, 2016. According to an HHS analysis, about 8 out of 10 returning consumers will be able to buy a plan with premiums less than $100 dollars a month after tax credits; and about 7 out of 10 will have a plan available for less than $75 a month.

Only perhaps 5 out of ten returning customers will be able to buy a silver plan for under $100 per month, and many of those who slip beneath that round-number threshold by buying bronze plans will be forgoing the Cost Sharing Reduction (CSR) subsidies that are available only with silver plans.  Yet the messaging about CSR on healthcare.gov and in HHS's communications is confusing and underemphasized.

Perhaps the ambivalence or inattention to CSR stems in part from a financial conflict of interest between the federal government and shoppers on the ACA exchanges.  When a CSR-eligible shopper selects a bronze plan, the Treasury saves not only on the forgone CSR subsidy, but also, in some cases, on the premium subsidy. Bronze plans are in some regions priced so low that the full unsubsidized premium is less than the premium subsidy to which the buyer is entitled, which is calculated to leave her paying a fixed percentage of income for the second-cheapest silver plan available. That's likeliest to be the case for older buyers, for whom unsubsidized premiums can be up to three times as high as for young buyers

This pricing permutation is very much in play in California in 2016. In 2015, 53.5% of California's subsidized enrollees were between the ages of 45 and 64 -- and again, for older buyers, premium subsidies often cover the whole cost of a bronze plan, and then some.

Which insured Americans get no subsidy whatsoever?

Who are the Americans who get no help from the federal government paying for their health insurance?

The uninsured, of course. Also, those who buy their insurance in the nongroup market (on- or off-exchange) and a) earn too much to qualify for subsidies, and b) are not self-employed.

It's important to recognize that the self-employed do get a subsidy: the self-employment health insurance deduction. If your health insurance costs less than your total self-employed earnings, you can deduct the whole cost from your earnings. A recent study indicates that this deduction takes an average of 22% off the average self-employed tax filer's health insurance bill.

My question: what percentage of buyers in the nongroup market are not subsidy eligible and not self-employed? They are the only insured Americans who get no government aid paying for insurance. Most of them, that is: there is also a medical expense deduction available to any household that spends more than 10% of its Adjusted Gross Income on medical expenses, including insurance. Only expenses over 10% of AGI can be deducted.

The ACA and the Working Class - Kevin Drum Festschrift

My festschrift contribution for Kevin Drum, who's recovering from a stem cell transplant in treatment for multiple myeloma, is up on Mother Jones. Kevin, give thanks, is doing very well, and managing to keep blogging on policy as well as track his treatment experience.

For those interested in the editing process -- as anyone who's ever edited inevitably is -- I thought my piece was skillfully shaped by Mother Jones managing editor Clint Hedler. Mostly he cut caveats and qualifications, which I've highlighted in the full draft below. Left to my own devices, I would leave the first and last highlighted sections in place and let the other cuts stand -- and I can see the case for all of them. I should be better at doing this to myself, as I spend half my day-job hours doing it to other people's articles.
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One thing I've always appreciated about Kevin is that his commitment to economic justice is grounded in political realism.  That balance was on display in his postmortem on the Democrats' drubbing in November:

when the economy stagnates and life gets harder, people get meaner. That's just human nature. And the economy has been stagnating for the working class for well over a decade—and then practically collapsing ever since 2008.

So who does the WWC [white working class] take out its anger on? Largely, the answer is the poor. In particular, the undeserving poor. Liberals may hate this distinction, but it doesn't matter if we hate it. Lots of ordinary people make this distinction as a matter of simple common sense, and the WWC makes it more than any. That's because they're closer to it. For them, the poor aren't merely a set of statistics or a cause to be championed. They're the folks next door who don't do a lick of work but somehow keep getting government checks paid for by their tax dollars. For a lot of members of the WWC, this is personal in a way it just isn't for the kind of people who read this blog.

And who is it that's responsible for this infuriating flow of government money to the shiftless? Democrats. We fight to save food stamps. We fight for WIC. We fight for Medicaid expansion. We fight for Obamacare. We fight to move poor families into nearby housing.

This is a big problem because these are all things that benefit the poor but barely touch the working class. 

As Kevin acknowledges, this is an age-old problem for Democrats. It's "unfair" in that there's overwhelming evidence that safety-net programs like food stamps, Medicaid and the Earned Income Tax Credit "have positive effects on health, educational attainment, earnings and employment years later," as Jared Bernstein recently wrote. Conversely, programs popular with the middle class, such as the mortgage tax credit and tax-sheltered college savings plans, bestow the bulk of their benefits on the affluent. The distinction between "the poor" and "the working class" may also be too neat, given the volatility of Americans' incomes and the erosion of stable jobs at working class pay levels. An awful lot of working people access the benefits that Kevin lists, or have family members who do, (e.g., a large majority of food stamp beneficiaries). All that said, the perception that Kevin fingers is a political force, and partly grounded in reality, in that safety net programs (for the non-elderly at least) do most directly benefit those at the bottom of the income distribution.

ACA customer satisfaction: it's the prices

J.D. Power released a health insurance satisfaction survey this past week in which a headline finding was that customers who bought private insurance plans on ACA exchanges expressed slightly higher average satisfaction than people in employer-sponsored plans* - 696 to 679 on a 1000-point scale.

Power polled plan holders both on their satisfaction with the plan itself and with the enrollment process.  A few notes on specific findings:

1. Regarding the sources of satisfaction with the plans themselves, Power reports, "Cost is the most influential attribute driving satisfaction among Marketplace plan members" but also that "plan members are most satisfied with the provider selection and claims processing attributes." I'm not sure how those findings fit together. Perhaps plan members gave selection and claims processing the highest absolute ratings but also said that cost was the most important factor to them? I'll see if I can find out. [UPDATE 4/27: Rick Johnson, senior director of the health care practice at J.D. Power, confirms that the inference above is correct: respondents rated price their top concern, but gave the highest scores to provider selection and claims processing.]

2. Re the satisfaction related to cost: 87% of marketplace customers qualified for premium subsidies, and among those, the federal government paid 72% of the premium on average, leaving the customer with an average premium share of  $101. Small wonder if those low premiums were a source of satisfaction.

Timothy Jost Discusses an ACA Provision that Should Kill the King Suit

In the vast web of the ACA, there is only one provision that directly identifies the federal exchange as a creditor of subsidies. That provision is cited in the government's brief but did not come up in oral argument last week. It is one that should put to rest the claim -- acknowledged as a possibly winning argument by Justice Kennedy  -- that the ACA unambiguously authorizes the crediting of subsidies through the state exchanges alone.

I spoke on March 6 to Timothy Stolzfus Jost, a law professor at Washington and Lee University, about this provision, which he first highlighted in September 2011, immediately after one of the King masterminds, Jonathan Adler, published the nucleus of the King case. The exchange was prompted by an  IRS rule, proposed in August 2011 and finalized in May 2012, that authorized the federal exchanges to award premium subsidies.

HHS expected *more* low-income ACA buyers to select silver plans

In my multi-stage exploration of the data on ACA private plan buyers' metal level selections, I have been pleasantly surprised to determine with a fair degree of confidence that about 90% of shoppers on healthcare.gov with incomes under 200% of the Federal Poverty Level selected silver plans -- and so availed themselves of the Cost Sharing Reduction (CSR) subsidies available only with silver. For all ACA buyers on all exchanges, the figure is a few percentage points lower, since many state exchanges did a much poorer job than healthcare.gov in steering CSR-eligible buyers toward silver.

While CSR is available to buyers with incomes up to 250% FPL, the rate of silver plan selection (necessary to access CSR) falls off a cliff at 201% FPL. That's wholly rational, as CSR weakens as you move up the income scale. For those with incomes between 200 and 250% FPL, CSR bumps up the actuarial value of a silver plan -- that is, the percentage of the average plan holder's yearly medical costs paid by the insurer -- just three points, from 70% to 73%.  At lower income levels CSR is much more valuable, raising AV  to 87% (for incomes at 150-200% FPL) or 94% (for incomes under 150% FPL). Accordingly, in New York (one of the few states that breaks out metal level selection by income level), 89% of buyers with incomes under 200% FPL bought silver -- but just 59% of those between 200 and 250% FPL did.

With all this in mind, I was surprised to read* in the latest CBO updated ACA cost projections that the Department of Health and Human Services and the Joint Committee on Taxation have been surprised that more buyers eligible for CSR have not selected silver plans:

Outlays for cost-sharing subsidies over the 2015–2024 period are currently projected to be $39 billion less than previously estimated, primarily because CBO and JCT now expect that more people will forgo those subsidies by choosing to enroll in a bronze plan instead of a silver plan...