The retentive ACA marketplace, revisited

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In my last post, I noted that enrollment drops in the ACA marketplace recorded in each year of the Trump era at the end of Open Enrollment more or less evaporate in yearly comparisons of average monthly enrollment, or end-of-year enrollment.

That is, it seems that fewer people in the last two years drop out without paying, and perhaps a higher percentage remain enrolled all year (many people in the ACA marketplace do have good reasons not to remain enrolled all year -- one of the marketplace's vital roles is as a stopgap). That's congruent with another change recorded in 2019: new enrollments down (-15.7%), re-enrollments up (2.3%), as of the end of Open Enrollment.

Why have apparent enrollment drops as of the end of OE in each of the last three years either shrunk or eroded entirely over the course of the year? A few possibilities:

Is subsidized enrollment in the ACA marketplace really up since 2016?

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CMS's report on long-term enrollment trends in the ACA marketplace released this week emphasized the 40% drop in unsubsidized enrollment from 2016 to 2018. But the counterpoint came as something of a surprise: subsidized enrollment, according to CMS, is up since 2016.

If you look at the most often cited enrollment numbers for each year -- total plan selections reported by CMS annually at the end of the open enrollment season  -- total subsidized enrollment is down substantially -- 7.1% from 2016 to 2018, and 7.7% from 2016 to 2019. But average monthly enrollment was higher in 2018 than in 2016 -- and probably will be slightly higher this year.

It might appear that retention has improved -- more people stay in their plans for more of the year. But that's not clear, as average monthly enrollment in 2018 is not quite the same measure as in years prior.  Let's look at the numbers:

ACA marketplace enrollment is down at low incomes as well as at high ones

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[Update, 8/15: CMS data on average monthly enrollment in each year appears to suggest that apparent year-over-year enrollment drops among the subsidized as of the end of Open Enrollment may have evaporated (in 2018, and perhaps 2019) as the year progressed. See this post.]

CMS is out with a report highlighting, not to say gloating over, a steep decline in unsubsidized enrollment in the ACA-compliant individual market from 2016 to 2018.  Nationally, while subsidized enrollment was up 1.3% in that period, unsubsidized enrollment crashed 40%, from an average monthly enrollment of 6.27 million in 2016 to 3.77 million in 2018.

That's not surprising, given premium increases averaging 21% in 2017 and 26% in 2018, and the obvious fact that the ACA marketplace was under-subsidized from the start and essentially unaffordable for many people with incomes modestly above the 400% FPL subsidy cutoff, as Urban Institute scholars Linda Blumberg and John Holahan pointed out in 2015:

Here I'd like to add a corollary: Enrollment since 2016 has declined not only at the top of the income scale, among those with incomes above 400% FPL, but at the bottom, among those with incomes up 200% FPL. It's shifted toward the upper end of subsidy eligibility, into the 200-400% FPL income range. The percentage of enrollees with incomes in that range has risen from 29.5% in 2016 to 34% in 2019 in HealthCare.gov states, and from 40.4% to 44.1% in California.

Subsidy-eligible, but unsubsidized

Updated 1/22 with California discussion corrected - please see note 2 at bottom.

Reading about Gallup's latest finding that 3.2 million more Americans were uninsured in 2017 than in 2016, I wondered about a particular (small) group of ACA marketplace enrollees: those with incomes in subsidy range who are nevertheless unsubsidized. Such people might be expected to have a particularly hard time with the steep premium increases of 2017 (not to say 2018 and 2019), as premiums take a huge share of their income.

I wanted to look at this group because Gallup's findings raised some riddles. Gallup found the sharpest increases in the uninsured among people with incomes under $36,000 -- but also found no change in the percentage of people insured by Medicaid. Among types of insurance obtained, the sharpest drop was among those who say they bought their own insurance (although Gallup's numbers for this population are weirdly inflated).  In the ACA marketplace the large majority (84%) who obtained premium subsidies were largely insulated from the year's steep premium hikes -- though reduced competition may have made choices less viable for some. Overall,  marketplace enrollment was down about 5%, or 500,000 in 2017.

The drop in off-marketplace individual market enrollment was doubtless steeper.  But most of those who buy off-exchange are presumably more affluent. It doesn't all seem to quite add up -- hence my interest in the almost invisible low-income unsubsidized individual market enrollees.

Subsidized ACA marketplace enrollment ROSE 2% in Maryland in 2018

ACA marketplace enrollment in Maryland for 2018 was down only slightly (2.6%) in 2018 That's a strong performance, as I noted earlier this week, "given the shortened enrollment period, radically cut federal funding for enrollment outreach and advertising, and general confusion generated by administration sabotage."

I also speculated that the drop-off may have been concentrated in unsubsidized prospective enrollees -- the only ones materially hurt by the state's enormous premium spikes (which actually benefited subsidized enrollees by inflating subsidies).  That is in fact the case.

In 2018, 32,171 enrollees in on-exchange private plans in Maryland were unsubsidized, according to numbers sent to me by the Maryland Health Connection (the state's ACA marketplace). That's out of 153,584 total enrollees (21%). In 2017, as of the end of Open Enrollment, 38,903 were unsubsidized out of a total of 157,832 enrolled (25%), according to Public Use Files published by CMS.*

That is, subsidized enrollment for 2018 was up about 2% -- to 121,413, compared to 118,928 in 2017. That jibes with the Maryland exchange's reporting that African American enrollment was up 12%, Hispanic enrollment up 10%, and rural enrollment up about 10%.