Well, Ezra Klein, Republicans may not have "plan" to save insurance markets after King. But they may deal

Republican Senators Orrin Hatch Lamar Alexander John Barrasso are out today with a lightly sketched "plan" to salvage premium subsidies credited through the ACA's federal exchange if the Supreme Court rules for the plaintiffs in King v. Burwell.  The proposal closely resembles the  possible post-King negotiation that former HHS Secretary Michael Leavitt outlined to me. Here's Hatch et al:

First and most important: We would provide financial assistance to help Americans keep the coverage they picked for a transitional period. It would be unfair to allow families to lose their coverage, particularly in the middle of the year....

Second, we will give states the freedom and flexibility to create better, more competitive health insurance markets offering more options and different choices. Republicans understand that what works in Utah is different from what works in Tennessee or Wyoming. We want to give states the time and flexibility to design health-care systems that work for them, not for the bureaucrats in Washington.

People who live in states that have state exchanges will continue to be subject to Obamacare’s costly mandates and rules, along with the subsidies. But their states could also have the benefit of our solution. Every state would have the ability to create better markets suited to the needs of their citizens.

And here's Leavitt last week:

Republican can do what they will to American healthcare -- by accepting the Affordable Care Act

Ask Republicans how they will reform the health insurance market if they succeed in repealing the Affordable Care Act and you will not get a substantive "replace" plan. You will, however, hear three desiderata: 1) give states more control of their insurance markets; 2) give insurers more freedom to design plans outside ACA-imposed constraints; and 3) give consumers in the individual insurance market more choice (though the ACA marketplace shelves in most regions at present are not what you would call bare).

If Republicans were sincere about changing the market in this direction, they would have enormous leverage to do so, both by working within the ACA's essentially federalist (or "state-deferential") structure and by negotiating changes to the law that Democrats would surely accept in exchange for an end to dead-end opposition.

Let's count the ways that Republicans in state government and Congress could shape the health insurance markets to their liking, starting with the tamest and moving toward the most aggressive.

Three signs the ACA private plan marketplace is working

Over at healthinsurance.org, I've noted them: 1) more "active renewals" than expected; 2) relatively low churn; and 3) a high level of takeup for Cost Sharing Reduction (CSR) subsidies -- that is, silver plan selection by buyers with incomes under 200% of the Federal Poverty Level. My takeaway:

Many healthcare professionals and scholars worry that a market providing choice from a large selection of private health plans with a complex array of features and coverage rules offers too much complexity for typical buyers, most of whom are on the lower end of the income scale.

King v. Burwell and Congress v. P5 + 1

Reading friend-of-the-hawks reporter Josh Rogin's account of the difficulties Obama may have getting Iran to agree to a deal that bypasses the U.S. Congress, and so could be overturned by a future (GOP) president, I was reminded of GOP demands that the administration float "contingency" plans in case  the Supreme Court destroys the Affordable Care Act by ruling for the plaintiffs in King v. Burwell.

In both cases, bad-faith opposition to vital and viable policy, the product of immense collective effort and years in the making, may well succeed. In both cases, the saboteurs are demanding a collaboration they've rendered impossible.

Gallup misreads its state ACA data: state-run marketplaces no better at reaching uninsured

Gallup does a great service in tracking the decline in the uninsured rate state-by-state since ACA implementation. But they draw a misleading conclusion from their latest data set:

Collectively, the uninsured rate in states that have chosen to expand Medicaid and set up their own state exchanges or partnerships in the health insurance marketplace declined significantly more last year than the rate in states that did not take these steps. The uninsured rate declined 4.8 points in the 21 states that implemented both of these measures, compared with a 2.7-point drop across the 29 states that have implemented only one or neither of these actions.

In fact, the superior overall performance of these states in reducing un-insurance is due entirely to the Medicaid expansion. Collectively, their exchanges did not perform particularly well with regard to enrolling subsidy-eligible residents in private health plans.

Compare Gallup's chart highlighting state leaders in reaching the uninsured population by both means (Medicaid and private plans) with the Kaiser Family Foundation's snapshot of states that reached the highest percentage of subsidy-eligible private plan buyers. [Update: The initial comparison is of uninsured rates from poll data taken by Gallup throughout 2014 with Kaiser's up-to-date ranking of performance in the QHP market (through 2/15/15). Kaiser's 2014 ranking appears at bottom.]

Michael Leavitt envisions a post-King negotiation to amend the ACA

If the Supreme Court upholds the plaintiffs in King v. Burwell and thus cripples the ACA exchanges in three quarters of the states, what then? Neither side is talking about how they might compromise to avoid de-insuring 7 million Americans and crippling the insurance market. But Michael Leavitt -- former HHS Secretary under George W. Bush, former 3-term governor of Utah, current CEO of an eponymous healthcare consultancy -- goes there, in an interview with me, now up on healthinsurance.org. Here's the core of what he envisions:

[A] possibility would be to take the current subsidy structure, but allow people who qualify for a subsidy to get it not just in a state exchange but in a private exchange that may be authorized by the state. Multiple private exchanges might begin to pop up. You’d end up with  a competitive marketplace with many more exchanges and lots more innovation.

I hope you'll read the whole thing.  And then, perhaps, a prior interview I conducted with Leavitt last June about the scope for state innovation in healthcare that the ACA does provide. And while you're at it, a  January 2014 Leavitt interview with Julie Appleby of KHN in which he expressed considerable empathy for the HHS officials trying to get the ACA implemented.

P.S. My own take on conservative demands for less regulation and more "innovation" in health insurance, probably inspired in part by this interview (though more immediately by Ross Douthat's column on conservative policy proposals), is in the prior post.

Conservative reform of the ACA: cutting strings at different ends

When those few conservatives who would genuinely like to see affordable health insurance available to all Americans -- and the many Republican office holders who pretend to -- float alternatives to the Affordable Care Act, they talk about making insurance more affordable, about offering more choice and flexibility to insurers and hence to customers.

Giving insurers more flexibility generally means three things. First, reducing or eliminating the ACA's federally mandated Essential Health Benefits (EHBs) -- which include mental health, drug treatment, childbirth and children's dental coverages that many people might plausibly protest they don't need. Second, allowing sale of plans with lower actuarial values -- the percentage of the average user's annual medical costs paid by the plan -- than the ACA allows. The law sets a floor of 60% AV in both the employer and individual markets and, in the exchanges, establishes silver-level 70% AV plans as the benchmark to which subsidies and Cost Sharing Reduction subsidies (boosting AV for lower income buyers) are tied. Third, widening the allowable price variation according to the plan holder's age and allowing price variation according to sex.

There's much less here than meets the eye.

Obama's seductive love for America

The irony in this "Obama doesn't love America" crap is that Obama got himself elected by holding up  to Americans a flattering mirror that was suited to the moment.

The national narrative that Obama put forward in 2007/8 had two salient points (okay, may it had three or four or five, but two come to mind here). It was, first, a bid to move the political center to the left -- to cast American history as a progression in which Americans at various crux points demanded and obtained new common investments in shared shared prosperity and new extensions of equal opportunity to an ever-widening and more inclusive circle -- African Americans, women, gays. In Obama's telling, the nation had veered off-course for eight or thirty years, but democratic self-correction was also part of the long historical pattern and would come with him.

That's a kind of "whig history" for America, and it resonated in the wake of a disastrous conservative presidency.  It was also a message essentially common to all Democrats and would have worked for almost any Democrat.

The real contest in 2008 was in the Democratic primary, and perhaps Obama beat Hillary by making this whig history sing, tapping a deep American mysticism previously tapped by Lincoln and -- somewhat more caustically -- by Martin Luther King. This second element was captured by Obama's "more perfect union" trope.  That is: America's founding documents expressed principles for the best ordering of human society, and while the nation has never lived up to these ideals, its democratic engine draws it ever closer -- ever more perfect, never perfected. Those ever-widening circles of inclusive opportunity are bending the arc of history toward justice. Martin Luther's famous "check" of equal opportunity, returned for insufficient funds, is being paid on a very long mortgage schedule.

The disappearing shoparound on Healthcare.gov

While enrollment figures in the ACA's first open season ultimately exceeded expectations, a disturbing number of those who remained uninsured remained ignorant of federal aid that would make insurance affordable for most of them. A McKinsey & Co survey conducted in April 2014 found that two thirds of subsidy-eligible respondents who'd tried to use Healthcare.gov and cited unaffordability as the reason they remained uninsured were unaware that they were eligible for subsidies. In a more recent Kaiser Family Foundation survey, almost half of still-uninsured respondents who said they were "told" they were ineligible for aid appeared to be aid-eligible at the time of the survey (a few months later).

While there are many ways that an applicant in Healthcare.gov or the state exchanges could get that false impression, it would appear that a well-designed, prominently placed "shoparound" feature could go a long way toward remedying the problem. Healthcare.gov has such a feature, and it's pretty easy to use. Punch in your zip code, the number of members of your household with their ages, and your annual income, and within a minute of starting you get a complete list of available plans with subsidy-inclusive prices. That is, you very quickly know the least amount you can pay as a monthly premium (or if you're likely to be eligible for Medicaid) -- that is, if you accurately estimate your income. There's a lot still to figure out -- but you're not likely to be slapped with the full sticker price and think that you're on the hook for all of it, as may have happened to many people who started an application and somehow disqualified themselves for a subsidy while applying (e.g., by saying that they did not plan to file a tax return).

Healthcare.gov did put up a shoparound in the first open season, but it wasn't fully functional until December, and even then it was easy to miss if you weren't looking for it. Therefore I rejoiced when, in the runup to the second open season this November, the new and improved shoparound was one of just two buttons on the home page, labeled "see plans and prices."

That was then. In the course of open season, the shoparound faded from view. By February it was three pages deep.  Its use declined accordingly. In its weekly enrollment summaries, HHS tracked "window shopping Healthcare.gov users" as well as overall site visitors.   Here's three snapshots:

The case against King, by Scalia, Kennedy et al

The plaintiffs in King v. Burwell claim that the ACA's creators intended to coerce states into setting up their own exchanges by authorizing state-established exchanges alone to credit subsidies to buyers -- denying that power to the backup federal exchange.

In response to this manifestly absurd assertion of intent, the law's supporters have pointed out that no one involved in the law's design, passage or implementation understood such coercion to exist; that laws that make federal grants to the states conditional on specific state action invariably spell out the consequences of non-participation; that the ACA's clear intent is to provide near-universal coverage; and that the ACA's core provisions were designed to be interdependent, so that denying subsidies to residents of some states would render the law inoperable.

On  all of these points, no participant has been so eloquent as the four dissenting Supreme Court justices in NFIB v. Sebelius, the suit challenging the law's constitutionality, who asserted that the entire law should be struck down.

In their dissent, Justices Scalia, Kennedy, Thomas and Alito argued repeatedly that to strike down any core provision -- e.g., the individual mandate or the Medicaid expansion -- was to thwart the intent of the law's creators and render the remaining parts of the law unworkable -- hence the imperative to strike down the whole law.

Abbe Gluck has highlighted the dissenters' most direct assertions of interdependence of parts, laying particular stress on their observation that the law's "system of incentives collapses if the federal subsidies are invalidated" because without the subsidies, "the exchanges would not operate as Congress intended and may not operate at all" (dissent, p. 60).

Equally striking is the dissenters' argument that making the Medicaid expansion fully voluntary, as the Court majority did, would also thwart Congress's manifest intent to provide universal coverage and would thus render the entire scheme unworkable.

No, Clinton and Frist, ACA marketplace coverage will not render CHIP unnecessary

In an otherwise eloquent plea by Hillary Clinton and former GOP Senate majority leader Bill Frist for Congress to renew funding for the Children's Health Insurance Program (CHIP), one paragraph brought me up short. It's not strictly speaking inaccurate, but it resorts to a shorthand that, in the way of 750-word op-eds, leaves a misleading impression:

Of course, the American health care landscape has changed significantly since CHIP started. Under the Affordable Care Act, many families with children are now receiving financial help to enroll in private health coverage through the new health insurance marketplace. But while it is possible that private, family-wide policies offered by employers and marketplaces may one day render CHIP unnecessary, for now substantial gaps still exist — and too many children can still fall through them.

In fact, the ACA puts the kids in CHIP in most families in which the adults qualify for private-plan premium subsidies. CHIP eligibility operates independently from adult eligibility for subsidized private plans or Medicaid under the ACA.  Every state sets its own eligibility for CHIP, ranging from 170% of the Federal Poverty Level (FPL) in North Dakota to 405% FPL in New York. The median eligibility is 255% FPL (see this Kaiser Family Foundation chart).

Love in the time of Obamacare

Ah, mid-February, when love and ACA open enrollment both come to climax. Tis the (second annual) season for #Healthpolicyvalentines:

Affordable insurance?
I don't have any.
You are my only
Essential Health Bennie.

        *     *     *

I've turned 26
But what does my Mama care?
She knows I'll stay covered
Thanks to Obamacare.

      *     *     *

Bronze plans are skimpy,
Golds rake your bucks in.
Silver is sweet
with Cost-Sharing Reduction.

     *     *     *

Obama soft-focuses our domestic ills

I usually find Obama interviews, especially long ones, reassuring. His understanding of issues is nuanced and multi-tiered. But his responses to Ezra Klein's questions about domestic issues and trends struck me as disappointingly unfocused, or off-focus, on several fronts. For example:

1. Asked about the causes of growing inequality, he back-loaded labor law:

Now, there are a whole bunch of reasons for that [stagnant middle class wages]. Some of it has to do with technology and entire job sectors being eliminated — travel agents, bank tellers, a lot of middle management — because of efficiencies with the internet and a paperless office. A lot of it has to do with globalization and the rest of the world catching up. Post-World War II, we just had some enormous structural advantages because our competitors had been devastated by war, and we had also made investments that put us ahead of the curve, whether in education or infrastructure or research and development.

Hey, HHS, you're boasting about the wrong metric

If you read the inimitable Elisabeth Rosenthal's account of unhappy ACA plan holders this weekend, you know that high deductibles and out-of-pocket costs are one serious weakness of the coverage offered to many buyers on ACA exchanges.*

One mitigating factor is that most buyers with incomes under 200% of the Federal Poverty Level get Cost Sharing Reduction (CSR) subsidies that strongly reduce deductibles and maximum out-of-pocket costs, to levels superior to those offered by most employer-sponsored plans.  CSR is only available with silver plans, but as I've labored to deduce, best evidence suggests that over 80%** of buyers with incomes under 200% FPL do buy silver, resisting the temptation of lower-premium bronze plans that would leave them on the hook for huge out-of-pocket (OOP) costs.

Given this partial success, I find it baffling that all of HHS' reports of enrollment data are written as if nothing matters but premium -- the lower the better. The report released today boasts:

Narrow networks: a painful of tourniquet on a bleeding healthcare system

Stories of bad buyer experiences with ACA exchange plans often induce me to push back a bit. I can't do that with Elisabeth Rosenthal's laser strike on patients' troubles with ACA plans' narrow networks and mazes of separate copays and coninsurance for different procedures.  Rosenthal is too nuanced, too thorough with context, and too precise in her accounts of buyers' experiences to quibble with. A sampling:

Alison Chavez, 36, who is self-employed, signed up for a marketplace plan in October 2013 that she hoped would be an improvement on her previous plan. She had recently been given a diagnosis of breast cancer and was just beginning therapy, so she was careful to choose a policy on the Covered California marketplace that included her physicians.

But in March, while in the middle of treatment, she was notified that several of her doctors and the hospital were leaving the plan’s network. She was forced to postpone a surgery as she scrambled to buy a new commercial policy that included her doctors. “I’ve been through hell and back, but I came out alive and kicking (just broke),” she wrote in an email

Sail on, Sullydish

I have had a hard time getting my thoughts and feelings together since Andrew Sullivan announced the shuttering of the Dish, happening tomorrow. Like many, I imprinted what political blogging was in large part from Andrew; my own blog grew in part out of interior response -- often opposition -- to  the Dish. As many have noted, one of Sullivan's cardinal virtues is that he will engage with anyone who engages him in good faith -- and will link to anyone he thinks worth reading. Because of that openness, I've been privileged to keep up a running dialogue with him -- here, on the Dish, and via email.  Because the two-way dialogue is real, it always continues for me solo when I read the Dish, and that's what I'll really miss.

Obviously I'm not alone. The Dish crew has had fun with a flood of farewell reader mail this last week. One curated outpouring brought this raucous parting to mind:

“But the wild things cried, “Oh please don’t go - we’ll eat you up - we love you so!”
And Max said, “No!”
The wild things roared their terrible roars and gnashed their terrible teeth and rolled their terrible eyes and showed their terrible claws but Max stepped into his private boat and waved goodbye.”

Image here.


So sail on, Sullydish. I trust we''l hear from Chris, Patrick et al soon, and elsewhere. As for Andrew, after a longish or shortish hibernation I trust he'll yawn awake when the skies clear and grow lank with longing to re-engage the world..  

Yes, Ta-Nehisi Coates, it's good to be right

The Twittersphere -- at least, my Twittersphere -- is widely commending Ta-Nehisi Coates' tribute to Andrew Sullivan.  I can sort of see why -- it captures what Andrew himself has often presented as his core virtue -- but it also seems to me to be based on a perverse premise.

Back when I started blogging, there was an annoying premium on "public smartness" and "being right" among pundits, journalists, and writers. Likely, there is still one today. The need to be publicly smart and constantly right originates both in the writer's ego and in the expectation of incurious readers. The writer gets the psychic reward of praise—"Such and such is really smart" or "Such and such was 'right' on Libya." And the incurious reader gets to believe that there is some order in the world, that there is a stable of learned (mostly) men who will decipher the words of God for them. The incurious readers is not so much looking for writers, as prophets.

Too many aid-eligible ACA applicants say they were "told" otherwise

A Kaiser Family Foundation survey of 10,000 low- and moderate-income Americans conducted last fall finds, disturbingly, that half of those who say they were "told" that they did not qualify for government help obtaining coverage do appear to have in fact been eligible.

It's not entirely clear what respondents meant when they said they were "told" they did not qualify for aid. Many apparently sought outside help.  But it's all too easy to get a "false negative" from the exchanges themselves -- and ACA master navigator Kate Kozeniewski detailed for me several ways this could happen. My writeup is at healthinsurance.org;  a sampling of Kate's list is below. Note that the weak points extend in part to the phone hotline: in Kate's experience, you have to get a supervisor to deal with issues of any complexity.

1. No tax return/no subsidy: At the very outset, Healthcare.gov asks whether the applicant plans to file a tax return – which many people who earn too little to owe income tax habitually do not do. If you click “no,” however it’s “no subsidy for you,” Kozeniewski notes ruefully. There is no warning about this – if you say that you’re not going to file a tax return, you simply move on through the application, and learn at the end that you are ineligible for help paying for coverage.
2. Married? Then file jointly: If you’re married and file separately, you’re not eligible for subsidies. Here too, the website does not warn you that you’re forfeiting subsidies if you put down that you file singly. Kozeniewski has seen a surprising number of single filers. “It seems there’s a decent number of people estranged from their partners who have not gone through the steps of getting a legal divorce. We also see immigrants whose spouses are living in another country. There’s even a fair amount who are married and living in the same household, but who file separately for whatever reason.”

Read the rest here.

The real world case against King: Should the Supreme Court impose "risks and uncertainties" on U.S. economy?

Leave aside for a moment the frankly ridiculous question of whether the text of the ACA authorizes premium subsidies to flow through the federal exchange. .Timothy Jost, surveying 30 amicus briefs filed to support the IRS' reading of the law to that effect, first covers those primarily engaging with the text of the law then turns to those from stakeholders that detail the real-world effects of gutting the ACA.

A note before looking at Jost's powerful survey of these pleadings. Some would argue that these real world effects are immaterial: either the law authorizes subsidies to be credited through Healthcare.gov or it doesn't. As I noted once before, though, the conservative justices who dissented against  the 2012 decision that upheld the constitutionality of the ACA  demonstrated their sensitivity to the real world effects of Supreme Court decisions in that very dissent.

Justices Scalia, Kennedy,Thomas and Alito argued that since the individual mandate was unconstitutional the whole law must be struck down because all its key provisions were interdependent and many of them would wreak economic havoc if left to operate with a core provision removed.  They were quite specific about the potential consequences of disfguring the law without killing it:

When employers drop coverage: Two brokers' perspectives on the individual market in the ACA era

I am shopping an article (update - it's up on SHRM.org) that looks at how small businesses that provide employees with health insurance are coping with the steady rise in costs -- slower since 2010 than in the five years preceding the passage of the ACA (coincidentally or not), but still relentless.

Below is an outtake. Two brokers spoke to me about their experiences helping individuals navigate the ACA exchanges or the off-exchange individual market after their employers stopped offering coverage . I decided that this topic didn't fit the scope of the main article, so here it is.

Roger Howell, president of Howell Benefit Services in Wilkes-Barre, PA, says that while most of his small group clients have renewed, a steady trickle drops coverage every year. When clients do drop coverage, they often hire his brokerage to help employees navigate the ACA exchange or the off-exchange individual market. He is troubled by the complexity of choices facing employees who are often accustomed to simply enrolling in their employer's plan.

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...

Will Republicans now learn to hate Medicare payment reform?

HHS and CMS yesterday announced a major expansion of efforts to move Medicare payments away from fee-for-service and toward so-called value-based and bundles payments. The ACA seeded this effort with a host of pilot programs, and the administration is looking to build on the momentum generated, as HHS Secretary Sylvia Burwell writes in the New England Journal of Medicine:

As we work to build a health care system that delivers better care, that is smarter about how dollars are spent, and that makes people healthier, we are identifying metrics for managing and tracking our progress. A majority of Medicare fee-for-service payments already have a link to quality or value. Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018. Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients. This is the first time in the history of the program that explicit goals for alternative payment models and value-based payments have been set for Medicare.

One worry about this initiative: phasing out fee-for-service has until now been a bipartisan goal. A bipartisan "doc fix" bill to update and reform the Medicare payment structure foundered only the question of how to pay for it - necessary because the status quo baked an unsustainable "Sustainable Growth Rate," established in 1997 and "patched" with a payment hike every year, into long-term budget projections.  The doc fix would have transitioned doctors to payments based on "performance scores" and, like the HHS/CMS initiative, encouraged formation of ACOs, medical homes and other structures purporting to foster coordinated care.

The ACA provision that should kill King, updated

[Update, 1/23: The ACA provision discussed below, which directs the federal as well as state exchanges to report to the Treasury tax credits provided to ACA private plan buyers, is treated in full in the government's respondents' brief against the King plaintiffs. The relevant paragraphs from the brief are posted at bottom.]
-----
July 29 - Ever since a three-judge panel of the D.C. Circuit Court found in Halbig v. Burwell that the ACA only authorizes subsidies to be paid for health insurance bought in state-run exchanges, not in state exchanges set up by the federal government, progressive reporters have been ransacking the record to  prove what they always knew: that the law's creators never intended to exclude federally run exchanges from the subsidy regime.  Today, Greg Sargent and Jonathan Cohn both published compelling circumstantial evidence to that effect.

It seems to me, though, that such circumstantial evidence should be unnecessary. The ACA includes a provision that ought to settle the issue -- on that the majority in Halbig egregiously misread. Health law scholar Timothy Jost highlighted the dispositive provision back in September 2011, two months after the IRS issued a rule spelling out that subsidies would be available through the federal exchange (at which point the brains behind the Halbig suit, Michael Cannon and Jonathan Adler, immediately began arguing in print that the IRS rule contradicted the ACA's text). With reference to the drafting error stipulating only that subsidies be credited through an exchange "established by a state," Jost asserted:

 we do not need to rely on the courts to correct this error. Congress corrected it itself.

Four days after Congress passed the Patient Protection and Affordable Care Act, it enacted the Health Care and Education Reconciliation Act of 2010. Section 1004 of HCERA amended section 36B(f) of the IRC to impose on exchanges established under section 1311(f)(3)—that is, state exchanges—and under section 1321(c)—that is federal exchanges, the obligation to report to the IRS and to the taxpayer information regarding tax credits provided to individuals through the exchange. In this later-adopted legislation amending the earlier-adopted ACA, Congress demonstrated its understanding that federal exchanges would administer premium tax credits.

In a subsequent post, Jost noted, "As a later-adopted statute, HCERA would take precedence over PPACA if there were a contradiction."

Bronze ACA plans are skimpy, but compared to what?

As a relative newbie to the wonderful world of U.S. health insurance, I have been troubled by the skimpy coverage of the lowest-tier bronze plans offered on the ACA exchanges. Mandated to cover 60% of the average user's yearly medical expenses (that is, to maintain an actuarial value of 60%), bronze plans carry an average individual deductible of over $5,000.*

On the plus side, only 20% of ACA private plan buyers in 2014 selected bronze plans, most of them probably in higher income brackets. By my estimate, over half of ACA buyers obtained plans with an actuarial value of 80% or higher, including about 90% of buyers with incomes under 200% of the Federal Poverty Level, who accessed Cost Sharing Reduction subsidies by buying silver plans. And while ACA coverage can have troubling limitations, from high deductibles to narrow networks, I just stumbled on information that indicates what an improvement the actuarial mandates constitute.

This 2012 study found that more than half of the health plans sold in the individual market in 2010 had actuarial values of less than 60%, and that 60% was the average AV of all plans sold on the individual market in that year.  Many of the "rate-shocked" holders of canceled individual market plans who hit the news in fall 2013 probably had plans that were skimpier than ACA bronze -- though a fair number may have been happy with plans that had coverage exclusions that did not affect them.

How is the ACA affecting employer-sponsored insurance?

I am working on a reported piece that looks at how employer-sponsored insurance (ESI) is changing and how it compares to insurance offered on the ACA exchanges [update: here it is]. The basic framework is provided by the Kaiser Family Foundation's 2014 Employer Health Benefits Survey.  Here are the premises as they now stand.  Informed input welcome!

1. The ACA has not strongly driven premium increases or cost-shifting to employees in ESI  -- though employers offering more generous plans are  beginning to react to the Cadillac tax, which takes effect in 2018. While premiums, deductibles and out-of-pocket (OOP) expenses have risen steadily, premiums rose more steeply from 2004 to 2009 than from 2009-2014, and deductibles have risen more or less steadily. The phase-out of grandfathered plans that don't comply with ACA coverage rules has meanwhile proceeded steadily; in 2014, just 26% of workers covered by ESI plans were in grandfathered plans, down from 36% in 2013, 48% in 2012 and 56% in 2011.

2. All that said, the constant cost-shifting has hit employees at small firms particularly hard. On average, they pay deductibles almost twice as high as employees of larger firms (an average of $1797 for individual coverage at firms with 3-199 employees, vs. $971 at larger firms). A higher percentage of small-firm employees (3-199 employees) remain in grandfathered plans (35%  vs. 22% in larger firms).

Reagan Revolution rollback

Here's how Matt O'Brien, the Washington Post/Wonkblog economics reporter, characterizes Obama's new tax proposals:

The state of the union is pretty good, actually, but President Obama has an idea to make it better: taxing Wall Street and the super-rich to make middle-class work even more worthwhile. It's Piketty with an American accent.

Okay, that's a little bit of an exaggeration, but not a huge one. Obama's State of the Union, you see, will call for $320 billion of new taxes on rentiers, their heirs, and the big banks to pay for $175 billion of tax credits that will reward work. In other words, it's fighting a two-front war against a Piketty-style oligarchy where today's hedge funders become tomorrow's trust funders. First, it's trying to slow the seemingly endless accumulation of wealth among the top 1, and really the top 0.1, no actually the top 0.001, percent by raising capital gains taxes on them while they're living and raising them on their heirs when they're dead. And second, it's trying to help the middle help itself by subsidizing work, child care, and education.

Stepping back, it's amazing the extent to which Thomas Piketty's tome Capital in the 21st Century, published in the U.S. in January 2014, has focused the U.S. policy debate on income inequality. Some economists have been talking about rising inequality since the 1980s, but Piketty and his colleague Emmanuel Saez have more recently put the spotlight on the very top -- the top 1%, .1% and .01% (they first published major findings pointing that way in 2003, but post-crisis updates have been making news in recent years). The book put the trends on the front pages. Now Democrats, after a rather disastrous pause to protect red-state senators in the 2014 election, are putting inequality front and center in their policy proposals.

Maryland's low income ACA customers benefit from Connecticut's site design

Maryland's ACA exchange was a disaster last year, so the state started over, creating a freely offered clone of the highly successful Connecticut exchange. That's worked out very well.

Charles Gaba reports that Maryland is one of 18 states that have exceeded HHS's goal for private plan enrollments in 2015.  As of January 11, Maryland has enrolled 91,137 residents in private plans, versus 67,757 in the first open season that ended last April.

Equally importantly. the Maryland exchange has strongly boosted the percentage of plan buyers who selected silver-level plans and reduced the percentage that bought bronze -- the lowest level, with deductibles averaging over $5,000 for a single enrollee. In 2014, just 49% of Maryland private plan customers bought  silver, and 31% bought bronze. That's in contrast to 65% silver/20% bronze breakdown in the nation as a whole,and 69%/17% in the 36 states using healthcare.gov.  This year so far, Maryland's silver plan takeup has risen to 61%, while bronze takeup has dropped to 23%.* 

If King is upheld, what will Congress do?

Congressional Republicans, who have promised and failed to come up with a legislative alternative to the Affordable Care Act for five years, are now promising that they will have a replacement ready in case the Supreme Court upholds the plaintiffs  this June in King v. Burwell.  Here's Reuters:

Representative Tom Price, Republican chairman of the House Budget Committee, told a conservative forum that the high court's anticipated ruling in the case known as King v. Burwell could cause President Barack Obama's signature domestic policy to unravel quickly.

"We need to be ready, willing and able to move forward," said Price, a leading Obamacare critic who replaced Wisconsin Republican Paul Ryan as House Budget Committee chairman earlier this year.

“We believe we are going to get to that point. I believe the president is actually going to be open to a better way,” he added.

A ruling for the plaintiff in King would leave the body of the law intact, albeit in a vegetative state. The exchanges would still exist, though they would be completely dysfunctional in the states covered by Healthcare.gov. Governors and legislatures in those states would be responsible either for finding a way to continue to subsidize the premiums of tens or hundreds of thousands of state residents who have accessed coverage through Healthcare.gov, or for justifying the denial of subsidies to those residents.

Because the law would still be on the books, there is nothing to force the administration to negotiate a full "replacement" that would entail repeal (as in "repeal and replace"). That leaves the question: Are there possible amendments that would meet Republicans' alleged policy goals without shredding the ACA's coverage grant?  Under pressure of abruptly withdrawing coverage from 8 million Americans, is compromise conceivable?

Stuck with Billy Pilgrim

When I was very little, I watched all or part of a movie on TV -- I think with a babysitter -- that I remember as a kind of combination western and horror movie. A group of men entered some kind of cave or underground realm that trapped them for (I think...) the movie's duration in a kind of phantasmagoric horror. At the end, they finally get out, and there's a (I think..) long shot of them riding horseback through a (I think...) western landscape.  My companion-babysitter said at that point (I think...) "it's about to start all over again...they're going to go back in," or words to (I think...) that effect.

Two things about the near-static image I have of this film have stayed with me. One is that wormhole notion -- that the unwary protagonists are in a kind of chronological feedback loop, where they keep reliving the same horror over and over without knowing it. There's a Star Trek/Next Generation episode playing on that horror, beginning and ending with a poker round.

The ACA: Good policy, tough politics

Three charts may explain in part why the ACA is working as designed, improving life in America, and hurting Democrats politically.

First, Gallup's latest on the uninsured rate:



Next, an assessment of the redistributive effects of the ACA by Henry Aaron and Gary Burtless (via Bill Gardner) :

In Rhode Island, low-income ACA buyers chose silver

From Rhode Island comes fresh evidence that a very high percentage of lower-income private plan buyers nationwide who bought silver plans, and thus accessed the Cost Sharing Reduction (CSR) subsidies that reduce deductibles and out-of-pocket expenses (CSR is available only with silver plans).

I have been tracking, in states that publish or provide me with the info, the percentage of buyers with household incomes under 200% FPL who bought silver plans, because at under 200% FPL, CSR is really strong. Without CSR, a silver plan is mandated to cover 70% of the average plan holder's yearly medical expenses - that is, its actuarial value is 70%. For buyers with incomes under 150% of the Federal Poverty Level (FPL), CSR raises the AV to 94%. For those with incomes between 150-200% FPL, the AV goes to 87%. For those between 200-250% FPL, it's 73%.

The ACA's invisible deductible discounts

The healthcare Twittersphere was riveted yesterday by Robert Pear's spotlight on Harvard professors up in arms about comparatively modest deductibles and copays added to their excellent health plan.

The main underlying story, as Adrianna McIntyre pointed out, is that cost-shifting to employees is accelerating in employer-sponsored insurance, driven in part by the ACA's Cadillac tax on the most generous plans.

There's a second story, however, in Pear's use of the ACA exchanges as a foil to highlight Harvard employees' relative privilege. Pear contrasted the Harvard plan's 91% actuarial value with that of a silver ACA plan, which he said "typically" covers just 70% of the average user's medical costs. As I pointed out yesterday, only about 20% of silver plan buyers get plans with an AV of 70%. For the rest, income-based Cost Sharing Reduction (CSR) raises the AV -- to 94%, 87% or 73%, depending on the buyer's household income. Available stats indicate that over 60% of silver plan buyers are at the AV 87% or 94% levels.

The broader point here is that the apparent prevalence of high deductibles on the ACA exchanges is somewhat misleading. As has been widely reported, bronze plans single-person deductibles average over $5,000, and silver plans (unenhanced by CSR) close to $3,000. Moreover,if you take a spin on the shop-arounds offered by Healthcare.gov and most state exchanges, the first price quotes you'll see are for bronze plans with deductibles in the $5,000-6,600 range, since available plans are most often displayed sorted by premium, lowest first.

Not quite the Harvard plan, but....

The NYT's Robert Pear reports that Harvard profs are up in arms because a small deductible and copays have been added to the university health plan, taking the actuarial value all the way down to... 91%.

Pear contrasts this to the 70% AV mandated for silver ACA plans, the "most popular" metal level. Which is fine, except...more than half of silver plan buyers qualify for Cost Sharing Reduction (CSR) at a level strong enough to take the AV up to 87% or 94%, depending on income level.

I have a post coming up on healthinsurance.org that teases out of enrollment stats published by New York State and HHS the likely percentages of ACA private plan buyers who access the higher levels of CSR, and the overall percentages of direct ACA beneficiaries who have obtained high-AV insurance.

The broader point: clunky or overly complex as the ACA's subsidy and means-tested benefit formulas may seem, they do work broadly to keep out-of-pocket costs relatively low for low-income beneficiaries.

Hope you'll tune in to the healthinsurance.org piece.

Update: The New York enrollment numbers also show that only 18% of silver plan buyers in the state had no CSR at all. I tend to discount the value of CSR to buyers with income between 200-250% FPL, for whom CSR boosts the silver plan AV to just 73%.  But it's really inaccurate to say that silver plans "typically" cover 70% of costs. That's probably true for less than a quarter of silver plan buyers.

In which Obama rhetorically contains the Islamic State

Remember the brouhaha late last summer over Obama's rapidly evolving language with respect to the aim of military action against the Islamic State? Was the plan that we did not entirely have yet merely to contain the rapidly expanding monstrosity, or rather to "degrade and destroy" it? Over the course of a frenetic couple of weeks, the messaging settled on an implicit extended timeline, in which the administration vowed to "degrade and ultimately destroy" IS. 

The qualifier "ultimately," I noted at the time, became Obama's linguistic tool of choice to bridge the chasm required to build or buy some kind of viable ally or basis for a political solution in Syria -- a process not yet begun. Remember "we don't have a strategy yet"? That was Obama's maladroit way of signaling that U.S. military action in Syria would be limited for want of a viable ally.

In an interview with NPR's Steve Inskeep on Dec. 29, in an almost throwaway subordinated clause, Obama rang a new variation on that formula with the same key qualifier:

And on the international front, you know, even as we're managing ISIL and trying to roll them back and ultimately defeat them...

...and the sentence moved on to Afghanistan. Thus was the problem rhetorically contained in a roundup sentence. But Inskeep, to his credit, didn't leave it there: he returned to the repressed at the very end of the interview. And there Obama bid at once to give the danger its due and, so to speak, contain it within the country's broader to-do list.

Tapped out in Kentucky, cont.

Yesterday, I took a look at what induced David Elson, a 60 year-old advanced diabetic in Louisville, Kentucky earning $28,000 "in a good year,", to sign up for an ACA health plan with a $350 monthly premium. At that income level (which was almost surely overstated), a benchmark silver plan would have cost him about $180 per month. His tale has been recounted in depth twice by Abby Goodnough in The New York Times.

Why sign up for a plan that cost twice as much as the benchmark? The short answer was that Mr. Elson was trying to keep his doctors -- most importantly, his kidney specialist. That locked him into just one provider, Anthem Blue Cross, and the high premium plan he chose was an alternative to cheaper Anthem plans with higher deductibles and copay-coinsurance combinations that may have cost him more. The problem was that it was always obvious that he could not afford that premium -- one of his providers said as much in Goodnough's March 2014 article -- and he never paid it. His kidneys failed this fall, and he ended up first in charity care and then -- as of today, Jan. 1 -- on Medicare.

As I pointed out yesterday, not only an alternative silver plan offered by another insurer but even a handful of gold and platinum plans with lower premiums and deductibles than the one he selected were available to Mr. Elson in 2014. Trying to keep his doctors came at a price he could not pay.

Today I want to look at one more factor that framed the choices faced by Mr. Elson -- prompted once again by commenter Bob Hertz. That's age-rating.

Tapped out in Kentucky: Back story to an ACA hardship case

It's not quite an iron rule, but it's a fair bet: When a newspaper reports an Obamacare hardship tale, involving someone who's bought a private plan that leaves coverage unaffordable, that person bought the wrong plan.

In two front-page stories separated by nine months, one running today, The New York Times' Abby Goodnough has reported the saga of a very sick 60 year-old gentleman, David Elson, who struggles to continue his work installing security systems while suffering from advanced diabetes. In February 2014 Mr. Elson, who says he earns $28,000 "in a good year," somehow ended up enrolling in a health plan with a monthly premium of $350 (after subsidy) and a deductible of $2,600.

There is nothing wrong with the reporting here (in fact it's excellent reporting, nuanced and empathetic). Mr. Elson made the choices described, for the reasons described below. Newspaper space is not infinite. Nonetheless, anyone familiar with the ACA subsidy scale could tell at a glance that he was paying more than he should -- and, as one of his caregivers noted back in March, more than he could afford.

On bronze-smithing the ACA

A couple of days ago I wrote about three conservative ways to change the ACA that would arguably increase viable options for individuals, insurers and (in one case) employers.  It occurs to me that a common thread runs through them all, and that thread may be twined round the heart of a system as invested as ours is in private enterprise, choice and competition.

Here are the three proposals:

1) Allow Cost Sharing Reduction (CSR) subsidies, currently available only with silver plans, to attach also to bronze plans, maintaining a proportionate difference in actuarial value between bronze and silver plans.

2) Allow smaller employers, or possibly even all employers, to fulfill the employer mandate by fully funding employee HSAs linked to HSA-qualified plans available on the ACA exchanges.

How conservatives might amend (rather than destroy) the ACA

The Affordable Care Act is by any rational assessment a conservative plan to expand access to healthcare -- relying in large part on private insurance and competition, devolving oversight and insurance industry supervision to the states, and imposing fiscal 'responsibility' on individuals with incomes as low as 138% of the Federal Poverty Level to contribute to the cost of their healthcare.

Yet conservatives complain bitterly that the private market is not free (i.e., to exclude benefits now deemed 'essential'); that the states are commanded to administer within a federal straitjacket; that the employer mandate will choke off job growth; and that the individual mandate is an unconstitutional impingement on personal liberty.

Looking back at a year of blogging about the ACA's increasingly successful implementation, it occurs to me that I've addressed three possible changes to the law that could reasonably be called conservative. Two increase viable consumer choice within the exchanges; one takes seriously the possibility of replacing the individual mandate, and one would loosen or perhaps partially replace the employer mandate.

Here they are:

New data: health exchange design matters

Why was there such huge variation among states in the proportion of ACA private plan buyers in the first open season who bought bronze plans -- the plans with the lowest premiums and highest deductibles and copays? In Hawaii, 41% of ACA shoppers bought bronze; in Mississippi, 8% did.

Part of the answer, as I've noted before, lies in a state's relative levels of wealth and health. Lower income buyers are eligible for generous Cost Sharing Reduction (CSR) subsidies that reduce deductibles, co-pays and yearly out-of-pocket (OOP) maximums -- but only if they buy silver plans.

Fortunately, most did. If you're sick and poor, a $6,000 deductible is likely to give you pause -- even if the plan is all but free and you don't come in knowing what a deductible is. On Healthcare.gov, only 15% of buyers eligible for any kind of subsidy bought bronze. The percentage is probably considerably lower among those eligible for strong CSR subsidies -- that is, buyers with incomes under 200% of the Federal Poverty Level (data from states that broke out metal level selection by income band, cited below, suggests as much).

Another factor plainly has a strong impact, though, and may account for some wealth/health anomalies in state performance. That's website design. In Connecticut, which had a 2013 median household income of $67,781, second highest in the nation, just 16% of all buyers in the first open season selected bronze. In Colorado, with a median income of $63.371, 40% bought bronze.

That's doubtless because the Connecticut site shows CSR-eligible applicants silver plans first; that is, the menu of plans available to a given user defaults to silver, both in the pre-application "shop-around" feature and in the actual application. The Colorado site, in contrast, does next to nothing to steer CSR-eligible buyers toward silver. The shop-around is cumbersome; the filter by metal level is hard to find (at the bottom of the screen, and you have to scroll back up to activate it). Perhaps more importantly, unlike on Healthcare.gov, applicants who qualify for CSR and make a move to buy a bronze plan receive no warning that they're leaving benefits on the table.

New data from Connecticut

The strongest evidence of the impact of site design comes from data about the choices of buyers with household incomes below 200% FPL (CSR is available but much weaker for those between 200-250% FPL). HHS did not provide this information for the 36 states that used Healthcare.gov in the first open season, and neither did most states. Colorado did, however, and so did New York (median 2013 household income $53,843).  And now, Access Health Connecticut has provided me with CT numbers for the current open season, which began on November 15.

Employers, HSAs and the ACA

Jay Hancock at Kaiser Health News reports that significant numbers of small businesses may stop offering health insurance to their employees, sending them instead to the ACA exchanges. This could be a good thing for employees who earn little enough to qualify for strong ACA subsidies -- win-win for employer and employee at the federal government's expense.

According to the Kaiser Family Foundation, small employers in 2014 paid an average of nearly $5,000 for solo coverage and a bit more $10,000 for a family premium. What if an employer wants to compensate employees for dropping a benefit that constitutes such a large share of their compensation?  There's a problem with straight salary increases: they reduce employees' ACA subsidies and so give a portion of the extra income back. At healthinsurance.org, I examine three scenarios in which a pay hike worth about 70% of a typical employer premium contribution triggers subsidy reductions ranging roughly from about 25-- 80%.

An employer who really wants to help employees can avoid this problem by getting creative about compensation.  One striking way to do so would be to fully fund Health Savings Accounts (HSAs) that employees can use with HSA-qualified plans on the exchanges. Here's how I described the possibility in the healthinsurance.org piece:

Health exchange design has a clear impact on metal level choices

[New data from Connecticut: please read updated version of this post here.]

Why was there such huge variation among states in the proportion of ACA private plan buyers who bought bronze plans -- the plans with the lowest premiums and highest deductibles and copays? In Hawaii, 41% of ACA shoppers bought bronze; in Mississippi, 8% did.

Part of the answer, as I've noted before, lies in a state's relative levels of wealth and health. Lower income buyers are eligible for generous Cost Sharing Reduction subsidies that reduce deductibles, co-pays and yearly out-of-pocket (OOP) maximums -- but only if they buy silver plans. Fortunately, most did. If you're sick and poor, a $6,000 deductible is likely to give you pause -- even if the plan is all but free and you don't come in knowing what a deductible is. On Healthcare.gov, only 15% of buyers eligible for any kind of subsidy bought bronze. The percentage is probably considerably lower among those eligible for strong CSR subsidies -- that is, buyers with incomes under 200% of the Federal Poverty Level.

Another factor plainly has a strong impact, though, and accounts for some wealth/health anomalies. That's website design. In Connecticut, which has a median household income of $67,8k, second highest in the nation, just 16% of all buyers selected bronze. In Colorado, with a median income of $63.4k, 40% bought bronze.

That's doubtless because the Connecticut site shows CSR-eligible applicants silver plans first; that is, the search results default to silver (at least they do in the pre-application shop-around feature; I've been trying to confirm that they do in the actual application process). [UPDATE: an Access Health CT spokesperson has confirmed that the actual application also defaults to silver for CSR-eligible users.] The Colorado site, in contrast, does next to nothing to steer CSR-eligible buyers toward silver. The shop-around is extremely cumbersome; the filter by metal level is hard to find (at the bottom of the screen, and you have to scroll back up to activate it); and unlike on healthcare.gov, applicants who qualify for CSR and make a move to buy a bronze plan receive no warning that they're leaving benefits on the table.

Scalia researched torture's efficacy by watching "24"

Antonin Scalia reacted* to the Senate torture report with a defense of torture, as reported by the AP*:

"Listen, I think it's very facile for people to say, 'Oh, torture is terrible.' You posit the situation where a person that you know for sure knows the location of a nuclear bomb that has been planted in Los Angeles and will kill millions of people. You think it's an easy question? You think it's clear that you cannot use extreme measures to get that information out of that person?" Scalia said.

That jogged a memory. What planted this scenario in Scalia's mind? Hark back to June 2007, via the Wall Street Journal Law Blog:

The Globe and Mail reported that Scalia came to the defense of Jack Bauer and his torture tactics during an Ottawa conference of international jurists and national security officials last week. During a panel discussion about terrorism, torture and the law, a Canadian judge remarked, “Thankfully, security agencies in all our countries do not subscribe to the mantra ‘What would Jack Bauer do?’ ”

Justice Scalia responded with a defense of Agent Bauer, arguing that law enforcement officials deserve latitude in times of great crisis. “Jack Bauer saved Los Angeles . . . . He saved hundreds of thousands of lives,” Judge Scalia reportedly said. “Are you going to convict Jack Bauer?” He then posed a series of questions to his fellow judges: “Say that criminal law is against him? ‘You have the right to a jury trial?’ Is any jury going to convict Jack Bauer?”

Obama: Drop that "Plans for under 100!" pitch

Hey, Mr. President: you may have the right audience here. But you have partly the wrong message:

Obama appeared Dec. 8 on Comedy Central’s “The Colbert Report,” where he took the place of host Stephen Colbert for a regular segment called “The Word” -- retitled “The Decree” for his appearance -- to pitch enrollment to young viewers.

“Most young people can get covered for less than $100,” Obama said, using lines purportedly meant for Colbert. “How is the president going to get that message out to the kids? 

The administration really needs to take down this "plans for under $100!" banner. Here's why: if an adult under age 35 has an income low enough to get a plan with a premium under $100, she almost certainly qualifies for Cost Sharing Reduction (CSR) subsidies that reduce deductibles and copays -- but only if she buys a silver-level plan. Keeping the premium under $100 for a single person in many cases means buying a bronze plan -- and the average deductible on a bronze plan is over $5,000.

Forecast: A lot more Pennsylvanians will buy bronze plans in the ACA marketplace in 2015 than in 2014

Here's a prediction: the percentage of ACA private plan buyers in Pennsylvania who select bronze plans -- the lowest metal level, with the lowest monthly premiums and the highest deductibles -- is going to shoot up in 2015.

In 2014, among states with the lowest percentages of bronze plan buyers in the ACA marketplace, Pennsylvania was something of an anomaly.

Is Medicaid expansion reducing SSI claims? If so, an uninsured diabetic in Tennessee called it

There is some evidence that the ACA's Medicaid expansion may be reducing claims for Supplemental Security Income (SSI). While such claims are dropping across the US as employment picks up, they're dropping somewhat faster in states that opted in to the ACA Medicaid expansion Modern Healthcare's Virgil Dickson reports:

The number of Americans applying for Supplemental Security Income benefits dropped in the first six months of this year compared to the same period last year, and experts are debating whether the decline is partly related to the healthcare reform law's Medicaid expansion to low-income adults.

A total of 1,189,567 SSI disability claims—mostly related to physical or mental disability— were filed in the first six months of 2014, compared with 1,330,169 during the same period last year, a drop of 10.6%, according to data obtained by Modern Healthcare from the Social Security Administration through a Freedom of Information Act request. The total decline in SSI claims in states that expanded Medicaid in the first six months of 2014 was 11.2%, compared with 10.0% in non-expansion states.

Back in June 2012, an uninsured diabetic waiting in line for treatment at a Remote Area Medical clinic in rural Tennessee forecast such a drop to New Republic reporter Alec MacGillis:

Instead of adding copper plans to the ACA marketplace, enhance bronze

One of the relative successes of the ACA's first open season is the high rate at which private plan buyers who were eligible for Cost Sharing Reduction (CSR) subsidies, which attach only to silver plans, did in fact choose silver.

In so doing, they resisted the temptation to pay far less per month for bronze plans, which carry sky-high deductibles and out-of-pocket maximums, unsoftened by CSR. As I've noted before, in the federal marketplace only 15% of buyers eligible for any kind of subsidy (including those who earn too much for CSR) bought bronze plans.

That's kind of surprising, since the premiums for silver plans are quite high for those in the middle income range of CSR eligibility. For a 44 year-old earning $23,000 per year, the benchmark second-cheapest silver plan in 2015 will cost $118, and the cheapest silver is usually only a few dollars cheaper.  The cheapest bronze plan price for this 44 year-old varies widely by state and county, falling most commonly in the $50--$75 range. That price spread between bronze and silver widens with age; a buyer in her 60s at this income level will often pay nothing or next to nothing for a bronze plan, versus the same $118 for silver (the subsidized benchmark price is a percentage of income and doesn't change with age).

I am troubled by the high premiums that low-income people have to pay for silver. $118 per month on an income of under $2,000 per month is quite a swallow. Though paying the extra premium for silver could save the buyer thousands in out-of-pocket medical costs, I'm impressed that so many many had the discipline to do it.  Prompted by a comment by xpostfactoid reader Bob Hertz, I find myself wondering: why do CSR subsidies attach only to silver plans?

What I wanted to ask Kevin Counihan

At a press briefing held yesterday, ACA marketplace CEO Kevin Counihan urged current ACA private plan holders to shop for a new plan, as "more than seven in ten of our customers can find lower prices by shopping."  Good -- the marketplace has gone all-in recently to try to convince existing customers not to renew their current plans without price-checking.

The next part of his message, however, betrays a skewed focus in my view. It's this: “Roughly eight in ten of our customers can get coverage for less than $100 a month after tax credits." That puts the focus unduly on premium, which is tantamount to dangling high-deductible bronze plans in front of low-income buyers.

The fact is, if you have access to a plan with a subsidized premium under $100, you are likely to be eligible for Cost Sharing Reduction (CSR) subsidies that will reduce deductibles and copays. CSR will cut out-of-pocket costs dramatically if your income is under $23,340 for a single person (200% of the Federal Poverty Level), and more modestly if your income is above that but below $29,175 (250% FPL).* But those secondary subsidies are available only with silver level plans, which have higher premiums than bronze.

Using Healthcare.gov's shop-around feature, I spot-checked the highest income that would enable a 44 year-old solo buyer to get the cheapest bronze plan in her zip code for under $100, give or take a dollar or two. In Chicago, it's $25,500. In Miami, it's $26,000. In Dallas, $27,500. In Biloxi, MS, $28,800; in Missoula, Montana, $25,500; in Newark, NJ, $27,700.  All of them are under the CSR threshold.

Older buyers with somewhat higher incomes can get bronze plans for under $100, since  the price spread between bronze silver increases with age.** In the six towns mentioned above, a 64 year-old could slip under the mark with an income ranging from $29,000 (barely CSR-eligible) to $33,500. Still, it's fair to say that the vast majority of buyers who can get a plan for under $100 are CSR-eligible.

It's the wages, stupid

"I'm no economist," to paraphrase Republican presidential hopefuls. But even a casual reader knows that for 35-odd years the lion's share of economic growth has gone to the wealthiest, and that the trend has accelerated in the last decade.

We're told, e.g. by David Leonhardt, that arresting the trend and creating wage growth is a gigantic mystery, and that Democrats, ostensibly the party of the less-than-wealthy, can only nibble around the edges, as with middle class tax cuts. That is, get GDP growth out of near-neutral and wage pressure will rise.

Now cometh billionaire Nick Hanauer, this generation's class traitor extraordinaire, to call bullshit and place the spotlight squarely on labor law and deliberate policy choices that have eroded workers' leverage vs. owners.  His focus is on wages -- specifically, in the piece below, on overtime pay. You can extrapolate and imagine a party that focuses relentlessly on the rules governing pay and workplace rules. I'm quoting an extended chunk here because I want to add my drops to the ocean, i.e. get a few more people to read this:

That high deductible ain't ineluctible

Dulce et decorum est to highlight the plight of low-income ACA shoppers who choose sky-high-deductible Bronze plans on the ACA exchanges. In some states, there are far too many of them.

But if you're going to do this, for God's sake bring into the narrative the Cost Sharing Reduction subsidies that attach to silver plans for low-income buyers, reducing deductibles and copays. For some buyers, the higher (though subsidized) silver premiums are a hard swallow.  But the story is incomplete if you don't lay out the choice. 

"Ware that swinging benchmark!" ACA Auto-renewal peril in Philadelphia

How could an ACA silver plan that cost a low-income family of three in Philadelphia $0 per month in 2014, with a $0 deductible, soar to $196 per month in the coming year?

A shifting "benchmark" silver plan and the disappearance of a large price spread between the benchmark second-cheapest silver and the very cheapest silver -- that's how,

Emily Van Yuga, an ACA outreach and enrollment coordinator for The Health Federation of Philadelphia, explained to me that last year, practically every one of the organization's clients bought that cheapest silver plan. This year, they all have to switch. Fortunately, the state is expanding Medicaid for 2015 (via a "private option" that the incoming Democratic governor, Tom Wolf, has vowed to scrap for traditional Medicaid), and most of the Federation's poor clients will will be eligible.

But the wildly swinging benchmark is a cautionary tale for 2014 ACA plan buyers who want to stay insured via the exchanges in 2015. I've laid it out in some detail on healthinsurance.org.

This is how you let people know what the ACA has to offer

According to a recent Kaiser Family Foundation survey, 53% of the uninsured don't know that the ACA provides financial help to low and moderate-income Americans to help them get insured. Last year, visiting Healthcare.gov or state exchanges didn't always alleviate the ignorance. An April 2014 McKinsey & Co. survey found that two thirds of subsidy-eligible respondents who visited the federal exchange,  remained uninsured and cited unaffordability as the reason did not know that they were eligible for subsidies.

I've asked before how so many visitors to Healthcare.gov could come away not knowing that their coverage would be subsidized. One answer: most did not find their way to the shop-around feature, which enables a user to enter a handful of data points (home location, household members with ages, and household income) and get plan price quotes with the subsidy included (or a notice that the user is likely eligible for Medicaid).  The shop-around was not functional until December 2013 -- and from that point on,while it wasn't exactly buried, it was hiding in plain site among several other potential starting points on the hc.gov home page.

This year it's different. The shop-around itself is streamlined a bit -- but more important, the home page steers users to it. "See plans and prices" is one of just two prominent options on the home page -- the one on the left, where reading starts.  If you pick the other -- "get started" -- you're prompted for your home state, after which you're again presented with a binary choice: see plans and prices, or apply now. "See plans and prices" is a bigger button.

In the same vein, email encouraging shop-around is pushed out to those who have created logins but have not enrolled in a health plan, either last open season or for 2015. I created a login last year, though I get my insurance elsewhere. This afternoon I received an email that looks like this:

View in browser | This newsletter created and distributed by Centers for Medicare & Medicaid Services Cyber Monday: Shop for health plans today This Cyber Monday, don’t forget to shop for health plans on HealthCare.gov. Getting covered may be cheaper than you think and you could be eligible for lower premiums and out-of-pocket costs. Take charge of your health care this holiday season. You’re on your way to the best gift of all – peace of mind for you and your loved ones. Get started today! Just enter your zip code to preview 2015 plans and estimated prices. Remember: Act by December 15 and your new coverage can start as soon as January 1 The HealthCare.gov Team

That big fat button leads straight to the shoparound, which begins with a zip code prompt. If you enter the requested info, you can get subsidy-inclusive price quotes within 30 seconds. That should give some uninsured people at least an understanding that "the government will help pay for coverage for low and moderate income Americans."

Now, if only the hc.gov shop-around would default results to silver for those eligible for Cost Sharing Reduction.  Calling Kevin Counihan....