xpostfactoid

Friday, March 29, 2024

Is there any remaining "upper coverage gap" in nonexpansion states?

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What's left of the upper coverage gap?

For some years, the Kaiser Family Foundation (KFF) has published estimates of people in the “coverage gap” in states that have refused to enact the ACA Medicaid expansion — that is, uninsured people who would be eligible for Medicaid if the state enacted the expansion. (As of now, 10 “nonexpansion states” remain.) In some briefs, KFF has divided the estimate into two groups: uninsured below 100% FPL, who in most cases are ineligible for government-supported insurance in nonexpansion states, and uninsured in the “upper coverage gap” — those with income in the 100-138% FPL range, who are eligible for subsidized marketplace coverage.

KFF estimates of the uninsured are based on the Census Bureau’s American Community Survey, which generally lags ACA enrollment data by two years. In April 2021, I noted that marketplace enrollment at 100-138% FPL in nonexpansion states in 2020, laid beside KFF’s estimates of uninsured in that cohort as of 2019, indicated that a bit more than half of those eligible for marketplace coverage in this income bracket had enrolled in plans. In a followup post, I noted that enrollment gains in 2021 at 100-138% FPL (a 17% increase in the 12 nonexpansion states then remaining) should be making inroads on the uninsured population in the upper coverage gap.

At the time of that writing, the American Rescue Plan Act (ARPA) had just rendered benchmark silver coverage with Cost Sharing Reduction free at incomes up to 150% FPL, and an emergency Special Enrollment Period, which extended through August 15, 2021, was just gathering steam. Since then, enrollment at 100-138% FPL (85% of which is in the remaining nonexpansion states) has more than doubled, from 3.3 million as of the end of the Open Enrollment Period (OEP) for 2021 to 6.9 million in OEP 2024.

Just last month, KFF updated its estimates of the uninsured in the coverage gap, including the upper coverage gap (100-138% FPL). The estimate, again, is based on the American Community Survey and only goes through 2022. Since that point, enrollment gains the 100-138% FPL income bracket exceed — in fact, more than double — KFF’s 2022 estimate of uninsured in the bracket. Enrollment figures below are from the Marketplace Open Enrollment Period Public Use Files, 2022 and 2024.

ACA Enrollment assistance in 2024: A conversation with Shelli Quenga

The enrollment doctor is in

Last week I caught up with Shelli Quenga of the South Carolina-based nonprofit Palmetto Project, who has been an ACA enrollment assistor and enrollment project director since the ACA marketplace’s first Open Enrollment Period (OEP) in fall 2013.

In the Obama years, the Palmetto Project was South Carolina’s chief grantee under in the federally funded Navigator enrollment assistance program. When the Trump administration gutted the program’s funding*, Palmetto Project converted its enrollment assistance program to a nonprofit brokerage in advance of OEP 2019. At that point, the program was operating on a shoestring, with five employees. Now, Quenga told me, they are up to 11 employees, with a couple of more hires planned.

After 11 years on the front lines of marketplace enrollment assistance, Quenga has a deep understanding of how people find their way to coverage through the ACA — or fail to. Her reflections shed light on the dynamic of the enrollment explosion of the pandemic years — particularly in the ten remaining states (including South Carolina) that have refused to enact the ACA Medicaid expansion. Enrollment overall is up 87% since OEP 2020, 147% in nonexpansion states, and 167% in South Carolina, from 214,040 in 2020 to 571,175 in 2024. In 2024, enrollment growth was concentrated at the lowest subsidy-eligible income levels, up 61% nationally in the 100-138% FPL bracket. In South Carolina, enrollment at 100-138% FPL almost doubled in OEP 2024, from 133,787 to 253,158.

Among the key points:

ACA Marketplace in 2024: low-income enrollment up, silver plan selection down

CMS has published its 2024 Marketplace Open Enrollment Period Public Use Files, providing detailed breakouts of enrollment by income, metal level selection, demographics, etc.

We already knew that enrollment increased by 31% nationally this year, spurred in part by the Medicaid unwinding — that is, the resumption of Medicaid redeterminations and disenrollments after a three-year pandemic-induced moratorium. While there’s always much to explore in the PUFs, two facts jump off the page for me:

Enrollment growth was heavily concentrated at low incomes — up 61% at 100-138% FPL and 54% in the slightly broader 100-150% FPL bracket. That’s perhaps not surprising, given that CMS announced that 2.4 million Medicaid disenrollees had enrolled in the 32 states using the federal platform, HealthCare.gov (and perhaps 2.9 million nationally, by Charles Gaba’s estimate). Year-round enrollment at incomes up to 150% FPL has likely also boosted enrollment in this bracket [added 3/23/24].
The decline in silver plan selection at low incomes that I flagged last March has continued. That is, growing numbers of low-income enrollees are forgoing Cost Sharing Reduction, available only with silver plans. At incomes up to 200% FPL, CSR makes silver plans roughly equivalent to platinum. Since March 2021, at least two CSR-enhanced silver plans in each rating area, with an actuarial value of 94%, are available at zero premium to enrollees with income up to 150% FPL. In the 150-200% FPL bracket, the benchmark (second cheapest) silver plan costs 0-2% of income (topping out at about $45/month for a single person) and has an actuarial value of 87%. Yet silver plan selection in the 100-150% FPL bracket was just 76.4% in HealthCare.gov states, down from 84.9% in 2022 and 89.3% in 2017. In the 150-200% FPL bracket, silver crashed from 69.5% last year to 56.7% this year. It was 83.2% in 2017.

Let’s look first at enrollment growth by income.

Biden administration to ACA enrollment assistors: Please credit yourselves

Please add my 13-digit ID

CMS is apparently working to redress the Trump administration’s attack on the effectiveness of the nonprofit enrollment assistors chartered by the ACA and partly funded by the federal government.

Earlier this week CMS sent this memo to enrollment assistors:

The memo spells out the rationale for ensuring that navigators, CACs and EAP, who have no direct financial incentive to credit themselves on marketplace enrollments they facilitate, do so anyway:

Including your assister ID will help the Centers for Medicare & Medicaid Services (CMS) to better understand the support that the assister community provides and continue to improve the consumer experience….
Understanding your reach as an assister is important to enhancing the support CMS provides you and the consumers you assist.

There is a long history behind this exhortation.

How the Trump administration handled the ACA marketplace, Part 3: Regulation

This post is Part 3 of an assessment of Trump administration policy with respect to the ACA, most specifically the ACA marketplace. Part 1 overviewed the administration’s early encouragement of state reinsurance programs, Trump’s cutoff of direct reimbursement of insurers for Cost Sharing Reduction subsidies, and the defunding of the Navigator enrollment assister program, paired with considerable support for health insurance brokers.

Part 2 reviewed the effective repeal of the individual mandate penalty, paired with regulations designed to boost an alternative market of ACA-noncompliant plans. Here, we’ll look at how Seema Verma’s CMS loosened rules for insurers and tightened them for marketplace applicants.

How the Trump administration handled the ACA marketplace, Part 2

The Trump administration stretched the clock for short-term, limited duration health plans

This post is Part 2 of an assessment of Trump administration policy with respect to the ACA, most specifically the ACA marketplace. Part 1 overviewed the administration’s early encouragement of state reinsurance programs, Trump’s cutoff of direct reimbursement of insurers for Cost Sharing Reduction subsidies, and the defunding of the Navigator enrollment assister program, paired with considerable support for health insurance brokers.

Below, we’ll look at the effective repeal of the individual mandate penalty (the one legislative initiative considered), and regulations designed to boost an alternative market of ACA-noncompliant plans.

As each part keeps ballooning as I write it, we’ll leave other administrative changes, loosening requirements on insurers and tightening them on prospective enrollees, to a Part 3.

Zeroing out the individual mandate penalty. After the Republican Senate in the summer of 2017 declined to take up the ACA “repeal and replace” bill passed by the House and then failed to pass its own repeal/replace alternative, John McCain famously scotched a final attempt to pass a “skinny” repeal bill that would have simply repealed the individual mandate and brought the Senate into conference with the House, perhaps to make one more run at a more comprehensive repeal/replace alternative. Following those failures, Republicans reduced the mandate penalty to zero in their massive tax cut bill passed in December 2017.

As an expression of intent to dismantle the ACA, the zero-penalty mandate’s chief function was to enable Republicans’ final attempt to void the ACA through the courts. In February 2018, a group of 20 states, led by Texas, sued to have the mandate declared unconstitutional, and the entire ACA statute voided. The suit sought ACA nullification on the ridiculous grounds that a) the 2012 Supreme Court decision upholding the constitutionality of the mandate did so only on the basis that the mandate is a tax, and within Congress’s taxing power; b) a zeroed-out mandate is no longer a tax; and c) since the Democratic Congress passed a resolution in 2010 declaring that the mandate was an “essential part” of the ACA’s overall “regulation of economic activity,” the whole law (including myriad parts unconnected with the ACA marketplace) had to be vacated. In June 2021 a 7-2 Supreme Court majority dismissed the suit, finding that the plaintiffs did not have standing because no one was harmed by a $0 penalty. The litigation did enable the Trump administration, 20 Republican attorneys general, and 126 House Republicans who signed an amicus brief in support of the plaintiffs to display root-and-branch opposition to the ACA for another three years after the legislative repeal drive failed.

Negation of the mandate was expected to drive healthier enrollees out of the market, raising premiums and thus further reducing enrollment. In 2019, CBO forecast (p. 11) that the $0 mandate penalty would increase the uninsured population by 7 million, or a bit more than 2%, and reduce marketplace enrollment by 4 million.

How the Trump administration handled the ACA marketplace, Part 1

In the wake of Trump’s vow to repeal the ACA if elected, Larry Levitt, Kaiser Family Foundation, outlines the former president’s past and purported future healthcare agenda.

One of Trump’s biggest political failures as president was his inability to persuade Congress to repeal the Affordable Care Act (ACA). However, the Trump administration did make significant changes to the ACA, including repealing the individual mandate penalty, reducing federal funding for consumer assistance (navigators) by 84% and outreach by 90%, and expanding short-term insurance plans that can exclude coverage of preexisting conditions. And, the Trump administration supported an ultimately unsuccessful lawsuit to overturn the ACA.
In one of the stranger policy twists, the Trump administration ended payments to ACA insurers to compensate them for a requirement to provide reduced cost sharing for low-income patients. At the time, Trump said this would cause Obamacare to be “dead” and “gone.” But, insurers responded by increasing premiums, which in turn increased federal premium subsidies and costs to the federal government, likely strengthening the ACA.
In the current campaign, Trump has vowed several times to try again to repeal and replace the ACA, saying he would create a plan with “much better health care.”

Trump certainly meant harm to the ACA. His comments in the wake of abruptly cutting off direct reimbursement of insurers for the value of Cost Sharing Reduction, cited by Levitt above, show his intent, as does his pressure on Republicans in Congress to pass legislation gutting its core programs. Should Trump regain the presidency, there is no question that he will pursue the agenda that Levitt outlines in his conclusion, including the ACA-related parts:

Trump’s record as president from 2017 to 2021, combined with recent comments on the campaign trail, suggest he would pursue policies to weaken the ACA, reduce federal spending on Medicaid, restrict access to abortion and family planning, and scale back benefits for immigrants if reelected as president in 2024.

Moreover, should Trump regain the presidency, he would lead a Republican party even more subservient to his will than in his first term. A Republican Congress would almost surely roll back the ACA Medicaid expansion and impose sharp spending caps on surviving Medicaid programs, as well as deregulating and largely defunding the ACA marketplace, as failed Republican legislation aimed to do in 2017. Should Democrats control one or both houses of Congress, an HHS Department filled with MAGA partisans, in line with plans currently being laid by well-funded right-wing organizations like the Heritage Foundation to root out technocratic expertise and install Trump loyalists at every level in all federal departments, would doubtless pull out all stops to undermine the marketplace and reduce Medicaid enrollments.

In Trump’s first administration, his appointments to HHS and CMS also were hostile to the structure of the ACA marketplace and the Medicaid expansion. Most notably, CMS administrator Seema Verma encouraged states to impose work requirements on “non-disabled, working age Medicaid enrollees — with some success, although the measures were largely checked by the courts. She also pushed states to conduct more frequent income and eligibility checks on Medicaid enrollees, encouraging the kind of procedural disenrollments (often of people who never received demands for information) now plaguing the post-pandemic Medicaid unwinding. '

But Verma and HHS Secretaries Tom Price and Alex Azar were also more constrained by conventional political incentives and the needs of corporate, state and individual constituents than their successors in a second Trump administration would likely be. The administration’s record with respect to ACA marketplace administration was mixed. Some measures harmed product quality and enrollment; some measures boosted enrollment and retention.

Unkind unwinding: Health Policy Valentines 2024

In a year of existential threats, and an era in which the corporate practice of medicine knows few curbs, there is still a stream of health policy wins worth serenading in the time-honored (since 2012!) tradition of #HealthPolicyValentines. This year’s mash notes below.

The Medicaid unwinding
is often blind and cruel.
But spare some V-day love
For ex parte renewal.

* * *

A valentine from Democrats,
enacted, but hardly trending:
An annual Part D cap
on out-of-pocket spending.

* * *

What’s sweeter for seniors
than sugar and spices?
Medicare negotiating
selected drug prices.

* * *

Send flowers, chocolate and smiles
for keeping insurers squirmin’
over AI-driven denials
to Casey Ross and Bob Herman.

* * *

O ACA, flawed child,
I’ll no longer carp
so long as your subsidies
remain enhanced by the ARP.

* * *

For low-income tar heels,
nothing can be finer
than Medicaid expansion
in North Carolina.

* * *

Let’s honor legislation
little known, in point of fact,
preventing harm, unnoticed:
The No Surprises Act.

* * *

As oligarch-funded theocrats
harm the women of this nation,
my love goes to the National
Abortion Federation.

* * *

And one for my wife as I join her on the far side of the age-65 threshold:

After 40 years of love
we’ll take no crap
from MA insurers —
thanks to Medigap.

* * *

While dredging up healthcare doggerel like this, I always end up with some bitter snippets, then remind myself they’re not um, valentines. Since they now exist, however, and at the risk of spoiling the mood, I’ll share a little rage rhyming:

The Supreme Court’s out of control,
but had better not go postal
by voiding the FDA rule
for Mifepristone and Misoprostol.

* * *

Nothing’s more dangerous
for those with colon polyps,
financially speaking,
than private equity rollups.

Take a trip down ACA memory lane with a visit to the Health Policy Valentines archives: Surprise! No Surprises (2023), Flowers in the graveyard (2022), Institutional edition (2021), But love grows old and waxes cold (2020), The Water is Wide: Health Policy Valentines (2019), HPV (2018), Love Knows No Repeal (2017), Love in the Time of Obamacare (2016), love, 2015, and Romance of the Rose, Health Policy Edition (2014).

Photo by Aykut Aktemur

Sunday, January 21, 2024

How has the Medicaid unwinding affected various states' ACA marketplace enrollment?

My last post stressed that ACA enrollment growth in the Open Enrollment Period for 2024 remains heavily concentrated in states that have refused to enact the ACA Medicaid expansion.

I might have pointed out, though, that the main divide in growth rates is between the 32 HealthCare.gov states and the 19 state-based marketplaces (SBMs). The difference in year-over-year enrollment growth as of Dec. 23 between expansion and nonexpansion states within the HealthCare.gov universe is not large -- 42.1% vs. 35.6%, according to Charles Gaba. Last year, the gap was bigger: enrollment in the nonexpansion states on HealthCare.gov increased by 22.7% in OEP 2023, vs. 9.9% in expansion states on the platform (Gaba). There was a similarly wide spread in growth rates in OEP 2022.

The Medicaid “unwinding” — the resumption in April 2023 of Medicaid redeterminations and disenrollments after a three-year pandemic-induced moratorium — is a major factor in this year’s enrollment gains. As of September, CMS reported that about 1.2 million Medicaid disenrollees (about 13% of the disenrolled) had enrolled in the marketplace (or in the Basic Health Programs available to low-income enrollees in New York and Minnesota) from April through September. As Medicaid disenrollments have now passed 15 million (!), close to 2 million by now may have landed in marketplace plans or the BHPs, accounting for perhaps 40% of enrollment growth.

That boost to enrollment is apparently at work in expansion and nonexpansion states alike. Of the 16 HealthCare.gov states with growth rates above the median, eight are expansion and eight are nonexpansion states. Again, expansion states are sharing more in this year’s strong enrollment growth than in prior post-pandemic years. The Medicaid unwinding may partly explain that. While growth rates remain lower in the SBM states (all of which have expanded Medicaid) than in HealthCare.gov states, strong enrollment growth (13.8%) has resumed in the SBM group in 2024 after remaining basically flat last year.

In my last post, with respect to the Medicaid unwinding, I wrote:

…state Medicaid disenrollment rates don’t clearly correlate with expansion/nonexpansion status or marketplace enrollment rates (at least not obviously; perhaps researchers will tease out significant relationships in years to come).

Here I want to take a look at another measure of the potential impact of the Medicaid unwinding on marketplace enrollment in OEP 2024: The extent to which the migration of Medicaid disenrollees into the marketplace during the off-season boosted each given state’s marketplace enrollment. CMS has tracked those enrollments, from April through September 2023, in the Medicaid Marketplace Unwinding Report. I’ve confined my focus to the 32 states using HealthCare.gov, as state-based marketplaces are quite a various lot, both in market conditions and reporting.

ACA marketplace enrollment up 135%-plus since 2020 in nonexpansion states; may approach 100% in all states

Marketplace enrollment in nonexpansion states is up 135% since 2020. Drink!

Updated 1/24/24

Politico’s Ben Leonard and Chelsea Cirruzzo, noting that ACA marketplace enrollment during the Open Enrollment Period (OEP) for 2024 was already up 25% over the final OEP 2023 tally as of December 23 (with OEP still running), locate the surge geographically:

So far, states in the South and the Rust Belt have had among the highest rates of enrollment growth between 2023 and 2024 plan years, according to a POLITICO analysis of HHS data.
Louisiana and West Virginia have the highest growth rates — about 63 percent each…Alabama, Arkansas, Georgia, Indiana, Mississippi, Ohio, South Carolina, Tennessee and Texas all had growth rates between 36 and 52 percent.

That is no surprise as to the southern states — for which, read primarily “states that have refused to enact the ACA Medicaid expansion.” While Louisiana is an expansion state, as are the three “rust belt states” cited above, the “nonexpansion” states have driven the marketplace’s surging enrollment growth throughout the pandemic years, as I’ve noted previously with respect to OEP 2021, OEP 2022, and OEP 2023. Every state marketplace is different, and enrollment in a given state may rise or fall in a given year or cluster of years for myriad reasons, but since OEP 2021, the shrinking pool of nonexpansion states (there were 14 in OEP 2021, 10 at present) have accounted for the vast majority of net new enrollments (75% of net new enrollments this year). That’s largely because of sustained growth in behemoths Florida and Texas, which together account for about a third of all marketplace enrollment.

The table below shows enrollment growth from 2020-2024 in the ten states that had not expanded Medicaid as of November 1, 2023, the beginning of OEP 2024. North Carolina enacted its Medicaid expansion beginning December 1, but the migration of low-income marketplace enrollees to Medicaid does not yet show up in the enrollment tallies, so I’ve included North Carolina in the nonexpansion state group. Note also that the totals for OEP 2024 run only through December 23, 2023, while OEP ended on January 16, 2024 in the 32 states using HealthCare.gov and is still running in several state-based marketplaces. Charles Gaba estimates that the final tally for OEP 2024 will rise by another 1-2 million, or 5-11%. [Update, 1/24/24: CMS released the final enrollment snapshot for HealthCare.gov states today. National totals are near-complete, with perhaps 20,000 additional enrollees likely to be tallied in SBMs by the end of the month. I have updated the table below; for the record, the original table, with 2024 tallies through Dec. 24, is preserved at bottom.]

New York's ACA alchemy: marketplace silver to Essential Plan platinum

Greener pastures for New Yorkers of a certain income

New York has a pending ACA Section 1332 updated waiver proposal to CMS that would extend eligibility for the Essential Plan, the state’s zero-premium, low-out-of-pocket cost health insurance program, to applicants with incomes up to 250% of the Federal Poverty Level ($36,450 for an individual, $75,000 for a family of four) in April 2024.

The economics of the program appear to defy gravity, and perhaps suggest lessons as to the public funding of health benefits in the United States.

Shedding “Medicaid-ish” payment rates

As currently structured, New York's Essential Plan is a Basic Health Program, an option for states established by Section 1331 the Affordable Care Act. A BHP is a health coverage program for state residents with incomes up to 200% FPL offered in place of standard ACA marketplace coverage. The implicit premise of Section 1331 is that BHPs will pay lower rates to providers and plow those savings into reducing premiums and out-of-pocket costs for enrollees — rather like Medicaid.

The Essential Plan currently provides coverage with an actuarial value of 98% to enrollees with income up to 150% FPL, compared to 94% for benchmark silver coverage in conventional marketplaces, and an AV of 92% to enrollees in the 150-200% FPL income bracket, compared to 87% in the marketplace. The plan has no deductibles at any income level and includes dental and vision coverage. Plan benefits are standardized.

2023: Understanding a maturing ACA marketplace

Not exactly New Year's fireworks, but the closest equivalent in my photos

Another blogging year goes to the archives. As the years go by it seems I write fewer and fewer posts and spend more and more time on each of them. I’d like to think that means the posts are getting better, but I wouldn’t swear to it.

Perhaps it’s fair to say my understanding of the ACA marketplace is maturing as the marketplace matures. A few themes in this year’s posting flesh that idea out:

I have long been concerned with CSR takeup — that is, how many low-income enrollees (that is, a majority of marketplace enrollees) obtain coverage that makes actual care affordable. Since ARPA rendered at least two CSR-enhanced silver plans free for enrollees with income up to 150% FPL and available for no more than 2% of income for those in the 150-200% FPL income range, I have been disappointed to note that silver plan selection at low incomes has not improved as I anticipated, and this March I noted that CSR takeup went backwards in 2023. I then added a spotlight on CSR takeup in states that have not expanded Medicaid, where the vast bulk of enrollees eligible for free CSR silver live. Perhaps more interestingly, following hints from brokers and those who work with them, I examined markets in which some enrollees might have cause to forgo the CSR benefit with eyes wide open, sacrificing low out-of-pocket costs to obtain a more robust provider network or other benefits.

The commercial para-universe to the ACA exchanges keeps expanding

Georgia looking peachy to web-brokers

More or less simultaneously with CMS’s announcement that 15.3 million people had enrolled in health plans via HealthCare.gov through December 15, HealthSherpa announced that 6.1 million of those enrollments were effected through its platform.

I’d like to revisit what that market share tells us about how people are getting coverage through the ACA marketplace today. For background, a couple of points from a recent post:

According to a CMS presentation to brokers, in HealthCare.gov states in 2023, 71% of active enrollees (new enrollees and active renewers) were assisted by brokers. 74% of new enrollees — 2.2 million out of 3.0 million — were broker-assisted. HealthCare.gov states accounted for 75% of total enrollment. In total, brokers enrolled 6.8 million of the 9.6 million who actively enrolled. (Of the 2.5 million who were passively re-enrolled, I don’t know how many were broker-assisted, initially, or in plan year 2023.)
In HealthCare.gov states, brokers rely heavily on commercial Direct Enrollment (DE) or Enhanced Direct Enrollment (EDE) platforms, which can process enrollments with subsidies (EDE directly; DE via a redirect to hc.gov for the application processing and then a return to the DE platform for plan selection). 81% of active broker-assistance enrollments are via DE or EDE, according to the CMS presentation. In 2023, more than half of enrollments on HealthCare.gov, excluding auto re-enrollments, were via DE/EDE (5.5 million). By my count of 62 EDE entities, thirteen are web brokers, the rest are insurers. The dominant EDE is HealthSherpa, which just announced that it has already processed 2 million enrollments for 2024. In 2023, HealthSherpa claimed to have accounted for 35% of HealthCare.gov state enrollments; the company seems on track to exceed that share this year.

HealthSherpa’s preferred metric for its market share in states using HealthCare.gov (the federal platform, used by 32 states) is its percentage of active enrollments -- that is, new enrollees and re-enrollees who update their accounts and make a deliberate choice of plan. Those who are passively auto re-enrolled are not credited to the platform that initially enrolled them. If OEP 2024’s auto re-enrollment percentage matches that of 2023, (21%), the 15.3 million enrollment total includes 3.2 million auto re-enrollees. That leaves HealthSherpa with just about a 50% share of active enrollment in HealthCare.gov states through December 15.

A "premium alignment" bill advances in NJ legislature

Will NJ's ACA marketplace glow as goldenly as its rest areas?

In June, I flagged a bill introduced in the New Jersey legislature this past spring, S3896/A5626, that would require silver plans in the state’s ACA marketplace to be priced roughly on par with gold plans in year 1 and on par with platinum plans in year two — reshaping a market in which gold plans have been priced out of reach for more than 98% of enrollees.

The bill’s logic is simple (though it has a complicated back story): On average, silver plans have a higher actuarial value than gold plans, since most silver plan enrollees qualify for the Cost Sharing Reduction (CSR) that attaches only to silver plans.

The bill was abruptly posted early this month for a December 11 hearing in the Assembly Financial Institutions and Insurance Committee, a committee chaired by one of the bill’s lead sponsors, John McKeon. The bill passed out of committee with no amendments on an 11-0 vote with one abstention. That’s first step in a gauntlet of three Assembly and two Senate committees’ consideration.

I testified in favor on behalf of BlueWave New Jersey, a progressive state advocacy group, along with Laura Waddell of New Jersey Citizen Action. My testimony is below.

- - -

TESTIMONY BEFORE SENATE BUDGET AND APPROPRIATIONS COMMITTEE
December 11, 2023

A5626/S3896 would correct a severe pricing imbalance in New Jersey’s ACA marketplace that weakens coverage for middle-income enrollees in health plans offered on GetCoveredNJ.

New Jersey is unique among U.S. state marketplaces in that in New Jersey gold-level plans – the metal choice that offers a coverage level closest to the average employer-sponsored plans – are priced out of reach for almost all enrollees. In New Jersey in 2023, just 1.5% of on-exchange enrollees selected gold plans, versus a national average of 11.9% (see CMS Public Use Files, Note 3). Nationally, according to tables published by the Kaiser Family Foundation, the lowest-cost gold plan premium in each state market is 4% higher than the lowest-cost silver premium in 2024. In New Jersey, the lowest-cost gold premium is priced 37% above the lowest-cost silver plan.

Still growing: OEP 2024 in the ACA marketplace

CMS’s Week 5 snapshot for the 2024 Open Enrollment Period (OEP) in the ACA marketplace shows 7.3 million active enrollments (new enrollments and active re-enrollments) — a stunning 39% year-over-year increase, according to Charles Gaba’s swift compilation. The snapshot is through December 2 for 32 states using HealthCare.gov and through November 25 for 19 state-based marketplaces (SBMs). New enrollment is up 44%, and active re-enrollment is up 37%, per Gaba. (Passive auto re-enrollment is reported at different times by different exchanges, and some SBM auto re-enrollment tallies are included separately in the snapshot.)

For the year-over year comparison, Gaba has helpfully adjusted for an extra day included in the 2023 Week 5 snapshot. His breakdowns for different state groupings — HealthCare.gov states vs. SBMs, and states that have enacted the ACA Medicaid expansion — are below, in simplified format, and followed by a few observations.

OEP Week 5: 2023 vs. 2024

Update: Ending presumed Medicare eligibility for New Jersey's elder ACA marketplace enrollees

I’d like to provide a couple of updates regarding an abuse in New Jersey’s individual market that I wrote about in September (here and here). the issue in brief: in 2023, the state’s standard individual health plan contract stipulated that insurers could presume that enrollees over age 65 were eligible for Medicare unless they provide written proof otherwise. Failing that proof, the insurer would assume Medicare eligibility and act as a secondary payer to Medicare — paying only a small fraction of the enrollee’s bills while collecting a full premium. In 2023, about 9,000 enrollees via GetCoveredNJ, the state’s ACA exchange, were over age 65.

As I reported, in May 2023 CMS issued guidance that unambiguously stated that this practice — presuming Medicare eligibility for senior enrollees and acting as a secondary payer — violated ACA requirements. While New Jersey’s Department of Banking and Insurance did not respond to my queries about the New Jersey policy and the CMS guidance, they did respond to the same queries from an nj.com reporter, Karin Price Mueller, whom I approached about the issue. As they told Mueller, on September 27 DOBI issued a directive (described in Mueller’s paywalled article and in my followup post) to insurers in New Jersey’s individual market instructing them to comply with DOBI’s guidance — that is, cease presuming Medicare eligibility and acting as a secondary to Medicare simply because an enrollee was over age 65.

Where and how do people find plans in the ACA marketplace?

On October 1, 2013, the day the ACA exchanges first opened for business, President Obama promised that the exchanges would enable shopping for health insurance “the same way you shop for a plane ticket on Kayak or a TV on Amazon.”

The wretched dysfunction at launch of the federal exchange, HealthCare.gov (and to varying degrees the state exchanges as well), evident that day, immediately made that promise a laugh line. While two months of technical and political hell ensued before HealthCare.gov was marginally functional, ultimately 7 million people did enroll for 2014 coverage — in line with CMS’s projections — and the image of the insurance shopper sorting through the options on the exchanges took hold. The functioning and messaging on the exchanges improved over time — though the proliferation in recent years of barely-differentiated plans complicated the task of plan selection.

In the ten years since then, I’ve written many posts about the weaknesses and strengths of the exchanges’ functionality and messaging. Do they make it easy to enter a few data points and preview plans and prices (net of subsidy) for the individual viewer? Do they adequately steer those eligible for strong Cost Sharing Reduction to silver plans? In the first cataclysm of the pandemic, did they make Medicaid availability clear? Do their decision support tools (highlighting plans likely to yield the lowest net costs) work well?

All of which might be said to obscure the fact that the unassisted enrollee navigating options via the government-hosted exchanges has become an increasingly rare bird. As insurers have reinvested in the marketplace, brokers selling ACA-compliant plans have proliferated (more than 74,000 were registered in 2023, up from 48,000 in 2019). Since 2021, the Biden administration has replenished the federally funded Navigator enrollment assistance program that the Trump administration had reduced to skeletal form (Navigator funding was cut from $63 million in 2016 to $10 million by 2018, then restored to about $100 million in 2022).

Unwinding to the marketplace in Maryland

In October, CMS reported that of the roughly 5.5 million people disenrolled from Medicaid from the start of the “unwinding” (the end of the pandemic-induced 3-year moratorium on Medicaid disenrollments) through July 31, about 600,000 (592,291) had enrolled in ACA marketplace coverage. Another 95,000 enrolled in the Basic Health Programs that in New York and Minnesota serve lower income enrollees who would otherwise be eligible for subsidized marketplace coverage.

As Charles Gaba notes, these tallies suggest that about 12% of those disenrolled from Medicaid from April to July have enrolled in marketplace or BHP coverage. If that ratio held into November, about 1.1 million of the 10.1 million disenrolled from Medicaid according to KFF’s estimate may have ended up in the ACA marketplace. According to tracking by Georgetown’s Center for Children and Families, as of October, based on the most recent state reports ranging from July to September, net Medicaid enrollment was down by 5.8 million. Assuming that net disenrollment might top 7 million by now, the marketplace may have insured about 15% of the net coverage loss, perhaps a bit higher for adults (as most children who are not insured through employment-sponsored plans end up in Medicaid or CHIP). Here’s hoping a larger percentage of the newly disenrolled find coverage from employers — or already have done so, and have been double-insured since some point after Medicaid redeterminations were paused in March 2020.

While the marketplace is taking up only a modest sliver of those disenrolled from Medicaid, the influx represents a substantial boost to marketplace enrollment. David Stewart, Health Insurance Program Director at the Maryland Area Health Education Center West, which serves primarily rural counties, tells me that since May, appointment traffic for enrollment assistance in his program was more than double normal volume prior to the Open Enrollment Period that began on November 1. To get a sense of how that increase in interest might translate in enrollment I went to the Maryland Health Connection in search of data, and to my surprise, found detailed monthly reports. And indeed, new enrollments from May through September in Maryland in 2023 were more than triple the 2022 total. While enrollment in Maryland as of April 2023 was down 2.7% from April 2022, enrollment as of September 2023 was 13.2% higher than in September 2022.

Walking the crosswalk: CMS seeks to boost CSR takeup

Let us lead you

When full enrollment data for the ACA marketplace in 2023 came out last spring, I expressed concern that the percentage of low-income enrollees forgoing strong Cost Sharing Reduction (CSR) subsidies, which are available only with silver plans, had risen to an all-time high. This in spite of the fact that since March 2021, the two cheapest silver plans in a given marketplace have been available for zero premium for enrollees with income up to 150% of the Federal Poverty Level, and for no more than 2% of income for enrollees with income in the 150-200% FPL range.

The table below shows metal level selection at the two income levels at which “strong” CSR is available in every year since 2017, the peak year for silver plan selection. (A weak version of CSR is available in the 200-250% FPL.)

CSR raises the actuarial value of a silver plan from a baseline of 70% (with no CSR) to 94% at incomes up to 150% FPL and to 87% at incomes in the 150-200% FPL range. Most low-income enrollees who forgo silver plans choose bronze plans, with an AV of 60%; a small but rising number choose gold, with AV of 80% (in about 10 states, gold plans can be cheaper than silver plans).

Virtually the only reason to pass up CSR at incomes up to 150% FPL is if the enrollee wants a more expensive insurer’s silver plan — i.e., in most cases, one with a more robust provider network — and finds it unaffordable. In June, I posited that the percentage of low-income enrollees choosing metal levels other than silver may be rising because of increasing prevalence in the ACA marketplace of ultra-narrow networks. That is, more enrollees may be forgoing CSR with eyes wide open.

Another possible cause of lower CSR takeup may be sheer confusion, as the number of plans on offer in most markets has proliferated to a ridiculous extent, only slightly trimmed back in 2024, thanks to a modest new curb on the number of plans an insurer may offer at each metal level.

In the Open Enrollment Period for 2024, officially kicking off next Wednesday (Nov. 1), we may get some clues as to the extent to which bronze selection at low incomes is due to inadvertence. For 2024, in the 32 states using the federal exchange, HealthCare.gov, CMS has undertaken* to push some low-income bronze plan enrollees into CSR silver:

New for PY 2024, the Marketplace has updated the automatic re-enrollment process to help more consumers take advantage of cost savings. Specifically, the Marketplace will automatically re-enroll certain income-based cost-sharing reduction (CSR)-eligible enrollees who would otherwise be automatically re-enrolled in a Bronze plan into a Silver plan. This automatic re-enrollment will apply only for consumers who do not make an active plan selection on or before the deadline for January 1 coverage, and only if a Silver plan is available in the same product type, with the same provider network, and with a monthly premium after premium tax credits that is no greater than that of the Bronze plan into which they would otherwise be automatically re-enrolled.

Those in “dominated” bronze plans who log on and re-enroll actively “will see the Silver plan highlighted in the online shopping experience if they return to HealthCare.gov on or before December 15 to review their options.” So there are two layers to this effort: a cross-walk (with opt-out) for those who remain passive, and a strong nudge for those who log on and newly assess available plans.

State exchanges may implement the CSR crosswalk if they so choose. Covered California did so beginning in plan year 2022, and Massachusetts auto-enrolled some enrollees in ConnectorCare (silver plans further enhanced by supplemental state subsidies) in 2023.

How many enrollees may be affected by the CSR cross-walk?

For a silver plan premium to be “no greater than” that of the bronze plan from which the enrollee will be switched out, the silver plan must be available for zero premium, as is the case for the two cheapest silver plans in every marketplace for enrollees with income up to 150% FPL. In a few cases, the cheapest plan in a given market may be zero premium at incomes above 150% FPL, and enrollees in a bronze plan from the same insurer with the same network may be auto-switched. For the most part, however, the new policy affects enrollees with income below 150% FPL.

In 2023, of the 5.6 million OEP enrollees in HealthCare.gov states with income in the 100-150% FPL range,** 1.1 million selected bronze or gold plans. Among re-enrollees (as opposed to new enrollees) in that income range, 3.0 million enrolled actively and 1.0 million were auto re-enrolled. For the three quarters of re-enrollees who actively re-enroll, a sharp prompt will push them toward silver if a silver plan from the same insurer with the same network is available at zero premium.

In 2023, the total number of re-enrollees in HealthCare.gov states (9.2 million) was about 90% of the enrollment total for 2022 (10.3 million). We might therefore expect some million non-silver current enrollees with income under 150% FPL to re-enroll (many of them will have enrolled after OEP for 2023, as marketplace turnover is constant, and enrollment is available year-round for those with incomes up to 150% FPL). The wild card is how many of those bronze or gold plan enrollees are in plans from insurers that offered the cheapest and second-cheapest silver plans in their area — and with the same network as the bronze plan the enrollee chose.

We’ve been here before

Covered California, the largest of the state exchanges, enacted the crosswalk to CSR silver in 2022, estimating*** that 32,000 bronze plan enrollees could get a $1/month silver plan from the same insurer (no plans in CA were $0 premium at that time). I looked at the results in April 2022. Silver plan takeup at incomes below 150% FPL ticked up modestly, by about 3 percentage points from 2021 — and that in the year when silver plans became free at incomes up to 150% FPL. In California in February 2022, 16,990 subsidized enrollees out of a total of 258160 with income in the 138-150% FPL range (6.6%) selected bronze plans. In June 2021, the nearest date for which I can find a comparison, 20,270 subsidized enrollees out of 215,490 with income up from 150-200% FPL (9.4%) were enrolled in bronze. In 2023, bronze selection among the subsidized crept back up to 7.9% (19,080 out of 241,350).

At the time of that estimate, in June 2021, only about 28,000 bronze plan enrollees enrolled via Covered California (including those with income under 138% FPL) had incomes under 150% FPL. I presume the analysis found that a considerable number of the 85,550 subsidized bronze plan enrollees in the 150-200% FPL income bracket could also get a free silver plan — possible, as there has been a wide price spread between cheapest and second-cheapest silver in some California rating areas in some years. From 2021 to 2022, the percentage of subsidized enrollees in the 150-200% FPL income bracket in California who selected bronze plans dropped from 19.1% to 15.2%, and held steady in 2023 at 15.1%. Again, though, subsidized silver plan premiums dropped dramatically from 2021 to 2022, thanks to the subsidy enhancements in the American Rescue Plan Act.

Effects may be stronger in HealthCare.gov states, as a much higher percentage of enrollees have income below 150% FPL, thanks to the nonexpansion states. Also, I don’t believe that Covered California implemented the heightened prompt to choose CSR silver for those who actively re-enroll. On the other hand, Covered California’s shopping tool does “default to silver” — that is, show silver plans at the top of the list of available plans — when silver plans are available for zero premium.

Do brokers need a prompt?

When assessing the possible impact of the CSR crosswalk (and strong nudge for active enrollees), it’s important to keep in mind that most ACA marketplace enrollees do not act alone, and many enrolled in the HealthCare.gov system never look at a HealthCare.gov screen. 71% of active re-enrollees in HealthCare.gov states were assisted by brokers ~~or nonprofit enrollment assisters~~ in 2023, as well as 58% in California and 76% in New York. A large majority of brokers use commercial e-broker platforms (enabled for “Direct Enrollment” or “Enhanced Direct Enrollment”), not the HealthCare.gov interface. HealthSherpa, the largest e-broker, alone accounted for 35% of enrollments in the HealthCare.gov system in 2023. The e-brokers are required, however, to follow form with HealthCare.gov in the CSR crosswalk, and to provide the enhanced “nudge'“ toward silver for active re-enrollees.*** Whether a significant number of brokers need such prompts to avoid placing their clients in dominated plans is an interesting question.

- - -

* A crosswalk to silver from dominated plans was proposed in a 2021 article by David M. Anderson, Petra W. Rasmussen and Coleman Drake.

** In the ten states that have not yet enacted the ACA Medicaid expansion (soon to be nine, as NC is expanding on Dec. 1), all of which use HealthCare.gov, eligibility for ACA marketplace subsidies begins at 100% FPL. In states that have enacted the expansion, eligibility begins at 138% FPL; below that threshold, enrollees are eligible for Medicaid. A large majority of enrollees with income below 150% FPL are in the nonexpansion states, most of them in Florida and Texas.

138,000 enrollees in HealthCare.gov states in 2023 had incomes below 100% FPL. Legally present noncitizens subject to the 5-year federal bar on Medicaid eligibility are eligible for marketplace subsidies even if their income is below 100% FPL. I have left enrollees with income below 100% FPL out of the HealthCare.gov calculations above because a fairly large percentage are subsidy-ineligible.

*** HealthSherpa, which like many platforms will foreground silver plans for user eligible for strong CSR, provides this screen for such enrollees if they opt for another metal level:

Thursday, October 05, 2023

Enrollment at ages 65 and up in the ACA marketplace has nearly tripled since 2017

Medicare, no -- coverage, yes?

My last two posts (1, 2) investigated a practice, first countenanced and then codified by New Jersey insurance regulators, allowing ACA marketplace insurers to denude enrollees over age 65 of most of their coverage by presuming them eligible for Medicare unless they proved otherwise, e.g., by applying for Medicare while knowing they were ineligible. (Seniors who have not paid U.S. payroll taxes for at least 10 years or not been married to someone who has, e.g., many older immigrants, are not eligible for free Part A Medicare and are eligible for ACA marketplace subsidies if their income qualifies them.) Prompted by resulting mainstream news coverage, NJ’s Department of Banking and Insurance (DOBI) has ordered individual market insurers to cease this theft of coverage.

As DOBI disclosed that individual market insurers in the state have been presuming Medicare eligibility in senior enrollees at least since 2016, I took a look at how many enrollees might have been affected. Along the way, I noted a statistical oddity: by 2023, enrollment in the over-65 age group had more than doubled since 2017, from 3,943 to 8,929 (a precise age breakout is not provided for 2016). Total enrollment in all age groups in the state increased just 16% from 2017 to 2023, from 295,067 to 341,901.

That prompted me to look at national enrollment in the 65+ age group over the same span. Enrollment in this (small) age group has almost tripled since 2017, while overall enrollment is up 34%, from 12.2 million in 2017 to 16.4 million in 2023. The data source in the table below is CMS’s State-level Public Use Files.

Friday, March 29, 2024

Tuesday, March 26, 2024

Saturday, March 23, 2024

Friday, March 15, 2024

Monday, February 26, 2024

Friday, February 23, 2024

Wednesday, February 21, 2024

Wednesday, February 14, 2024

Sunday, January 21, 2024

Thursday, January 18, 2024

Sunday, January 14, 2024

Monday, January 01, 2024

Tuesday, December 26, 2023

Sunday, December 17, 2023

Friday, December 08, 2023

Tuesday, November 21, 2023

Friday, November 17, 2023

Thursday, November 09, 2023

Saturday, October 28, 2023

Thursday, October 05, 2023