Which metal tier plans are people selecting, and why?
Strong Enrollment Numbers Released by Covered California and Department of Health Care Services
Covered California, February 19, 2014
Covered California™ and the California Department of Health Care Services (DHCS) announced today that as of Jan. 31, 2014, more than 1.6 million Californians have signed up for either Covered California health insurance plans or for low-cost or no-cost Medi-Cal.
Nearly half of those covered — 728,410 Californians — selected a Covered California health insurance plan.
Most subsidy-eligible consumers who enrolled — 451,074, or about 62 percent — signed up for a Silver plan, the second-lowest-costing plan of the four plan tiers. About 86 percent of consumers across all tiers received some sort of financial assistance.
Metal Level of Individuals Enrolled: Oct. 1 to Jan. 31:
Subsidy eligible (626,210):
0.4% - Minimum Coverage
21.1% - Bronze
67.3% - Silver
6.0% - Gold
5.1% - Platinum
5.5% - Minimum Coverage
33.8% - Bronze
28.7% - Silver
14.4% - Gold
17.7% - Platinum
40 Percent Of Enrollees Through eHealth Website Are Young Adults
By Julie Appleby
Kaiser Health News, February 21, 2014
During a call with Wall Street analysts Thursday, eHealth CEO Gary Lauer said 40 percent of the 169,000 consumers who used the site to obtain insurance from October through December were in the young adult category (18-34), “a highly sought-after demographic.”
Private exchange sees surge in health care enrollment
By Kelly Kennedy
USA TODAY, February 20, 2014
Gary Lauer, CEO of eHealth Insurance, said individual memberships rose 50% in the fourth quarter of 2013 compared with the same period in 2012.
Premium rates, (eHealth v.p. Brian) Mast said, dropped 25% when the law went into effect, as more people chose the less expensive bronze-level plans.
By Don McCanne, M.D.
Of the 728,000 people already enrolled in Covered California - California’s insurance exchange established under the Affordable Care Act - over two-thirds of those who were eligible for subsidies purchased silver plans, whereas well less than one-third who were not eligible for subsidies also selected silver plans. Why might that be?
(First, a clarification on subsidies: The Covered California report includes both premium tax credits and cost-sharing subsidies under their definition of subsidies. However, the type of subsidy can influence whether or not an individual chooses a silver plan. Anyone with an income below 400 percent of the federal poverty level [FPL] can receive a premium tax credit if the plan is purchased through the exchange. Those with incomes below 250 percent of the FPL can also qualify for cost-sharing subsidies when they use their plans, but only if they purchase a silver plan through the exchange.)
(Clarifying metal tiers: The actuarial value of a plan is the percent that the plan pays for for health care services provided within the insurer-selected networks, leaving the rest to be paid by the patient, sometimes with subsidies. Bronze covers 60 percent, silver 70, gold 80 and platinum 90 percent. The standard for the exchanges is silver, whereas the standard for Congress is gold.)
It is likely that the conservatives are right in one regard with their consumer-driven health care in that people will shop prices when purchasing health plans. For the Covered California purchasers who were not eligible for any subsidies, more chose the lower priced bronze or minimal coverage plans (plans with very high deductibles) - 39 percent combined. Since the unsubsidized group included wealthier plan purchasers, it is no surprise that 32 percent chose the high end gold and platinum plans. Since only 29 percent of the unsubsidized purchasers selected the intermediate silver plans, it appears that these purchasers were more interested in either lower prices or better coverage, but not so much both. Consumer shopping seemed to play a role.
What about those who were eligible for subsidies - those below 400 percent of FPL? It is likely that the majority were eligible for both premium and cost-sharing subsidies, but would have to purchase silver plans to receive both. Since the spreads between the premiums for the silver and bronze plans were not that great after the premium credits were applied, most shoppers likely decided that the additional cost-sharing subsidies were well worth the small differences in the premiums. So 67 percent of this group were smart shoppers and bought the silver plans. Only 21 percent bought the bronze or minimum coverage plans, and likely many of those were above 250 percent FPL that disqualifies them from receiving cost-sharing subsidies. Only 11 percent sprung for the gold or platinum plans - not surprising that it was this low since members of this group all fall under 400 percent FPL.
Now let’s look at purchases of health plans through private exchanges that are not eligible for any subsidies, using eHealth as our example. We do not have a breakdown of the precise numbers that chose the various tiers, but the price shopping impact had to be very great. eHealth reports that their average premiums dropped 25 percent because so many individuals chose the cheap bronze-level plans. The percentage has to be huge. With no subsidies to consider, these shoppers chose price.
What can we make of all of this? Everyone should have essential health care coverage automatically. Instead we have inserted shopping decisions that are not a problem for the wealthy because they can buy the best, but they are a problem for the majority who will buy lower actuarial value plans because their personal finances are limited. Our policymakers have selected a plan with the relatively low actuarial value of only 70 percent (silver plan) to serve as the benchmark, especially for those with incomes below 250 FPL. They reduce the impact with subsidies, but this does not correct what is a fundamentally flawed policy in health care financing.
Wait until those shoppers who chose bronze plans start accessing health care. When they’re left broke, maybe they will finally understand our message - that we all can have essential health care, and we can pay for it easily through equitable taxes. Nobody has to shop plans, everyone gets care, and nobody goes broke.