Implementing Health Reform. On October 28, 2015, the Assistant Secretary for Planning and Evaluation (ASPE) for the Department of Health and Human Services released a report on Decisions Regarding Health Plan Choices in the 2014 and 2015 Marketplaces.
Healthcare.gov opens for enrollment for the 2016 open enrollment period on November 1, 2015. Consumers who were enrolled in a marketplace plan for 2015 can return to the marketplace as of that date and choose a different plan for 2016. (The marketplaces are already available for window shopping.) Individuals who are enrolled in coverage for 2015 and who do not return to the marketplace and select a different plan for 2016 will be reenrolled in the same plan they were enrolled in for 2015 (or a “crosswalk” replacement plan offered by the same insurer.) The message of the ASPE report is that it pays well to return to the marketplace and shop.
Of the 6.4 million individuals enrolled in a plan through the 35 states that used the federally facilitated marketplace (FFM) for both 2014 and 2015, 4.8 million (74 percent) reenrolled for 2015. These 6.4 million enrollees include 1 million enrollees who did not enroll during the 2015 open enrollment period but rather selected a plan during a special enrollment period after the end of the 2015 open enrollment period. Also included are a half million who selected a plan during the 2015 open enrollment but selected a different plan during a special enrollment period during 2015. The report does not fully explain where the 2014 enrollees who left went, but presumably many transferred to Medicaid, Medicare, off-marketplace individual coverage, or employer coverage.
Of the 4.8 million who reenrolled for 2015, 1.5 million (31 percent) switched plans. Of the 3.3 million (69 percent) enrollees who stayed with their 2014 plan or a crosswalk plan, 1.1 million actively reenrolled in the plan while 2.2 million were auto-reenrolled. Plan switching rates are much higher than historical rates in employer-sponsored insurance (2.8 percent), the Federal Employee Health Benefits Program (12 percent), and Medicare Drug Plans (13 percent).
The percentages of 2014 enrollees who returned for 2015 vary significantly from state to state. Forty-four percent of Iowa and 40 percent of Nebraska enrollees did not return, while only 18 percent of Arizona and Wyoming enrollees left. African Americans and individuals with incomes above 400 percent of the federal poverty level were disproportionately likely to leave. The percentages of 2014 enrollees who chose a new plan as opposed to staying with their 2014 plan also varied by state (but not by demography). 37 percent of Nebraska enrollees and 33 percent of Arkansas enrollees chose a new plan, but only 11 percent of Alabama and 13 percent of Arkansas enrollees switched.
Of the 1.5 million 2014 enrollees who switched plans for 2015,
- 340,000 (23 percent) changed plans within the same metal level and insurer,
- 570,000 (39 percent) changed insurer but not metal level,
- 300,000 (20 percent) changed metal level but not insurer, and
- 260,000 (18 percent) changed metal level and insurer.
Most (69 percent) of 2014 enrollees were enrolled in silver plans. Cost-sharing reduction payments (CSRs) are only available for silver plan enrollees and 85 percent of silver plan enrollees received CSRs. Moreover, the amount of premium tax credits is pegged to the second-lowest cost available silver plan. Over 90 percent of the 2014 silver plan enrollees who remained for 2015 stayed at the silver level. Only two percent of 2014 enrollees were enrolled in catastrophic plans. Almost two-thirds of these (63 percent) did not return for 2015, while 19 percent moved to a higher level of coverage.
Of silver and gold 2014 enrollees (9 percent and 4 percent of all enrollees respectively) about half reenrolled in the same level, a quarter moved to a lower level, and a quarter did not reenroll. Overall, of the 9 percent of enrollees who changed metal level, two thirds moved to a lower metal level category, and one third to a higher metal level.
ASPE estimates that consumers who switched plans but not metal levels in 2015 saved $33 per month—nearly $400 annually—over what they would have paid had they stayed with their 2014 plans for 2015. Consumers who stayed at the same metal level but switched plans and insurers saved $41 per month, about $490 annually. Consumers who switched metal levels may have saved money in premiums by switching, but if they went from a silver plan to a lower-level plan they might have incurred much higher cost sharing without access to CSRs and thus ended up spending more. Premium savings from switching plans within metal levels varied significantly from state to state — from $67 per year in Delaware to $699 per year in Louisiana.
ASPE also modeled the effect of premium competition among plans on consumer choice in 2015. Not surprisingly, consumers are less likely to select a plan if its premium, after the application of premium tax credits, is high relative to the premiums of other plans in the rating area. Consumers are, for example, 24 percent less likely to enroll in a silver plan with a premium 10 percent higher relative to other plans in the area. Price sensitivity increased with plan metal level.
Consumer responsiveness to premium increases (after the application of premium tax credits) also, again not surprisingly, varies depending on whether the premiums of competing plans increase. If a plan increases its premiums by 10 percent and no other plans in the rating area increase their premiums, enrollment drops by 30 percent, but if all other plans increase premiums 10 percent, enrollment in that plan would only drop 4 percent. Because premium tax credits are set based on the premium of the second-lowest cost plan in a rating area, consumer responsiveness will vary not only based on premium changes in the plan in which a consumer is enrolled but also in the changes in the premium of the benchmark plan.
According to the CMS press release accompanying the ASPE report, if all 2015 enrollees switched from their 2015 plan to the lowest-cost plan in the same metal level for 2016, consumers could save an average of $610 annually before tax credits. The total savings to consumers and taxpayers—who pay for the premium tax credits—would exceed $4 billion. More than 80 percent of 2015 marketplace enrollees can find a lower premium plan in the same metal level before tax credits by returning to shop.
Of course, consumer plan selection should depend not only on premiums, but also on other factors such as plan networks, formularies, and cost-sharing structures. New marketplace features may help consumers make plan comparisons based on these factors. Moreover, if every consumer switched to the lowest-cost plan in a metal level, there might be dramatic effects not only on plan premiums but also on market stability. It is clearly in the interest of individual consumers, however, to shop.
from Health Affairs Blog http://ift.tt/1P5YVQV
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