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Dear Friends & Colleagues,

Re: Insight from Three Obscure ACA Metrics

When HHS releases its next enrollment update in the coming days, the media will likely focus on three numbers: (1) total sign-ups for qualified health plans; (2) the proportion of enrollees between ages 18 and 34; and (3) state-specific numbers relevant for local constituencies.  And all three are sure to be fascinating numbers!  Goodness knows that we’ll have something fun to say about those soon after they are released.
 

HOWEVER, we believe that three other (and more esoteric) metrics also provide important insights into enrollment trends.  We summarize these data for you below.  Note that at least two of the three numbers are consistent with the view that most marketplace enrollees through February 1, 2014 previously had insurance and have simply transitioned from earlier coverage to subsidized policies.
 We’ll discuss this briefly in the “Implications” section at the end.

Stand-Alone Dental Plans: Strong Interest in FFM States

We noticed a fascinating number in the most recent enrollment report from HHS.  Of the 1.9 million served by the federally-facilitated marketplace (FFM) by February 1, 2014, some 422,000 consumers (21%) have purchased stand-alone dental policies.  Interestingly, the coverage isn’t for children: 96% of the policies were for adults age 18-64.  And adults age 26-44 were disproportionately likely to buy stand-alone dental coverage.  The geographic distribution is also a bit surprising: in 17 of the 36 FFM states, more than one in five adult QHP enrollees selected stand-alone dental products (including the larger states of Georgia, Texas, Virginia, Pennsylvania, New Jersey, Illinois, and Florida).  Unfortunately, though, the enrollment report doesn’t show the timing of the purchase, so it is not possible to discern any change in enrollment trends before and after the New Year.  We also don’t have data yet on the state-based marketplaces (SBM), so we may not yet have the full picture.  Even so, these data are evidence of the early demand for ancillary dental coverage. 
 

Bronze Plan Selection: Undersubscribed?

Bronze plan selection seems surprisingly low with fewer than one in five consumers choosing this metallic tier.  Given reports that perhaps one in four subsidy-eligible adults may qualify for a “zero dollar” plan, we might have expected the bronze selection rate to be higher as such coverage is essentially “free”.   These numbers may lend additional evidence to support the conclusion that signups to date are disproportionately from the ranks of the previously insured.  That said, the rate of bronze plan selection may well increase as more uninsured individuals enter the marketplaces in the 20 days remaining of open enrollment.
 

Overall, males were slightly more likely than females to select bronze coverage (17% and 15%, respectively). However, in twelve of the 36 FFM states, more than 20% of adults selected bronze plans (including Illinois, Texas, Montana, Alaska, Indiana).  We also know that the rate of bronze selection was on average higher in SBM relative to FFM states (23% and 16%, respectively) – with relatively higher rates of bronze selections in Washington, Hawaii, Colorado, Maryland, and DC.  (The higher rates of bronze selection in SBM may be a product of the different way in which these marketplaces present health plans to consumers relative to the presentation in the FFM.)   Still, bronze signups appear relatively low across most marketplaces.

Catastrophic Plan Selection: Enrollment Trending Light

Catastrophic or “cat” plans had relatively low enrollment (approximately 36,000) across all states and both sexes.  Data for the approximately 19,000 cat plan enrollees in the FFM are only partly revealing.  While cat plans are by definition limited to persons age 29 or under or with very low incomes, 54% of enrollees are between ages 26-34 -- and only a very small fraction (3%)  are 18 or under.  Because of the format of the HHS reporting, we cannot tell the proportion of persons age 26 to 34 who qualified on the basis of their income rather than their age.  The relatively low interest in cat plans is perhaps unsurprising if you believe that persons transitioning from coverage make up the majority of current Marketplace enrollees.

Note that enrollees in cat plans cannot claim the § 36B premium assistance tax credits for such coverage, though cat plans do count as minimum essential coverage for purposes for the § 5000A tax penalty.  One related statistic: Among the approximately 322,000 enrollees in the FFM states
not receiving subsidies, 30% chose bronze plans and an additional 6% chose catastrophic plans.

Implications: More Enrollment Work to Do

If most marketplace enrollees to date previously had insurance, then the tax industry’s work with enrollment has become even more important.  In short, the tax industry helps uninsured individuals enroll by leveraging the 1040 information to streamline the application process.  Since 88% of the uninsured who are eligible for the tax credits are already filing taxes, the tax filing moment may be the best opportunity to enroll these Americans.  We take this role seriously and will continue to help – now and again during the open enrollment period for 2015, which, we are happy to report, now extends through February 15, 2015!

We will update this analysis when HHS shares February enrollment data in the coming days.  Please feel free to contact me at
brian.haile@jtax.com or 615-761-6929 if I can be helpful in any way.  

Yours,
 
Brian


 1 See generally, Laszewski, Bob, “Survey Data and Market Reports Say the Uninsured Are Not Signing Up for Obamacare,” January 19, 2014 blogpost, available at http://healthpolicyandmarket.blogspot.com/2014/01/survey-data-and-market-reports-say.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+HealthCarePolicyAndMarketplaceBlog+%28Health+Care+Policy+and+Marketplace+Blog%29; Nather, Dan, “Obamacare stats still hard to nail down,” Politico, February 24, 2014, http://www.politico.com/story/2014/02/obamacare-enrollment-numbers-103828_Page2.html. By way of background, the February enrollment report noted that about 82% of qualified health plan enrollees (which translates to about 2.6 million people) receive financial assistance. This in itself is a small 

number: the pre-2014 individual market alone served roughly 11 million enrollees. See Kaiser Family Foundation, “Individual Insurance Market Competition,” (2011), available at http://kff.org/other/state-indicator/individual-insurance-market-competition. Over 44% of individuals with “direct purchase” insurance in Census Bureau surveys reported incomes between 125%-400% of the federal poverty level. While some individuals may retain grandfathered plans and others may not be eligible for a substantive tax credit, it is very likely that the 2.6 million enrollees receiving assistance transferred from a plan for which they were paying “full freight.” Author’s calculations of data from Current Population Survey 2012-13 from U.S. Census Bureau. 

2 The general source for enrollment data analyzed here is: U.S. Department of Health and Human Services, “Health Insurance Marketplace: February Enrollment Report,” ASPE Issue Brief, February 12, 2014, available at http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Feb2014/ib_2014feb_enrollment.pdf. 

3 For estimates on the availability of zero-dollar bronze products, see recent reports from McKinsey and Credit Suisse at http://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Healthcare%20Systems%20and%20Services/PDFs/McKinsey_Reform_Center_Exchanges_go_live_Early_trends_in_exchange_dynamics.ashx and https://doc.research-and-analytics.csfb.com/docView?sourceid=em&document_id=x531093&serialid=QVESvNa9T%2bFOVahl%2fzKL5CWJ8Ce%2f8bybAHq1HuKQ4zw%3d, respectively. 

4 Dorn, Stan, Matthew Buettgens, and Jay Dev, “Tax Preparers Could Help Most Uninsured Get Covered,” Urban Institute and Robert Wood Johnson Foundation, February 18, 2014, available at http://www.urban.org/publications/413029.html.