The last-minute Obamacare shoppers were bargain hunters


Unlike the Olympic Games, "silver" health plans are Obamacare's clear winner. (Nelson Ching/Bloomberg News)

Welcome to Health Reform Watch, Jason Millman's regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Jason with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, or sign up here to receive it straight from your inbox. Read previous columns here.

Obamacare enrollment may have ended weeks ago, but it came to a symbolic conclusion Thursday when the Obama administration released the final enrollment report for 2014. Importantly, we have a final look at what types of new health plans the 8 million Americans who signed up for Obamacare are choosing.

What kind of insurance coverage Americans are buying 

Comparing the latest Department of Health and Human Services monthly enrollment report to the previous month's, we see that the nearly 4 million people who signed up since the end of February were more likely to pick cheaper coverage.

Similar to the Olympic Games, health plans under the Affordable Care Act come in bronze, silver and gold, as well as catastrophic (the cheapest option) and platinum (the most expensive). The general idea of the "metal levels" is as you climb from catastrophic up through platinum, premiums get more expensive as the health plans cover more and out-of-pocket costs decrease. Naturally, there's already a Wonkblog explainer on this.

Twenty percent of all people who chose plans in the Obamacare marketplaces went with bronze, and 65 percent chose silver — both were up from 18 percent and 63 percent, respectively, at the end of February. The percentage of those picking gold (9 percent) and platinum plans (5 percent) through the end of the enrollment period were down slightly from February. Overall, 2 percent chose catastrophic plans.

The mid-level silver plans, in which insurers cover 70 percent of the costs, seem to hit the sweet spot for customers who got federal aid. Those plans also offer an additional benefit that other metal levels don't. People signing up in silver plans who earn less than 250 percent of the federal poverty level — $29,175 for an individual, or $59,625 for a family of four — are also eligible for assistance for out-of-pocket costs.

But let's go a little deeper in what people are choosing this year, with help from some charts courtesy of Wonkblog's Christopher Ingraham.

Federal vs. state marketplaces

From the following chart, you can see bronze plans were somewhat more popular and silver plans less popular in the state-run exchanges, compared to the 36 federal-run marketplaces.

ffmvsstates

What explains this federal-state difference in bronze enrollment? Federal subsidies appear to have driven Americans to more expensive silver plans. HHS reported that 86 percent of people selecting plans in the federal exchanges qualified for federal assistance, compared to 82 percent of people in the state-run exchanges.

There was a pretty wide disparity in the percentage of people qualifying for federal subsidies in some state-run exchanges. In the District of Columbia, for example, just 16 percent of sign-ups qualified for premium subsidies. The subsidy eligibility rate was also relatively low in Colorado (60 percent), Hawaii (38 percent) and Vermont (59 percent). In Hawaii's case, major technical problems with the exchange prevented people from applying for subsidies, officials there said.

More evidence that subsidies matter

Nationally, about 85 percent of people who picked an exchange plan qualified for a subsidy. For the 15 percent who didn't, they gravitated more to the cheaper bronze-level plans, which feature higher out-of-pocket costs. Here's what that looks like in the 36 federally facilitated marketplace (FFM), or federal exchanges.

financialassistance

Subsidies are cut off at 400 percent of the federal poverty level, which is almost $46,000 for an individual and $94,000 for a family of four. So why would people earning more gravitate to the cheaper plans? A few explanations are possible. The subsidies for lower-income exchange enrollees were apparently good enough to make silver plans a better value than the bronze. Those earning too much for subsidies may think even the second lowest-cost option is still unaffordable.

What about the youth?

Since the Obama administration has spent so much energy on enrolling young adults, let's take a look at what they're selecting. The plan selection stays pretty true to the overall national picture.

youngpurchase

An interesting shift during the last six weeks of enrollment occurred in catastrophic plans, the skimpiest coverage option under the health-care law. The high-deductible plans, which aren't eligible for subsidies, were only supposed to be available to people under 30 or people who were unable to afford other coverage. Then the controversy over canceled health plans erupted last fall, and the Obama administration said anyone with a canceled plan can purchase catastrophic coverage.

At the end of February, young adults (ages 18-34) had accounted for 91 percent of all people picking catastrophic plans. By the end of enrollment, though, young adults accounted for 83 percent of all catastrophic plans. So that suggests that some people who had canceled plans did sign up for catastrophic coverage near the end of enrollment, but still a relatively small amount. Just about 89,000 people in all chose catastrophic plans in the federal exchange states.

What are people buying off the exchange?

We don't have a great of what individual plans people are purchasing off the exchanges, a relatively small market that accounts for 5 million people, according to Congressional Budget Office estimate. But a new report from eHealthInsurance, an online Web broker selling individual plans across the country, may serve as a guide.

As the enrollment period progressed, eHealth found that people were buying cheaper plans, as expected. For the most part, people buying coverage through eHealth didn't have access to federal subsidies. Over the entire enrollment period, eHealth said individual plan premiums averaged $271, while family plans were $667.


(eHealthInsurance)

Now, here's the tradeoff. As people chose plans with cheaper premiums, the plans also came with higher deductibles. The average deductible for coverage selected between January and March was $4,307 for individual plans and $8,045 for family plans — 14 percent and 12 percent higher, respectively, than plans chosen between October and December, eHealth said.


(eHealthInsurance)

The types of plans people are purchasing will be an especially interesting data point to track between the first and second years of the ACA's insurance market overhaul. Will people decide it's worth paying a bit more in premiums next year if they feel they paid too much out of pocket this year? Will they decide the insurance is too expensive altogether, and they'd rather risk facing the individual mandate penalty?

Be sure to check back next year.

Top health policy reads from around the Web.

Obamacare enrollment will be tougher next year. "The Obama administration needs to improve everything from customer service to Spanish-language outreach if it’s to parlay a functioning website and recent enrollment momentum into even more Americans with health coverage, supporters said. ... The enrollment period for 2015 begins Nov. 15 and is just three months, half as long as this year. The federal government may not have as much money to spend on advertising or on groups that help people sign up." Alex Wayne in Bloomberg.

Federal exchanges did pretty well, too. "A last-minute deluge of health insurance sign-ups came from states where political leaders have opposed the Obama administration’s health-care law, according to federal figures released Thursday. In March and April, the number of people enrolling in plans more than doubled in the 36 states that chose not to set up their own marketplaces, the figures show. Most of these states deferred to the federal marketplace, HealthCare.gov, in a show of resistance to the program." Sandhya Somashekhar and Dan Keating in the Washington Post.

Another HHS departure. "One of the federal government’s top Obamacare officials, Mike Hash, will retire at the end of May." Meghan McCarthy in Morning Consult.

This post was updated with a clarification of who's eligible to purchase catastrophic coverage.

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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