If you’re familiar with the different levels of Obamacare coverage, you’ve probably heard of the “metal” levels: Bronze, silver, gold and platinum, in addition to catastrophic health plans.
There have been some suggestions recently to add a cheaper coverage level to the Affordable Care Act to help draw people into the program. Karen Ignagni, head of America’s Health Insurance Plans, suggested it this past week. The Obamacare “fix” package offered by five centrist Democratic senators and one independent yesterday would also create a lower tier of coverage. Insurance industry consultant Bob Laszewski offered a similar idea on his blog this week.
It’s all happened in the same week that Obamacare hit a symbolic target – 6 million signups and counting in the program’s first year. What’s still unclear is the health status of those joining the exchanges. Insurers say adding a cheaper level of coverage would help attract into the program healthier people, who might not feel that strongly about their need for health insurance.
“People could gradually get into the program so they could be part of the risk pool, so we don’t hold healthier people outside so the process could be working the way it’s designed,” said AHIP’s Ignagni on C-SPAN’s “Newsmakers."
At some point, there's a limit to how cheap plans could get without a change to the law. Plans have to live by ACA caps on out-of-pocket costs, provider network requirements and a mandated set of 10 benefits. Obamacare allies that fought for the law’s passage wouldn’t be thrilled about weakening those requirements.
Sabrina Corlette of Georgetown University’s Health Policy Institute said she doesn’t see the need to add a cheaper coverage level into the mix. “It strikes me as a solution in search of a problem,” she said. “When you look at enrollments and where enrollment is going in the marketplace, we’re seeing people gravitate to silver and above.”
According to the Obama administration's most recent monthly enrollment report, the mid-level silver plan has easily been the most popular in the Obamacare exchanges – 63 percent have selected that level of coverage, in which insurers pay 70 percent of the costs. People choosing silver plans can also get federal help with out-of-pocket costs if their incomes are under 250 percent of the federal poverty level. The bronze plans, which offer cheaper premiums but higher out-of-pocket costs, have been less popular in the exchanges, accounting for 18 percent of signups.
Just 1 percent of exchange enrollees have selected catastrophic plans, but only two categories of people can purchase catastrophic coverage – anyone under 30 years old, or anyone who had their health plan cancelled this past year. People also can’t receive subsidies for catastrophic health plans.
One wild card is we don’t know much about what level of coverage people are buying off the exchange, where subsidies aren’t available. The online Web broker eHealthInsurance gave us a glimpse of that market this week, reporting that 14 percent of its customers during the last six months have picked catastrophic plans and 43 percent chose bronze – both much higher rates than what the exchanges have seen.
Ceci Connolly, managing director of PwC's Health Research Institute, said there’s been a shift toward cheaper plans in the later months of the six-month enrollment period. But it’s too early to say whether another cheaper coverage level could bring more people into the market.
“There’s so much we need to learn from this first year,” Connolly said. “It probably makes sense to collect some information and make a more informed decision for next year.”