Come for the politics, stay for the snark.

Damn right I heard that as a threat.

Sitting here in limbo waiting for the dice to roll

Speaking of republicans, is there a way for a political party to declare intellectual bankruptcy?

“But what about the lurkers?”

Jesus, Mary, & Joseph how is that election even close?

We’ve had enough carrots to last a lifetime. break out the sticks.

Fuck the extremist election deniers. What’s money for if not for keeping them out of office?

Accused of treason; bitches about the ratings. I am in awe.

No one could have predicted…

When your entire life is steeped in white supremacy, equality feels like discrimination.

Anyone who bans teaching American history has no right to shape America’s future.

When do we start airlifting the women and children out of Texas?

Accountability, motherfuckers.

Shallow, uninformed, and lacking identity

An almost top 10,000 blog!

A sufficient plurality of insane, greedy people can tank any democratic system ever devised, apparently.

I know this must be bad for Joe Biden, I just don’t know how.

It may be funny to you motherfucker, but it’s not funny to me.

The willow is too close to the house.

Republican obstruction dressed up as bipartisanship. Again.

Good lord, these people are nuts.

If you’re pissed about Biden’s speech, he was talking about you.

Whatever happens next week, the fight doesn’t end.

Not so fun when the rabbit gets the gun, is it?

You are here: Home / Anderson On Health Insurance / Enrollment by Actuarial Value in 2015

Enrollment by Actuarial Value in 2015

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I wanted to look at the average purchased actuarial value on the Exchange in 2015. My expectation going into the data dive was that the average purchased value would be significantly below the target threshold. My thought was that all else being equal, a plan with a lower actuarial value will have both a lower absolute premium and a lower net of of subsidy premium. I thought that the marginal buyer on the Exchange is primarily price sensitive so that they would buy the lowest priced product within a metal band all else being equal.

I got surprised. This is not what I saw in the data for 2015.

Average Bronze was a smidgen above the target.  Silver, Gold and Platinum were within one point of the target.  I had expected to see average purchased AV with a one’s digit of eight not nine.

Chart 2 is the ever enrollment sums by trimmed actuarial value bins.  As you can see Silver is the dominant story here.

 

Bronze, Gold and Platinum have similar profiles.  Silver is a bit different.  I think that this is the Cost Sharing Reduction (CSR) effect.  CSR is added on top of the standard benefit design.  An CSR qualified individual will see the same net benefit structure if they buy a 68% Silver or a 72% Silver, all else being equal.  In this scenario, it makes the most sense for the individual to buy the least expensive Silver as they will still get a 73%, 87% or 94% actuarial value plan at the end.

The last thing that I found interesting is that insurers were offering lower AV value products on average than what was being bought.  The spreads were not large although it was largest at Bronze and smallest at Platinum.  I am not sure what this means but my expectations were wrong when I started this.

 

 

Data: Enrollment data was here. Actuarial Value data was from the Universal Rate Review Template PUF. Other data from 2015 QHP Landscape PUF.

Reader Interactions

7Comments

  1. 1.

    Nicole

    I love your posts, David, but boy howdy sometimes they make me feel like I’m a moron (because this is an important issue that I just don’t know much about) – what is your evaluation of this? Are you saying that people are doing a better job shopping for overall value than just looking for the least expensive plan in each band? That is, they’re being reasonably smart consumers when shopping for a plan?

  2. 2.

    David Anderson

    @Nicole: I don’t know what to say about this data yet.

    I had gotten into a good conversation on Twitter yesterday about plan level enrollment data and then I started to put things together. And as I put things together, my priors were getting shakier.

    I don’t have a good story to tell myself much less anyone else about this data yet. I think it is interesting in the best sense of that word.

  3. 3.

    itstrue

    It’ll be interesting to see how this plays out as the rules changes for 2018 take effect, with allowable AVs shifting from +/-2% to +2/-4%. If no one bites on the -4’s, that says something.

  4. 4.

    Nicole

    @David Anderson: Thanks. Even as someone with no background in this, it is really interesting to watch a major social program come into existence and evolve. Social Security is very different from what it was at the start, although the overall objective has always been to reduce elderly poverty. It’s much better at it today than it was when it originated; I hope health care doesn’t get sabotaged and has a similar (though maybe a bit faster) journey.

  5. 5.

    hilts

    OT

    As journalism and democracy struggle, New America Foundation caves in to Google

    The New America Foundation has received more than $21 million from Google; its parent company’s executive chairman, Eric Schmidt; and his family’s foundation since the think tank’s founding in 1999. That money helped to establish New America as an elite voice in policy debates on the American left.

    But not long after one of New America’s scholars posted a statement on the think tank’s website praising the European Union’s penalty against Google, Mr. Schmidt, who had chaired New America until 2016, communicated his displeasure with the statement to the group’s president, Anne-Marie Slaughter, according to the scholar.

    The statement disappeared from New America’s website, only to be reposted without explanation a few hours later. But word of Mr. Schmidt’s displeasure rippled through New America, which employs more than 200 people, including dozens of researchers, writers and scholars, most of whom work in sleek Washington offices where the main conference room is called the “Eric Schmidt Ideas Lab.” The episode left some people concerned that Google intended to discontinue funding, while others worried whether the think tank could truly be independent if it had to worry about offending its donors.

    Those worries seemed to be substantiated a couple of days later, when Ms. Slaughter summoned the scholar who wrote the critical statement, Barry Lynn, to her office. He ran a New America initiative called Open Markets that has led a growing chorus of liberal criticism of the market dominance of telecom and tech giants, including Google, which is now part of a larger corporate entity known as Alphabet, for which Mr. Schmidt serves as executive chairman.

    Ms. Slaughter told Mr. Lynn that “the time has come for Open Markets and New America to part ways,” according to an email from Ms. Slaughter to Mr. Lynn. The email suggested that the entire Open Markets team — nearly 10 full-time employees and unpaid fellows — would be exiled from New America.

    h/t http://www.emptywheel.net/2017/08/30/as-journalism-and-democracy-struggles-new-america-caves-to-google

  6. 6.

    Sab

    @hilts: I know your comment was OT to David’s important point, but still, WOW! So New America Foundation is now dreck. That is very unfortunate.

  7. 7.

    Another Scott

    @hilts: I’m having trouble getting outraged about this.

    Foundations that depend on benefactors for their funding are always – at least to some extent – at the mercy of those benefactors. It goes with the territory.

    I don’t think that Lynn is being “squashed by Google” or however he’s spinning it.

    That said, Yes, corporate consolidation is a problem. But there are many, many problems that need to be addressed….

    My $0.02.

    Cheers,
    Scott.

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