CSR retention and mandate repulsion

Covered California released their open enrollment wrap-up report.  They were basically flat year over year.

Covered California announced that more than 1.5 million consumers selected a health plan for 2019 coverage during the most recent open-enrollment period, a figure in line with last year’s total. There was a 7.5 percent increase in the number of existing consumers renewing their coverage and a 23.7 percent drop in the number of new consumers signing up for 2019.

This is in directional alignment with the experience of Healthcare.gov.  There renewals were flat year over year.  New enrollees were down by 15% year over year.

I think two seperate forces are pushing against each other.

We know that pricing is good for the subsidized population because of the termination of Cost Sharing Reduction (CSR) subsidies.  95% of the country is seeing the CSR costs loaded into the Silver premiums only which makes Gold and Bronze plans for subsidized buyers relatively cheaper than they otherwise would have been.  Anyone who goes and looks will see a good deal.  The renewal process is working rather smoothly and people who are already in the system are still seeing good enough deals to stick around for another year.

The other force is getting new people to look at plans.  This is where the individual mandate seems to matter.  Compared to 2017 and 2018, new buyers have fallen off.  They have fallen off in Healthcare.gov states where there is an attendant drop in outreach, advertising and assistance funding.  They have fallen off in California which is probably operating at the outreach possibility frontier.

I think that once a subsidy eligible individual looks at the exchanges, they will likely see a good deal.  But the lack of a mandate has decreased the probability that someone who is subsidy eligible will look in the first place.  We can test this by seeing how many new accounts were created that never purchased insurance over time.

The change of the covered population to a higher level of retention can change some dynamics.  It reduces churn and it may increase the average duration of coverage at a particular insurer. Longer spans change incentive calculations for preventive care pushes.  I wonder if we need to think about closed blocks of business logic with the ACA?

Right now CSR Silverloading keeps the currently signed up, signed up while the lack of a mandate seems to push some incremental enrollees away from ever signing up.