West Virginia is a state whose population is disproportionally likely to benefit from the Affordable Care Act’s subsidized health insurance markets. It has a large population of people who need health insurance and who earn between 100% and 400% Federal Poverty Level (FPL). It has light to non-existent competition on Healthcare.gov so the stable equilibrium may not be converged pricing in every county which compresses the premiums spread.
However since 2017, the total share of Healthcare.gov enrollment that West Virginia supplies has gone down.
For the 2021 OEP, national enrollment increased. It increased on Healthcare.gov once we adjusted for two more states with 7% of the 2020 enrollment leaving the platform and going totheir own exchanges. However, West Virginia lost enrollment again.
There are two things going on, I think.
First, we have good evidence that partisanship matters. Republican leaning counties (and states) tend to have less enrollment at any given price point than a comparable Democratic leaning area. The elite messaging that conservative leaning partisans have heard is that the ACA is horrendous and should be avoided. That (probably) matters.
This obstacle can be overcome through superior pricing.
Here, West Virginia has made a policy choice. The state government has decided that they will not structure their market to provide increased affordability for subsidized buyers. Since 2018, Cost Sharing Reduction (CSR) subsidies are not paid directly by the federal government. Instead, the benefit must be provided and insurers can seek compensation through indirect means via the premium channel. The overwhelming majority (48) states currently have insurers “Silver load” CSR benefits onto the silver premiums. This increases the silver premiums relative to gold and bronze plans and produces larger than 2017 status quo counterfactual subsidies. That means a lot of people are either exposed to zero premium bronze plans OR see gold plans with significantly less cost sharing priced near silver plans. The value proposition in silver load states for people who don’t want to buy silver plans just got a whole lot better and people who bought silver plans in previous years sometimes move to non-silver plans.
Three states, West Virginia, Indiana and Mississippi, mandate a different CSR compensation scheme. These states require insurers to spread the CSR costs to all plans in a system known as Broad loading. Broad loading results in minimal changes in relative premium spreads compared to 2017 policy. Few people see a better deal now than they did under the Obama administration in these states.
The combination of partisan response and the deliberate embrace of broad loading’s inability to provide a different set of pricing facts and reality to counter-act that partisan response in West Virginia has resulted in a shrinking ACA market in the Mountaineer State.