New Mexico just released a road map of state based wrap-around subsidies and benefit enhancements for the ACA marketplace for the 2023 plan year. The state intends to significantly decrease premiums and cost-sharing with state funds. I’ll probably write more about this later as there are some fascinating research ideas embedded within the program design but I need to digest them.
However, there is one nugget that leaped out at me immediately. The state is relabeling Cost Sharing Reduction (CSR) Silver plans so that they are distinctly named instead of confusingly named.
Turquoise Variant Actuarial Values
To simplify the choice landscape for consumers, the underlying metal tier for plans that offer robust out-of-pocket assistance will be replaced with a “Turquoise” label during the shopping experience. Turquoise variant names will correspond with specific AV requirements. The naming conventions will match the level of income-based out-of-pocket assistance offered to consumers, as shown in Table 3. The new “Turquoise” label will help consumers identify which plans qualify for the most robust out-of-pocket assistance.
I think this is going to be very helpful.
Right now, Silver plans are sometimes better than Gold and Platinum, and sometimes they are just better than Gold but other times they are worse than Gold. That is confusing as hell as it breaks the ability of people to learn by doing over time. Buying insurance is really tough in the best of circumstances and the ACA markets are not the best of circumstances. I think having a clear label that indicates that a plan is the highest actuarial value plan available to a particular household makes a lot of sense.
Now it is time to see if it actually changes decision-making.
Wapiti
Just glancing through the attachment, I wonder if New Mexico has determined that they will get the best results by helping their Native American communities better navigate the process.
O. Felix Culpa
What are AV requirements? As a New Mexican (but not on the market), I find this interesting and hopeful. We worked hard to establish and grow Democratic majorities in the state legislature, aka Roundhouse, as well as elect a Democratic governor. It has made a difference in numerous areas. See: free college. NYT. CNN.
O. Felix Culpa
@Wapiti: I don’t know what is being done in this specific area, but the NM government works closely with the leaders of the pueblos and other Native communities in the state.
Parmenides
Doesn’t this really mean that the plan regulations for the different tiers needs to be tightened. If a silver can be better than a gold then the signaling mechanism of the tiers is gone. Adding more or different labels obviously helps but the fundamental problem is that the tier system is broken. I’m not sure how exactly to fix that in a competitive marketplace (which is why my preferred system is second order auctions and one product per state or compact) but adding new colors seems a patch on a broken system. Now, I concede that the Turquoise is signaling something other than the metals but it just screams that its a patch.
David Anderson
@O. Felix Culpa: AV = Actuarial Value — or the amount of total allowed claims that the patients as a group have to pay in the form of deductibles, co-pays and co-insurance.
Right now AV changes by plan choice and income. For instance someone who earns between 100-150% FPL can buy a 94% AV Silver plan (~$500 annual deductible) or an 80% Gold plan or a 60% AV Bronze plan… New Mexico would bump up the Silver AV to 99% (~$75 annual deductible)
West of the Cascades
@David Anderson: I am excited by this as a freshly-minted New Mexican with my medical insurance through the marketplace. Does the fact that NM manages its own marketplace (beWellnm) give it more flexibility to do this than if it were managed through healthcare.gov?
Geminid
@O. Felix Culpa: New Mexico’s Democratic Governor and legislature also pushed through an ambitious clean power plan in 2019. This will have general health benifits, especially when the Four Corners coal generation plant finally shuts down in 2031 Astronauts orbiting the Earth in the 1960’s remarked on that plant’s visible smoke plume
O. Felix Culpa
@David Anderson: Thanks for the explanation. :)
David Anderson
@West of the Cascades: Yes, a state based marketplace allows for way more flexibility in policy decisions for a state. The plumbing is intense and detailed in the attached document and it can’t be done for a single state on Healthcare.gov
West of the Cascades
@David Anderson: Thanks! I am even more officially happy to have moved from Oregon to New Mexico now.