Variations in the lived experience in the ACA

The ACA has always been a tremendously heterogeneous lived experience. It varies by year and it varies by county. There is some consistency when the stars and the moon line up. There is inconsistency as a function of the very design of the subsidy structure as well as normal business decision combined with federal policy changes as well.

I want to highlight the picture below as I had to throw it out off of the poster I presented at the National Health Policy Conference on Monday as it was out of the time scope of the work I showed. But I still think it is pretty cool. The left hand side is a set of counties in Tennessee with the Silver Spread (Least Expensive Silver plan minus Benchmark Silver plan) for a 40 year old non-smoker in 2017. The right hand side is the Silver Spread for a 40 year old non-smoker in 2018 in the same counties.

So what is going on here?

In 2017, Blue Cross and Blue Shield of Tennessee insured the west side of the line. In those counties they offered two Silver plans. One Silver plan was significantly more expensive than the other. On the east side of the line, Humana was the only insurer in the light yellow counties. Humana only offered a single Silver plan. That was the least expensive plan and the Benchmark plan for the no-gap counties. The counties on the west side offered much more affordable, net of subsidy, deals to healthy, subsidized individuals than the eastern counties.

In 2018, Humana bailed from the individual market. Blue Cross and Blue Shield expanded into the counties that Humana used to cover in Tennessee. In these counties, they are the only insurer. They kept their previous strategy of offering two Silver plans; a high premium and low premium plan. They also assumed (correctly) that Cost Sharing Reduction Subsidies (CSR) would not be paid for the 2018 plan year so they built CSR costs into the baseline Silver rates. From here, the counties that always had BCBS coverage saw a doubling of the Silver Gap. The new to BCBS counties saw a new Silver Gap worth $194. A 40 year old individual in Roane County earning $29,500 now qualifies for a $0 Silver plan in 2018. Last year, they would have been paying about $130 for that Silver plan.

The lived experience of the ACA changes every year and over every county line. And this will be even more true as more and more states adopt 1332 waivers going forward.

4 replies
  1. 1
    Patricia Kayden says:

    Thanks for explaining a market which appears very complex to non-experts. With all that Republicans are doing, I’m surprised that the ACA is surviving, to be quite honest.

  2. 2
    Brad F says:

    “The counties on the west side offered much more affordable, net of subsidy, deals to healthy, subsidized individuals than the eastern counties.”

    “Deals to healthy?” You mean people, regardless of health, who chose to buy that particular silver product, correct?


  3. 3
    ProfDamatu says:

    @Brad F: I’m not David, but my guess based on past experience is that the cheaper Silver probably has higher deductible and out of pocket costs (and possibly even a narrower network and/or drug formulary) than the benchmark silver, making it much more attractive to healthy individuals than to folks who think they might have substantial health care needs.

  4. 4

    @Brad F: correct.

    My implied assumption is that the known sick are buying no matter what so pricing is irrelevant but on the intensive margin pricing matters for the healthy

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