From Alain – I had to clone David’s original post because it’s borked for some reason. Please use this one instead as commenting in the other post was nonfunctional for most.
Over at Health Affairs, I have a piece that riffs on a series of posts that sketched out what an auto-enrollment process could be. I liked that series but I have some suggestions for making the proposal stronger and easier to implement.
The first is a very weedy examination of risk adjustment. They proposed using Catastrophic plans which currently risk adjust against themselves to take advantage of the low premiums. But those plans would not lower the rates of Bronze, Silver or Gold plans. There is a better solution to give catastrophic/hit by a meteor coverage at zero net premiums while improving the entire metal risk pool:
If we are to assume a low-premium plan that contributes to metal risk adjustment is a desired means of lowering premiums in the metal risk pool by lowering average morbidity, then the idea advanced in 2013 by Senator Mark Begich (D-AK) and others to allow so-called “copper” plans that have 50 percent actuarial value would be a better course of action. Copper plans would have higher deductibles and out-of-pocket maximums than current bronze and catastrophic plans. These plans would also have lower premiums due to the lower actuarial value being sold.
My other suggestion is more mechanical — move the open enrollment window:
Katherine Swartz and John A. Graves found in 2014 that the current policy benefit year that begins on January 1 and ends on December 31 coincides with periods of significant financial stress for households. The Henry J. Kaiser Family Foundation found in 2017 that almost half of the currently uninsured thought insurance was too expensive. It is plausible that the timing of the open enrollment period at the height of financial stress has led to more people electing to remain uninsured. The entire market could be improved if the policy year shifts to a May 1 to April 30 cycle instead of the current calendar year cycle. This would lead to purchasing decisions made with the most recent tax information as well as eliminating a source of adverse selection and sorting.
Some states are starting to talk about how they can get creative with the ACA in order to stabilize their markets. Auto-enrollment is a plausible mechanism so I hope that I am able to smooth off at least one or two rough edges of a pretty good initial plan.