New Jersey and the policy counterfactual for outreach

New Jersey has a Democratic trifecta since January 2018. The legislature and governor have been active.

  • Reinsurance waiver funded by
  • State based mandate
  • Transitioning to a State-Federal Partnership exchange

So what are the effects?

This is a bit convoluted.  New Jersey projects that without the policy changes, that started in 2019, 2020 premiums would be 30% higher in 2020 than they are in 2019 instead of the 8.7%.

The transition to their own exchange is also having impact:

One of the big advantages of a state running their own exchange is that they don’t count on federal advertising or outreach funds.  Instead, locally raised money can be spent locally to achieve state objectives.  In 2018 and 2019, New Jersey had a “small” dose of navigator and advertising dollars.  In 2020, the navigator dose will be six times larger and potentially better targeted.  The same may be true for advertising dollars where there will be more spent and potentially spent more effectively.

The theory of change is that this will lead to more enrollment and lower premiums than if New Jersey had stayed on  The idea is that the most marginal buyers who are currently flipping a coin and having it come up tails and therefore they are deciding to not buy any insurance are relatively healthy and cheap to cover folks.  Advertising and navigation assistance will change the weight of the coin and push at least some of these marginal decision makers into the ACA pool where they will cost significantly less than average which brings down premiums.  California claims that their advertising and outreach delivers massive premium reductions through this mechanism.

From a causal identification strategy point of view, the boundary states provide a lot of potential matched pairs for a difference in difference analysis.  Pennsylvania and Delaware are constant states with no changes in governing structure since 2017.  Maryland and New York run their own exchanges.  Maryland will be changing their enrollment process by easing administrative burden next year.  Since New Jersey has rolled out some of the policy changes in stages (mandate/reinsurance 2019, more advertising/navigation 2020…) dis-entangling impact should be easier than if all of this happened at once.

New Jersey should be the source of a dozen really cool papers by 2023 that will bring insight into what drives individual market enrollment.

Medicaid expansion and zero premium exchange plans

The Civitas Institute of North Carolina is arguing against Medicaid expansion. They contend that Medicaid expansion will throw thousands of people off of their current zero premium plans that they can buy on the Exchange.

The expansion population is composed of working age, able-bodied adults, 78 percent of whom have no dependent children. Working full time at minimum wage, these individuals would be eligible for fully-subsidized, no-cost-to-them plans on the federal exchange….

Expansion will force approximately 146,000 North Carolinians off of their private plans and move them onto the state’s Medicaid rolls. It will also disqualify an additional 120,000 uninsured people from the fully-subsidized plans for which they are currently eligible, but of which they are not taking advantage.

Zero premium plans are common. However, they are incredibly different in the benefit structure and financial exposure borne by someone who earns between 100% to 138% FPL to compared to Medicaid Expansion.

Zero premium plans happen when a plan is priced below the silver benchmark and the relative premium spread is bigger than the individual’s expected personal contribution. For the 100-138% cohort, the personal contribution for a single individual ranges from $22/month to about $55 per month for the benchmark silver plan. The benchmark plan is a silver plan with 94% AV CSR benefits. That translates into a deductible ranging from zero to a few hundred dollars and an out of pocket max of less than $2,000. Compared to a baseline silver, this is a great improvement in the quality of the benefit. It is still significantly worse than Medicaid if we assume appointments can be found.

However, silver plans are not guaranteed to be zero premium. There could be a “tight spread” between the cheapest silver plan in a county and the benchmark which often happens if the region is a competetitive region with strategically adept insurers or if there is a monopoly and the monopolist for some reason or another only offers a single silver plan as both the benchmark and the cheapest silver. Instead, the vast majority of time, the zero premium plan are bronze plans. In Orange County, North Carolina, the bronze plans all have deductibles over $6,000. If someone is earning 138% FPL, that is over a third of their annual income before the insurer actually starts paying for catastrophic expenses. Bronze plans, in this scenario, are hit by a meteor protection.

I am using Robert Woods Johnson Foundation HIX Compare data for the map below. I am looking to see what is the highest metal level (with CSR benefits included) that is available at a zero premium for a single fifty year old.

For someone at the top of Medicaid eligiblity, the zero premium plan requires them to spend several months of income before they get any non-preventive services covered by the insurer. If we hold the income constant and make the person younger, zero premium plans that are not bronze are even less likely. Older and larger families are more likely to see a non-bronze zero premium plan. At 100% FPL, zero premium silver plans are available for all single fifty years thoughout North Carolina.

If we make the assumption that plan quality matters and cost sharing attributes matter for significant elements of the 100-138% FPL cohort, then zero premium exchange plans, even zero premium 94% CSR Silver plans are, on some critical financial attributes, significantly inferior to Medicaid and zero premium Bronze plans are grossly inferior on those financial attributes compared to Medicaid. For these to be equalized, there has to be an incredible assumed quality differential between exchange plans that are offered by private insurers and Medicaid plans that will be soon be offered by most of the same private insurers as North Carolina transitions to Medicaid managed care. That assumption has to be heroic and so far unobserved.

Zero premium exchange plans have some really nifty attributes but they are not a near substitute for Medicaid expansion for the 100-138% FPL groups.

North Carolina anti-gerrymandering and Medicaid Expansion

As I noted yesterday, the North Carolina state courts have struck down the state legislature gerrymander that has made Raleigh a foregone Republican conclusion since 2011 despite Democrats winning a majority of the two party vote in 2018. The state Republicans are not appealing the decision.

There are a lot of policy angles here. The biggest one to me is Medicaid expansion.

Right now, North Carolina has not expanded Medicaid. The Democratic Governor Cooper wants to expand Medicaid, the Republican State Assembly Leader Berger does not. The state does not have a budget as Cooper has vetoed the last budget that did not expand Medicaid. The Legislature is passing a series of mini-buses funding significant chunks of the state government.

There has been some interest from Republicans to pass a fairly restrictive, work requirement and administratively burdensome Carolina Care Medicaid expansion for the past couple of years but the bill won’t get pass gatekeepers. It has gone nowhere.

There are now two paths forward for Medicaid expansion. I am assuming that the new maps will put a lot of Republicans in districts that instead of being R+8 or R+10 are now R+2 or even. Those incumbents will be facing new voters and voters with a different preference profile. The incentive for a larger band of Republicans than those currently pushing Carolina Care would be to do something about Medicaid Expansion much like their counterparts in Virginia did after the 2017 election.

The other pathway is that the maps will be significantly friendlier Democrats and more politically elastic in general. At that point the 2020 state election can be fought over Medicaid Expansion and if the Democrats can get the governors’ mansion and at least one gavel, the path forward to expansion gets a whole lot clearer.

I’ve upped the probability of a North Carolina Medicaid expansion in the next three years significantly in the past twenty hours.

Annals of the Horrible

Thought I’d share some (late) lunch joy by cleaning out a couple of browser tabs I’ve been meaning to share with the Jackaltariat.

First up in the catalogue of awful…

Nothing says more about a society than how it treats its most vulnerable.  Which is why this, from Pennsylvania coal country last month, says all you need to know about a certain kind of Republican* values:

Wyoming Valley West School District, one of the poorest districts in the state as measured by per-pupil spending, is located in a former coal mining community in Northeastern Pennsylvania, known affectionately by locals as “The Valley.”

When officials there noticed that families owed the district around $22,000 in breakfast and lunch debt…

…school council president Joseph Mazur thought that this would be a good next move:

…the now-infamous letter to about 40 families deemed to be the worst offenders in having overdue cafeteria bills — those were children with meal debt of $10 or more.

“Your child has been sent to school every day without money and without a breakfast and/or lunch,” said the letter signed by Joseph Muth, director of federal programs for the Wyoming Valley West School District. “This is a failure to provide your child with proper nutrition and you can be sent to Dependency Court for neglecting your child’s right to food. If you are taken to Dependency court, the result may be your child being removed from your home and placed in foster care.”

That this was about performative cruelty, and not fiscal prudence can be shown with two facts. The $22,ooo in arrears comes to about 1/4 of one percent of the district budget; you gotta know that if this was about keeping the school doors open, proposing a (surely) expensive round of child theft would not be the first move the financial folks would make.

Just to drive the point home, the guy behind the move, school council president Mazur went on to refuse an offer from a guy in Philadelphia who wanted to pay off the whole debt.  Mazur was eventually forced to reverse course.

Next up, an even more grotesque example of cruelty for cruelty’s sake from July.  I believe some commenters pointed out this incident, and I’ve been meaning to vent rage about it ever since, but here it is:

At a Border Patrol holding facility in El Paso, Texas, an agent told a Honduran family that one parent would be sent to Mexico while the other parent and their three children could stay in the United States, according to the family. The agent turned to the couple’s youngest daughter — 3-year-old Sofia, whom they call Sofi — and asked her to make a choice.

“The agent asked her who she wanted to go with, mom or dad,” her mother, Tania, told NPR through an interpreter. “And the girl, because she is more attached to me, she said mom. But when they started to take [my husband] away, the girl started to cry. The officer said, ‘You said [you want to go] with mom.’ “


I rate that child abuse, and those who did the crime should be in prison, as far as I am concerned. Een if the family separation followed the letter of the law, putting the kid in that position was gratuitous immiseration, and will deliver lasting trauma, doled out, it seems, for the agent’s amusement.


There is a word to describe such behavior and such people:  evil.  This was evil.  I say this as one with more memory of than current participation in organized religion, but it seems to me that those who welcome evil into our republic commit a grievous sin.


Happy lunch!  Open thread.

*Luzerne County, in which the relevant school district operates, went 58-39% for Trump in 2016.


Image: Pieter Breughel the Elder, The Massacre of the Innocentsc. 1565-7

Changing Minimum premiums in California

The least expensive premium (net of any applicable subsidy) determines the size and health status of the individual market ACA risk pool.  We assume that the marginal buyer is flipping a coin as to whether or not they want to buy insurance.  These buyers tend to be healthy and price sensitive.  The point of the individual mandate was to make not buying insurance more expensive than buying heavily subsidized insurance so as to at least nudge if not hip-check healthier buyers into the risk pool.

Yesterday, I outlined that Covered California will see lower silver premiums and higher bronze premiums.  This action will compress subsidized spreads and potentially increase the net of subsidy premium for the cheapest bronze plan. Kevin Drum thought this was no big deal, but the details matter as I ran the numbers.   I used the Robert Woods Johnson Foundation (RWJF) HIX Compare April 1, 2019 data set to calculate expected minimum premium for the cheapest Bronze plan in 2019 and 2020 for a single 50 year old non-smoker at 200% and 300% FPL for each rating area.  A rating area is a group of counties where insurers have to offer a particular plan at the same premium.  California has nineteen rating areas including two that split Los Angeles County.  I used actual data for 2019 and projected a 5.7% increase in the cheapest bronze premium and a 4.3% decrease in the benchmark silver premium. I then calculated net premiums and changes from 2019 to 2020.

This is a significant set of changes in several rating areas in California.

The short version is that the changes in spreads will mainly hit folks earn between 200%-400% FPL if they are looking to buy the cheapest coverage possible. The new state funded subsidies will be smaller than the premium increases that we should expect. The state will be spending a lot of money to partially and incompletely back fill a problem that an actively managed market is creating. Previously the Feds were bearing the entire cost of making the cheapest plan very cheap and now the state is taking on some of that cost from the Feds as the spread is being compressed.

The ACA is complicated, and California is showing that seemingly good things have negative consequences for some groups.