START OF 2018 OPEN ENROLLMENT PERIOD

Time: D H M S

UPDATED: WSJ "conservative think tank" policy director shocked to discover water is wet!!

h/t to Charles Ornstein for the link to this amusing, if befuddling column in the Wall St. Journal today:

Two reports released in the past week demonstrate a potential bifurcation in state insurance exchanges: The insurance marketplaces appear to be attracting a disproportionate share of low-income individuals who qualify for generous federal subsidies, while middle- and higher-income filers have generally eschewed the exchanges.

On Wednesday, the consulting firm Avalere Health released an analysisof exchange enrollment. As of the end of the 2015 open-enrollment season, Avalere found the exchanges had enrolled 76% of eligible individuals with incomes between 100% and 150% of the federal poverty level—between $24,250 and $36,375 for a family of four. But for all income categories above 150% of poverty, exchanges have enrolled fewer than half of eligible individuals—and those percentages decline further as income rises. For instance, only 16% of individuals with incomes between three and four times poverty have enrolled in exchanges, and among those with incomes above four times poverty—who aren’t eligible for insurance subsidies—only 2% signed up.

I'm not questioning any of the data or demographics presented in the reports. I have no reason to think they're inaccurate. What I don't understand is why this is newsworthy.

The ACA exchanges serve two main functions: To allow an easy, apples-to-apples comparison of comprehensive-coverage healthcare policies, and to offer tax credits for those who qualify financially. That's it.

The reason why 87% of ACA exchange enrollees qualify for tax credits is because that's exactly the income range that the exchanges are targeting. Frankly, I'm a bit surprised that so many (13%) enrollees don't qualify for the credits...because anyone earning more than 400% of the Federal Poverty Level really has little reason to enroll via the exchanges in the first place.

That's exactly why I've been desperately attempting (to my great frustration, for the most part) to track off-exchange QHP enrollments nationally. There's a good 8 million or so people, most of whom are at the $100K+ income range, who are enrolling in the same policies but doing so directly through the insurance companies.

Of course, there are exceptions, including my own family. Last year we expected to qualify for a credit. Plus, given that I'm running the ACA Signups project, it seemed a bit hypocritical not to enroll via Healthcare.Gov here in Michigan, so we did. This quickly turned out to be a very wise move, because (ironically, due to my work on this project) our household income plummeted in the first quarter of the year...and then again in the second quarter as I spent 2 months recovering from a particularly nasty case of shingles (also, ironically, brought on by this project). Things were looking a bit sticky for awhile.

As it happens, thanks in large part to the generousity of supporters of this site, by the end of the year our household income ended up being higher than we had expected for 2014, so we have to pay about $280 back to the IRS. I can't thank all of those who chipped in enough, by the way.

However, both of us are self-employed, which means our income jumps around a lot from year to year. This year we might earn $50K or $150K; we really don't know...so it behooves us to stay with the ACA exchange regardless, because if we moved off-exchange we'd lose any opportunity for the credits if we end up having a lousy year this time around.

In short, the higher your income, the less need/point there is in enrolling via the official ACA exchanges (exceptions: Both the District of Columbia and the state of Vermont require all individual healthcare policy enrollments to be run through their exchanges, although this may change in Vermont soon).

Why this is raising any eyebrows, at the WSJ or elsewhere, I have no idea.

UPDATE: Now, here's the truly ironic part: The reports in question do tell a very relevant story about the ACA exchanges...just not one which has anything to do with those at the upper end of the income scale.

Instead, Andrew Sprung has written an excellent analysis of the enrollment patterns of those at the lower end of the tax credit scale...and found something vitally important:

Red-state governors and legislatures that refused the Affordable Care Act’s Medicaid expansion were probably aiming to help the ACA die the death they thought it deserved. Oddly enough, those refusals have propped up enrollment in private health plans on HealthCare.gov, the federal exchange.

About 11.7 million people are currently enrolled in private health plans sold on the ACA exchanges. Of those, 8.8 million bought their plans on HealthCare.gov, the federal exchange serving 37 states, including almost every state under mainly Republican control. Almost two million of those QHP buyers – approximately 1.9 million, or 22 percent – would have been eligible for Medicaid if their states had not refused to expand Medicaid eligibility in accordance with the terms offered by the ACA.

Read his whole analysis. Fascinating stuff...and if the "conservative think tank" policy director at the Wall St. Journal hadn't been so caught up in the enrollment patterns of the six-figure plus crowd, he might have actually had a real story to write about.