Marketplace Coverage Enrollment by Metal Tier, 2016-2018

An analysis of 2018 Affordable Care Act (ACA) administrative changes suggest consumers chose plans with lower premiums but higher out-of-pocket costs.

The Issue

In late 2017, the Trump Administration stopped directly reimbursing insurers for cost-sharing assistance they are required to offer to eligible enrollees in silver level marketplace plans. In response, most states instructed insurers to finance the costs of these subsidies by adding them into the premiums of their silver level plans.

Key Findings

The analysis uses data from states relying on the healthcare.gov enrollment platform to illustrate the ramifications of the administration’s decision to end direct reimbursement of insurers for cost-sharing subsidies provided to the lowest income marketplace enrollees.

• In 2017, on average, a benchmark (second lowest priced) silver premium was 21 percent higher than the lowest-priced bronze plan available to consumers.
• In 2018, after federal reimbursement of cost-sharing subsidies ended, the silver plan premiums rose to an average of 38 percent above the lowest-premium bronze plan, sparking an 11-percentage-point drop in the share of marketplace enrollees buying silver plans. Most of that enrollment drop shifted into lower priced bronze plans, coverage that requires substantially higher out-of-pocket costs when using medical care.

Conclusion

This approach increased silver premiums relative to other levels of coverage, increasing the federal cost of providing premium subsidies and making silver plans more expensive relative to other tiers of insurance offered. Because the Trump Administration also dramatically decreased funding for enrollment navigators, many consumers may be unaware that switching to a bronze plan not only lowers their monthly premium, but also increases their risk of high out-of-pocket expenses.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.