A new measure of pending marketplace degradation

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Will Plan Year 2025 forever be Obamacare's Babe Ruth? 

Charles Gaba has issued a timely warning that most of the enrollment loss in the ACA marketplace this year, resulting from expiration (so far) of the enhanced premium subsidies funded only through 2025, will only be evident after CMS releases its first snapshot of effectuated coverage — that is, paid-for coverage. Thanks to auto re-enrollment, enrollment losses will look relatively slight (perhaps minus 1 million) as of the end of the Open Enrollment Period.

Republicans will make hay of this — claiming, as CMS did, that the subsidy reduction is not so catastrophic for the 93% of enrollees subsidized in 2025 who will remain subsidy eligible in 2026. And CMS’s annual snapshot of coverage effectuated as of Feb. 1 typically doesn’t appear until June or July. At that politically distant point, much more of the fallout from expiration of the enhanced subsidies will become visible.

In 2024 and 2025, early effectuated coverage exceeded 95% of end-of-OEP enrollment, whereas in 2016, it was just 85%. Retention improved during the first Trump administration, probably for reasons including 1) a shortened Open Enrollment period and cuts to funding for enrollment assistance and outreach, which likely discouraged more marginal enrollees from enrolling at all, and 2) Trump’s cutoff in October 2017 of direct reimbursement of insurers for the Cost Sharing Reduction (CSR) subsidies that attach to silver plans at low incomes, which triggered silver loading (the pricing of CSR into silver plan premiums) and increased the number of enrollees paying zero or very low premium. Retention increased further after the enhanced subsidies enacted by the American Rescue Plan Action March 2021 made zero-premium coverage much more widely available — to the point where, in 2025, about a third of all enrollees paid zero premium.

There’s reason to believe that massive sticker shock when the first 2026 premium bills arrive — with subsidized premiums for a benchmark silver plan more than doubling on average from 2025 to 2026 — will drive the ratio between OEP enrollment and February effectuated enrollment back to Obama-era levels this year, or even lower. Further, since Republicans have terminated year-round enrollment for enrollees with income below 150% FPL, average monthly enrollment in 2026 will drop even further compared to 2025. That change won’t be evident until mid-year 2027.

Read Gaba on this. He’s sharp on the political ironies (with advocates of the enhanced subsidies now echoing Republicans’ 2014 cry of “but how many have paid?” as the ACA’s first enrollment period wound down), and he roughs out credible estimates, roughly matching CBO’s, of enrollment losses in 2026 as reflected in average monthly enrollment (about 4 million). What I want to do here is consider another important effect of reduced subsidies: The likelihood that many who remain enrolled will downgrade their coverage to reduce their premiums. How might we measure the combined effects of increased uninsurance and increased under-insurance?

To get a grip on any future degradation of coverage obtained in the marketplace, we can use actuarial value (AV) — in combination with effectuated enrollment. AV is the percentage of the average enrollee’s costs a plan is designed to cover, calculated according to a formula created by CMS.*

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Average weighted AV in the entire national marketplace has been stable over the years at 78-79% (compared to about 84% in employer-sponsored coverage), though the factors determining the average have been quite volatile. More on that stability/volatility below. If the enhanced subsidies are not renewed, I believe average AV as well as total enrollment will drop in 2026 and years following. To get a sense of the effects of dropped coverage and degraded coverage, I propose a measure something like “OPS” in baseball — a combination of on-base percentage and slugging percentage. The measure would simply be “Total AV” — total enrollment times average weighted actuarial value. The best measure of total enrollment, although it entails an 18-month data lag (under current practice), would be average monthly enrollment. An alternative measure, available roughly six months after the end of each OEP, would be early effectuated enrollment (as of February).

In 2025, we have a figure for average monthly enrollment through September**: 22.4 million (22,356,622). As Republicans terminated year-round enrollment at low incomes (implemented by the Biden administration) as of August, there will probably be a slight drop in the full year total, when available, to perhaps 22.3 million. Average weighted AV was 79.0% (Total AV calculations require a bit of extrapolation, outlined in a note at bottom, from the Public Use Files published by CMS). Total AV for the marketplace in 2025 will thus be about 18.4 million — probably a permanent all-time high, if the enhanced subsidies are not restored.

Taking expected increased attrition into account, Gaba estimates that average monthly enrollment will drop to about 18.5 million in 2026. That’s a 17% drop from 22.3 million in 2025. If weighted average AV drops, say, from 79% to 75%, Total AV in 2026 will be 13.9 million— a 24% drop. That’s a fuller measure of what may be lost.

Average weighted AV: Stable in aggregate, volatile in composition

As to the shifting composition of average weighted AV in the ACA marketplace over the years: The chief source of high-AV coverage in the marketplace is the Cost Sharing Reduction (CSR) that attaches to silver plans at low incomes, raising a silver plan’s AV to 94% at incomes up to 150% of the Federal Poverty Level and to 87% at incomes in the 150-200% FPL range — compared to 60% for bronze and 80% for gold. Over the years, silver plan selection at low incomes (those eligible for strong CSR) has eroded steadily, but the percentage of enrollees with income below 200% FPL has risen sharply. (A weak CSR is available in the 200-250% FPL bracket, raising AV to 73% . AV for silver plans without CSR is 70%.)

First, look at the rate of silver selection at the two highest CSR levels from 2017-2025. This is only in HealthCare.gov states, as in early years CMS data for state-based marketplaces was much less complete. Over this period, the number of states using the federal exchange dropped from 39 to 30. At the same time, all states that have refused to enact the ACA Medicaid expansion (excepting Idaho until 2020) used the federal exchange throughout these years, ensuring that enrollment in the 100-150% FPL income bracket has always been concentrated in HealthCare.gov states (In 2025, when just 30 states used HealthCare.gov, 85% of enrollees at 100-150% FPL were in Healthcare.gov states).

While silver selection at incomes where strong CSR (94% or 87% AV) is available has dropped, the percentage of enrollees at incomes below 200% FPL has risen steadily since 2019 (the first year in which CMS provided income breakouts for all states).

The percentage of all enrollees who obtained CSR hit an all-time high in 2017 at 57%, dipped to 53% in 2018 (the first year when silver loading went into effect), and was 53% in 2025. But not all CSR is created equal, and in the silver loading era, silver selection in the 200-250% FPL bracket, where CSR raises AV to just 73%, fell off a cliff. In 2017, in HealthCare.gov states, 16% of silver selection at CSR-eligible incomes was in the 200-250% FPL bracket; in 2025, that percentage was down to 3.5%. Conversely, in 2025 78% CSR enrollment was in the 100-150% FPL bracket, compared 52% in 2017. In 2025, in HealthCare.gov states, 41% of all enrollees — 7 million out of 17.1 million — obtained CSR with a 94% AV.

A word about enrollment at income below 100% FPL, the income threshold below which marketplace subsidies are unavailable for citizens. CMS did not break out this income bracket until 2022. In 2025, there were 548,650 enrollees in the under-100% FPL bracket, 2.2% of all enrollment. Most of them were lawfully present noncitizens subject to the “5-year bar” to Medicaid eligibility to which U.S. law subjects noncitizens. The ACA stipulates that immigrants subject to the 5-year bar are subsidy-eligible in the marketplace even if their income is below 100% FPL. But the Republicans’ vile megabill enacted this summer stripped out this eligibility as of Jan. 1, 2026. CBO estimates that about 300,000 immigrants will lose coverage as a result — and most of them were probably enrolled in high-CSR silver. That’s one more ding to average AV (as well as enrollment) in 2026 and years following, even if the enhanced subsidies are extended.

The other major change in the distribution of AV over the years derives from silver loading — the pricing of CSR directly into silver plan premiums, adhered to in varying degrees in different states and rating areas, or by different insurers within states and rating areas. Because ACA premium subsidies are designed so that enrollees pay a fixed percentage of income (varying by income bracket) for the benchmark (second-cheapest) silver plan, when silver premiums rise, so do subsidies, and so do “spreads” between the benchmark silver plan and cheaper plans — e.g., most bronze plans, and in some states, many or most gold plans. Since insurers tend for competitive reasons to underprice silver plans (as silver remains the dominant metal level, since most enrollees qualify for strong CSR), an increasing number of states are mandating that insurers price plans in strict proportion to actuarial value. Since silver plans, enhanced by CSR for most enrollees, have higher AV than gold plans, gold plans should be cheaper than silver - -and in 20 states in 2026, lowest-cost gold plans are on average priced at premiums below that of the silver benchmark.

Weak or strong silver loading has been in place in almost all states since 2018, and as a result, silver plan selection has collapsed at incomes over 200% FPL (where CSR is weak or unavailable) as well as eroding at incomes under 200% FPL. Note above that gold plan selection as well as bronze plan selection has increased at low incomes. Much of the gold selection increase is concentrated in Texas, where gold plans are far cheaper than silver. In 2025, almost 900,000 Texas enrollees with income under 200% FPL enrolled in gold plans. That’s about 6% of all enrollees with income under 200% FPL nationwide.

Low-income enrollees who select gold plans are giving up AV, often in exchange for a reduced premium (e.g., to obtain coverage from an insurer whose silver plan is priced above benchmark). The difference in AV is reflected most dramatically in the annual out of pocket maximum .By statute, out-of-pocket maximums are capped at a much lower level for CSR-enhanced silver plans available to those with income under 200% FPL than for all other plans, including gold. In 2026, the highest allowable OOP max for silver plans at incomes up to 200% FPL is $3,500, compared to $10,600 for other metal levels. For enrollees with income below 150% FPL, silver OOP maxes are usually far lower than $3,500, averaging $1,738 in 2026, according to KFF.

At incomes over 200% FPL, the window in which the premium difference between silver plans and bronze plans is worth the higher AV provided by silver plans is very narrow — and again, in many states, at least some gold plans are cheaper than benchmark silver. Silver selection at incomes over 200% FPL has appropriately collapsed. Here is the breakout in HealthCare.gov states:

With respect to average weighted AV, the increase in gold selection in this income bracket only partly offsets the larger increase in bronze selection. But again, inflated silver premiums more often than not make bronze a better value than silver at incomes over 200% FPL.

Why enrollment has doubled and silver plan selection has diminished

The story of why enrollment surged after ARPA was enacted in March 2021 is in one sense straightforward: ARPA made high-CSR coverage free to enrollees with income up to 150% FPL, increased premium subsidies in every income bracket, and lifted the income cap on subsidy eligibility. But the story is somewhat complicated, for better and worse, by surging broker participation in those years. The number of brokers registered with HealthCare.gov rose from 49,000 in 2018 to 83,000 as of OEP for 2024. Since Americans remain persistently ignorant about what’s available in the marketplace until they need it, increased broker outreach was probably key to the doubling of enrollment in the post-ARPA era. At the same time, broker fraud also metastasized around 2023-2024. A CMS crackdown and rule-tightening has probably reduced such fraud but has not yet quelled it, to judge from broker discussion sites I tune into. Brokers enrolled probably some hundreds of thousands of people without their knowledge or consent — the totals are still unknown — and engaged in unauthorized plan switching — sometimes multiple times — for hundreds of thousands more. (The switching may have slightly pushed average AV down slightly, as fraudster brokers looked for zero-premium plans to switch enrollees into, and most of those would be bronze plans.)

The story of why silver selection has eroded at incomes under 200% FPL is more complicated. As more low-income enrollees have poured into the marketplace in the enhanced subsidy era, some may simply make mistakes. The number of available plans in each rating area has proliferated; the average enrollee is confronted with more than 100 choices. Most enrollments are broker-assisted, and there is a fair amount of low-quality and sometimes corrupt brokerage, though I know of no source or means to assess broker quality norms (a good broker is priceless, given our ridiculously complex marketplace, and there are plenty of good ones). At the same time, I have delved more than once into the probably-increasing incidence of enrollees choosing lower-AV coverage with eyes wide open, in order to obtain coverage from a plan with a more robust provider network or a formulary that covers the enrollee’s drugs. Competition has pushed the marketplace toward narrow networks, especially at the lowest premiums at each metal level, and that has probably induced more enrollees to trade AV for network or formulary quality.

In any case, expiration of the enhanced subsidies is likely to accelerate the erosion of CSR takeup. An option to take some or all of the premium subsidy as an HSA would of course further erode AV, trading first-dollar coverage for increased exposure to high out-of-pocket costs. Total AV for the marketplace is therefore likely to erode even faster than total enrollment if subsidies remain at current levels.

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*AV is in one sense a misleading measure, in that the average is skewed by the small percentage of enrollees in any plan who incur very high costs (capped for the enrollee by the out-of-pocket maximum, which this year can be as high as $10,600). If your plan has an AV of 60% and covers essentially no costs before, say, an $8,500 deductible, but you’re in an accident and incur $100,000 in medical costs, if the out-of-pocket maximum is $10,000, 90% of your costs are covered. For many other enrollees in such a plan, AV may be effectively zero, even if they spend thousands of dollars out of pocket. That said, AV is a uniform measure that does indicate the relative value from year to year of marketplace coverage.

**See Gaba, who posts a table combining 6 months of effectuated enrollment for 2025 available here (find “January-July effectuated enrollment tables” for 2025) with August and September estimates provided in CMS’s monthly Medicaid and CHIP enrollment snapshots.

A note on average weighted AV calculations. The marketplace Public Use Files for 2022 through 2025 break out enrollment at each CSR level for HealthCare.gov states but not for all states. As a proxy, I used the breakouts of metal level enrollment by income in the “State, Metal Level and Enrollment Status” PUF, taking silver totals as a proxy for CSR levels, subtracting the difference between total CSR enrollment (provided for all states) and total silver enrollment at incomes from 0-200% FPL proportionately from each CSR bracket.
     For 2017, I had to get a bit more creative, as metal level selection by income was broken out only for HealthCare.gov states, though the PUF does show total silver enrollment in both HealthCare.gov states and SBM states. To estimate the distribution of silver selection by income in SBM states, I used the “SBM-FPs” — nominal state marketplaces using the federal exchange — as a proxy, since all four of those states had expanded Medicaid. I then calculated an average silver AV for HealthCare.gov states (84.6%) and SBM states (80.7%) and used those averages for total silver enrollment in each of the two categories.

Edited 1/9/25 -- including correction of a typo regarding avg. monthly enrollment in 2025 (estimated at 22.3 million, not 23.3 million).

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Getting right-side of the newly restored ACA subsidy cliff

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Yesterday I came across a post by an Obamacare enrollee who in 2026 fell off the newly restored “subsidy cliff” -- the income threshold above which premium subsidies are once again unavailable.

As the Open Enrollment Period for 2026 continues through January 15 in the 30 states that use HealthCare.gov, and as late as January 31 in seven of the twenty state-based marketplaces, I thought (belatedly) that perhaps the info below might help some people take steps to remain subsidy-eligible — that is, to plan to take deductions that will get your income below the cap on subsidy eligibility.

To silver-load or not: Arkansas vs. New Jersey marketplace, 2026

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Does the NJ marketplace need a Huckabee-sting?

The looming expiration of the enhanced Premium Tax Credits in the ACA marketplace (ePTC) increases the salience of the extent to which different states encourage or enforce strict “premium alignment,” A.K.A. silver loading, the pricing of the full value of Cost Sharing Reduction (CSR) into silver plans.

Here, we’ll contrast current plan offerings in a state marketplace with some of the most extreme silver loading effects, Arkansas, with a state where the effects are among the weakest, New Jersey.

If you are unfamiliar with how silver loading works or why it exists, see the explanation at bottom.

To defend against the looming expiration of the enhanced ACA subsidies funded only through 2025, Arkansas implemented the nation’s strictest “premium alignment,” requiring insurers to price silver at 1.46 times what it would be priced at the baseline silver actuarial value of 70%. That is, Arkansas requires insurers to price silver plans as if all silver plan enrollees have income under 200% FPL and so obtain plans with actuarial value of 94% (the AV of CSR-enhanced silver for enrollees with income up to150% FPL) or 87% (silver AV for enrollees in the 150-200% FPL income bracket) — an average AV of 91%. For a convoluted tale of how Arkansas arrived at this point, see Charles Gaba.

Pricing silver as if all enrollees have income under 200% FPL is meant to be a self-fulfilling prophecy. A “CSR factor” like Arkansas’ ensures that gold plans will be cheaper than silver plans with the same provider network, making silver plans an illogical choice for enrollees with income over 200% FPL, since gold plans have a higher AV than silver for enrollees above that income threshold. That assumption has been borne out in the Texas marketplace, where in 2025, just 1% of the state’s 1.9 million silver plan enrollees had income over 200% FPL.* In 2025, 78% of silver plan enrollees in Arkansas obtained 94% AV or 87% AV. The average weighted AV for silver plan enrollees in the state was 86.8%. It’s not a great leap to assume average silver plan AV of 91% under the current pricing regime.

Thanks to this pricing formula for silver plans, Arkansas has the nation’s widest premium spread between the average lowest-cost bronze plan and the average benchmark (second cheapest) silver plan. On average, the premium for the lowest-cost bronze plan in Arkansas is just 57.8% of the benchmark silver premium. Gold coverage in Arkansas is also very cheap, averaging just 83.6% of the benchmark. On that front, Arkansas is tied with Pennsylvania for fourth-lowest in the nation.

Talking points for an electoral death march

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A man may smile, and smile (sort of)...

Multiple Republican senators and House reps, psyching themselves up for electoral suicide, are sharing this messaging from the Koch-funded Paragon Health Institute, where virtually all their ACA-related talking points originate:

There are of course lies, damned lies, statistics, and Koch-funded talking points designed to strip Americans of healthcare access to help fund tax cuts for the wealthy.

Look at the mid-section of Johnson chart above, from 2018 to 2025 (there should be a sharp spike from 2017 to 2018, but never mind). There is barely any premium increase in that long stretch, during which average premiums for employer-sponsored insurance rose far more quickly. Here is the comparison in the National Health Estimate Accounts, published in June of this year (see Table 17 in NHE Projections - Tables, here)

From 2018 through 2023, the last year for which the NHE has data, premiums in the individual market (“direct purchase” above) were up 13% — while premiums in the employer-sponsored market rose 29%. From 2023-2025, average ACA benchmark silver premiums rose 9% (from $456/month to $497/month), while average ESI premiums rose 11% (from $8,435/year to $9,325/year) for single coverage according to KFF’s annual employer benefits survey. As of 2025, ESI premiums remained considerably higher than marketplace premiums, though the difference is probably in line with differences in network quality and actuarial value (a measure of the level of out-of-pocket exposure).

An icy reception for visitors to the immigrants detained at Delaney Hall in Newark

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The, um, visitor reception center at Delaney Hall

Please excuse a departure from our usual usual programming here at xpostfactoid, as I want to report on an ongoing, intentional, sustained abuse of physical and mental health imposed on New Jersey (and really, the entire nation) by our federal government.

On Saturday afternoon, I joined my wife Cindy to visit a detained young man at Delaney Hall, the Geo Group-run immigrant detention center opened this past spring in Newark’s most insalubrious industrial region. As readers here probably know, Geo Group’s treatment of visitors to Delaney detainees is designed to be abusive: Visitors are forced to wait outside, under an open metal canopy with cold metal benches, before being ushered through the gate to again line up outside to be processed through security.

Yesterday, as part of a group of 50-60 visitors, including about ten children and babies, we waited outside for 100 minutes in 35-degree weather.

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Cindy and I are among the volunteers who regularly set up and staff a sort of comfort station for Delaney visitors on the sidewalk outside-- more on that ad hoc enterprise at bottom. We have witnessed what the visitors endure and gotten to know to some of them, but yesterday we had the chance to experience the abuse first-hand (Cindy has visited before, but not in freezing weather or at a crowded time). I am focused here only on the visitor experience at Delaney, respecting the privacy of our friend inside.

Where the 100 minutes went

We arrived for our visit one hour prior to the scheduled 4:30 visiting hour (as Geo Group requires) and joined a line then about 30 people long. The guard worked his way down the line, checking that people were there to visit a detainee scheduled for visiting in that hour. Every time a van or car arrived to go through the gate, he had to interrupt himself and walk back to manually open the gate. This particular guard was civil, which is not always the case.

At 4:15 we passed through the gate and lined up again in front of the security check-in area, a grim cubicle maybe 20 feet square. We waited there, still outside, while the door was opened at intervals and small groups were let in for processing. Each person had to be checked again against the visitor list, hand in their i.d., remove jackets and shoes, and pass through a metal detector. There were 3 Geo employees in the security box, but only one was checking people in. We waited out there for 55 minutes for our turn (and people behind us waited longer), entering security at 5 :10 pm.

Our group included one baby, a toddler and at least ten elementary school-aged children and young teens. After the first group (and largest) group was admitted, the guards did ask the visitors to allow the babies and children and their caregivers to go to the front of the line, which everyone did willingly, but most of those children waited outside as long as we did, as subsequent groups were only about 5-10 people. An elderly person who had to leave the security room to pass off her phone asked to be let in but was made to wait outside again.

The visit itself is not too restrictive. The visiting area is like a crowded school lunchroom, with benches running on both sides of long tables. Visitors are supposed to sit opposite detainees, but people are allowed to touch, and children went to sit with their detained fathers (or other detained relative). There was a fair amount of crying, and of laughter. We visited a young man who has seen too much and has no clear path to a better life, or even a safe life. We will be visiting him again.

The young man we visited told us that Senator Andy Kim was coming to Delaney the next day, and that turned out to be the case. Among New Jersey elected officials, Kim is truly the moral leader, on this as on many fronts.

New Jersey elected officials must act

Despite the federal government’s preemptive powers, New Jersey leaders must make it a priority to stop this abuse of their constituents. The pressure on Geo Group and DHS must be ramped up. Surely this abuse of wives, children, parents, and other loved ones of those detained at Delaney must violate multiple laws and civil rights.

About the volunteer effort at Delaney

Present throughout all visiting hours at Delaney (setting up at 6 a.m. on Saturdays and Sundays for the first visiting hour, which starts at 7:30), an ad hoc coalition of volunteers offers hats, gloves, scarves, blankets and handwarmers; coffee, hot chocolate and donuts; toys and art materials for children (though it’s now usually too cold for the latter); diapers and supermarket gift cards for those who have a breadwinner inside; a listening ear when needed; and information about more in-depth support services, along with a list of vetted immigration lawyers. Several nonprofits as well as individuals are involved in the effort, though I think they would not want me to name them here. Originally, as there was no seating, we set up rows of camp chairs, and we still have those on hand for those who can’t manage on the cold metal benches Geo Group has now set up outside, beneath an open metal canopy.

Delaney Hall, like the next-door Essex County Correctional Center, is located in a truly forbidding industrial region of New Jersey, surrounded by energy storage tanks, warehouses, trashy vacant lots, and industrial facilities. Across the street, a narrow freight railroad track is lined with yards-deep trash. The air often stinks. Behind it all, miles to the east, the Manhattan skyline stands like a vision of a different world. None of this matters directly to the detainees, who, according to our friend inside, have no outside view, though they do exercise outside and so get to breathe the insalubrious air. Delaney is within a mile of Newark’s Liberty International Airport, facilitating deportation. I will never fly into Newark again without seeking a glimpse and thinking about the barbarity we have institutionalized at Delaney and the prison next door.

Update: Via Pax Christie, video footage of the visitor line at Delaney on an even colder evening: https://www.instagram.com/p/DSEPgEKDbs9 

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Bill Cassidy and the Sundowning Kid

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That shit-eating grin will eat your health coverage

I never set up to be a prophet of healthcare policy, or anything else. But when Senator Bill Cassidy floated a plan in early November to extend and modify the enhanced ACA marketplace subsidies that are funded only through 2025, I made a prediction that’s shocked me by its rapid fulfillment:

…if Cassidy reverts to form, he may well embrace plans far more toxic than his current sketch. In 2017, as noted above, he co-sponsored the first and least-bad ACA repeal/replace plan, in March. In September 2017, he co-sponsored the last and worst such plan, Graham-Cassidy, which would have liquidated both the ACA marketplace and the Medicaid expansion, replacing both with inflation-capped block grants to states, inequitably distributed to favor red states (penalizing blue states for expanding Medicaid). Then as now, Cassidy unctuously claimed he was advancing a “nonpartisan” approach— which likely would have increased the uninsured population by more than 30 million, with losses increasing over time as per capita caps on block grants bit progressively deeper.

The plan Cassidy announced last month, which never made it into a bill, would have ended the enhanced premium tax credits (ePTC) in their current form but used the $26 billion estimated cost to fund Flexible Spending Accounts (FSAs) for subsidy-eligible ACA enrollees — that is, funds to spend directly on out-of-pocket costs.

Well lo, less than a month later, Cassidy, along with Senator Crapo, is out with a far more toxic plan, this time written into legislation, that would end ePTC funding and use multiple channels to push ACA marketplace enrollees into plans with actuarial values in the 50-60% range — while also, inevitably, radically cutting enrollment and adding complexity to a marketplace that already presents prospective enrollees with a numbingly complex set of choices. The bill would

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• Fund HSAs for enrollees in bronze plans (60% AV) or catastrophic plans ( ~ 57% AV) worth $1,000 if they are age 18-49 or $1,500 if they are age 50-64.

• Open catastrophic plans (here co-named “copper” plans) to all enrollees, instead of primarily to enrollees under age 30 as in the original ACA (CMS has already widened access, but retained a cumbersome exemption application process).

• Fund the Cost Sharing Reduction (CSR) subsidies that attach to silver plans for low-income enrollees through direct reimbursement of insurers for its value, as it was funded before Trump cut off those payments in October 2017, instead of pricing it into plan premiums as at present. In most states, CSR is priced into silver plans only, as CSR is available only with silver plans. Since premium subsidies are structured so that enrollees pay a fixed percentage of income for a benchmark silver plan, raising silver plan premiums also increases subsidies, creating effective discounts in bronze and gold plans for subsidized enrollees. The bill would end this silver loading, reducing the value of enrollees’ premium subsidies in addition to the loss of ePTC.

At present, slightly less than half of marketplace enrollees, about 11.6 million are in CSR-enhanced silver plans with an actuarial value of 94% or 87%. Another 13% are in gold plans with an AV of 80% — which, thanks to silver loading, are available below the cost of a benchmark silver plan in 20 states. By ending ePTC and raising silver plan premiums at low incomes, while adding a modest first-dollar benefit to bronze and catastrophic plans, the Cassidy-Crapo bill would push millions of low-income enrollees into bronze plans. Ending silver loading would push millions more from gold into bronze — and likely drive additional millions out of the market entirely, as the advent of silver loading (before the Democrats created ePTC in the Biden years) made zero-premium bronze plans available to millions of prospective enrollees. The marketplace — what’s left of it— would be converted largely, if not all but entirely, into a market in which most enrollees obtain just 57-60% AV, leaving them exposed to thousands of dollars in additional out-of-pocket costs. While that exposure would be mitigated for many in some years by the HSA funding, every year a significant minority of low-income enrollees would be exposed to thousands of dollars in extra out-of-pocket costs.

Low-AV coverage as a default option for low-income people is a perpetual Republican goal, the party’s favored alternative to the ACA marketplace. The House and Senate ACA “repeal/replace” bills of 2017 also would have pushed most enrollees into bronze or sub-bronze coverage. Republicans are wed to the discredited premise that high out-of-pocket exposure will reduce waste in healthcare spending and make smart shoppers of people in need of medical care. In fact, Democrats also bought into this canard enough to expose millions of marketplace enrollees to damagingly high out-of-pocket costs. Republicans’ only consistent healthcare “reform” idea is to make those costs even higher, exposing ever more Americans to ever more medical debt.

The bill also picks up where OBBBA left off by gratuitously penalizing states that have enacted the ACA Medicaid expansion (further radically cutting high-AV coverage for low-income people); penalizes states that use their own funds to provide coverage to select undocumented populations; prohibits federal Medicaid funding for gender transition services and bars states from including gender transition in EHBs; bars CSR funding for plans that cover abortion, as mandated in many blue states (federal funds already can’t be used to fund abortion coverage, which must be offered for a separate, small premium). In other words, in addition to increasing the ranks of the uninsured and the underinsured, the bills takes vicious swipes at undocumented, trans, and female human beings. For a more detailed provision-by-provision rundown, see Charles Gaba.

The etiology of this steaming pile of legislative aggression is somewhat mysterious. On the one hand, the Republican plans diverting ACA funds to HSAs multiplied like hydra heads in response to Trump’s seemingly incoherent babble on Truth Social in mid-November, calling on Congress to “Take from the BIG, BAD Insurance Companies, give it to the people, and terminate, per Dollar spent, the worst Healthcare anywhere in the World, ObamaCare.” The Cassidy-Crapo fact sheet fawningly boasts that the bill “sends money to patients instead of insurance companies” (so much for the fond Democratic dreams of circa 2007-2009 of defanging Republican opposition to reducing the uninsured population by centering their plans on a market of private insurance plans).

At the same time, Trump’s sudden turn on insurers and apparently nonsensical call to make healthcare more affordable neither through government-run insurance nor through private insurance looks like his senile transcription of longstanding Republican plans to fund healthcare through tax-favored individual spending accounts. Specifically, the Cassidy-Crap crap, which the whole Republican party now looks to align behind, is essentially the plan floated by Trump whisperer Brian Blase of the Paragon Institute, originally in 2022 and recently updated. Cassidy’s earlier iteration, as I noticed in the prior post, was essentially Blase lite. Blase’s proposal, like the Cassidy-Crapo bill, would end ePTC funding and instead use the funding earmarked for Cost Sharing Reduction (CSR) in the original ACA to fund HSA accounts linked to bronze plans — ending ePTC and silver loading in one fell swoop, and pushing most of the shrunken ranks in marketplace coverage into bronze plans (Blase specifically looks forward to cutting the ranks of the CSR eligible by more than half — see my prior post on this). As is so often the case, Trump’s policy choices are a debased version of already-debased versions of longstanding Republican policy.

You can’t change how much sleep you need by going to bed earlier, and you can’t change how much medical attention people need by reducing the actuarial value of their coverage. You can choose how much healthcare people access by cutting AV, but faced with wildly unaffordable out-of-pocket costs, enrollees they will cut down on desperately needed as well as unnecessary care — and go into debt to boot. In fact, the relatively slow rise of U.S. healthcare spending from about 2013-2023 was mostly likely driven mainly by Americans’ terror of being saddled with unaffordable medical bills. Republicans would cut federal spending by cutting AV along with premium subsidies — increasing the underinsured as well as the uninsured population. By so doing, they will degrade Americans’ physical as well as financial health. Par for the course for a party of corrupt oligarchic-serving thieves and autocrats.

Cassidy, let us not forget, cast the deciding vote allowing confirmation of RFK Jr. as HHS director and the resulting destruction of public health administration by the federal government. He is a cowardly go-along who purports to care for his constituents and offer nonpartisan solutions while in the end always partnering with party hardliners to undermine public welfare. I’m not happy that he’s made a prophet of me. But he is…predictable.

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Some bitter pills to swallow in Trump's ACA prescription

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Raise that subsidy cap...

It may be a fool’s errand to write about reported features of a now-stayed Trump administration plan to extend the enhanced ACA premium subsidies for two years, with various conditions and haircuts imposed.

Since House hardliners have stayed the plan, it’s likely to get worse if it ever sees light of day. But as outlined in the various media reports, the pending plan is full of poison pills — or, shall we say, enrollment-inhibiting side effects. The features already floated raise a question we may well be confronted with: If Republicans do coalesce round a plan something like what’s been floated, would Democrats (most, some, a handful) get on board? Should they?

Let’s consider the constraints imposed on the enhanced subsidy schedule in the Trump outline.

The HOPE Act, extending enhanced ACA subsidies with a slight haircut, is cause for...hope

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Pandora...don't ignore her

Picture yourself in a boat on a river, with tangerine trees, and a Republican party that grounds genuine fiscal conservatism (the kind that eschews multi-trillion-dollar tax cuts) in fact rather than in lies and fantasy. What might a compromise on extension of the enhanced premium subsidies in the ACA marketplace look like?

Stop presses: It might look like the bill put out by the Problem Solvers’ caucus today. (I mean ‘‘stop presses” literally, as I was sketching out my own compromise here when I came across the bill in question.)

The Healthcare Optimization Protection Extension (HOPE) Act (summary here, bill text here) was introduced today by Problem Solvers members Tom Suozzi (D-NY), Don Bacon (R-NE), Josh Gottheimer (D-NJ), and Jeff Hurd (R-CO). It addresses two legitimate concerns about the enhanced premiums subsidies (eAPTC) created by the American Rescue Plan Act and currently funded only through 2025: that they spend too much money subsidizing high-income enrollees (questionable, but not absurd), and that they opened an easy pathway to fraud (true, but only in concert with other factors that can be addressed to shut the fraud down).

The HOPE bill only lightly increases the premium burden at incomes over 600% of the Federal Poverty Level ($93,900 annually for an individual, $126,900 for a couple, $192,900 for a family of four). The subsidy “cliff” — the cap on eligibility — goes back in place, but rises from the pre-ARPA (and now pending) 400% FPL to 935% FPL. The new cliff will take a substantial bite from some pretty affluent individuals and families, as explored below, but the ranks of those affected are small.

100 Years of ACA Repeal

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Please, Sir, may I have my inadequate calorie ration up front?

In its initial lightly sketched form, Senator Bill Cassidy’s ACA reform plan is the least bad of several Republican proposals, in that it extends funding for the enhanced ACA premium subsidies (eAPTC) that will otherwise expire at the end of 2025, while redirecting them.

As outlined to the Washington Examiner, Cassidy’s proposal would end eAPTC but use the $26 billion estimated cost to fund Flexible Spending Accounts (FSAs) for subsidy-eligible ACA enrollees — that is, funds to spend directly on out-of-pocket costs (or other medical costs, e.g., dental). As Charles Gaba notes, it’s unclear whether each enrollee’s FSA would be funded with the amount of eAPTC she would have been eligible for, or whether the FSA would be flat-rate or allocated by some other formula. (Cassidy emphasizes that HRAs, unlike Health Savings Accounts, are use-it-or-lose it, saving the federal government money from enrollees who access little or no medical care in a year.)

The incentive for most enrollees would be strong to use their reduced premium subsidies to buy a bronze plan (average deductible about $7,400) and use the FSA to cover first-dollar expenses. That’s donut-hole coverage, as the FSA wouldn’t cover all expenses up to the deductible or annual out-of-pocket maximum (as high as $10,600). It would work for a lot of people, while leaving lots more who would otherwise have been in high-CSR silver (actuarial value 94% or 87%, in contrast to 60% for bronze) saddled with thousands more in out-of-pocket expense.

A tincture of gold mitigation in the 2026 ACA marketplace

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Trumpcare 2.0 is also gold-laden

Amidst the carnage wrought by the (still reversible) expiration of the enhanced subsidies in the ACA marketplace, one substantial mitigating factor has emerged: silver loading has reached a milestone. While net-of-subsidy premiums for benchmark silver plans will more than double for the average subsidized enrollee, the average lowest-cost gold plan will be priced below the benchmark (second-cheapest) silver plan for the first time.

That average masks a ton of variation: the average lowest-cost gold plan is priced below benchmark in only 20 states. But those states include Texas and now Florida, which together accounted for more than a third of all enrollees nationally (8.7 million). In total, average lowest-cost gold plans have premiums below benchmark in 20 states with 12.7 million enrollees, 52% of all enrollees nationwide. (In another 12 states, lowest-cost gold premiums average less than 105% of benchmark premiums.)

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