California's New Gold Rush: Marketplace Enrollees Switch To Gold-Tier Plans In Response To Insurance Premium Changes

Abstract

The individual health insurance market has grown significantly since the 2014 implementation of the Affordable Care Act's state-based and federally facilitated Marketplaces. During annual open enrollment periods, Marketplace enrollees can switch plans for the upcoming year. The percentage of reenrollees in California's state-based Marketplace, Covered California, who made changes to their coverage steadily increased between the 2014-15 and 2017-18 open enrollment periods. Following the implementation of "silver loading"-in which insurers raised 2018 silver-tier plan premiums to compensate for their loss of federal payments for cost-sharing reductions-the proportion of consumers who moved into gold plans during the 2017-18 open enrollment period dramatically increased, compared to previous years. Among bronze or silver plan enrollees who switched metal tiers during open enrollment, those who could enroll in gold plans that were no more than $49 per month more expensive than their initial bronze or silver plan had a significantly higher probability of switching to gold coverage than those who faced larger premium differences.

Keywords: Affordable Care Act; California; Cost sharing; Health insurance exchanges; Health maintenance organizations; Markets; Open enrollment; Premiums; Rating; health policy; individual markets.