News that a CareFirst BlueCross BlueShield subsidiary will stop selling bronze level plans on the Virginia marketplace next year prompted some speculation that it could signal a developing movement by insurers to drop that level of coverage altogether. The reality may be more complicated and interesting, some experts said, based on an analysis of plan data.
Bronze plans provide the least generous coverage of the four metal tiers offered on the insurance marketplaces, paying 60 percent of benefits on average, compared to 70 percent for silver plans, which are far more popular. During the 2016 open enrollment period, 23 percent of marketplace customers signed up for a bronze plan, compared with 68 percent who chose silver, 6 percent who picked gold and 2 percent who chose a platinum plan.
Next year, the CareFirst BCBS subsidiary Group Hospitalization and Medical Services will no longer offer bronze plans on the Virginia marketplace, and bronze plan members will be transitioned into silver plans, said a spokesperson for the insurer. The company will continue to offer bronze plans on other exchanges, however.
The decision spurred some health policy analysts and health law critics to question whether other insurers would follow suit. Part of that reasoning had to do with the health law’s risk adjustment program. In the program, individual and small group insurers that enroll sicker, generally costlier members receive payments from insurers that enroll healthier, less costly members. Since bronze plans may attract healthier people, insurers may stop selling them to avoid risk adjustment program payments, some argue.
Between 2015 and 2016, the number of bronze plans offered on the marketplaces increased less than 1 percent, while the number of silver plans grew by 2.9 percent, according to data from the Robert Wood Johnson Foundation.
It’s too soon to say whether CareFirst’s shift signals a trend in insurers pulling back from the bronze metal tier, said Katherine Hempstead, who leads RWJF’s work on health insurance coverage. But even if that happens, it’s unclear that the impact on consumers would be negative.
Bronze and silver plans may become more similar as time passes, Hempstead said.
Insurers have some wiggle room in designing plans. Although bronze plans must pay 60 percent of costs on average, they can range from 58 to 62 percent. Likewise, every silver plan doesn’t have to pay exactly 70 percent of costs on average, a plan can pay from 68 to 72 percent. Issuers can design plans that pay at the low or high end of these ranges and still meet the criteria for a bronze or silver plan.
An analysis of the premiums for bronze and silver plans in Census regions across the country reveals that average prices for the two types of plans moved toward each other slightly between 2015 and 2016, Hempstead said. In addition, looking across all regions the highest priced bronze plan was significantly more expensive than the cheapest silver plan in each region in 2016.
A recent analysis by the actuarial firm Milliman found that while people who purchased silver plans tended to get those with lower premiums, those turning to bronze plans chose the more expensive options. “Many issuers found it difficult to develop [bronze] plans that were palatable to consumers and in the bottom portion of the metallic level range,” the report concluded.
“It’s interesting if the industry standardizes itself,” Hempstead said, “and what if the most common plan becomes a sort of bronzy silver?”
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