America's Health Insurance Plans, the primary industry group, supports allowing what are often referred to as “copper plans” to be sold on the exchanges. The organization has argued that it would entice more people—particularly younger, healthier individuals – into the marketplaces.
The idea has found some traction with swing-state Democrats. Sen. Mark Begich (D-Ala.), who faces a tough re-election fight (his Republican challenger will be determined in a primary contest on Tuesday), introduced legislation in November that would amend the Patient Protection and Affordable Care Act to allow for copper plans. That bill has six co-sponsors, including Sens. Mary Landrieu (D-La.) and Mark Warner (D-Va.), who are both up for re-election this year. However, the bill has made no progress in the Senate and there is no companion measure in the House.
Katherine Hempstead, who directs coverage activities for the Robert Wood Johnson Foundation, questions whether there is a market for lower-actuarial-value plans. During the first open enrollment period, 20% of federal exchange customers opted for a bronze plan—the skimpiest coverage available to most consumers, designed to cover 60% of medical costs—according to the CMS data.
“The low take up of the (bronze plans) makes me feel like the impact of adding a 50% AV plan would be kind of underwhelming,” Hempstead said. “It doesn't seem like there's a strong consumer preference for that.”
Hempstead further points out that the individuals who are likely to be attracted to such plans are those with lower incomes who will often be ill-prepared to handle the high deductibles and other out-of-pocket expenses that come with lower-actuarial-value plans.
“There is concern that it puts even more of the cost on the consumer,” Hempstead said.
The Avalere analysis assumes that copper plans would be available through the exchanges starting in 2016. The study estimated that the average premium would be $4,600 per year, 18% lower than for the average bronze plan.
The lower actuarial threshold also would convince some employers to maintain coverage, according to the Avalere analysis. The Society of Actuaries has predicted that 3% of employers will stop providing coverage under the ACA. But if the copper plan option existed, Avalere estimates that 4% of that group would continue offering coverage to workers. That increase represents just 0.1% of the current employer-sponsored market.
The Avalere study was paid for by the Council for Affordable Health Coverage. That group's members include insurers such as Aetna and Cigna Corp.
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