A couple of years ago, as part of his temper tantrum against Obamacare, Donald Trump decided to eliminate CSR subsidies. Click here for more details about what this means, but the short story is that Trump thought this was a great way to sabotage Obamacare. However, thanks to the details of how this works—which Trump was naturally ignorant of—it turned out to be a net positive that increased Obamacare subsidies by nearly $200 billion over ten years. Nice work, Donald!
Two years have now gone by, and Andrew Sprung has recently been diving into the whole issue of “silver loading”—i.e., the insurance industry response to the loss of CSR subsidies—and I’ve been following along but not entirely understanding all the nuts and bolts. Today, however, he writes about whether silver loading affects Obamacare enrollment rates. That looks interesting! Does higher silver loading, which provides more bang for the insurance buck, also increase enrollment? Here’s a state-by-state look:
Higher silver loading does indeed increase enrollment. The effect isn’t huge, but as silver loading gets higher, re-enrollment rates also get higher. This is not surprising: when you effectively provide bigger subsidies, which reduces the cost of insurance, more people are likely to enroll. You can click here to read Sprung’s more detailed analysis.
Econ 101 bottom line: if you make something cheaper, more people will buy it. Isn’t that fascinating?