Our deep dive analysis of the 48-state public exchange rates from HHS suggests that affordability may not be a roadblock to achieving the CBO projected 7M exchange lives in 2014. Based on our analysis we estimate ~6.5M people alone will be eligible for a $0 premium plan. Simply put, we don't see any logical reason why anyone in this population wouldn't take free healthcare coverage vs. remaining uninsured. Therefore the question of exchange uptake, in our opinion, is really whether outreach, education, and logistics/IT is successful in order to hit CBO projections as opposed to a question of affordability. We note that any higher uptake would be positive for hospitals while assessing the impact to managed care remains difficult.
Based on our analysis of exchange pricing compounded by Census/Kaiser data on the uninsured by income brackets, we estimate that approximately ~6.5M currently uninsured will have a $0 premium bronze plan available to them. We arrive at this estimate using a bottom-up approach through which we evaluate each individual state and determine the highest income level at which individuals can purchase a $0 premium bronze plan after subsidies. We also determine the income floor for subsidy eligibility, which is determined by whether a state expands Medicaid (138% FPL) or does not (100% FPL). Finally, we cross reference the range of incomes that can purchase a $0 premium bronze plan with Census data segmenting the uninsured by income level on a state-by-state basis to arrive at our ~6.5M estimate.
-- from Credit Suisse, First Edition, U.S. Alert, September 26, 2013
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