Many of us have been asking this question for months: How many people who purchased coverage through the Marketplaces missed out on lower cost sharing because they did not enroll in a Silver plan? Now we have an estimate thanks to a new analysis by Avalere Health. Avalere’s headline – “More than 2 Million Exchange Enrollees Forgo Cost-Sharing Assistance” – suggests that these people knowingly abstained or refrained from taking advantage of a key form of financial assistance that reduces out-of-pocket costs for health care services. But we don’t really know if that’s the case.

Although cost-sharing reductions (CSR) are available to people with income under 250 percent of the federal poverty level (about $50,000 for a family of 3), the value of the reductions are heftier for people under 200 percent of the FPL. The additional financial assistance means that the health plan pays a higher share of costs. Without CSRs, a Silver plan pays 70 percent of average health care costs. With financial assistance, the average cost paid by the plan increases to three different coverage levels:

• 73 percent of costs for enrollees with income between 200 and 250 percent of the FPL
• 87 percent of costs for enrollees with income between 150 and 200 percent of the FPL
• 94 percent of costs for enrollees with income below 150 percent of the FPL

Only Silver-level plans qualify for cost-sharing reductions but the Avalere analysis indicates that more than a quarter of enrollees – 2.2 million people – with qualifying income did not choose Silver plans. The analysis suggests that consumers are likely enrolling in lower-cost Bronze plans but it would be helpful to know for sure. Depending on someone’s income, choosing a Gold or Platinum plan, which cover 80 and 90 percent of health care costs respectively, could mean they are actually paying more in premiums to get a plan that covers less.

The fact that 27 percent of CSR-eligible people are not enrolled in Silver plans demonstrates the need for additional consumer assistance and new tools that help consumers make informed decisions in choosing a plan. Navigators and certified application counselors are knowledgeable about plan differences and play a critical role in educating consumers about their options. Unfortunately, the resources dedicated to funding navigator grants are insufficient to serve all marketplace consumers.

Since many consumers purchase coverage directly on their own, the federal and the state-based marketplaces can do more to alert consumers when they are missing out on financial assistance. Here are three ideas for marketplaces to consider:

• A pop-up alert could be programmed into Healthcare.gov and the state marketplace technology that warns someone who is CSR-eligible that that their out-of-pocket costs could be lower before they select a different metal level plan.
• When marketplaces send out renewal notices in advance of the next open enrollment period, they should inform current enrollees who are missing out on CSRs and encourage them to look at Silver plans.
• Marketplace call center staff should be specifically trained to inform consumers of their eligibility for cost-sharing reductions and what it could mean to their overall costs for health care and coverage.

The Affordable Care Act has been tremendously effective in increasing the number of people who have the peace of mind and financial protection that health insurance brings. But we have learned that there is a critical need to increase health insurance literacy so that consumers get the highest value out of their health care coverage. Of course, people who are extremely healthy and use few health care services may actually fare better financially with a lower-cost bronze plan. But as we know, one accident or illness can change that scenario in a heart beat. Knowing that 2.2 million consumers are missing out on cost-sharing reductions, we must do more to make sure consumers are well informed and make the best choice in health plans to meet their needs.

A special thanks to the Robert Wood Johnson Foundation for its support of our work on providing feedback to HHS and highlighting how ACA implementation is impacting consumers.