ACA enrollment train wreck coming

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On Tuesday, the Trump administration dashed widespread hopes that it would open an emergency Special Enrollment Period in the ACA marketplace for the 38 states using HealthCare.gov, the federal exchange, allowing anyone who was uninsured to apply for coverage. Twelve of the thirteen state-based exchanges have opened such emergency SEPs, and most are extending the deadline.

The White House told reporter Amy Lotven that an emergency SEP is not needed because "there's already special enrollment for job loss." That's wrong, as Charles Gaba and others pointed out: there's a SEP for loss of insurance that usually follows job loss.

Not only does that ordinary SEP exclude those who were uninsured before job loss -- it's also likely to make obtaining insurance a dauntingly difficult and dangerously slow process for the millions who do lose employer-based insurance and seek new coverage through HealthCare.gov.

The normal SEP crawl

Shelli Quenga, Director of Programs at the Palmetto Project in North Charleston, South Carolina, a nonprofit brokerage* serving primarily low income clients, explained to me that obtaining a SEP after loss of job-based (or other) insurance coverage is difficult in the best of times. "The process is deliberately cumbersome, and it's going to cause people to remain without coverage," she worries.

The newly unemployed also need an emergency Special Enrollment Period

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After a week or two of rumors that the Trump administration would open an emergency Special Enrollment Period (SEP) on HealthCare.gov, the federal ACA exchange used by 38 states, the administration announced on Tuesday that it would not do so. Twelve of the thirteen state-based exchanges have announced emergency SEPs since March 10, with only Republican-ruled Idaho demurring.

As Jeff Young put it, team Trump could not choke down "an admission that the law and its benefits help people." Their spite will likely cost some people their lives and others all their worldly wealth. As the Kaiser Family Foundation's Larry Levitt noted, some 9.2 million of the nation's uninsured were eligible for ACA marketplace subsidies at last count (i.e., as of 2018).

Normally, enrollment in ACA-compliant private plans is only possible during Open Enrollment, which runs Nov. 1 - Dec. 15 in HealthCare.gov states. A SEP is available at other times only to those who undergo a "life change," such as loss of employer coverage, marriage, divorce, death of a family member, etc.

Whether fear of COVID-19 and the huge costs of hospitalization (ranging from about $9,000-90,000 by Kaiser's estimate) would induce many of the uninsured to seek coverage is an open question.*  Poor takeup among the subsidy-eligible has persisted since the ACA marketplace launched. The 9 million subsidy-eligible uninsured estimated by Kaiser roughly match total on-exchange enrollment. Takeup is better among those rendered eligible for Medicaid by the ACA expansion, but Kaiser also estimates that about 7 million uninsured are eligible for Medicaid and CHIP. An emergency SEP, plus a concerted public information campaign, might shrink those ranks.

The main benefit of an emergency SEP opened unconditionally to all may lie elsewhere, however. ACA enrollment can be complicated at the best of times. An ordinary SEP, including one triggered by job loss and attendant insurance loss, adds friction.  An applicant has to attest to and verify the loss of insurance; the marketplace has to confirm it, grant the SEP, and then open the gate. In some states, accepting evidence of loss of coverage is up to the insurance company with which the applicant seeks to enroll.

Our emerging public option: Medicaid

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Axios's Bob Herman notes that "Medicaid will be a lifeline for droves of Americans affected by the coronavirus pandemic."

The program will pick up many people who lost their income and their health insurance together, as well as people who lost jobs that didn't provide health insurance, and potentially some people who are still working and need medical care but aren't insured.

Indeed it will. As of early this year, about 72 million Americans were enrolled in Medicaid's various programs. Based on an old rule of thumb from Georgetown's Edwin Park that I've cited before, enrollment (including CHIP)  could reach 85 million or more by the time the pandemic subsides:

CARES Act may reduce ACA "coverage gap" in states that refused Medicaid expansion

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The enhanced unemployment benefits provided by the CARES Act, the emergency COVID-19 relief bill signed into law on March 27, count as income for those seeking subsidized health insurance in the ACA marketplace (the income does not count in consideration of Medicaid/CHIP eligibility).

As I noted last week, that's going to vastly reduce premium subsidies and likely wipe out Cost Sharing Reduction subsidies for many newly unemployed people who seek coverage.  On the plus side, however, the rush of temporary income should also narrow the "coverage gap" in states that have refused to enact the ACA Medicaid expansion, including Florida and Texas.

Enhanced unemployment benefit will skew ACA marketplace/Medicaid enrollment

The enhanced unemployment benefits provided in the CARES Act, the massive COVID-19 response bill that passed the Senate 96-0 last night, looks likely to create some strange incentives for the newly uninsured seeking health insurance.

For anyone who qualifies for unemployment insurance, the bill adds an extra $600 week to the normal benefit for four months. That's $10,400 for anyone who stays unemployed for that long (as millions likely will: a staggering 3.3 million new jobless claims were entered this week).  For the first time, UI benefits are available to the "self-employed, independent contractors, those with limited work history, and others who are unable to work as a direct result of the coronavirus public health emergency."

As noted last night by the Brookings Institute's Loren Adler, the extra $600 per week will not be counted for the purposes of determining eligibility for Medicaid and CHIP, but will be counted for determining subsidy eligibility for private plans in the ACA marketplace. If that holds, some fairly high earners will likely end up eligible for Medicaid but not for subsidized marketplace coverage.  That's all the more likely because while Medicaid eligibility is determined on a monthly basis, marketplace subsidies are determined on the basis of annual income -- so income earned up to the time of layoff counts along with the enhanced UI benefit.*

Other may be eligible both for Medicaid and for weak marketplace subsidies. In that case, Medicaid should be the clear choice for most. Let's look at the math.

Unemployed alert: When NOT to seek health insurance through the ACA marketplace

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Update, 3/25: If I understand a brief description of unemployment benefits in the stimulus bill right, many or most of those who qualify for unemployment will receive too much to qualify for Medicaid, unless -- per comment from Stan Dorn below -- the bill text exempts this income from consideration [further update: (unconfirmed) word is that it does!]. More below.

The expected economic fallout from the coronavirus pandemic is shocking. Morgan Stanley forecasts that the unemployment rate will approach 13% next quarter. We're talking Depression.

That onrush will put enormous strain on the enrollment infrastructure established by the ACA for the private plan marketplace and Medicaid, at a time when our healthcare infrastructure will also be under tremendous strain and flux. Thank God the core ACA programs, Medicaid expansion and the subsidized marketplace, are intact and funded. But the enrollment machinery is balky.

I am particularly concerned about one glitch that could flummox a lot of newly uninsured people: the mismatch between marketplace and Medicaid income assessments. In applications processed through the marketplace -- HealthCare.gov and the 13 state exchanges -- subsidy eligibility or Medicaid eligibility (in expansion states) is determined on the basis of annual income. In state Medicaid offices, Medicaid eligibility is determined on the basis of monthly income going forward.

The ACA marketplace in year 7: The navigators' view

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The Affordable Care Act's health insurance marketplace, born on January 1, 2014, isn't a baby any more. In fact you might say it's reached maturity.

Like many children, it's disappointed its parents somewhat, insuring about half as many people as the Congressional Budget Office forecast when the ACA was passed. It's withstood multiple legislative and administrative assaults from Republicans and survived a half dozen near-death experiences via  repeal bills and court challenges to its constitutionality, one of which still looms. The marketplace's lower-profile twin, the ACA Medicaid expansion, has been more successful -- insuring more people more thoroughly for less money.

But the individual market for health insurance reshaped by the ACA is beginning its seventh year of offering comprehensive health insurance to anyone who lacks access to other insurance without regard to their medical history or current health. The ACA-compliant market serves about 13 million people, about three quarters of them subsidized, with the federal government paying about 86% of subsidized enrollees' monthly premium on average.

As the nation is faced with a major pandemic-induced recession, the marketplace and ACA Medicaid expansion stand poised to insure millions who lose employer-based insurance.

Call the midwife

There is a set of marketplace midwives who were in at the birth and have continued their intimate engagement: enrollment assisters, including nonprofit navigators established by the ACA; nonprofit and often volunteer Certified Application Counselors (CACs); and for-profit brokers who work in the individual market.

Emergency Special Enrollment Periods in 12 state ACA marketplaces: How easy?

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Twelve of the thirteen states (including D.C.) that run their own ACA marketplaces have announced emergency Special Enrollment Periods to help the uninsured get covered while the Coronavirus rages. Washington state was first to announce a SEP,  on March 10. CMS is "evaluating" following suit for the 38 states using the federal platform, HealthCare.gov. Idaho is the only holdout (and only red state) among the SBEs.

Kudos to the states that have taken the plunge. May it go smoothly operationally. Some began with some messaging confusion, e.g., info about the emergency SEP that seemed contradicted by older messaging about conventional SEPs, granted only to individuals for life changes such as job loss instead of to anyone seeking insurance. Most of those have been straightened out, but some mixed messaging lingers.  Below, a sampling of clear and not-so-clear home page messaging.

The ACA as recession insurance, revisited

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Almost a year ago, I noted that the ACA marketplace has never operated in a shrinking employment market -- job growth has been steady since the marketplace launched in January 2014.  That's created a (fortunate) headwind for enrollment, and

Conversely, the marketplace -- along with the ACA Medicaid expansion -- stands in reserve as a shock absorber when the next recession or financial crisis hits.

That's now. Goldman Sachs projects that after a 30% spike in jobless claims last week, to 281,000, new claims will hit 2.25 million this week -- an unprecedented surge. Mnuchin, Trump's Treasury Secretary, warned Republican senators this week that unemployment could go to 20%, a level not seen since the Great Depression. In the Great Recession of 2008-9, 9 million people lost their jobs; losses this time around could far exceed that total.

Millions of people are going to lose access to employer-sponsored insurance. The ACA machinery to get them insured is knobbly, but functional and funded. I have a post at healthinsurance.org to help the newly uninsured navigate their options. The basics:

The ACA wars through a pandemic lens: Nicholas Bagley looks back

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I spoke to Nicholas Bagley, health law professor at the University of Michigan, about measures to limit Americans' out-of-pocket exposure for coronavirus treatment -- assuming that in the U.S., simply covering all OOP for everyone treated for the disease at government-set payment rates to providers is not going to happen.

My thought was that Bagley could speak to avoiding legal pitfalls in any such measures. But his sense is that in the current crisis, legal concerns pertain mainly to potential administrative actions  (for example,  Can the CDC Pay for Everyone's Coronavirus Testing?).

Given normal U.S. legislative sclerosis, seeking regulatory authority to do what needs to be done is often fertile ground for legal analysis. Right now, though, the cards may line up for decisive legislative action, as they do in this country when (and only when) Republican political survival depends on it. And while there are multiple constraints to regulatory action, "there are fairly few constraints on Congress's legislative power," Bagley said. "Congress doesn't quite have carte blanche, but close to it. The question is not what does the Constitution allow Congress to do. We should be asking, 'what do we think ought to happen?' And then we should do it."