Monday, July 27, 2020

Surprise/no surprise: ACA marketplace enrollment is UP in 2020 (on-exchange only)

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Mystery of the ACA marketplace: every year since 2016, while total signups during Open Enrollment have ticked down, the percentage of those who effectuate their enrollment by making their first payment has risen.

On Friday CMS released 2020's first Effectuated Enrollment Snapshot, showing enrollment as of February. Enrollment is about 1% higher than in February 2019, though it was about 0.3% lower as of the end of Open Enrollment. It's also slightly higher than in February 2018.  The gap between total plan selections as of the end of Open Enrollment and effectuated enrollment after all first payments are due is the lowest ever.

Below I've charted signups as of the end of OE vs. the first effectuated enrollment tally from 2016 through 2020.  The comparison is really only apples-to-apples from 2018-2020, when OE ended on December 15 in states, and nearly all enrollees in state-based marketplaces would also have to have paid by February 1. In 2016 and 2017, OE ended on January 31 in states, so late enrollees did not have to pay until March 1. The effectuated enrollment totals for 2016 and 2017 are therefore as of March, by which point some early enrollees could have already paid once and then dropped out.*

Effectuated enrollment percentages in the ACA marketplace, 2016-2020
As of the first month in which all OE enrollees owed payment

Plan selections – end of OE
First effectuated enrollment tally
Effectuated enrollment as of
Percent of OE signups effectuated
Effectuated Enrollment Snapshots (2016, 2017, 2018, 2019, 2020)
CMS state-level Public Use files
xpostfactoid – adjustment of 2017 March e.e. total

Why the improved retention? Some possible factors:
  • Shortened Open Enrollment season: In 2017, OE on was shortened, ending Dec. 15 instead of Jan. 31 as in 2016 and 2017. In prior years, the latest enrollees may have been the most marginal. The Obama administration would escalate advertising as the deadline approached.

  • Maturing market: While there's always a lot of churn in the ACA marketplace, after seven years there are probably more multi-year enrollees than in earlier years.

  • Silver loading effect: When Trump cut off direct reimbursement to insurers for CSR benefits in fall 2017, insurers in most states priced the value of CSR into silver plans only (since CSR is available with silver only), creating discounts for subsidized enrollees in bronze and gold plans. Since 2018, large numbers of bronze plan enrollees have paid nothing or close to nothing for coverage; others have obtained gold plans at a steep discount.  These discounts may have improved retention.
It's important to keep in mind that the stability in enrollment since 2016 is on-exchange only. Off-exchange, where enrollees are unsubsidized and therefore bore the full brunt of steep premium hikes in 2017 and 2018, enrollment cratered from 2016-2018. Unsubsidized enrollment on-exchange also dropped. In total, unsubsidized enrollment in ACA-compliant plans dropped from 6.7 million in Q1 2016 to 3.4 million in Q1 2019, according to the Kaiser Family Foundation. That Q1 figure for 2019 is an estimate, however. It's possible that after two years of flat premiums (2019-2020), , with a third coming in 2021, unsubsidized enrollment will prove to have recovered somewhat. Whether the pandemic boosts unsubsidized. enrollment, as people fear to go uncovered, or reduces it, as fewer people can afford it, is another question.

The really interesting effectuated enrollment snapshot will show enrollment as of June 30, 2020, revealing whether the pandemic has driven significant numbers to enroll. That report should be out in the fall, if CMS gets around to it.

Update, 7/28: I've been reminded that back in June CMS reported accelerated post-OE enrollment via Special Enrollment Period (SEP) in states the pandemic months -- with enrollment granted specifically to those who lost other coverage up 139% in April 2020 vs. April 2019, and 43% in May 2020 vs. May 2019. In total, SEP enrollment was 188,000 higher Jan-May 2020 than Jan-May  2019. Several SBEs also reported elevated enrollment during the emergency SEPs they established in late March. Covered California, the state exchange, reported that SEP enrollment through June 20 was about 100,000 higher than in the same period in 2019. SEP enrollments nationwide may more than offset the usual steady enrollment attrition that occurs throughout the year (in 2019, enrollment in states dropped by about 400,000, or 3.6% from February to June). Then again it may not: more people than usual may drop coverage or transition to Medicaid in response to loss of income.

Related:  Is subsidized enrollment in the ACA marketplace really up since 2016?

*CMS reported 2017 effectuated enrollment as of February, while some 539,000 enrollees did not have payment due until March. To estimate a March total, I've tacked 88.5% of those enrollees onto the February total. That's the effectuation percentage for those who owed their first premium in February, as explained in this post.
   Last year, a CMS analysis of enrollment patterns included monthly enrollment since 2016, which Charles Gaba charted here. That analysis posted somewhat lower February/March totals than CMS's effectuated enrollment snapshots. I've used the snapshots because they're available for all years, though I had to adjust 2017 as explained above. The monthly totals showed higher enrollment in Dec. 2018 than in Dec. 2016, generally regarded as the peak year for ACA enrollment.

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