Thursday, October 08, 2020

ACA marketplace enrollment in Covid-19 season: Flat? Up a million? Both?

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 As millions of Americans lose job-based health insurance during the pandemic months, Medicaid, bolstered by the ACA Medicaid expansion, has served as a far more potent protection against becoming uninsured than the ACA marketplace, for several reasons:

  1. As family incomes crash, about twice as many newly unemployed and uninsured become eligible for Medicaid as for subsidized marketplace coverage, according to Urban Institute calculations (2.4 times as many in expansion states; 1.6 times as many in nonexpansion states).  Medicaid eligibility is determined on a current monthly basis, while marketplace subsidies are calculated on the basis of estimated annual income.

  2. The emergency extra $600/week unemployment insurance provided for up to four months (now expired) by the CARES Act does not (did not) count with respect to Medicaid eligibility, but did count in calculation of marketplace subsidies, severely weakening them (it continues to count, since the relevant measure is annual income).

  3. The Families First Act effectively required states to suspend income redeterminations and disenrollments in Medicaid for the duration of the emergency. In the marketplace, people pay premiums and so disenroll themselves when the premiums become a hardship.

  4. While Medicaid enrollment is year-round, marketplace enrollment outside of the annual Open Enrollment Period (Nov. 1 -- Dec. 15 in 38 states, somewhat longer in most state-based marketplaces) requires a Special Enrollment Period (SEP), granted to those who lose coverage or report other "life changes," such as divorce or childbirth. Applying for a SEP entails extra administrative burden. While 12 of 13 state-based marketplaces opened emergency SEPs easing or eliminating that burden, did not -- though the federal exchange did suspend the need for pre-enrollment documentation of the reason the SEP should be granted.

  5. Unemployment may drop a significant number of marketplace enrollees into Medicaid eligibility. 
Result: Medicaid enrollment has increased by about 6 million, or 9% through August, while ACA enrollment is probably close to flat. Perhaps that's not a fair measure, since monthly attrition in the marketplace is a norm -- and appropriate, since serving as a stopgap is an important marketplace function. From January to September 2019, total marketplace enrollment dropped by almost exactly a million, from 10,498,207 in January to 9,490,318 in September (see p. 11 here).  Thus, if total marketplace enrollment were flat from January through September, that could be viewed as an increase of a million compared to ordinary times. 

Avalere Health has  forecast on the basis of early SEP data that enrollment will increase by a million this year as a result of the pandemic. The report does not address attrition. If enrollment is down by 400,000 from January through December the forecast would be accurate, based on last year's attrition. The increase would be reflected in average monthly enrollment compared to last year's, recorded in each year's first effectuated enrollment snapshot for the prior year.

We don't yet have a second quarter effectuated enrollment snapshot for the ACA marketplace. We do have some tidbits, though. From January through May, SEP enrollment in the 38 states using was 188,000 thousand higher than in 2019 according to a CMS report  (effectuated enrollment in February 2019 and February 2020 was almost identical). In Covered California, CA's ACA exchange, which held an emergency SEP open from March 20 to August 31 and advertised extensively, SEP enrollment was up by 167,700 compared to same period 2019 (California marketplace enrollment is about 19% of's). Even more striking, total effectuated enrollment in California was higher in June (1.53 million ) than in March, (1.42 million). That's a 7.7% increase, whereas the excess SEPs in states through May would only cover about a third of "normal" attrition at the 2019 pace.

Two more tidbits. Via Charles Gaba, in Maryland, which held an emergency SEP this spring on the heels of a special tax season SEP meant to encourage the uninsured, total individual market enrollment (including off-exchange) increased by 2.6% from February 29 through June 30. In New Jersey, which uses and could not open an emergency SEP, total individual market enrollment is down 1.76% from the first quarter to the second

Two tentative hypotheses, then: 1) the emergency SEPs opened by state-based exchanges may had a real impact, though the their effectiveness may have varied according to how frictionless they were; and 2) any increase in marketplace enrollment won't do much more than offset normal attrition (which totaled about 13% from January to December in 2019), and may do less. California is probably an outlier in this regard -- which is odd, because it's also an outlier in weak Medicaid enrollment during the pandemic.
Afterthought: perhaps the buried lede here is that California's second quarter increase in enrollment is quite something.


  1. Thanks for good observations. I did not realize the impact of those $600 weekly payments on ACA subsidies. If a person got $600 a week for four full months, that is 16 weeks and $9600 of extra income. As you say, that can blow you right out of a good subsidy on ACA plans.

  2. I appreciate this detail:

    "The emergency extra $600/week unemployment insurance provided for up to four months (now expired) by the CARES Act does not (did not) count with respect to Medicaid eligibility, but did count in calculation of marketplace subsidies."

    (i.e. the $600 not counting for Medicaids and expanded Medicaid, yet counting for on-exchange subsidies) which I did not know.

    As you may recall from prior comments of mine here, since it is underpublicized relative to the rest of the flaws in the current ACA, I have a special concern over Medicaid estate recovery on expanded Medicaid and other non-long-term-care Medicaids, because, in the presence of the recovery, the coverage is not "insurance", but rather can be just loan, until death, for all medical expenses payed out. That's not insurance. It's a loan. (Whether the states recover all medical bills paid out, or just capitations, seems to be at the states will, perhaps tied to how it itself paid for Medicaid coverage. Minnesota, when it was doing the recovery, indicated it gave itself both options.)

    For those unaware, the recovery is done in 10-14 states (including blue MA, MD, and NJ) currently, on ACA expanded Medicaid, and other standard medical expense Medicaids for people 55 and older. (The status is fairly well documented in the Wikipedia article on Medicaid estate recovery, which I put the info into myself. Wikipedia is not reliable in itself, but the references are all there and online for verification.)

    (I know the author of the blog is aware of the issue, as he commented on it with shock maybe a year ago in a blog post.)

    Besides being a problem for lower-income people in passing on modest wealth, and a snag for some others with assets to lose, who don't know about the ill-publicized estate recovery, I note that many states, such as my own MA are going around switching people to expanded Medicaid as they lose their jobs from covid. Mostly it's a good thing, but for many, those over 55 in our state like MA that does the recovery, if people have assets to lose, it's a real bomb that they're gibing people. (The state does not warn people of the bomb. If they actually have enough saved to afford it, they can get real not-a-loan insurance as non-subsidized on-exchange plan. But MA, as with many states, doesn't tell people conspicuously.)

    Anyway, your own text that I quoted brings up another problem with our crazy patchwork system. Since eligibility for any Medicaid, including ACA expanded Medicaid, makes one ineligible for a subsidized on-exchange plan under ACA rules, in the 14 states, the disregard of the $600 is forcing more people 55 and older onto the just a loan potential bomb of non-insurance!

    (Of course, the issue becomes rather moot if the full ACA is taken out by the Supreme Court next June, so perhaps we should wonder why any of us are potentially wasting our time worrying about these details with the ACA.)

  3. I was a friend of one of the families that challenged estate recovery in MN.
    This practice is a grotesque attempt to tax the beneficiaries of social insurance.

    Now, the majority of the non-seniors who get Medicaid are about two pay periods from homelessness. They are not going to be leaving any taxable estates to anyone.

    However this idiotic law is a concern to some seniors in nursing homes. However, my impression is that the income and asset tests to even get Medicaid for a nursing home stay are very stringent. So again, estate recovery is repulsive but I think it will be very, very rare.

    Let me know if I am correct on this.