Saturday, December 19, 2020

ACA marketplace enrollment up 10% in states that haven't expanded Medicaid

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CMS has reported* preliminary final 2021 enrollment figures in the ACA marketplace for the 36 states using the federal exchange, HealthCare.gov. In this pandemic year, enrollment in those states is up 6.6% compared to 2020 -- the first year of enrollment increase as of the end of Open Enrollment** since 2016.

Of course, enrollment increase is not uniform across those states -- every state market is different. Charles Gaba has helpfully broken out the 2020 vs. 2021 totals by state, and kindly lent me his charts. From the state totals one obvious pattern leaps out: enrollment is up 9.7% in states that have not enacted the ACA Medicaid expansion -- and down 0.5% in states that have expanded the expansion (including Nebraska, which opened the Medicaid expansion doors in October of this year). Below is Charles' chart broken out by expansion/nonexpansion.

ACA marketplace enrollment 2020 vs. 2021: Non-expansion states using HealthCare.gov 

2021 enrollment: HealthCare.gov non-expansion

ACA marketplace enrollment 2020 vs. 2021: Expansion states using HealthCare.gov 



Why the difference? A few likely factors:

1. In states that have expanded Medicaid, a considerable number of prior marketplace enrollees may have shifted to Medicaid as income dropped as a result of layoffs and reduced business triggered by the pandemic. In expansion states, adults with incomes below 138% of the Federal Poverty Level ($1468/month for an individual; $1303/month for a family of four) are eligible -- and become eligible as soon as current monthly income drops below the threshold.

2. In states that have not expanded Medicaid, eligibility for marketplace subsidies begins at 100% FPL ($12,760/year for an individual, $26,200/year for a family of four), and  many adults below that threshold fall in the so-called "coverage gap" (e.g., most adults without children) and are not eligible for any aid. In 2020, the four months of supplemental unemployment insurance at $600/week allotted by the main Covid-19 relief bill, the CARES Act, counted as income in calculation of ACA marketplace subsidies, but not in calculation of Medicaid eligibility. The extra income, available to many workers not normally eligible for unemployment insurance, probably pushed many low income people in non-expansion states into eligibility for marketplace subsidies, which are relatively generous at the lowest incomes.  While that extra income is not available in 2021 -- not yet, anyway (a bill offering a smaller supplemental UI grant may pass) -- some of those for whom the extra income enabled enrollment in 2020 are likely either auto-enrolled for 2021 (as happens if an enrollee does not update information) or have gotten a bit creative with estimates of 2021 income, estimating a total over 100% FPL.

3. More generally, in non-expansion states, the marketplace is the only game in town, and the pandemic may have stimulated more people to enroll than in recent past years.

4. The states that run their own exchanges, which are generally governed by Democrats committed to making the ACA marketplace work as well as possible (and which have their own marketing budgets, funded by a user tax on participating insurers), have all expanded Medicaid -- but these states generally outperform Medicaid expansion states on HealthCare.gov and will probably show a modest net enrollment increase in 2021. Caveats: 1) New Jersey and Pennsylvania exchanges were just launched this fall, and transition friction may crimp enrollment, and 2) In Minnesota, Medicaid enrollment is up 17% since February, and the low-cost MinnesotaCare, a Medicaid-like Basic Health Program program, is open to residents with income up to 200% FPL. That doesn't leave much room for marketplace expansion. New York's Basic Health Program, the Essential Plan, available at incomes up to 200% FPL, also limits the scope for marketplace enrollment growth.

Marketplace enrollment should be considered in light of Medicaid enrollment, which is open year-round and rose by 10-11%, , or by over 7 million, from February to October this year. In the ACA marketplace, open enrollment is limited to a few weeks per year -- November 1 to December 15 in the states using HealthCare.gov. Outside of OE, those who lose job-based insurance or undergo other qualifying "life changes" must apply for a Special Enrollment Period (SEP), as several hundred thousand generally do.***  In a normal year, net enrollment drops by a bit more than 1% per month from the end of open enrollment through year-end. This year, the pandemic elevated SEP enrollment to an as-yet unknown degree, doubtless reducing net attrition (we'll learn some time next year, probably June, how much enrollment dropped from February to December in 2020). As Gaba points out, renewals for 2021, which were up 11.4% (while new enrollments were down), were probably boosted by 2020 SEP enrollments.

All of which is to say that while the marketplace enrollment increase is relatively modest, it needs to be considered in light of both drop-down into Medicaid and boosted 2020 SEP enrollment.

As a side note, Wisconsin, where marketplace enrollment was down 2.2% for 2021, might be deemed a quasi-expansion state, as adult Medicaid eligibility extends to 100% FPL (as opposed to 138% FPL in expansion states). Taking Wisconsin out of the "nonexpansion" category boosts marketplace enrollment increase in that group to 10.2%, while adding the state to the "expansion" category increases the enrollment loss there to 0.6%.

Update, 12/27/20: I was just now appalled to note that I had included the nonexpansion state table twice, rather than following it with the table for expansion states. I've corrected the error. Apologies if anyone was discombobulated. 

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* As of now, the CMS link to state-by-state results is broken; Gaba got hold of the breakout before CMS pulled the report. While CMS may be editing the results, changes are likely to be minor.

** As I've noted before, since 2017, reduced enrollment attrition throughout the year has largely offset the shrinkage in total enrollment as of the end of OE.

*** In March, eleven state-based exchanges opened emergency Special Enrollment Periods, enabling those not normally eligible for a SEP to enroll, and reducing friction for those who would have been eligible for an individual SEP.

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2 comments:

  1. Your side note about Wisconsin, at the end, "[In Wisconsin], adult Medicaid eligibility extends to 100% FPL (as opposed to 138% FPL in expansion states)", brings up an issue of a possible additional one of the numerous holes, obvious or obscure, small or humongous, in our oh-too-complex health insurance system.

    Already, in states that do standard ACA criteria: expanded Medicaid to 138% FPL (no asset cap, income-determination-period state's option) and subsidized on-exchange for people not ELIGIBLE for any Medicaid, including expanded, income 100% FPL to 400% FPL (estimated annual basis), if the expanded Medicaid eligibility is based on monthly income, as I think they have left it in most states, then there are cases of a person being with annual income under 100% of FPL being ineligible for either expanded Medicaid or subsidized on-exchange for some months. (E.g. monthly income alternating 30% FPL and 150% FPL monthly -- the person is eligible for neither during the six 150% FPL months.)

    With the Wisconsin case, it sounds like the case will be much more common: e.g. alternating 70% 110%, unless their waiver to do that tweaks the expanded Medicaid eligibility just right.

    (I had this thought learning that GA may be doing the same, with the 100% expanded Medicaid top cutpoint. Basically, it's a reasonable idea; to give as many people ordinary normal health insurance as possible, and our MA governor, Republican Baker, proposed that, but was defeated. But the fine details, often not well handled either by lawyers or people with degrees in administrative science, have to be addressed correctly for it to work out.)

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    1. Norman, the ACA has a rule that if your annual income is below 138% FPL (in an expansion state), you are eligible for Medicaid even if your current monthly income at the time you apply is over the monthly limit. This rule is poorly understood and requires human intervention to activate; a navigator in WV told me that they invariably have to "escalate" a call to a supervisor on the marketplace hotline to get this done. Conversely, if you project an annual income over 138% FPL (and under 400% FPL), you are eligible for marketplace subsidies.

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