Sunday, December 27, 2020

In response to the pandemic, ACA marketplace enrollment was likely up 6 percent-plus by June 2020, year-over-year

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CMS has released average monthly effectuated enrollment in the ACA marketplace for the first half of 2020. Combined with updated data about enrollment from February through May 2020 via the Special Enrollment Periods (SEPs) granted to people who lose access to other insurance or undergo other "life changes" outside the annual Open Enrollment period, the new data offers some measure of the extent to which Americans turned to the marketplace in response to loss of employer coverage triggered by the pandemic.

While total enrollments as of the end of Open Enrollment* were nearly identical in 2019 and 2020 (total plan selections down by 0.03%), average monthly enrollment through June (10,543,098) was up 3.4% in 2020 compared to June 2019 (10,194,206).

The average monthly enrollment comparison probably understates the impact of increased enrollment via SEP and improved retention during the pandemic months. The averages include monthly totals for January through March, when the pandemic's effects were zero to minimal. In June 2019,** effectuated enrollment was 9,797,989, 7.4% below the total for February 2019. We don't yet have a comparable figure for June 2020: it will be included in the effectuated enrollment snapshot for February 2021, which probably won't drop until this summer. But the year-over-year increase as of June 2020 was almost certainly well above the 3.4% half-year increase in average enrollment, and the increase likely continued to grow throughout 2020.

I have ventured an estimate as to effectuated enrollment this past June, highlighted in green below. 

ACA marketplace enrollment, 2020 vs. 2021
Estimated increase, June 2020 vs. June 2021

Enrollment as of

2019

2020

2020 vs. 2019

End of OE (12/15-1/31)

11,444,141

11,409,447

-0.03%

Effectuated: February

10,579,744

10,673,516

+0.09%

Avg. monthly: Jan--June

10,194,206

10,543,098

+3.42%

Effectuated: June

  9,797,989

10,410,621

+6.25%

In 2019, average effectuated enrollment from January through June was 3.6% lower than the single-month total for February. This year, average enrollment through June is just 1.2% lower than the February total -- one third the difference.  If you take one third of the 7.4% drop in monthly enrollment from February to June in 2019, a decrease just shy of 2.5% suggests about 10,411,000 enrolled in June 2020, 613,000 higher than in June 2019, an increase of 6.25%. 

Of course, the monthly drop from February to June probably was not steady. Elevated SEP enrollment, stimulated mainly by job loss, would likely not have kicked in until May, as someone enrolling in early March would have coverage effected in May. In 2018 and 2019, years in which enrollment in February was broadly similar to 2020, monthly enrollment from February to April dropped by 275,000 and 248,000, respectively. Assuming better retention in those months in 2020, and a January enrollment total essentially identical to February's (they're generally very close), here is a hypothetical distribution for the known average monthly enrollment of 10,543,098, January to June 2020:

Jan:      10,673,516
Feb:     10,673,516
March: 10,563,516 (-110k)
April:   10,453,516 (-110k)
May:    10,447,516
June:    10,447,516

That June estimate is 6.6% above the June 2019 total. Of course, retention in April or May might be higher or lower than estimated here.

By way of comparison, total Medicaid enrollment nationally increased 5.3% from February through June. Enrollment growth among those rendered eligible by the ACA Medicaid expansion*** (adults with incomes up to 138% FPL), was about double that. Expansion enrollment is probably up by more than 3 million since February. In the marketplace, if reduced attrition and increased SEP continued through the fall, year-over-year enrollment in December may be up by about a million.

Speaking of Medicaid expansion, marketplace enrollment as of the end of Open Enrollment in four states that have enacted expansions since January 2019 (Virginia, Maine, Utah and Idaho) was down a collective 77,810. New expansions generally depress marketplace enrollment for more than a year. Typically, a third or more of enrollees in non-expansion states would be eligible for Medicaid had their states enacted the expansion, and the transition when a state does expand takes time to shake out. Matt Broaddus at CBPP pegs the enrollment loss attributable to expansion in those four states in 2020 at 50-60,000. Nebraska launched a Medicaid expansion this past October, and enrollment in that state dropped by a couple of thousand (2.4%).  The reduction will likely be larger in 2022.

Medicaid also probably exerted a broader downward pull on marketplace enrollment, as some marketplace enrollees who lost income likely transitioned to Medicaid (while others became newly eligible for marketplace subsidies).  The fact that the $600-per-week supplemental unemployment insurance provided for up to four months by the CARES Act counted as income with respect to marketplace subsidies, but did not count toward Medicaid eligibility, further tilted the field toward Medicaid. On the other hand, in states that have refused to enact the expansion, the extra UI income probably lifted a number of people over the 100% FPL threshold required for marketplace subsidy eligibility.  These contrary effects may have spilled over into 2021 enrollment: in the 36 states using the federal exchange, HealthCare.gov, in 2021, enrollment was up 10% in states that have not expanded Medicaid, and down 1% in states that have.

What we know of increased SEP enrollment in the early pandemic months is in line with the year-over-year marketplace enrollment increase from mid-2019 to mid-2020. According to an updated CMS report, SEP enrollment from January through May in the 38 states using HealthCare.gov in 2020 was up by 205,114 in 2020. California, which opened an emergency SEP for all comers on March 20, 2020, announced that from that date through August 31, SEPs increased by 167,700 over the same period in 2019 [update, via Charles Gaba: SEPs up by 177,940 year-over-year through Oct. 31). Eleven of the other 12 state-based exchanges (SBEs) operating in 2020 also opened emergency SEPs, reducing the friction involved in SEP enrollment to varying degrees. California accounts for slightly less than half of all SBE enrollment (and 14% of total marketplace enrollment). 

In short, we know of SEP enrollments in 2020 somewhere in excess of 400,000 above 2019 levels logged from May through August. CMS attributes further year-over-year increase to improved retention. 2021 enrollment totals in the 36 states using HealthCare.gov this year appear to reflect both elevated SEP and improved retention,  as renewals were up 11% in those states, offsetting a 5.4% decrease in new enrollments for a net increase of 6.6%. The increase may be higher in the 15 state-based exchanges (New Jersey and Pennsylvania launched new SBEs this year). SEPs generally outperform HealthCare.gov states -- though new SEPs often experience growing pains and enrollment drops.

Eventually -- in summer 2022 -- we will have a hard count of total marketplace enrollment in every month of 2020 and can assess the full impact of increased SEP enrollment  and elevated retention in this pandemic year.

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* The tally as of the end of Open Enrollment represents "plan selections," a portion of which (about 6% in recent years) are never effectuated, as some enrollees fail to make their first payment.

** The first effectuated enrollment snapshot for each year includes monthly enrollment totals for the prior year.

*** The expansion, rendered voluntary for states by the Supreme Court in 2012, has been enacted in 36 states plus D.C., with Oklahoma and Missouri scheduled to enact next summer.

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