Monday, May 17, 2021

Emergency SEP enrollment, shrinking attrition boost ACA marketplace enrollment beyond yearly top lines

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In a report issued last September, Covered California, the golden state's ACA exchange, announced that effectuated enrollment in private health plans through the exchange had reached an all-time high of 1.53 million (1,527,730) as of June 2020.   That was in the midst of an emergency Special Enrollment Period (SEP), effectively a second open enrollment season, implemented by California in response to the Covid-19 pandemic.  (In normal years, SEPs are open only to individuals who can demonstrate a qualifying "life change," such as loss of job-based insurance.)

The emergency SEP ran from March 20 through August 31, 2020. According to the September report, SEP enrollment increased by more than 100% over the same period in 2019, to 289,460.  As the CoveredCA report stresses, that's in contrast to a mere 27% increase in SEP enrollment in the 38 states then using the federal exchange,, for which the Trump administration refused to open an emergency SEP.  In September, active membership enrolled through CoveredCA reached a new all-time high, 1,551,470.  

Driven largely by the boost in SEP enrollment, plan selections as of the end of OE 2021 in California finally surpassed their 2016 high point of 1,575,340, reaching 1,625,546. (The term "plan selections" acknowledges that not all those who "enroll" in plans during OE make a first payment and thus "effectuate" enrollment and become, in CoveredCA parlance, "active members").  

While plan selections as of the end of OE have always served as the headline number for ACA marketplace enrollment, they provide a somewhat misleading picture. Every year, an average of about 10% of those who "enroll" in plans during OE never pay their first premiums, and attrition continues throughout the year, as disenrollments exceed SEP enrollments -- at least through 2019, the last year for which monthly enrollment has been published.  But attrition has been shrinking beginning in 2018, perhaps because the silver loading that began that year sharply reduced net-of-subsidy premiums for many enrollees, including a substantial number who paid zero premium.  In 2016, national enrollment as of December was 28% below the end-of-OE total for plan selections. In 2019, December enrollment was just 20% below the end-of-OE tally.

In California in 2020, the emergency SEP -- and demand triggered by the pandemic, perhaps aided by state subsidy boosts introduced in 2020 -- wiped out monthly attrition from March through December. Thus the SEP enrollment surge has boosted enrollment more than the end-of-OE topline indicates.  Here is a look at enrollment changes in March and December as well as at the end of OE from 2016 forward, as shown by CoveredCA's quarterly active enrollment tallies. Numbers marked in red are all-time highs (or attrition lows).

Enrollment in Covered California, 2016-2021

Sources: Covered California Active Member Profiles; CMS state-level Public Use Files

While end-of-OE enrollment in California in 2021 is just 3.2% above the 2016 end-of-OE high point, enrollment in December 2020 exceeded enrollment in December 2016 by 17.4% (and exceeded the previous December high, in 2018, by 14.9%). 

In 2021, the Biden administration, reversing Trump administration policy, opened an emergency SEP running from February 15 through August 15** in states -- then massively boosted premium subsidies through 2022 via the American Rescue Plan. The enrollment surge triggered by emergency SEP in California in 2020 will almost certainly be exceeded nationally this year (proportionately: we know that SEP enrollment in the 36 states was up by 550,000 through April 31 compared to 2020, or 2.4 times higher year-over-year). 

While national enrollment in 2021 as of the end of Open Enrollment, at 12.0 million, remained behind the 2016 high of 12.7 million,* effectuated enrollment as of mid-year is almost certainly at an all-time high. Average monthly enrollment, the best measure of ACA marketplace takeup will also probably be at an all-time high in 2021, though those numbers won't be posted until mid-2022.

* Marketplace enrollment since 2016 has been reduced by several hundred thousand by belated enactment of the ACA Medicaid expansion in Louisiana, Virginia, Maine, Utah, Idaho, and most recently Nebraska.

** Corrected, thanks to Kevin below; I had Aug. 31 originally.

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  1. The emergency SEP runs through August 15, not August 31... unless it's been changed again. :-)