Monday, May 03, 2021

UI effect? ACA marketplace enrollment soared at low incomes in nonexpansion states in 2021

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Back in March 2020,  you may have read here that the emergency supplemental unemployment insurance provided by the CARES Act -- $600 per week for up to 4 months -- would likely lift some uninsured people in states that had refused to expand Medicaid out of the so-called "coverage gap." That is, the extra UI income would raise some low income people over the income threshold for marketplace subsidy eligibility in nonexpansion states: 100% of the Federal Poverty Level (FPL).

Back in December, you may have read here that as of the end of Open Enrollment for 2021, marketplace enrollment was indeed up 10% over 2020 levels in nonexpansion states, but flat in expansion states.

This month, you may have read here that takeup of marketplace coverage at incomes just over the subsidy eligibility threshold in nonexpansion states -- 100-138% FPL -- has historically been weak -- under 50% in of these states states.

More detailed data about 2021 enrollment was released by CMS on April 21. I don't think it's an exaggeration to say that enrollment at the lowest subsidy-eligible income levels in nonexpansion states exploded this year. 

Enrollment at 100-150% FPL in nonexpansion states: 2020 vs. 2021
Source: CMS state-level public use files, 2021

Enrollment at 100-150% FPL in these fourteen states increased by 16.7% over 2020. For comparison, total marketplace enrollment in all states at all income levels was up 5.2% this year. The total increase in this income bracket in these fourteen states, 424,957, is 71% of the entire increase nationwide, 594,918. The 2.97 million enrollees at 100-150% FPL in these states is 88% of all enrollees in this income bracket nationally.
In Texas, where the uninsured rate for the total population was a worst-in-nation 18.4% as of 2019, and where the income threshold for Medicaid eligibility for adult caregivers is 14% FPL, marketplace enrollment at 100-150% FPL increased by 25.7% in 2021.  That increase suggests pent-up demand among Texans in the coverage gap (income below 100% FPL, ineligible for Medicaid). Many low income people in Texas and nonexpansion states generally may have been lifted by supplemental UI over the 100% FPL eligibility threshold in 2020, enrolled mid-year via Special Enrollment Period, and either renewed passively (not updating financial info for 2021) or estimated an income for 2021 that would keep them insured.

As noted in this post, silver plan selection among low income enrollees nationwide took a dive in 2021. That's concerning, since at incomes below 200% FPL, silver plans, and silver plans alone, come with strong Cost Sharing Reduction (CSR) that sharply reduces out-of-pocket costs. Silver plan deductibles average $177 at incomes up to 150% FPL, and $800 at incomes in the 150-200% FPL range, according to KFF -- compared to $6,921 for the bronze plans that that growing numbers of low income enrollees have been selecting. Hopefully, the enhanced premium subsidies provided through 2022 by the American Rescue Plan, coupled with the Biden administration's fresh investment in enrollment assistance, will push more low income enrollees back into silver. A benchmark silver plan is now free at incomes up to 150% FPL, and tops out at $43/month for a single enrollee at 200% FPL.

Update, 5/6/21: Today CMS announced that nearly 940,000 people have enrolled in the marketplace during the emergency Special Enrollment Period that began on Feb. 15. As Charles Gaba notes, here too enrollment is heavily skewed toward nonexpansion states. Moreover, as CMS reports the median deductible for new enrollees during the SEP to be just $50, that indicates a high concentration of enrollees at the lowest subsidy-eligible income levels.

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