Saturday, June 19, 2021

ACA marketplace enrollment in 2020 exceeded the 2016 peak (on-exchange)

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Every June, the first "effectuated enrollment snapshot" of the ACA marketplace for February includes month-by-month and average monthly enrollment for the previous year.

Though I had been eagerly awaiting this year's snapshot, having inferred last December that marketplace enrollment in June 2020 was probably at all-time mid-year high, I missed its release on June 5. But it's out, and it's official: average monthly enrollment in 2020 was the highest ever, exceeding the 2016 peak by 5.2%. 

That's notwithstanding the fact that initial "plan selections" as of the end of Open Enrollment for 2016 exceeded the 2020 end-of-OE tally by almost 1.2 million (12,681,874 vs. 11,444,141). Here are the official average monthly enrollment tallies by year:

Average monthly enrollment: ACA marketplace, 2016-2020

2016     10,007,113
2017       9,763,076
2018       9,895,197
2019       9,810,613
2020     10,531,978

Although end-of-OE plan selections were 9.8% higher in 2016 than in 2020, average monthly enrollment was 5.2% higher in 2020 than in 2016 (and 7.4% higher than in 2019).  Why? 

One major factor was off-season enrollment via Special Enrollment Period (SEPs) triggered by the pandemic. Individuals can apply for a SEP if they undergo a qualifying "life change" -- most often loss of job-based coverage, especially last year.  Through May 2020, in the 36 states using, CMS reported a year-over-year increase in SEP enrollment of about 200,000, while Covered California, the state exchange, reported a year-over-year increase of about 168,000 through August. In March 2020, twelve state-based exchanges opened emergency SEPs, running for several weeks or several months, that mostly allowed anyone lacking insurance to enroll. While CMS under Trump declined to open an emergency SEP for, the agency did smooth the application process, allowing applicants to enroll after attesting to job loss, providing documentation later.

The second factor was reduced attrition throughout the Trump years, which I discussed in last week's post about booming enrollment in 2021 (average monthly enrollment may exceed the 2020 figure by 20%).  Possible factors, in brief: 1) a reduced Open Enrollment season and radical cuts to enrollment assistance and advertising may have filtered out more marginal enrollees, leaving a higher percentage who knew they needed coverage, and 2) discounts generated by silver loading, commencing in 2018, increased the number of enrollees paying zero premium or very low premiums.

There is a major asterisk beside 2020's record-breaking enrollment, also noted in the prior post: off-exchange enrollment in ACA-compliant plans (where all enrollees are ineligible for subsidies) cratered after steep premium increases in 2017 and 2018, from 5.1 million in Q1 2016 to about 2.0 million in Q1 2019 (KFF estimate). Off-exchange enrollment did not recover in three years of flat premiums (2019-2021) and now never will, as a large majority of those whose incomes previously made them subsidy-ineligible are now eligible for subsidies, which are available on-exchange only. 

On the other side of the equation, since 2016 the marketplace has lost several hundred thousand enrollees to belated state Medicaid expansions -- in Louisiana (2016), Virginia and Maine (2019), Idaho, Utah and Nebraska (2020), and Oklahoma (in progress now).

Still, on net, the individual market was larger in 2016 than in 2020 -- or 2021, for that matter.

Once again, see this post for discussion of dramatic enrollment changes in progress this year.

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