Tuesday, June 15, 2021

Three quarters of recent SEP enrollment on HealthCare.gov is in nonexpansion states

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HHS announced yesterday that new enrollments in the emergency Special Enrollment Period that began on February 15 totaled 1.24 million through May 31 in the 36 states using HealthCare.gov. That's more than triple enrollments during the same time period in 2019, the last "normal" year in which enrollment was unaffected by the pandemic. Further, HHS pointed out that since the enhanced subsidies enacted in the American Rescue Plan appeared on HealthCare.gov on April 1, 43% of new enrollees selected plans for which they will pay $10 per month or less.

Charles Gaba pointed out yesterday that the single biggest determining factor of how much a state's SEP enrollment has increased over pre-COVID time is whether the state has enacted the ACA Medicaid expansion.  Say that again.

Of the 1.2 million new enrollees, three quarters were in 13 states that had not enacted the ACA Medicaid expansion as of May 31 -- excluding Wisconsin, which offers Medicaid to state residents with incomes up to 100% of the Federal Poverty Level.*

Emergency SEP enrollments in nonexpansion states

Fully 75% of the SEP enrollments in HealthCare.gov states are in the 13 nonexpansion states -- and close to 50% of those enrolled in these states since the ARP subsidies were posted are paying less than $10 per month.  Florida and Texas alone account for 578,775 SEP signups, and half of those enrolled since April 1 in those states are paying $10/month or less, most of whom probably have incomes that would qualify them for Medicaid in expansion states.

The nonexpansion states' outsized enrollment share is not quite as remarkable as it sounds -- or rather, it's an intensification of a longstanding anomaly in ACA marketplace enrollment. In nonexpansion states, eligibility for marketplace subsidies begins at 100% FPL, rather than the 138% FPL threshold in expansion states, where residents with incomes below that threshold are eligible for Medicaid. At 100-138% FPL, a benchmark silver plan strong enhanced by Cost Sharing Reduction cost just 2% of income until the ARP passed -- and is now free (benchmark silver is free to enrollees with incomes up to  150% FPL).  The marketplace has thus always provided a partial patch to the "coverage gap" created when the Supreme Court made the ACA Medicaid expansion optional for states. Through 2019, at least a third of enrollees in nonexpansion states -- about 2 million enrollees in all -- had incomes in the 100-138% FPL range and so "should have" been eligible for Medicaid.

The pandemic seems to have intensified demand among those just above the poverty line. Enrollment in nonexpansion states increased by 10% in Open Enrollment for 2021, while downticking slightly in expansion states on HealthCare.gov. Enrollment at 100-150% FPL increased by 17%.  The 13 nonexpansion states listed above accounted for 69% of enrollment in the 36 HealthCare.gov states in 2021, up from 67% in 2020.  In this year's emergency SEP, once again, these states' collective share jumped to 75%.

Fear of contracting a lethal disease while uninsured may have spurred enrollment among those for whom coverage was comparatively low cost. Perhaps more importantly, large doses of supplemental unemployment insurance provided by the CARES Act in 2020 and partially renewed in 2021 pushed many incomes over the 100% FPL threshold for subsidy eligibility in the marketplace -- and in some cases, perhaps, provided a basis for at least estimating an income over the threshold, opening a window to subsidized coverage. Then came the ARP, rendering silver plans -- more generous than the average employer plan at low income levels -- free for those with incomes up to 150% FPL. The Biden administration spent $50 million on advertising the SEP and the reduced premiums, and sent $2.5 million to the Navigator groups that provide nonprofit enrollment assistance, for which the Trump administration had gutted funding ($80 million is earmarked for navigators for OE 2022, exceeding the 2016 funding peak of $63 million).

The net result of these factors, as I noted last week, is a 20% increase nationally in mid-year enrollment over the pre-pandemic peak. The unemployment insurance boosts, the SEP, and the ARP subsidy boosts have combined for an effective intervention -- one of many channels of effective pandemic relief. Another, on the healthcare front, has been the pause in Medicaid disenrollments enacted in the Families First Act last March, which, along with the survival of the ACA Medicaid expansion from Republican repeal attempts, has helped drive a 30% increase in Medicaid expansion enrollment (see Charles Gaba's ongoing state-by-state reports) and a 16% increase in overall Medicaid enrollment. Notwithstanding large employment losses triggered by the pandemic, only partially recovered to date, the U.S. uninsured rate may very well be at an all-time low

I wish that HHS would turn its attention to enrolling those who declare themselves uninsured when they present themselves for vaccination. That missed opportunity notwithstanding, the SEP surge is impressive. 

The ACA remains a gap-ridden kludge, plagued by narrow networks, enrollment complexity, mass ignorance of its offerings, unnecessary cost to government (as subsidized plans pay commercial rates to providers) and excessive built-in churn. But let's take U.S. domestic policy successes as they come. The ACA has been a bulwark in the pandemic, and it's poised to come a lot closer to living up to its name.

* Oklahoma has enacted the Medicaid expansion after the Republican legislature and governor acceded to a state referendum. Enrollment opened on June 1, 2021 for coverage beginning July 1 -- and thus has not directly affected marketplace enrollment through May 31, though some may have held off in anticipation of enrolling in Medicaid.

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