Thursday, July 15, 2021

More than half of all ACA SEP enrollment is in nonexpansion states

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CMS announced yesterday that ACA marketplace enrollment during the emergency Special Enrollment Period (SEP) that began on February 15 had passed 2 million by June 30. That's more than triple the total enrolled in the same period of 2019, the last year unaffected by the pandemic. By that standard, the emergency SEP, coupled with the subsidy boosts in the American Rescue Plan (ARP), has produced more than a million excess off-season enrollments. Mid-year on-exchange enrollment is certainly at an all-time high.

Let's look again (as I did in June) at emergency SEP enrollment in states that as of June 30* had not  enacted the ACA Medicaid expansion. In those states, eligibility for marketplace subsidies begins at an income of 100% FPL (as opposed to 138% FPL in expansion states), and more than a third of enrollees in normal times have incomes below 150% FPL -- which, as of ARP passage in March, now qualifies them for a free benchmark silver plan with low cost-sharing. 

As in the prior SEP report on enrollment through May 31, SEP enrollment in 13 nonexpansion states (excluding Wisconsin, which has no coverage gap**) accounts for 75% of enrollment in the 36 states that use the federal exchange, These 13 states account for more than half of SEP enrollment nationally.  SEP enrollment in these states is more than quadruple enrollment in the same period in 2019, exceeding that year's total by more than 860,000.

Emergency SEP enrollment in nonexpansion states 
(Wisconsin excluded)

CMS reports that 44% of new SEP enrollees in states who enrolled after April 1, when the enhanced ARP subsidies went live on the site, are paying $10 per month or less for coverage. In nonexpansion states, 50% are paying less than $10/month (see table below), and most of those enrollees are getting free silver coverage with the highest level of Cost Sharing Reduction (CSR). CMS reports that the median deductible for new enrollees in states since April 1 is $50. Most enrollees who obtain a deductible that low have incomes under 150% FPL, qualifying them for the highest level of CSR. Many with deductibles above that threshold are also getting free silver coverage. According to KFF, the average (mean, as opposed to median) deductible for silver plans at incomes below 150% FPL is $177.

Enrollees in nonexpansion states paying $10 per month or less

The free coverage available at low incomes via the SEP may be taking at least a small bite out of the so-called coverage gap afflicting an estimated 2.2 million adults as of 2019 with incomes below the poverty level in nonexpansion states. Eligibility for marketplace subsidies in nonexpansion states begins at an income of 100% FPL, and in those states most adults without children (and many with children) don't qualify for Medicaid. But eligibility is based on a projection of next-year income -- or, during a SEP, of year-in-progress income.  And estimates are...estimates. 

In a rule published in May, CMS, obeying a March court order with alacrity, stopped requiring applicants who report an income over 100% FPL, but for whom "trusted data sources" tapped by the exchanges indicate an income below that level, to provide documentation that their income is over that eligibility threshold.  While knowledge of that change is probably very limited, the enrollment stimulus created by the pandemic, the supplemental unemployment income provided to millions in 2020 and 2021 in pandemic relief legislation, and the availability of free high-CSR silver coverage to 150% FPL, may have stimulated enrollment by residents of nonexpansion states who found themselves ineligible in prior years.

For more context on the surge in enrollment during the pandemic at incomes below 150% FPL in nonexpansion states, see this post.

Postscript: Looking back at OE for 2021, enrollment in nonexpansion states increased by more than 500,000 compared to OE 2020.  This year, SEP enrollment from Feb. 15 through June 30 in nonexpansion states exceeds enrollment in the same period last year by 700,000, and 2019 same-period enrollment by 861,000. That's a lot of new enrollment, most of it at low incomes

UPDATE, 7/17/21: In the next post, I estimate that enrollments in the lowest income bracket in nonexpansion states (100-150% FPL) is up by almost 800,000 compared to last year (combining Open Enrollment and SEP signups).


*Oklahoma enacted the expansion beginning July 1 of this year, with enrollment beginning on June 1. Its SEP totals may be affected by that transition. But most Medicaid enrollments are not through the ACA exchanges, and public knowledge of newly available benefits is always far from universal. 

** Wisconsin offers Medicaid to adults with incomes up to 100% FPL. As that is also the lower threshold for subsidy eligibility in the ACA marketplace, the state has no coverage gap per se.

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