Sunday, October 31, 2021

Open enrollment 2022! Marketplace loaded for bear, but bear traps remain

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Open enrollment in the ACA marketplace begins tomorrow. This will be the first OE season - -and hopefully, not the last - -in which the enhanced subsidies created by the American Rescue Plan (ARPA) are in place. It's a season of hope -- and also worry. Some thoughts below.

1. All systems go? The marketplace, which never reached half the enrollment projected by CBO in 2010, is in some senses loaded for bear this fall. Thanks to ARPA, silver plans with strong Cost Sharing Reduction (CSR) are now free for people with incomes up to 150% FPL ($19,320 for an individual); cost no more than 2% of income at incomes up to 200% FPL; and cost no more than 8.5% of income (without CSR) for any enrollee who lacks access to other affordable insurance. 

Navigator organizations, which operated on a shoestring (if at all) during the Trump years, their federal funding cut from $63 million in 2016 to $10 million in 2018 and years following, have been granted $80 million for 2022. Florida's chief navigator organization, Florida Covering Kids and Families, started with 120 navigators in 2013 but was down to 50 in OE for 2020, with just 25 in the off-season. This OE, they've got 200 navigators in place. (Federal navigator funding, derived from user fees charged to insurers selling in the marketplace, only applies to the 33 states still using, the federal exchange. State exchanges fund their own outreach through user fees they retain.)

2. Bolt already shot? While one might expect an enrollment surge in this OE, much of that potential may have been sopped up by the emergency Special Enrollment Period enacted by CMS from February 15 to August 15 of this year (state exchanges followed suit, with some variations). The enhanced ARPA subsidies came online in April. More than 2.8 million people newly enrolled in this period, more than triple the pre-pandemic norm. Effectuated enrollment in August 2021 was up 14.6% over 2020, the previous high (also stimulated by the pandemic), and 22% over enrollment in August 2016, the peak prior to 2020. 

In 2020, as in 2021, the pandemic stimulated off-season enrollment. In March and April of that year, 12 state exchanges opened emergency Special Enrollment Periods, and while CMS (under Trump appointee Seema Verma) declined to do so for the 36 states using, the federal exchange did smooth the process of obtaining an individual SEP following job loss. Effectuated enrollment as of June 2020 was 7.4% higher than in June 2019, whereas a half year later, the Open Enrollment tally for 2021 exceeded the 2020 total by a smaller margin, 5.2%. Will that pattern repeat this year?

3. Coverage gap limbo. The tentatively and equivocally agreed-upon framework and draft text of the Democrats' Build Back Better bill (summary here) would close the coverage gap through 2025 in the states that have refused to enact the ACA Medicaid expansion. Those states currently provide no options for most adults with incomes below 100% FPL ($12,880 for an individual in 2022). At present, in 11 states, most adults with income below that threshold do not qualify for Medicaid and get no help at all, because eligibility for marketplace subsidies begins at 100% FPL.  The BBB bill removes the 100% FPL threshold and offers free coverage to those previously in the gap. But...the bill is not yet passed, and OE begins tomorrow.

Starting tomorrow, what will enrollment assisters tell applicants who estimate income for 2022 below the threshold? Perhaps "hang tight, cross your fingers, and we'll call you when (if?) the law changes and the enrollment process has been adjusted."

There is another alternative, though: encourage many if not most applicants to simply estimate an income for 2022 that's over the threshold.  The application form allows for this possibility:

Several factors point toward the viability of an optimistic estimate. I have elsewhere detailed various strategies for avoiding the coverage gap, or legitimately helping others to avoid it. Here are the conditions that provide for wiggle room in the income estimate:

  • Eligibility is based on an estimate of next-year income
  • Many applicants, not recognizing the stakes, probably underestimate their income (the application does not provide any information about the minimum threshold)
  • By statute, there is no clawback of premium subsidies granted if income ultimately proves to be below the threshold.
  • As of May of this year (as was true before 2019), the exchanges will not require documentation of an income estimated to be over 100% FPL if the "trusted data sources" tapped by CMS indicate an income below that threshold.
  • The law is likely to eliminate the minimum income threshold within weeks.
  • The coverage gap is an unintended consequence of political dysfunction and a logical and moral travesty.
The coverage gap has left some 2 million people who should be eligible for Medicaid uninsured. May it die a swift and permanent death.

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