Sunday, February 20, 2022

Why is offering year-round enrollment at low incomes

CMS has soft-launched a new "monthly special enrollment period" (SEP) for health insurance seekers with incomes below 150% of the Federal Poverty Level in states that use the federal exchange, This new rule, finalized last fall, effectively creates continuous enrollment for the lowest-income enrollees. At present, the SEP can be accessed by calling the help center (1-800-318-2596); it will be available online on by late March. State-based exchanges can implement this continuous enrollment at their option. 

Louise Norris covers every nuance of the rule's operation here. I will focus on CMS's stated motives and goals, and the likely impact.

The rule stipulates that the monthly SEP will only be operative as long as benchmark silver coverage remains free to enrollees with income up to the 150% FPL threshold. Boosts to ACA marketplace subsidies provided by the American Rescue Plan Act (ARPA) created that free coverage through 2022. While Democrats clearly intended and have been expected to extend the ARPA subsidies beyond this year, that is no longer certain now that the Build Back Better legislation has stalled.

Continuous enrollment in coverage available free at low incomes is of a piece with Medicaid enrollment practices, as well as with enrollment in the Basic Health Programs established under the ACA by Minnesota and New York. BHPs offer free or low-premium coverage with low-out-of-pocket costs -- rather like Medicaid -- to residents with incomes up to 200% FPL. 

In its September 27, 2021 update to ACA rules, CMS spelled out the rationale for the new monthly low-income SEP. The broad context, cited in the executive summary, is President Biden's January 28, 2021 Executive Order 14009, “Strengthening Medicaid and the Affordable Care Act," which declares:

millions of people who are potentially eligible for coverage under the ACA or other laws remain uninsured, and obtaining insurance benefits is more difficult than necessary. For these reasons, it is the policy of my Administration to protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American. 

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Fighting ignorance of ACA offerings

To justify the monthly SEP, CMS acknowledges at the outset that ignorance about coverage offered through the ACA -- let alone the massive subsidy boosts created by ARPA --  is rife, and awareness is almost inversely proportionate to income. 

The APTC benefit changes under the ARP make affordable coverage available to more uninsured people. However, as discussed in the proposed rule, if past trends continue, HHS believes that some consumers who qualify for these benefits under the ARP may continue to forgo enrollment in premium-free coverage due to a lack of awareness of the opportunity to enroll or a misconception about what the coverage would cost, and that low-income consumers who have lacked coverage for more than a year may be especially difficult to reach.

Also in keeping with Biden's executive order, CMS has ramped up funding for enrollment assistance and outreach, which the Trump administration had gutted. This rule is intended to give that outreach more room to run:
Therefore, while HHS will undertake extensive outreach and engagement efforts to promote enrollment during the open enrollment period for 2022 coverage and to help ensure consumer awareness of existing special enrollment periods for which they may qualify, given the established challenges with promoting awareness of access to coverage among low-income consumers, HHS believes additional enrollment opportunities for low-income consumers are appropriate and in the best interest of low-income consumers. 
Preparing for a Medicaid disenrollment wave

The final rule also cites a looming crisis that's top-of-mind to those committed to helping Americans get and keep health coverage. In response to the first onrush of the COVID-19 pandemic, in March 2020, the Families First Act effectively required states to pause income redeterminations and disenrollments  for Medicaid enrollees for the duration of the Public Health Emergency (which the administration just extended). States had to implement the moratorium in order to receive a 6.2% increase in the federal contribution to Medicaid costs, also for the duration of the PHE.  Largely as a result of the moratorium, Medicaid enrollment by July 2021 had increased by almost 13 million since February 2020. When states resume their renewal and disenrollment processes, millions of children and adults may lose coverage -- many because state bureaucracies fail to communicate effectively with often-transient enrollees, but also in many cases because income boosts render enrollees ineligible. 

Many of those who "earn out" of Medicaid will be eligible for free marketplace coverage, but may not recognize this or know how to access the coverage. The new monthly SEP is intended to help:
In addition to providing certain low-income individuals with additional opportunities to newly enroll in free or low-cost coverage that is available to them, HHS believes this special enrollment period may help consumers who lose Medicaid coverage to regain health care coverage. While, as discussed in the proposed rule, these consumers can already qualify for a special enrollment period due to their loss of Medicaid coverage per § 155.420(d)(1), and may also have access to other flexibilities, whether members of this group of consumers are able to benefit from existing enrollment periods and flexibilities may vary, and may require Exchanges to assess eligibility on a case-by-case basis. This may also require consumers who generally have low household income and who therefore may face other barriers to accessing health care coverage, such as low health insurance literacy levels and lack of Internet access, to be aware of the potential for an extended enrollment timeframe and to request it from their Exchange...

This special enrollment period could help mitigate the risk of long-term coverage disruptions due to the potentially high volume of Medicaid terminations following the end of the COVID-19 PHE, by giving qualifying individuals who lose Medicaid and who may miss or misunderstand notifications about their coverage loss more time to enroll in Exchange coverage. 

Shrinking the coverage gap in nonexpansion states

Implicitly, the new SEP is aimed predominately at low-income people in the twelve states that have refused to enact the ACA Medicaid expansion, which extends Medicaid eligibility to most adults with incomes up to 138% FPL (children are eligible to higher income thresholds in most states).  In nonexpansion states, eligibility for marketplace subsidies begins at an income of 100 % FPL (vs. 138% FPL in the expansion states).  In nonexpansion states, half of all enrollees (as of 2021, and likely more in 2022) have incomes below 150% FPL and so currently qualify both for free benchmark silver coverage and for the new monthly SEP.  

Enrollment in the nonexpansion states has surged by 45% in two years. These twelve states account for 71% of enrollment in the 33 states using and 50% of enrollment in all states. Nationally, in 2021, 88% of all enrollees with incomes in the 100-150% FPL range were in the twelve nonexpansion states. The percentage is likely higher in 2022.

In nonexpansion states, most adults who apply for coverage and report an income below 100% FPL fall in the "coverage gap" -- eligible neither for Medicaid  nor marketplace subsidies. The new continuous SEP could help some people in this gap obtain coverage. Marketplace subsidy eligibility is based on an estimate of income in the coming year (during Open Enrollment) or the current year (in a SEP application). Annual and future income is notoriously difficult to predict for low earners, who often work uncertain hours, or with seasonal variations, or in multiple jobs, or are self-employed. 

The marketplace application allows for some wiggle room between income documented in pay stubs and income estimated for the year. A savvy enrollee or enrollment assistor can legitimately help push a good-faith annual income estimate into subsidy eligibility.  A SEP applied for during an income surge (for example, a 24/7 gig for a home health aide) could facilitate an estimate over the 100% FPL threshold.

The rule for the new SEP stipulates that while an applicant can obtain coverage by attesting income without documentation, "CMS will continue to require consumers whose projected annual household income cannot be verified using a trusted electronic data source to submit documentation to confirm their annual income." That raises a regulatory question. In May 2021, CMS announced that in accordance with a court order, it would void a Trump administration rule requiring documentation of income estimated above 100% FPL if the "trusted data sources" tapped by the exchange indicated an income below that threshold. That is, CMS will no longer condition coverage on documentation that income is above 100% FPL.  CMS can reduce or end premium subsidies if an attested income appears to be below the income indicated by those sources and documentation does not demonstrate otherwise. 

The new SEP rule as cited above raises two questions. First, if the applicant attests to an income over 100% FPL and a "trusted electronic data source" indicates a lower income, will documentation be required on those grounds? Then, if the documentation -- say, two pay stubs -- indicate an income below 100% FPL, will the exchange deny coverage? The May 2021 rule says no. I am seeking clarification of this point from CMS and will update when I have a response. [Update, 3/2/22: CMS's response was somewhat ambiguous, but the regulations really aren't: documentation can be required because an income attestation appears lower than trusted sources indicate, but not because the attestation appears to be higher.]

A resource for recent immigrants

The new monthly SEP also serves an important category of low income people in all states: legally present noncitizens who are subject to a federal "five-year bar" to Medicaid eligibility -- or a longer bar (up to ten years) in some states. Adults in this category (children are not barred) are eligible for marketplace subsidies even if their income is below the 100% FPL threshold, or below 138% FPL in states that have expanded Medicaid -- in which case, at present, benchmark silver coverage is free. Nationwide, about 2-3% of enrollees have incomes below 100% FPL. California, which provides more detailed income information about active enrollees than does CMS for, reports that as of September 2021, 2.7% of enrollees had incomes below 138% FPL, 76% of them subsidized.  

In finalizing the rule, CMS notes the impact on immigrants time-barred from Medicaid:

Several commenters noted that they expected this special enrollment period to be especially helpful to individuals in their area whose income is under 100 percent of the FPL, but who do not qualify for Medicaid because of their immigration status, and who therefore may qualify for APTC. They noted that this group can be difficult to reach through outreach and education, and therefore may benefit significantly from additional opportunities to enroll throughout the year. Several commenters voiced support for outreach and education to promote awareness of this special enrollment period as well as other special enrollment period qualifying events. Some added that currently-available enrollment opportunities are underutilized due to their complexity and due to the challenges associated with learning about and enrolling in coverage. Some commenters encouraged CMS to focus outreach and education efforts on vulnerable communities, individuals with LEP, immigrants, and the LGBTQ+ community. A  few commenters specified potential outreach strategies, such as engaging schools and community health workers. 

Advocates in immigrant communities also often note the continued chilling effect of Trump's now-rescinded expansion of the Public Charge Rule, which would have empowered immigration officials to penalize immigrants on the path to citizenship who accessed public benefits, including Medicaid. While subsidized marketplace coverage was not included in the Trump Public Charge rule, the chill was general. While the lingering chill may include a sense that Trump's rule might be restored when Republicans return to power, the fact that marketplace coverage (now free at low incomes) was not included should be an aid to marketplace outreach.

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As noted above, year-round enrollment for free or very low-cost public insurance programs is established procedure. Historically, takeup of marketplace coverage, even at low incomes, has been much lower than takeup of Medicaid -- though that must be already changing to a degree, given the 45% two-year enrollment increase in marketplace enrollment in nonexpansion states, which has brought more than a million enrollees with incomes below 150% FPL into coverage. The ARPA subsidy boosts turbo-charged this enrollment surge at low incomes. Continuous enrollment, coupled with sustained increased outreach and enrollment assistance, should continue to improve marketplace takeup. But this progress -- and partial safety net for those disenrolled from Medicaid -- depends in large part on extension of the ARPA subsidies.

Update, 10:35 a.m., 2/20/22: The SEP also allows existing enrollees to change plans. Health insurance professional Wesley Sanders raises an objection that's also articulated in the comments that CMS cites in its final rule: existing enrollees who develop a need for expensive care or care from a specific provider may switch plans, creating adverse effects:

Year round switching from one MCO to another isn’t established practice though and the adverse selection risks CMS creates disincentives for issuers to offer broad networks. I think CMS is making a mistake by not limiting enrollment to those who do not already have ACA coverage.

In response to worries about adverse selection, CMS responded that it limited the SEP to years in which benchmark silver plans are free to enrollees with incomes below 150% FPL, in hopes that an influx of young and healthy enrollees will mostly offset any adverse selection effects.

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Photo by Mikhail Nilov from Pexels

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