Enrollment in the ACA marketplace has historically -- and appropriately -- been weighted toward people in low-income households. Lower income workers are less likely to have access to affordable employer insurance. While just 17% of the U.S. population is in households with income between 100 and 200% of the Federal Poverty Level (FPL), 52% of marketplace enrollees nationally had income in that range as of the end of the Open Enrollment Period (OEP) for 2021. In the twelve states that have still refused to enact the ACA Medicaid expansion, where most adults with income below 100% FPL have no access to subsidized insurance, more than half of enrollees have incomes below 150% FPL.
The American Rescue Plan Act, passed in March 2021, boosted premium subsidies in the ACA marketplace at every income level, removed the former income cap on subsidy eligibility (400% FPL), and made silver plans with strong Cost Sharing Reduction free at incomes up to 150% FPL, as well as much cheaper than previously in the 150-200% FPL income bracket (0-2% of income instead of roughly 4-6% for a benchmark silver plan). During the emergency Special Enrollment Period that ran through half of 2021, fully 45% of enrollment in the 36 states then using the federal exchange, HealthCare.gov (where enrollment is dominated by the nonexpansion states) had income below 150% FPL. About 62% were below 200% FPL. Enrollment growth in OEP for 2021 (before the ARPA subsidy boosts were enacted) was also concentrated in nonexpansion states and heavily weighted toward low incomes in those states.
Given this history, as enrollment surged during the Open Enrollment Period for 2022, I was blithely confident that growth was concentrated at low incomes. I was wrong. Texas health insurance broker Jenny Hogue was onto something:
While enrollment growth in the 100-150% FPL income bracket did match the overall growth rate in OEP 2022, the growth rate was lowest in the 150-200% FPL bracket and rose with income in every bracket above that level. While 52% of enrollees during OEP 2021 had incomes in the 100-200% FPL range, just 43% of the total enrollment growth in OEP 2022 (1.08 out of 2.51 million) was in that income range.
Below is the breakout of enrollment growth by income from OEP 2021 to OEP 2022 -- for HealthCare.gov states, states with their own exchanges (SBEs), and all states. Getting an apples-to-apples comparison between years required some adjustments, explained below. The three rightmost columns also require some decoding.
Enrollment by income bracket, 2021-2022
Now, as to those adjustments:
- Since three states (KY, ME, NM) formed new state-based marketplaces in advance of OEP 2022, I classified those states as SBEs for 2021 as well, to get an apples-to-apples comparison. For the same reason, since CMS lumped together incomes below 100% FPL and above 400% FPL as "other income" (i.e., mostly* subsidy-ineligible) through 2021, I have done the same here. Nationally, just 1.6% of 2022 enrollment was under 100% FPL, so the under/over category is mostly over 400% FPL, and newly subsidy-eligible.
- In 2021, Idaho's SBE did not provide income breakouts for enrollment, so CMS did not sum the income breakouts for all states (including SBEs). To fill in those blanks and make the columns summable, I applied the percentages in the Idaho income breakout for 2022 (which the state did provide) to the state's 2021 enrollment total.
- In the state-based marketplaces, there is a very odd distribution (and shift in distribution from 2021 to 2022) between incomes over 400% FPL (subsidy-ineligible in prior years) and "other/unknown" income. It appears to me that there is some transposition in the SBEs between the over-400% FPL and "unknown" categories. For that reason, the far right column combines the "under/over 400% FPL" and "unknown" categories.
Big picture: the surge in high-income enrollment in HealthCare.gov states -- where 71% of all enrollment is concentrated in the twelve remaining nonexpansion states -- is really striking. Enrollment at incomes over 400% FPL increased by about 500,000 in 2022. That should not obscure a continuing surge in enrollment at income in the 100-150% FPL range, which is up 42% over two years (since OEP 2020) in the 33 states currently using HealthCare.gov. That's an increase of 1.2 million low-income enrollees, many of whom may have been in the coverage gap previously. As Krutika Amin of the Kaiser Family Foundation points out to me, in absolute terms the largest cohort of new enrollees in 2022 (by far) is in the lowest subsidy-eligible income bracket, 100-150% FPL.
As for the enrollment increase at higher incomes: plainly there is a surge in interest among the newly subsidy-eligible and among those for whom the percentage of income required for a benchmark silver plan dropped pretty sharply. It's also likely, though, that income as a percentage of FPL rose across the board during the rapid employment recovery of 2021.
Update, 4/8/22: The next post looks at income distribution in the 12 states that have not enacted the ACA Medicaid expansion
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* One category of U.S. residents is eligible for marketplace subsidies at incomes below 100% FPL: legally present noncitizens who are subject to the 5-year bar for Medicaid eligibility (and longer bars in some states). At present, high-CSR silver plans are available for free to enrollees with incomes below 100% FPL (and up to 150% FPL). In 2022, just 65% of enrollees in HealthCare.gov states with income below 100% FPL chose silver plans, compared to 85% in the 100-150% FPL category. That indicates that perhaps three quarters of enrollees with income below 100% FPL (or slightly more) are subsidy-eligible.
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