Total individual market enrollment in health insurance may (finally) be at an all-time ACA-era high

Please see a 2023 update at https://xpostfactoid.substack.com/p/aca-effectuated-enrollment-in-2023 

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In June 2021, I wondered, will attrition in the ACA marketplace go negative?

Until the pandemic struck, enrollment attrition throughout the coverage year in the ACA marketplace was an established norm. Every year, effectuated enrollment (i.e. paid-up enrollment) as of the first month after the end of Open Enrollment (OE) was between 6% and 15% lower than the "plan selection" total as of the end of OE. From February through December, enrollment would downtick by 600-800,000....

This year, we're in a different world. The Biden administration opened an emergency SEP in HealthCare.gov on February 15, extending August 15, and the state exchanges followed suit, with some variations. Then the American Rescue Plan, signed into law on March 11, provided a massive subsidy boost through 2022, with the new subsidies appearing live on HealthCare.gov on April 1, and in state exchanges pretty shortly thereafter.

Well, the results are in, courtesy of CMS's early effectuated enrollment snapshot for 2022, which includes average monthly enrollment and month-by-month enrollment totals for the year prior.* And the answer is: almost! Or, in a sense, yes!  

Average monthly enrollment in 2021 came to 97.8% of  total plan selections as of the end of the year's Open Enrollment Period -- and to 106.3% of the early effectuated enrollment total reported as of February 2021.** 

ACA marketplace enrollment retention, 2016-2022 

Year	End of OE	Post-OE effectuated	Early effectuated/OE	Average monthly	Avg. monthly/OE
2016	12,681,874	10,828,894	85.4%	10,007,113	78.9%
2017	12,216,003	10,526,942	86.2%	9,763,076	79.9%
2018	11,750,175	10,515,192	89.5%	9,895,197	84.2%
2019	11,444,141	10,433,850	91.2%	9,810,613	85.7%
2020	11,409,447	10,592,901	92.8%	10,408,892	91.2%
2021	12,004,365	11,034,220	91.9%	11,734,931	97.8%
2022	14,511,077	13,807,669	95.2%

Sources: CMS state-level public use files and effectuated enrollment snapshots

The 2.8 million plan selections logged in the emergency SEP swamped monthly attrition -- which was apparently higher than normal, as enrollment was "only" 1 million higher in August 2021 (12.1) million than in February (11.0 million according to the monthly tallies in this year's early snapshot).

Other points worth noting:

• Average monthly enrollment, juiced by the emergency SEP, was up 12.7% year-over-year in 2021 and was 17.3% higher in 2021 than in 2016, long regarded as the high-water mark for the marketplace (as enrollment dropped during the first three Trump years).
  
  
• 2022 looks on track to extend the steady annual improvement in retention recorded above. Retention improved in the Trump years, probably because shortened enrollment periods and radical cutbacks in advertising and outreach winnowed out more marginal enrollees. Since the ARPA subsidy boosts were posted in April 2021, far more enrollees are paying zero premium or close to it, and far fewer on-exchange enrollees are unsubsidized. The improved affordability (and reduced friction for zero-premium enrollees) has perhaps offset the higher attrition you might expect after the Biden administration lengthened the Open Enrollment Period and increased spending on outreach eight- or nine-fold.
  
  
• Thanks to a 21% year-over-year increase in plan selections in 2022, coupled with improved retention, total enrollment in ACA-compliant individual market plans, on- and off-exchange, may finally have topped its prior high-water mark in 2016 -- or at least come close. Huge premium increases in 2017 and 2018 triggered a collapse in off-exchange enrollment, which dropped from 5.1 million in Q1 2016 to 2.0 million in Q1 2019, according to Kaiser Family Foundation estimates. More on that point below.

To pick up the thread on total individual market enrollment in 2022 vs. 2016: the chart above indicates that on-exchange effectuated enrollment was about 3 million higher in early 2022 than in early 2016.  To that difference we can probably add the likely effects of improved retention. If I may venture an estimate of average monthly enrollment for this year, I'll place the average at 93.6% of total plan selections as of the end of OE. I got there by applying the 2020 difference between early effectuated enrollment and average monthly enrollment (passing over the anomalous 2021). 

My estimate for average monthly enrollment this year, 13,582,368, exceeds the 2016 average monthly total by almost 3.6 million -- a difference larger than the estimated drop in off-exchange enrollment through 2019.  Perhaps this estimate is high: if retention matches the 2020 level, average monthly enrollment will come in at 13.2 million -- about 3.2 million higher than in 2016. 

The caveat: off-exchange enrollment may well have dropped further than it had by early 2019. In 2016, 84.7% of effectuated enrollees were subsidized; in 2022, 90.4% were.  On the other hand, after the premium spikes of 2017-2018, premiums were close to flat from 2019 through 2021.

If my higher estimate for average monthly enrollment for 2022 is close to right, it would constitute a 16% increase over 2021 (less than the end-of-OE increase, because of the massive SEP enrollment in 2021), a 30% increase over 2020, and a 36% increase over 2016. 

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*  I have searched repeatedly for this year's early effectuated enrollment snapshot, as they usually have dropped in June. I only just found it; a friend estimates that it's been up for a couple of weeks.

** Every year, the early effectuated totals for the prior year are revised. I have used the revised figures. This year's report shows a particularly large revision for early 2021, from 11.3 million as of last year's early snapshot to 11.0 now. Further complicating things, the written overview refers to 11.2 million effectuated in February 2021, whereas the monthly tables show 11.2 million enrolled in April. I have gone with the February total reported in the monthly table. If 11.2 is the correct total, that would continue the steady improvement in retention from plan selections as of the end of OE to the first effectuated enrollment snapshot as of the end of OE.