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Until late this morning, the narrative for the ACA marketplace’s Open Enrollment Period (OEP) for 2025 appeared to be that enrollment was down from 2024 highs. The December 4 enrollment snapshot showed 5,364,197 “active” plan selections nationally, compared to 7,299,900 as of December 6, 2023. That’s an apparent 26.5% drop, which should be discounted by about 5% to account for the two extra enrollment days in last year’s early December snapshot.
The “losses” appeared to be concentrated in HealthCare.gov, the federal marketplace (FFM), as active enrollment in the 20 state-based marketplaces was actually up a bit year-over-year as of early December, even discounting Georgia, which newly launched an SBM for OEP 2025. Taking all states together, new enrollees were down from 1,476,658 on December 6, 2023 to 987,689 on Dec. 4 this year (again, discount for two days).
But mid-OEP year-over-year comparisons are always dicey, and Charles Gaba, for one, has been skeptical as each snapshot since Nov. 1 indicated lagging “active” enrollment — which includes new enrollment and re-enrollment by those who logged on and actively chose a plan, as opposed to those who passively allow auto re-enrollment. Gaba put forward two reasons to doubt that enrollment this year would lag.
First, it seemed likely that much of last year’s large pool of new enrollees (4.2 million in the 32 FFM states) would passively allow auto re-enrollment. New enrollment last year was heavily concentrated at low incomes, and attributable in large part to the Medicaid “unwinding” — that is, the process of re-determining Medicaid enrollees’ eligibility after a three year pandemic-induced paused. Redeterminations began in May 2023 and continued into this summer. Most low-income enrollees pay no premium and may not be fully engaged in the enrollment process.
Second, some half dozen state-based marketplaces have been reporting strong enrollment growth in their own news releases. Also, CMS’s Dec. 4 report showed 11% year-over-year auto re-enrollment growth in the SBMs — up from 3,49,956 last December to 3,785,626 this year, again excluding Georgia’s total.* (The December reports show auto re-enrollment in the SBMs but not in the FFM because SBMs effectuate auto re-enrollment early in OEP or even prior to it, whereas the FFM books re-enrollments in mid-December. More on that below.)
Well, today CMS released new top-line figures, inclusive of auto re-enrollment in the FFM, and the new numbers vindicate Gaba’s prediction. Auto re-enrollment in the FFM almost doubled, from 3,624,950 as of the end of OEP 2024 to 7.4 million as of now for 2025 (auto re-enrollment happens all at once). That increase drove 2025 enrollment in the FFM to 16.6 million, already surpassing last year’s total FFM enrollment of 16.4 million, which included 1.3 million in Georgia (now included in the SBM total, which was not provided in today’s release). As of this time last year, FFM enrollment had reached 15.3 million. Strip out Georgia’s 1.2 million total from the tally for this time last year, and as Gaba points out, FFM enrollment is up by about 18%. Six SBMs that Gaba has tracked show a 23% year-over-year increase.
Massive auto re-enrollment in the federal marketplace is not an unmixed blessing. As I outlined in a prior post focused on differences in auto re-enrollment between the FFM and the SBMs:
Auto re-enrollment can be dangerous, because 1) enrollees’ personal circumstances that affect subsidies — their income and the family members seeking coverage in the exchange — may change; 2) an enrollee’s current plan’s premium may rise in the coming year; and 3) most unpredictably, the benchmark (second cheapest silver) plan against which subsidies are set can change. If the coming year’s benchmark plan has a lower premium than the current year’s, subsidies shrink, since enrollees pay a fixed percentage of income for the benchmark plan. If the enrollee’s premium rises and the benchmark falls, it’s a double whammy.
The problem is particularly acute in the FFM, because HealthCare.gov
sends out a renewal letter, but with no specific information as to subsidy and premium in the coming year for the enrollee’s current plan. Instead, the FFM requires insurers to send renewal letters prior to November 1 (first day of OEP), with an estimate of premium in the current year. But the insurer’s letter, while it provides the plan’s new premium (before subsidy) in the current year and an estimate of what it will cost net of subsidy, bases the subsidy estimate on the prior year’s benchmark.
Auto re-enrollment is less problematic in the SBMs, because the SBMs ensure that enrollees and their agents or brokers have better information as of the start of OEP: generally, an estimate of what their current plan will cost them in the coming year based on the next year’s premiums and benchmarks and assuming no change in the enrollee’s income. Accordingly, auto re-enrollment rates have historically been much higher in the SBMs than in the FFM. In the FFM in 2024, just 30% of renewals were auto re-enrollments, compared to 72% in the SBMs.
So far, about 51% of 2025 re-enrollments in the FFM are passive auto re-enrollments, up from 30% last year. (That percentage may drop a bit, as some auto re-enrollees may change plans before the Jan. 15 end of OEP, with the plan switch effective on Feb. 1).
In the FFM in 2024, 55% of enrollees had income below 150% FPL, entitling most of them** to free benchmark silver coverage, compared to just 16% of enrollees in the SBMs (all of the 2024 SBM states have expanded Medicaid, which cuts out the large pool of marketplace enrollees found in the nonexpansion states). Moreover, enrollment since spring 2022 has been available year-round to enrollees with income below that threshold, and the Medicaid unwinding continued through this summer. In short, there is a huge cohort of low-income enrollees in the FFM, most of whom probably paid no premium in 2024.
Lower income enrollees tend to be lower-information, often with limited English proficiency and/or limited access to or comfort with computers. Since early 2021, when enhanced ACA subsidies made high-AV coverage free for enrollees with income up to 150% FPL, the ranks of agents targeting this population has swelled. A large if hard-to-determine portion of agent-assisted enrollments are now executed by high-volume call centers, which in some cases have engaged in outright fraud and in perhaps a larger number of cases provide cursory service. (There are lots of good agents, but the soaring number of agents registered with HealthCare.gov — 83,000 in 2024, up from 49,000 in 2018, suggests a hypercompetitive market, and allegations of large-scale fraud, by CMS as well as by litigants, suggests entry of a significant number of bad actors). In the high-volume call centers, an enrollee may not have an ongoing relationship with a single agent, but rather connect with a new one at each contact, as in a customer service center.
Seven million-plus auto re-enrollments in the FFM marketplace may portend some rate shock in coming months.
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* The newly launched Georgia Access, Georgia’s SBM, appears to have auto re-enrolled essentially all existing enrollees, as the Dec. 4 snapshot lists 1.2 million auto re-enrollees for state. Georgia enrollment as of the end of OEP 2024 was 1.3 million.
** A small percentage of enrollees with income below 150% FPL may be ineligible for subsidies, e.g., because of an offer of “affordable” insurance from an employer. A somewhat larger percentage of the nearly 400,000 enrollees with income below 100% FPL are ineligible for subsidies. Subsidy eligibility begins at 100% FPL for all except lawfully present noncitizens subject to the federal 5-year bar to Medicaid eligibility (or to longer waiting periods in a few states).
Photo by JESHOOTS
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