The "upper coverage gap" in nonexpansion states has shrunk dramatically

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It has been gratifying if frustrating to watch the number of states that have refused to enact the ACA Medicaid expansion (after the Supreme Court rendered the expansion optional to states in 2012) dwindle from 26 in 2014 (when the ACA’s core coverage programs launched) to 10 today.*

Those ten remaining nonexpansion states include Texas and Florida — two population behemoths that between them account for more than 60% of the 1.9 million uninsured people estimated by the Kaiser Family Foundation (KFF) to be in the “coverage gap” — eligible neither for Medicaid (available in expansion states to adults with income up to 138% of the Federal Poverty Level) nor for subsidized marketplace coverage (for which eligibility begins at a minimum income of 100% FPL in nonexpansion states). The arc of Medicaid expansion history may be bending toward justice, but for the poor uninsured it’s far too long.

The American Rescue Plan Act (ARPA) included an enticement to nonexpansion states to enact the expansion — a temporary but lucrative increase in the federal share of Medicaid costs for nonexpansion enrollees in any state that enacts the expansion. So far, only North Carolina has (provisionally) taken advantage of that incentive.

The lingering coverage gap, in which nearly two million uninsured adults with income below the poverty line remain mired with no federal help toward health coverage, has led some advocates to resurface an old proposal: Allow states to expand Medicaid eligibility only to incomes up to 100% FPL, rather than the statutory 138% FPL threshold now in effect in 38 states (with two more states, South Dakota and North Carolina, slated to join within the year). Such an expansion would be cheaper for states, since the federal government funds 100% of marketplace premium subsidies, versus a mere 90% of costs for Medicaid expansion enrollees. 

ACA marketplace enrollment in nonexpansion states is up 73% since 2020

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CMS dropped its next-to-last snapshot of ACA marketplace enrollment for 2023 today. Enrollment remains on pace for a 13% year-over-year increase.

Charles Gaba has year-over-year breakouts for each state as well as for HealthCare.gov states, state-based exchanges (SBEs), and states that have refused to enact the ACA Medicaid expansion (or, in the case of South Dakota, not yet enacted an expansion that will kick off this summer). Salient facts among those breakouts:

• Enrollment in the 18 SBEs is down slightly (2.8%).

• Enrollment in all states that have enacted the ACA Medicaid expansion is up 2.6%

• Enrollment in 12 nonexpansion states is up 23.4%.

• Enrollment in Texas is up 32% — probably triggered in part by a state law effectively requiring insurers to price gold plans lower than silver plans.

I don’t think we’ve fully fathomed the enrollment growth in nonexpansion states during the pandemic years. Since the end of the Open Enrollment Period for 2020, which ended December 15, 2019 in HealthCare.gov states (e.g., in all nonexpansion states), enrollment in the twelve states that have not enacted the expansion to date has increased by 73%. By the end of Open Enrollment on January 15, the increase will probably top 75%. Florida and Texas alone have added more than 2.4 million enrollees in those three years. The twelve states together have added 3.6 million enrollees and account for 55% of enrollment nationally.

Nonexpansion states continue to power ACA enrollment growth

Open enrollment

Ever since ACA marketplace enrollment began rising during the Open Enrollment Period for 2021, enrollment growth has been concentrated in states that have refused to enact the ACA Medicaid expansion.  In nonexpansion states, eligibility for marketplace subsidies begins at an income of 100% of the Federal Poverty Level (FPL), compared to 138% FPL in expansion states, where Medicaid is available below that threshold.  

In OEP for 2021, enrollment increased by 10% in 14 nonexpansion states and marginally decreased, by 0.5%, in expansion states. In OEP for 2022, enrollment was up by 30.5% in 12 nonexpansion states, and up 11.5% in expansion states (Oklahoma and Missouri enacted the expansion in 2021).  Over two years, enrollment in the 12 states that still had not expanded as of OEP for 2022 was up 45.1%, compared to 27.0% for all states. Almost three quarters of all enrollment growth over those two years (73.3%) was in states that had not expanded Medicaid as of OEP for 2022. Nonexpansion states include the behemoths Florida and Texas, which together account for 31% of all marketplace enrollment (in 2022, 4.6 million out of 14.5 million total enrollees).

Now Charles Gaba reports that the pattern appears to be repeating during OEP for 2023, though there's a lot of unevenness and uncertainty in weekly reporting (e.g., the 18 state-based marketplaces, which all serve expansion states, have only reported through Nov. 27, versus Dec. 4 in HealthCare.gov states). With that caveat, enrollment appears to be up 26.7% in nonexpansion states and just 2.7% in expansion states.

ACA marketplace enrollment in 2020 exceeded the 2016 peak (on-exchange)

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Every June, the first "effectuated enrollment snapshot" of the ACA marketplace for February includes month-by-month and average monthly enrollment for the previous year.

Though I had been eagerly awaiting this year's snapshot, having inferred last December that marketplace enrollment in June 2020 was probably at all-time mid-year high, I missed its release on June 5. But it's out, and it's official: average monthly enrollment in 2020 was the highest ever, exceeding the 2016 peak by 5.2%. 

That's notwithstanding the fact that initial "plan selections" as of the end of Open Enrollment for 2016 exceeded the 2020 end-of-OE tally by almost 1.2 million (12,681,874 vs. 11,444,141). Here are the official average monthly enrollment tallies by year:

Average monthly enrollment: ACA marketplace, 2016-2020

2016     10,007,113
2017       9,763,076
2018       9,895,197
2019       9,810,613
2020     10,531,978

Although end-of-OE plan selections were 9.8% higher in 2016 than in 2020, average monthly enrollment was 5.2% higher in 2020 than in 2016 (and 7.4% higher than in 2019).  Why? 

UI effect? ACA marketplace enrollment soared at low incomes in nonexpansion states in 2021

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Back in March 2020,  you may have read here that the emergency supplemental unemployment insurance provided by the CARES Act -- $600 per week for up to 4 months -- would likely lift some uninsured people in states that had refused to expand Medicaid out of the so-called "coverage gap." That is, the extra UI income would raise some low income people over the income threshold for marketplace subsidy eligibility in nonexpansion states: 100% of the Federal Poverty Level (FPL).

Back in December, you may have read here that as of the end of Open Enrollment for 2021, marketplace enrollment was indeed up 10% over 2020 levels in nonexpansion states, but flat in expansion states.

This month, you may have read here that takeup of marketplace coverage at incomes just over the subsidy eligibility threshold in nonexpansion states -- 100-138% FPL -- has historically been weak -- under 50% in of these states states.

More detailed data about 2021 enrollment was released by CMS on April 21. I don't think it's an exaggeration to say that enrollment at the lowest subsidy-eligible income levels in nonexpansion states exploded this year. 

In response to the pandemic, ACA marketplace enrollment was likely up 6 percent-plus by June 2020, year-over-year

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See June 2021 update below the first chart.

CMS has released average monthly effectuated enrollment in the ACA marketplace for the first half of 2020. Combined with updated data about enrollment from February through May 2020 via the Special Enrollment Periods (SEPs) granted to people who lose access to other insurance or undergo other "life changes" outside the annual Open Enrollment period, the new data offers some measure of the extent to which Americans turned to the marketplace in response to loss of employer coverage triggered by the pandemic.

While total enrollments as of the end of Open Enrollment* were nearly identical in 2019 and 2020 (total plan selections down by 0.03%), average monthly enrollment through June (10,543,098) was up 3.4% in 2020 compared to June 2019 (10,194,206).

The average monthly enrollment comparison probably understates the impact of increased enrollment via SEP and improved retention during the pandemic months. The averages include monthly totals for January through March, when the pandemic's effects were zero to minimal. In June 2019,** effectuated enrollment was 9,797,989, 7.4% below the total for February 2019. We don't yet have a comparable figure for June 2020: it will be included in the effectuated enrollment snapshot for February 2021, which probably won't drop until this summer. But the year-over-year increase as of June 2020 was almost certainly well above the 3.4% half-year increase in average enrollment, and the increase likely continued to grow throughout 2020.

ACA marketplace enrollment up 10% in states that haven't expanded Medicaid

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CMS has reported* preliminary final 2021 enrollment figures in the ACA marketplace for the 36 states using the federal exchange, HealthCare.gov. In this pandemic year, enrollment in those states is up 6.6% compared to 2020 -- the first year of enrollment increase as of the end of Open Enrollment** since 2016.

Of course, enrollment increase is not uniform across those states -- every state market is different. Charles Gaba has helpfully broken out the 2020 vs. 2021 totals by state, and kindly lent me his charts. From the state totals one obvious pattern leaps out: enrollment is up 9.7% in states that have not enacted the ACA Medicaid expansion -- and down 0.5% in states that have expanded the expansion (including Nebraska, which opened the Medicaid expansion doors in October of this year). Below is Charles' chart broken out by expansion/nonexpansion.

ACA marketplace enrollment 2020 vs. 2021: Non-expansion states using HealthCare.gov 

Medicaid expansion enrollment far outstrips marketplace enrollment and is the chief bulwark against huge spikes in uninsured population

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As millions lose jobs and health insurance during the pandemic, I have railed against ACA marketplaces for submerging information about Medicaid* and focusing their messaging almost exclusively on the private plan marketplace.

In expansion states, at least twice as many of the newly uninsured will be eligible for Medicaid as for subsidized marketplace coverage, according to estimates by the Urban Institute and Kaiser Family Foundation. You'd never know it to look at most state-based marketplaces, and to a lesser extent, HealthCare.gov.

The exchanges were conceived primarily as private-plan marketplaces and still view routing people to the ACA's Qualified Health Plans as their primary -- almost sole -- mission. But in expansion states, they also qualify or enroll applicants into Medicaid where appropriate, and it's high time they recognized Medicaid enrollment (or routing) as a core mission.

The Medicaid expansion has been the primary engine for ACA-triggered reductions in the nation's uninsured population. To illustrate the point, I've set ACA Medicaid expansion enrollment next to marketplace enrollment in the 34 states (including DC) that had enacted the expansion as of June 2019, the last month for which CMS has recorded expansion enrollment data. Nationally, Medicaid enrollees who fit the ACA's expansion enrollment criteria outnumber marketplace enrollees by a 3-to-1 margin, subject to a couple of caveats at bottom. Links to data sources are in the headings.

Surprise/no surprise: ACA marketplace enrollment is UP in 2020 (on-exchange only)

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Mystery of the ACA marketplace: every year since 2016, while total signups during Open Enrollment have ticked down, the percentage of those who effectuate their enrollment by making their first payment has risen.

On Friday CMS released 2020's first Effectuated Enrollment Snapshot, showing enrollment as of February. Enrollment is about 1% higher than in February 2019, though it was about 0.3% lower as of the end of Open Enrollment. It's also slightly higher than in February 2018.  The gap between total plan selections as of the end of Open Enrollment and effectuated enrollment after all first payments are due is the lowest ever.

CSR takeup bends slightly under silver load at incomes up to 200% FPL

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For ACA marketplace enrollees with incomes up to 200% of the Federal Poverty Level (FPL), silver-level plans are almost always the wisest choice. Through 2017, silver plans were priced as if they had an actuarial value of 70%, compared to 60% for bronze plans and 80% for gold. The Cost Sharing Reduction (CSR) subsidy, however, raises the AV of a silver plan to 94% for those with incomes up to 150% FPL, and to 87% for those with incomes in the 151-200% FPL range. Insurers were reimbursed separately for CSR, and it wasn't priced into premiums.

That changed when Trump cut off direct CSR reimbursement in October 2017. In 2018, CSR was priced into premiums -- in most states, into silver premiums alone. By 2019, almost all states allowed this "silver loading." Since ACA premium subsidies are designed so that the enrollee pays a fixed percentage of income for a silver benchmark plan, inflated silver premiums boost subsidies and so create discounts for subsidized buyers in bronze and gold plans. But these discounts are not enough to offset the value of the CSR that's available up to 200% FPL.

The story is quite different at 201-250% FPL, where CSR is weak, raising the AV for silver plans to just 73%. In that income range, gold and bronze plan discounts often do outstrip the value of CSR -- almost as strongly as they do at incomes above 250% FPL, where the silver AV is 70%.