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Exchanges May Add More than 1 Million New Enrollees due to COVID-19

Summary

Affordable Care Act (ACA) exchanges have seen a significant uptick in enrollment, especially from those losing employer-sponsored coverage or who were previously uninsured. However, different approaches to special enrollment periods (SEPs) leave many with limited opportunities to enroll.

Exchange enrollment has remained very stable over the last several years, with nearly 11 million individuals enrolled in exchange plans at the beginning of 2020. However, exchanges are now experiencing significant mid-year enrollment increases, especially since March. The health, economic, and employment effects of COVID-19 and the Public Health Emergency (PHE) are leading tens of millions of individuals to consider new coverage options. With unemployment rates at or near 10% in almost all states, many consumers have been separated from their previous employer-sponsored plans. The economics of Medicaid eligibility in many states and the recent boost to unemployment assistance indicate that many are turning to the exchanges for coverage. In fact, Avalere’s proprietary COVID-19 enrollment model estimates an increase in exchange enrollment. This increased enrollment is likely to last for some time given the “stickiness” of exchange coverage and the availability of premium subsidies. This increased market size may lead more issuers to begin offering or expand their marketplace plan offerings.

State and Federal Reports Show over 750K New Exchange Enrollees

A new report from HealthCare.gov shows that nearly half a million (487,000) enrollees have newly enrolled in exchange coverage using the loss of coverage SEP since December 18, when the annual open enrollment period (OEP) closed in the 38 states that use HealthCare.gov. This is 46% higher than the rate of use for that SEP reason for the same time in 2019 and higher than any period outside of the annual OEP since the exchanges launched in 2014. April saw a substantial increase in the use of the loss of coverage SOP when 154,000 individuals enrolled, a 139% increase from April 2019. In total this year, 892,141 individuals have used an SEP to enroll in coverage through HealthCare.gov, a substantial increase from SEP enrollment through May in each of the 3 previous years (which has averaged 330,708 for the loss of coverage SEP and 650,605 overall).

Figure 1. SEP Enrollment through HealthCare.gov, 2017–2020
Figure 1. SEP Enrollment through HealthCare.gov, 2017–2020

Accounts for SEP enrollment from the end of OEP through May. Source: CMS Special Trends Report: Enrollment Data and Coverage Options for Consumers During the COVID-19 Public Health Emergency, June 2020.

In the 12 states plus DC that operate their own state-based exchanges (SBE), almost 263,000 individuals have newly signed up for coverage since March. However, enrollment numbers have only been publicly released for 8 of the 12 SBEs. Therefore, the number enrolling through the SBEs is likely higher. In CA alone, nearly 250,000 new enrollees have enrolled through Covered California since its OEP closed on January 31. Of those, 175,000 (or 88%) have enrolled since March.

Not Everyone Has the Same Opportunities to Enroll in Exchange Coverage

Individuals cannot choose to enroll in exchange coverage at just any given point in time. Instead, individuals require a SEP-qualifying event to enroll outside of the annual OEP. There are several qualifying events, including loss of current ACA-compliant coverage, a change in economic circumstances (e.g., significant changes in income), a permanent move to a new state or part of a state with new plans, or a unique exchange-granted SEP. Thus, those affected by COVID-19 who did not have employer-sponsored coverage may not qualify for the loss of coverage SEP and may not have any other qualifying event that will allow them to enroll. This can leave many with fewer coverage options.

While several states have recently expanded SEP enrollment options, the ability of individuals to newly enroll in exchange coverage has not been uniformly granted in all states. In response to the PHE, 12 of the 13 SBEs (all but ID) and DC created COVID-19-specific SEPs. These SEPs allow individuals to newly enroll in coverage outside of annual OEP, even if they do not qualify for other SEP-triggering events. Though ID did not create a COVID-19-specific SEP, the state relaxed enrollment guidelines for individuals who lost employer-sponsored insurance due to termination, furlough, or layoff. Even so, these COVID-19-specific SEPs periods are time limited. The SEPs for CA, DC, MD, MA, NY, and VT remain open, while those in CO, CT, MN, NV, RI, and WA have all ended.

The federal government has not created a COVID-19-specific SEP on HealthCare.gov, which could lead to lower exchange enrollment, particularly for individuals previously without employer-sponsored coverage. Additionally, 13 of these 38 states have not expanded Medicaid, which could leave many consumers without options to access coverage. While recent legislation passed in the US House of Representatives (H.R. 6800) would require HealthCare.gov to open an 8-week SEP, that bill has not yet been considered in the Senate.

Table 1. State-Based Exchange COVID-19 SEP Duration and Enrollment
State COVID-19 SEP Enrollment Deadline SBE COVID-19 SEP Enrollment SEP Enrollment as a % of 2020 OEP Enrollment
DC* September 15 N/A** N/A
VT* August 14 N/A** N/A
CA* July 31 175,030 (as of June 20) +11.4%
MA* July 23 20,000 (as of April 28) +6.2%
MD* July 15 14,000 (as of June 8) +8.8%
NY* July 15 N/A** N/A
NV May 15 5,479 +7.7%
WA May 8 22,000 +10.4%
CO April 30 14,263 +8.5%
RI April 30 N/A** N/A
MN April 21 14,000 +8.1%
CT April 17 1,920 +2.0%

*Enrollment is ongoing, and numbers are preliminary

**N/A indicates the state has not publicly released preliminary or final exchange enrollment data during the SEP.

Exchange Enrollment May Reduce Care Access for Some

Shifts in enrollment patterns have a variety of implications for consumers, including access to providers or therapies (especially for those with certain conditions), affordability of products and services, opportunities to choose a new plan, and the diversity of plan options available to consumers in specific geographic areas. Avalere’s analysis of exchange coverage, benefit, and formulary data show that exchange coverage is often unlike employer-sponsored insurance, though it was intended to be similar to employer plans. These analyses show that, compared to employer market coverage, the types of exchange plans with the highest levels of enrollment can have fewer covered benefits, tighter networks, more limited formularies, and higher cost sharing. Even for individuals who are able to enroll in exchange coverage, the transition from employer-sponsored coverage to the exchanges is not seamless, and can have implications for access and affordability. Importantly, even where coverage is similar, the requirement to meet new deductible and out-of-pocket spending limits and satisfy new care management requirements (like step therapy or prior authorization) could create gaps in care.

Given that exchange enrollees tend to maintain their exchange coverage in subsequent years, the political and judicial climate concerning the ACA may result in new access and plan affordability changes for exchange enrollees. For instance, the 2020 election and the forthcoming Supreme Court ruling on the ACA could also affect whether consumers can choose to remain on exchange coverage or plans choices available to them (such as a public option). Given uncertainties at the federal level, there is a significant opportunity for states to act.

This could be through codifying aspects of the ACA into state law or helping to protect consumer affordability and access (e.g., network adequacy, cost-sharing limitations, new premiums subsidies, and changes to SEP eligibility). However, very few states have taken a broad approach to these state actions. The 2020 election and growing market and economic uncertainties may prompt states to take an even more active role.

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