SummaryWhile access to insurance has increased for millions, mid-year plan switching can have unforeseen consequences for patients.
In January, in response to the COVID pandemic, President Biden implemented a broad special enrollment period (SEP) through an executive order. In March he signed the American Rescue Plan (ARP) into law, providing more subsidies to help people afford health insurance premiums. New incentives combined with the SEP mean a significantly higher number of people can be expected to switch plans mid-year in 2021 than in previous years. While access to insurance has increased for millions, mid-year plan switching can have unforeseen consequences for patients.
Under typical circumstances, the Affordable Care Act (ACA) limits when people can enroll in health coverage on ACA exchanges, where millions qualify for subsidies to reduce their premiums. In previous years, people could enroll only during the annual open enrollment period or in cases of a qualifying life event. In an executive order issued on January 28, 2021, the Biden administration created a broad SEP allowing people to enroll or change their plan through August 15, 2021. The Centers for Medicare and Medicaid Studies reported that 940,000 people signed up for new coverage between February 15 and April 30. Additionally, 1.9 million current exchange enrollees returned to obtain more generous tax credits under the American Rescue Plan Act.
The American Rescue Plan Act, which became effective on March 11, 2021, included enhanced premium subsidies through the end of 2022. Avalere estimates that more than 18 million people are eligible for increased subsidies under the law and at least 8 million people who weren’t eligible for subsidies before are now eligible for help affording premiums.
These new incentives combined with the SEP mean a significantly higher number of people can be expected to switch plans mid-year in 2021 than in previous years. While access to insurance has increased for millions, patients need to be aware of how mid-year plan switching can impact their out-of-pocket costs.
Key Considerations for Consumers
- Coverage and Provider Networks: A new plan may cover different drugs than those covered on the current plan. Provider networks are also plan specific.
- Utilization Management May Apply: A new plan may require the patient to complete new utilization management features, such as prior authorizations or step therapy.
- Patient Costs at the Point of Care: Patients who change plans mid-year could be surprised by costs at the point of care. Deductibles and out-of-pocket maximums may reset. Copays and coinsurance amounts will vary by plan.
Key Considerations for Stakeholders
As consumers navigate their options and incentives to change plans mid-year, stakeholders must assess the potential impacts and opportunities of an unusually high number of mid-year plan changes. Shifts in coverage and payer mixes may lead to unanticipated impacts on stakeholders.
- BioPharma: Pharma can support patients in understanding plan options by offering bridge programs to mitigate potential lapses in therapy caused by utilization management and by conducting yearly assessments of co-pay card limits to mitigate out-of-pocket cost changes leading to access barriers.
- Providers: Providers should check with patients at each visit to determine whether their insurance changed. Patients who change plans mid-year may have new utilization management requirements and their cost-sharing amounts could change.
- Health Plans: Insurers should consider implications to their enrollment and retention strategies. An unusual volume of mid-year plan changes may also increase demands on customer service resources to help new enrollees understand their plans
Avalere is a leading healthcare strategic advisory firm that offers consulting services for clients across the healthcare spectrum including life sciences companies, health plans, providers, foundations, financial institutions, and government. With extensive experience in policy, benefit design, coverage, and access to care programs, Avalere is helping clients understand the implications of mid-year plan changes and identifying solutions to unanticipated impacts that affect both stakeholders and consumers.
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