November 1 will be here sooner than we know it. The day marks the start of the fifth open enrollment (OE) for the Affordable Care Act (ACA) marketplaces. This year’s open enrollment, however, is shaping up to be quite different from previous years. The change in administration and corresponding numerous changes in policy will likely cause confusion for current and new Marketplace consumers, putting more of a burden on the assisters that help them. At the same time, the Trump administration has proposed deep cuts to marketplace consumer outreach, assistance, and enrollment system budgets this fall.
What are some of the OE-related changes and their impact on consumers?
Shorter Open Enrollment. Rather than a three-month period to enroll, which has been the OE period for the last three years, consumers in most states will have only half that time this year to renew or apply for Marketplace coverage. Without aggressive outreach, many consumers may be unaware of the changed timeframe. Additionally, data from previous OEs indicate that more than half of new consumers and one-third of enrollees waited until the last few weeks to enroll. Many may have delayed sign up until January because of competing financial obligations during the holiday season. With a shorter timeframe that ends in mid-December, people no longer have the option to wait until January when they may be more financially stable to get coverage.
Unexpected Bills. According to one survey, nearly a quarter of Marketplace enrollees stop paying health plan premiums and drop their coverage. Many do so either because they cannot afford the premiums or because they obtain other coverage but neglect to notify the marketplace or insurer of that fact. This year, if these individuals come back and try to enroll during OE, their insurer can require them to pay any past-due premiums as a condition of enrollment. This could result in a nasty shock when many consumers try to re-enroll into their health plans. This is a new policy that the Trump administration is implementing, but federal officials have not stated any plans to require insurers to notify current enrollees of this policy change. As a result, most marketplace consumers are unlikely to be aware of the consequences of stopping premium payments mid-year or failing to notify their plan of a change in their coverage.
More Difficult-to-Compare Coverage. In 2018 insurers will have more flexibility to meet the ACA’s actuarial value (AV) or “metal level” standards. Under the ACA, individual health plans must have the following actuarial values that correspond with metal levels: 60 percent (bronze); 70 percent (silver); 80 percent (gold) and 90 percent (platinum). Previously, insurers could effectively meet the AV standard for each metal level if they fell within a range that the Obama administration defined as between +/2 percent (i.e., de minimis variation).* Under the Trump administration’s new rules, insurers can now meet the AV standard for the silver, gold and platinum levels with -4 to +2 percent variation and -4 to +5 variation for some bronze plans. The greater variation will allow insurers to offer lower premium plans, but consumers may not realize those plans come with higher deductibles and cost-sharing. Most consumers select their health plan primarily based on the size of the premium, and they struggle to understand cost-sharing concepts.
The new AV flexibility will also inhibit consumers’ ability to make informed comparisons among plan options at different metal levels. Insurers can now offer bronze plans with an AV of as much as 65 percent and a silver plan with an AV of as little as 66 percent – making plans across those metal levels virtually indistinguishable.
New Enrollment Pathways. This year, consumers will be able to enroll directly into a Marketplace plan using a web broker or insurer’s website. Unlike previous years when third-party websites directed consumers to HealthCare.gov for their financial eligibility determination, consumers can now complete their applications using one website. But it’s not as simple as it sounds. Consumers who use direct enrollment will use a Marketplace application, but may not have a HealthCare.gov account because the IT system doesn’t automatically generate one for consumers who use direct enrollment. For consumers, this means they may not receive notices or communications from the Marketplace about a data matching inconsistency or other important updates affecting their eligibility and enrollment. This could not only be confusing to consumers, but also create more work for assisters, agents and brokers who may have to help these consumers set up a HealthCare.gov account and find their application in the system. Additionally, these web-brokers will not be obligated to provide consumers full information for all their marketplace plan options as long as they provide a notice to consumers that additional information is available at healthcare.gov. Nor are brokers required to disclose to consumers the range of commissions they receive from different insurers or sellers of ancillary products, raising the risk that some brokers could have financial incentives to steer consumers into products that are not optimal for them.
Uncertainty about the Mandate to Buy Coverage. A Trump administration Executive Order directs federal agencies to waive or exempt Affordable Care Act provisions imposing costs or penalties under the extent permitted by law. As a result, the IRS decided not to proceed with plans to implement software that would reject tax returns without health insurance information on them. Although data is yet unavailable indicating that this action has caused some individuals not to purchase coverage or drop coverage this year, insurers are pointing to the uncertainty of the individual mandate enforcement as one reason for increasing premiums this year.
Exiting Plans, New Plans, Changing Plans. With increasing policy uncertainty in Washington, D.C. over key issues affecting the stability of the marketplaces, such as whether the Trump Administration will discontinue the ACA’s cost-sharing reduction subsidies (CSRs), insurers have grown skittish about their participation. For example, a major insurer in Virginia told state regulators it would have to consider exiting the marketplace or reducing its service areas if the CSRs are not paid.
While some insurers may depart, others may seize the opportunity to expand into a new market and pick up their competitors’ market share. The result? Consumers in many markets may find that the plan they are in has been discontinued, or their insurer has left the market. Others may have entirely new options to choose from, requiring consumers to be active, informed insurance shoppers to ensure they enroll in coverage that best meets their needs.
At the same time, consumers may also be worried and confused about the future of the Marketplaces as the President and administration officials actively promote the narrative that they are imploding. In addition to raising consumer anxiety, this negative propaganda could lead some consumers to decline to enroll because they have been led to believe that the coverage won’t be available long-term.
Consumer assisters will continue to be at the forefront, answering consumers’ questions, conducting outreach, and helping them enroll. Their job has always been a challenging one, but this year’s changes, combined with continued policy uncertainty and negative rhetoric, will only make it harder.
*The Obama administration allowed variation in certain types of bronze plans of +5/-2 percent.