When the COVID-19 pandemic struck last year, the Affordable Care Act (ACA) acted as a critical safety net. As millions faced job and income loss in the face of a growing threat of infection and disease, Medicaid, expanded under the ACA in most states, and the law’s health insurance marketplaces provided coverage and financial assistance. Notably, states sprang into action to increase access to health insurance coverage by creating additional marketplace enrollment opportunities and launching outreach and marketing campaigns. In contrast, the Trump administration kept the federal ACA marketplace closed to those who did not qualify for an existing special enrollment period (SEP), leaving consumers in 38 states without access to marketplace coverage unless they experienced a life event like loss of comprehensive employer coverage.
But the new administration is tapping into the ACA’s potential and expanding its reach. Last month, the Biden administration re-opened enrollment through HealthCare.gov by establishing a temporary SEP. The ongoing SEP allows the uninsured and consumers enrolled in non-marketplace plans to sign up for marketplace coverage and available financial assistance, as well as providing an opportunity for current marketplace enrollees to switch plans. All fifteen state-based marketplaces followed suit and opened temporary SEPs for the uninsured.
First Look: Enrollment Data Shows Significant Increase in New Enrollees
The federal SEP began February 15. After the first two weeks of the SEP, the Centers for Medicare and Medicaid Services (CMS) announced over 200,000 new plan selections on the federal marketplace, almost three times the number of new plan selections seen during the same period last year. Some states, like the Carolinas, saw an even greater increase in new plan selections. Overall, nearly 386,000 new consumers requested coverage on an application submitted in the first two weeks of the SEP, including almost 55,000 who were eligible for Medicaid or CHIP.
This SEP activity comes after a busy Open Enrollment Period (OEP), where 8.3 million new and returning enrollees selected marketplace plans through HealthCare.gov. While the numbers appear to lag behind the rate of signups during the OEP, SEP signups are best understood in comparison to enrollees coming to the marketplace outside of the annual enrollment window, as OEP data reflect not only new enrollees but also renewals. The substantial increase in new plan selections over the same time period last year suggests that the federal SEP offered a new access point for enrolling in health insurance, and people are taking advantage of the opportunity to get coverage.
American Rescue Plan Will Provide Critical Expansion of Financial Assistance
To be sure, expectations of the SEP greatly reducing the uninsured rate have been tempered by several factors, not the least of which is the lack of affordable plan options. While creating a broad enrollment opportunity helps expand access to coverage, the cost of insurance remains a considerable barrier. However, the recently signed American Rescue Plan will revitalize the “Affordable” component of the ACA by temporarily extending subsidies above the current cut-off of 400 percent of the federal poverty level (FPL), enhancing subsidies for those currently receiving financial assistance, and targeted premium assistance to those receiving unemployment benefits. These changes mean that millions of consumers will be able to enroll in comprehensive marketplace plans will low- or even no-cost premiums.
Given the initial enrollment numbers, once new subsidies are implemented, the ACA’s marketplaces are likely to see considerable enrollment activity, including and especially for people who forego coverage due to cost. Estimates from the Congressional Budget Office (CBO) suggest that the enhanced premium subsidies in the American Rescue Plan will reduce the number of uninsured by 800,000 this year, 1.3 million people in 2022, and another 400,000 in 2023. Other estimates also suggest that 3.4 million people buying off-marketplace coverage and 1.4 million people buying marketplace plans without financial assistance would see lower costs, particularly for those whose household income is just above the current income limit of 400 percent FPL. Quick implementation – and if needed, additional enrollment opportunities outside of open enrollment – will markedly increase marketplace enrollment to expand coverage and reduce premiums.
Marketing and Outreach Efforts Can Help to Reach the Uninsured
Increasing access to coverage through a mid-year enrollment opportunity and substantial financial assistance is critical, but ensuring uptake will require reaching the millions of people who will have new and improved access to coverage. The federal health insurance marketplace underwent numerous changes under the Trump administration, including significant cuts to funding for marketing and outreach efforts. As part of its SEP initiative, the Biden administration has invested $50 million in outreach and education, including marketing efforts and community engagement focusing on populations disproportionately impacted by COVID-19. The administration also provided $2.3 million to Navigators for the ongoing SEP. These investments follow the example of state-based marketplaces that broadcast special enrollment opportunities during the pandemic through robust marketing and outreach efforts including targeted campaigns to reach the uninsured.
During a global pandemic, the gaps in our health care system have never been more apparent; the risk of infection and economic hardship wrought by COVID-19 have exacerbated existing disparities in access to coverage and care. Over a decade after its enactment, the ACA has provided coverage options to those without a job-based health plan, but obstacles to insurance persist. Recent federal actions have addressed some of these impediments, providing new enrollment opportunities and significantly expanded premium subsidies. A substantial increase in enrollment activity even before the improved access to financial assistance suggests a high demand for marketplace coverage.
We still have a long way to go to ensure everyone has access to comprehensive, affordable insurance, and even those with coverage face barriers to care due to high cost sharing. But expanding opportunities for enrollment, significantly reducing the financial burden of premiums, and conducting ample and dynamic outreach to get people enrolled is a huge step forward.