For the last four years, December 15 has marked the final day to enroll in health insurance through the Affordable Care Act’s (ACA) marketplaces in most states. This year, unless you live in Idaho, consumers have an extra month to enroll in 2022 coverage. The annual enrollment period for the ACA marketplaces launched on November 1. During the first five weeks of open enrollment, almost 4.6 million people signed up for marketplace plans, and nearly twice as many consumers are getting a plan for $10 or less compared to enrollees at this time last year. The American Rescue Plan (ARP), which temporarily expanded the availability and amount of financial assistance for marketplace enrollees, has made coverage more affordable than ever; thanks to the extended open enrollment period, consumers in all but one state have more time shop for plans and take advantage of the ARP-driven savings. But even though the longer enrollment window has increased opportunities for consumers to gain coverage, many insurers oppose the extension.
The Case for a Longer Open Enrollment Period
More informed decision-making
Extending the open enrollment period has several benefits for consumers. Allowing for plan changes after the first of the year will make it easier to avoid unexpected premium increases. Last year, one-third of marketplace enrollees did not actively shop for plans—they were instead automatically re-enrolled in the same plan (or a similar product, if their plan was no longer available). Because of year-to-year changes in premiums and subsidy levels, consumers who are automatically re-enrolled could be signed up for a plan that is no longer affordable. When the open enrollment period ended in mid-December, automatic re-enrollees may not have realized that their premiums were going up until they received their January bill, after their opportunity to shop around for a cheaper plan had already ended. This year, consumers who are automatically re-enrolled in coverage can return to the marketplace after receiving their first premium invoice, and may select a new, more affordable plan.
More time to seek enrollment assistance
A longer open enrollment period also gives consumers a greater opportunity to get help choosing and signing up for coverage. Assisters, such as Navigators and Certified Application Counselors, can help consumers with a range of enrollment issues, from understanding plan options to estimating their income. Enrollment assistance is associated with higher rates of enrollment, suggesting that access to assistance could be the difference between gaining coverage or going uninsured. Evidence suggests that there has been inadequate capacity to meet the demand for enrollment assistance in recent years; a longer enrollment period, paired with the additional funding for Navigators, may help assisters meet that need. In the rule setting the longer enrollment period, the Biden administration highlighted that the extension would be “particularly beneficial” to underserved communities who face time constraints and language barriers, and may otherwise not be able to access assistance.
Better enrollment outcomes
Given the benefits to consumers, it’s no surprise that longer open enrollment periods are associated with more signups. In the years that the federal marketplace had only a six-week enrollment window, state-based marketplaces (SBM) could set later deadlines, and states with extended open enrollment periods often had higher enrollment than those with shorter enrollment periods. This dynamic can be seen by enrollment outcomes in New Jersey and Pennsylvania during their first year as SBMs: when these states, for the first time, had the opportunity to set a longer enrollment period than the federal marketplace, they saw enrollment increases, including New Jersey’s nearly 10 percent uptick in overall plan selections and a similar rise in new enrollees in Pennsylvania. While other factors may contribute to this trend, the association between the length of the enrollment window and signups suggests that this year’s extension could improve enrollment outcomes.
Concerns Raised About Extending Open Enrollment into the New Year
Adverse selection
The annual enrollment period is, admittedly, a limited window for a reason; when the ACA prohibited insurers in the individual market from denying coverage to sick people, it also restricted the ability to sign up for health plans to a specific timeframe to prevent people from waiting until they need health care services to enroll as a way to prevent adverse selection. When finalizing the rule that pushed the deadline for enrollment up to December 15 (after previous open enrollment periods had lasted at least twice as long), the federal government cited the potential for people to sign up only after they became sick as a reason for cutting the enrollment window in half. When the Biden administration initially proposed the extend enrollment period, insurers expressed concern about adverse selection.
But the data suggest otherwise. Younger consumers tend to wait until the end of the open enrollment period to sign up for coverage; a shorter enrollment period could thus dampen enrollment among a demographic insurers see as critical to a balanced risk pool. California’s marketplace, which has always extended open enrollment into the new year, has indicated that providing more time to enroll led to a healthier risk mix. Moreover, data from 2020 special enrollment periods—mid-year enrollment opportunities that were opened largely in response to the COVID-19 pandemic—suggest that providing additional opportunities to enroll resulted in greater enrollment among younger consumers and decreases in relative spending risk. And given that many insurers project the ARP’s temporary subsidy expansion will increase the number of healthy enrollees, any potential for taking on greater risk during the extended enrollment period is likely to be mitigated by the draw of more affordable coverage.
Partial-year coverage
Insurers opposed to extending the open enrollment period have argued that it could lead to gaps in coverage, noting that consumers who wait until the last minute to enroll will have plans that are not effective until February 1. This could leave consumers potentially uninsured for the month of January (and insurers lose a month of premiums). Several SBMs have addressed this problem by allowing consumers to enroll in January 1 coverage if they sign up by December 31. Because the enrollment period in these states extends into 2022, there is still the potential for partial-year coverage, but it demonstrates that cutting off the open enrollment period in mid-December is not the only way to assure consumers a full year of health insurance. The federal marketplace should strive to provide the same opportunity for enrollees who rely on HealthCare.gov.
Some insurers have also suggested that the dual deadline (one for plans that begin January 1 and another for February 1 coverage) could create consumer confusion. This underscores the need to invest in effective consumer outreach and advertising to broadcast coverage deadlines and inform the millions of uninsured who are eligible for nearly free marketplace plans about the opportunity to gain coverage.
State-based Marketplaces Have Led the Way
After a previous administration cut the federal marketplace’s annual enrollment window down to six weeks, most SBMs continued to hold longer open enrollment periods. SBMs paired the extended opportunity to enroll with robust marketing and outreach, and reaped the rewards of these efforts in the form of better enrollment outcomes. Evidence suggests that outreach and marketing are associated with higher enrollment and a healthier risk mix, and SBMs have continued to not only invest in advertisements and consumer assisters, but also design campaigns that aim to reach historically uninsured and underinsured populations. In addition to extending the open enrollment period, the federal marketplace is taking a page from SBMs by increasing its budget for Navigators and undertaking one of its largest outreach campaigns to date. That means in most states, consumers will have not only more time to enroll but more information and resources to understand their coverage options, the enrollment process, and important deadlines.
However, not all SBMs have adopted the extended enrollment period. The federal government has allowed SBMs to hold shorter (or longer) enrollment periods, as long as they last until at least December 15. Idaho is the only state in the country that will end open enrollment in December, with all other states extending the enrollment window into the new year. While it is too early to know if this will impact enrollment outcomes, Idaho’s marketplace has already warned residents that they may face longer wait times for customer support. The exchange also announced that consumers have faced delays in application processing, prompting an extension of the enrollment period from the initial December 15 deadline to December 22.
Takeaway
The Biden administration has taken several actions to increase enrollment opportunities for the federal marketplace, such as opening a temporary special enrollment period in response to the COVID-19 pandemic, instituting an ongoing mid-year enrollment opportunity for low-income individuals, and extending the annual enrollment window by one month. Other policies, such as increased flexibility around income verification are expected to reduce obstacles to enrolling in coverage. Along with the expansion of financial assistance under the ARP, these actions will lower barriers to comprehensive health insurance, and ultimately care access.
Opponents of extending the annual enrollment window or creating additional special enrollment periods have cited adverse selection and partial-year coverage as reasons to further restrict enrollment, but evidence suggests that offering more opportunities to sign up for coverage can actually improve the marketplace risk pool—especially when paired with generous subsidies that make coverage affordable. This year, there is somewhat of a “control group” to test insurers’ expectations about extending the open enrollment period into the new year—Idaho is the only state with a December deadline for 2022 coverage. Policymakers should keep their eye on Idaho see if their shorter enrollment window reduces coverage gaps and improves the risk pool, as insurers have argued it will. But given the lack of awareness about marketplace coverage and financial assistance, as well as the low take-up among those who are eligible for special enrollment periods, concerns about expanded enrollment opportunities may be misplaced.