Record-High Marketplace Enrollment, New Census Data, And More

On September 15, 2021, the U.S. Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) issued new data showing record-high effectuated enrollment through marketplace coverage under the Affordable Care Act (ACA). In total, 12.2 million people were actively enrolled in marketplace coverage as of August 2021. Mid-year enrollment peaked thanks to the more than 2.8 million people who enrolled during the Biden administration’s broad six-month COVID-19 special enrollment period (SEP). The new data was released alongside a statement from the White House and a separate report showing continued record-high enrollment in Medicaid and CHIP.

This post also discusses the latest Census data that showed a stable uninsured rate during 2020, new grants to 28 states and the District of Columbia, and a quality rating information bulletin that outlines requirements for marketplaces ahead of the 2022 plan year.

Record-High Marketplace Enrollment

HHS’s new report shows that more than 2.8 million people newly enrolled in marketplace coverage during the six-month COVID-19 SEP that ran from February 15 to August 15. The SEP was initially slated to run until May 15 but was extended to August 15, in part due to the enhanced premium tax credits made available under the American Rescue Plan Act (ARPA). Of the 2.8 million people, 2.1 million people enrolled through the 36 states that use HealthCare.gov while an additional 738,000 people enrolled through the 15 state-based marketplaces.

Consistent with the data reported throughout the SEP, enrollment is significantly higher relative to prior years. New HealthCare.gov enrollment for 2021 was nearly three times and nearly four times higher than for 2020 and 2019, respectively. The SEP also increased enrollment among people of color; a higher proportion of SEP enrollees identified as African American or Hispanic/Latino relative to prior years.

HHS emphasized the importance of enhanced ARPA subsidies to new and existing consumers. More than 90 percent of consumers who newly enrolled during the SEP qualified for marketplace subsidies, and 48 percent of new HealthCare.gov consumers paid premiums of $10/month or less. The average premium for new HealthCare.gov consumers fell by 30 percent, from $117 in 2020 to $81 in 2021.

Existing HealthCare.gov consumers also saw savings. Existing consumers had premiums reduced, on average, by $53 per month (i.e., savings of about 49 percent). Many existing consumers—about 2.7 million—actively returned to HealthCare.gov to “claim” and apply their savings while HealthCare.gov automatically reduced premiums for 2.6 million existing consumers. Over 8 million existing consumers saved a total of $537 million.

HHS also reported on the impact of ARPA’s special subsidy rule for those who received or were approved to receive unemployment benefits in 2021. Since July 1 (when this benefit was rolled out on HealthCare.gov), nearly 209,000 consumers have qualified. Of these, 34,000 would not have been eligible for marketplace subsidies at all in the absence of ARPA because they would have fallen in the Medicaid coverage gap.

More generous ARPA subsidies also meant that consumers were able to enroll in more generous coverage. The median deductible for new HealthCare.gov enrollees fell by more than 90 percent (from $750 in 2020 and 2019 to $50 in 2021). This is because more low-income consumers qualified for a zero-premium plan with cost-sharing reductions that resulted in platinum-equivalent coverage (i.e., a plan with a 94 percent actuarial value) with the lowest out-of-pocket costs.

The ARPA subsidies also increased the number of higher-income people who enrolled in coverage. Those with an income over 400 percent of the federal poverty level accounted for 7 percent of enrollment compared to less than 2 percent in prior years. This is unsurprising: individuals at this income level were not previously eligible for marketplace subsidies until ARPA eliminated the “subsidy cliff.” Enrollment levels were even higher in state-based marketplaces where 12 percent of new SEP consumers had an income over 400 percent of the federal poverty level.

The enrollment report includes even more state-specific statistics and breakdowns by marketplace type. SEP enrollment was significantly higher—about 2.5 times higher—in states without Medicaid expansion. California, Florida, Georgia, North Carolina, and Texas saw six-figure gains in marketplace enrollment during the SEP. The state-based marketplaces in California, Connecticut, the District of Columbia, Nevada, New Jersey, New York, and Vermont are continuing their SEPs through the end of the year.

Effectuated Enrollment Data

When added to existing enrollees, the additional 2.8 million SEP enrollees bring total marketplace enrollment to 12.2 million people as of August 2021. Note that marketplace enrollment has been higher in prior years: nearly 12.7 million people and 12.2 million people enrolled during the 2017 and 2018 open enrollment periods, respectively. But effectuated enrollment during those years dropped following the open enrollment period. As a result, 12.2 million people enrolled as of August 2021 represents record-high effectuated marketplace enrollment.

Report On Medicaid And CHIP Enrollment

Separately, CMS issued a report showing continued historic enrollment through Medicaid and CHIP, with more than 82.3 million people enrolled as of April 2021. This is an increase of nearly 581,000 people relative to March 2021, suggesting that people continue to newly qualify for and rely on Medicaid. Relative to February 2020, enrollment through Medicaid and CHIP has increased by 16.4 percent (11.6 million individuals). Medicaid enrollment increased by 17.8 percent (11.4 million people) while CHIP enrollment increased by 2.9 percent (194,000 people).

Continued enrollment is driven in part by the COVID-19 SEP. While the number of Medicaid/CHIP applications submitted directly to states dropped slightly in April 2021 (compared to March 2021), the number of applications sent to states by HealthCare.gov was up significantly beginning in March 2021, as people visited HealthCare.gov to apply for marketplace coverage but were referred to Medicaid or CHIP. Indeed, the marketplace report discussed above shows that 14 percent of those who applied for coverage through HealthCare.gov (541,000 people) were eligible for Medicaid or CHIP. The is consistent with a similar pattern observed during the annual marketplace open enrollment period: the federal marketplace transferred a high number of applications to states in November and December 2020.

Maintenance of effort requirements included under the Families First Coronavirus Response Act are also contributing to sustained high enrollment. In that legislation, Congress provided a 6.2 percentage point increase in the federal match rate for state Medicaid programs so long as states provide continuous enrollment throughout the declared public health emergency. The public health emergency is expected to be in effect through at least the end of 2021, and federal officials pledged to give states at least 60 days advance notice of any change. The Biden administration has already given some guidance to states about how to process pending eligibility and enrollment actions at the end of the declared public health emergency. CMS also adopted a monthly SEP for low-income individuals to help ensure that those who are churning off of Medicaid coverage can successfully transition to marketplace coverage.

Another Report Shows Stable Uninsured Rate For 2020

On September 14, the Census Bureau issued its report on health insurance coverage for 2020. In 2020, 8.6 percent of people (28 million people) were uninsured. This was not significantly different from the uninsured rate of 8.5 percent (27.5 million people) in 2018, the recommended year of comparison.

(Consistent with other recent analyses, the uninsured rate remained stable despite economic upheaval and job loss from the pandemic. However, this uninsured rate might be artificially low because it does not reflect people who lost coverage during 2020. The survey asks only if someone was uninsured during the entire year (rather than at some point during the year). The pandemic also complicated the fielding of the survey so the data may be less reliable than prior years. For instance, respondents in 2020 and 2021 generally had a higher income and educational level relative to prior years.)

Of those with coverage, most (66.5 percent) had private insurance. More than half of the population had employer-sponsored coverage (54.4 percent), followed by Medicare (18.4 percent), Medicaid (17.8 percent), individual market coverage (10.5 percent), and military coverage (3.7 percent). There was an increase in the percentage of people covered through public programs, but this uptick was observed in Medicare as opposed to Medicaid.

Most of the trends were generally consistent with prior years. Coverage rates among adults increased as age increased. More children (those under age 19) were uninsured in 2020 relative to 2018 (which itself was an increase from prior years). Young adults remained the least likely to be insured in 2020, and those aged 19 to 25 had the highest uninsured rate (14.4 percent) of any age group. Hispanic individuals had the highest uninsured rate (18.3 percent), followed by Blacks (10.4 percent), Asians (5.9 percent), and non-Hispanic Whites (5.4 percent). People of color also had higher rates of enrollment in public coverage while non-Hispanic Whites had higher enrollment in private coverage.

Coverage rates generally increased as income increased. Households with income at or above 400 percent of the federal poverty level had the highest coverage rates while those whose income is below 300 percent of the federal poverty level had double-digit uninsured rates. Uninsured rates for low-income people would be lower if more states expanded their Medicaid program. In 2020, the uninsured rate was 8.9 percent for expansion states versus 17.6 percent for non-expansion states. And non-expansion states saw a 2.6 percentage point increase in the uninsured rate among those living in poverty relative to 2018.

CMS Awards State Flexibility Grants

On September 15, CMS announced $19.6 million in new grant funding for insurance departments in 28 states and the District of Columbia. This two-year funding is to “enhance and support the role of states in the implementation and planning for several of the federal market reforms and consumer protections.” States were able to request funding to evaluate and bolster implementation of only certain market reforms—guaranteed issue, guaranteed renewability, or coverage of the essential health benefits package. Funding awards ranged from $660,000 in Nevada to $698,500 in Pennsylvania.

The announcement does not provide specific detail on each state’s activities except to note which reforms each state will address. Most states will focus on all three market reforms. Grant funds can be used to, for instance, implement or enhance policy form review, hire a clinician to review drug formularies, develop actuarial and economic analyses, perform market scans, and bolster market conduct examinations, market analysis, financial examinations, and consumer complaint investigations.

CMS announced the two-year grant funding in November 2020. This is the second round of funding under this grant opportunity: CMS previously awarded just over $8.6 million in funding to 30 states and D.C. in August 2018. The funding stems from Section 2794 of the Public Health Service Act, which directed the HHS Secretary to administer a five-year grant initiative to support state rate review programs. Congress appropriated $250 million for the rate review program, with four cycles of rate review grants where all but seven states received a grant. Funds that were not obligated by the end of fiscal year 2014 remain available for grants to states for planning and implementing the market reforms and consumer protections under Part A of Title XXVII of the Public Health Service Act.

Quality Rating Information Bulletin For 2022

On August 18, CMS issued a new bulletin with guidance to all marketplaces and direct enrollment entities on the display of quality rating information for the 2022 plan year. Quality ratings—which reflect clinical quality data and enrollee satisfaction data—use a five-star system and have been displayed for most marketplace plans since 2019 (for the 2020 plan year). Before that, quality rating information was only available through five federal marketplace states and some state-based marketplaces.

In light of the pandemic, CMS opted to continue to display quality rating information from plan year 2020 for plan year 2021. In the new bulletin, CMS will extend this policy to plan year 2022, meaning that quality rating information that will be displayed during the upcoming open enrollment period will be the same as in 2021 and 2020 (i.e., the quality rating information calculated during the 2019 rating year). The bulletin also includes marketing guidance for insurers. This guidance appears to be consistent with prior requirements; more technical requirements outlined in September 2020 guidance.

State-based marketplaces should be prepared to display quality rating information for 2022 but will continue to have some display flexibility as outlined here. CMS will provide new ratings data files for the qualified health plans offering coverage in state-based marketplace states. Direct enrollment entities, which had previously had enforcement discretion not to display quality rating information, must do so.