Obamacare Sees Record Numbers as 2.5 Million More Seek Coverage


August 13, 2021 9:41 am

The Affordable Care Act’s six-month special enrollment period comes to a close this weekend after helping drive marketplace coverage to record levels as the Biden administration continues to scrap Trump-era policies that depressed sign-ups.

While final data isn’t available, state and federal marketplace enrollment could soon be “peaking” at a record 13 million or more, said Katie Keith, an associate research professor at Georgetown University’s Center on Health Insurance Reforms. “All the folks who track enrollment data in real-time think it will,” Keith said.

That includes longtime blogger Charles Gaba, who follows marketplace enrollment at ACASignups.net. Gaba said enrollment probably reached 12.8 million at the end of July. Another 200,000 to 300,000 have likely enrolled in August, he said. “So if you take that, then, ‘yes’ it’s definitely possible,” Gaba said of reaching 13 million. “I’m not going to say ‘absolutely, it will.’ But there’s a very strong chance that it will break 13 million. Maybe 13.1 million.”

The special enrollment period and premium subsidies in the American Rescue Plan—both triggered by the Covid-19 pandemic—have spurred this year’s enrollment turnaround after marketplace sign-ups stagnated during the Trump presidency.

After reaching a record 11.1 million in 2016, the number of people who signed up for coverage and paid the first month’s premium fell to 10.3 million in 2017, Trump’s first year in office, HHS data shows. This “effectuated” enrollment never topped 10.7 million during Trump’s term in office due, mainly due to policy changes that slowed enrollment after congressional Republicans failed to repeal the ACA.

These policies included reducing the annual enrollment period by 30 days, expanding the availability of “skinny plans” with fewer benefits but lower premiums, cutting funding for marketplace navigators who help people sign up, and refusing to pay subsidies to insurers as incentives to stay in the marketplace. The sweeping GOP tax legislation of 2017 also eliminated the ACA’s “individual mandate” penalty for not having coverage.

“There was a deliberate attempt to undermine the ACA markets,” Keith said.

An Unlikely Boost

Biden’s campaign promise to strengthen the ACA got an unlikely boost from the Covid-19 pandemic. As job-based coverage dried up amid pandemic-related unemployment, Congress responded with the American Rescue Plan that offered subsidies to help more people purchase marketplace coverage.

The subsidies have dropped the median deductible for new consumers during the special enrollment period by nearly 90%, from $450 to $50, the Centers for Medicare & Medicaid Services reported. One-third are playing less than $10 per month for premiums, which allows them to get better plans with more benefits, Joel S. Ario, managing director of Manatt Health, said.

“You combine a president who wants to make the ACA work better, with a pandemic that makes people understand the importance of health care, maybe more than they otherwise would, I think that together is a boon for the ACA,” said Ario.

As of Feb. 15, a record 11.3 million people had already enrolled and paid for coverage during the annual enrollment period, federal data show. Another 1.8 million people got coverage through HealthCare.gov during the special enrollment period. And an additional 723,000 used the special enrollment window to obtain coverage through state-based marketplaces.

These 2.5 million-plus new enrollees made for a “very successful” special enrollment period, said Christine Eibner, a senior economist at the RAND Corporation.

The CBO projected the American Rescue Plan subsidies would help increase enrollment by less than 1.7 million people in 2021 because “the enhanced subsidy structure would take effect midway through the plan year.”

“But 2.5 million people, that’s more than a 20% increase“ over sign-ups during the annual enrollment period, Eibner said. “That’s a big change. It surpasses the estimates that CBO had projected when the American Rescue Plan was being negotiated. So by those two measures,” the enrollment period “seems to be exceeding expectations.”

While initial sign-ups may exceed 13 million, Gaba said roughly 10% of new enrollees typically disenroll before ever paying their first premium. This causes actual enrollment to be lower than the total number of sign-ups.

Biden Team Proposals

The Biden administration has proposed restoring the length of the annual enrollment period from 45 to 75 days. It also has proposed a new monthly special enrollment period for adults and dependents who are eligible for advance premium tax credits—and whose household income is less than 150% of the federal poverty level.

It would allow them to enroll in marketplace coverage whenever their income or eligibility permits. They currently must experience a qualifying life event, like divorce or job loss, or wait for the annual open enrollment period to get coverage.

Eibner said the insurance industry has valid concerns that people may use the year-round marketplace eligibility to enroll in coverage only after they become sick. Keith, of Georgetown University, said those concerns were “overblown.”