Implementing Health Reform: New HHS 2015 Marketplace Enrollment Estimates
Posted By Timothy Jost
November 11, 2014 - Health Affairs Blog
On November 10, 2014, the HHS Assistant Secretary for Planning and Evaluation
(ASPE) released an estimate of “How Many Individuals Might Have Marketplace Coverage After the
2015 Open Enrollment Period [1].” ASPE estimates that 9.1
to 9.9 million will be enrolled, substantially lower than the 13 million
enrollee estimate the Congressional Budget Office issued in the Spring of
2014.
Both the ASPE and CBO estimates see the marketplaces as eventually covering
24 to 25 million people. But while CBO projected that the marketplaces
would reach this number in 3 years, ASPE believes that a 4 to 5 year ramp-up
period is more realistic based on the launch experience of other programs, like
Medicaid and CHIP.
Examining the numbers. The marketplaces
enrolled 8.1 million individuals during the 2014 open enrollment period.
The ASPE brief states that 7.1 million were still enrolled as of October of
2014. It is not clear whether or not this number includes 112,000
individuals that HHS recently announced have been dropped from the marketplaces
because they failed adequately to document their immigration or citizenship
status. HHS has also announced that another 105,000 individuals will have
their financial eligibility determined on data available to HHS (in most
instances 2012 tax returns), because they failed to document the income levels
they claimed on their applications. These individuals will not lose
coverage, but may receive smaller tax credits.
Given the fact that many of the 8.1 million who signed up for coverage in the
spring of 2014 had little experience with health insurance, many lacked checking
accounts or other obvious means to pay their premiums, and many enrolled in
high-deductible plans that were unlikely to cover much in the way of medical
services in the short-term, it is remarkable that nearly 90 percent are still
enrolled.
Over the course of the year, moreover, many would have found jobs that
provided health insurance or become eligible for Medicaid and dropped
marketplace coverage. The decisions of large states like Michigan and
Pennsylvania to expand Medicaid must have had a significant effect on enrollment
of individuals in those states with incomes between 100 and 138 percent of
poverty, who would have become eligible for Medicaid. Apparently, however,
many other individuals became eligible for special enrollment periods because of
loss of employer coverage, a move, the birth of a child, or for some other
reason, keeping the number of enrollees somewhat stable.
ASPE estimates that 5.9 million of these 7.1 million individuals will
reenroll for 2015. This figure is surely too low. It is based on
retention rates in similar programs and the experience of a major insurer.
But both reenrollment and eligibility redetermination will be automatic for
marketplace enrollees. Any enrollees who could not afford coverage have probably
already dropped it.
Some may face higher premiums for 2015 and may decide to drop. But
because the amount that individuals actually must pay for marketplace coverage
if they choose the lowest or second lowest-cost silver plan is based on their
income, not on the premiums actually charged, anyone whose income has stayed
stable and who is willing to shop for coverage should experience 2015 costs not
that different from 2014. My guess is that there will be some loss of
enrollment during the 2015 open enrollment period, and, of course, ongoing
enrollment churn into 2015, but a 17 percent loss estimate is too high.
ASPE estimates that another 3.2 to 4 million individuals will enroll during
the 2015 open enrollment period. It estimates that 75 to 80 percent of
these will be drawn from the ranks of the uninsured. ASPE estimates that
there are 15 million uninsured individuals eligible for marketplace coverage and
another 8 to 12 million with individual off-marketplace coverage who could
purchase coverage through the marketplace, so this figure also seems low.
It may be realistic, however. The 2015 open enrollment period will be
only 3 months; half as long as the 2014 open enrollment period. Presumably
those individuals who were most in need of coverage have already enrolled and
populations that remain eligible will be harder to reach. Navigator resources will be less for 2015 than they were for
2014 [2]. Moreover, Americans have endured a steady barrage of anti-Affordable Care Act advertising
[3] throughout the mid-term political season. Rarely does a new
product entering a market have to face an overwhelming headwind of negative
advertising to establish itself.
Finally, the Supreme Court’s grant of certiorari in the King case
[4] injects additional uncertainty into the 2015 open enrollment
period, although it is clear that any premium tax credits for which individuals
qualify will not have to be paid back even if the Court decides to reject the
IRS rule allowing federally facilitated exchanges to grant premium tax
credits.
There is reason to hope, however, that 2015 enrollment figures will exceed
expectations. The 2015 marketplace application process has been
streamlined for most applicants, and CMS has just released a very user-friendly window-shopping tool [5] that
makes it very easy for individuals to determine what coverage they are eligible
for and what it will cost.
In the end, it is important to remember that the most important goal is not
to enroll individuals in marketplace coverage, but rather to reduce the number
of the uninsured in the United States. About 32 million Americans remain
uninsured—25 percent fewer than were uninsured when the marketplaces
launched. Seventeen million are eligible for Medicaid and thus not for
marketplace coverage. Medicaid enrollment has grown by 8.7 million in 2014
[6] and will continue to grow if more states expand
Medicaid.
Most marketplace enrollees are subsidy eligible, and a vigorous and dynamic
market exists outside the exchange to sign up higher-income enrollees.
Employment is growing and thus more people are likely to have employer-sponsored
coverage. There is every reason to believe that the number of uninsured
will continue to shrink. It is important that the marketplaces enroll enough individuals
to ensure a viable and stable market [7], particularly once the
reinsurance and risk corridor programs end in 2017, but marketplace and
off-the-marketplace enrollees are in the same risk pool, so growth in the market
outside the marketplace also contributes to stability.
There is one vitally important step that the administration could
take to substantially increase 2015 open enrollment.
Beginning in late January and through mid-April millions of uninsured Americans
will file their 2014 income tax returns. Many will become aware at that
point for the first time that they will have to pay a penalty for not having had
minimum essential coverage for 2014. These penalties are relatively
small—for 2014, $95 per adult or 1 percent of income over the filing
limit. Penalties for 2015 will be much higher, $325 per adult and 2
percent. But many will discover that they owe the penalty after February
15 when open enrollment closes and it is no longer possible to enroll for
2015.
The agencies should establish a special enrollment period lasting through
April 15 for anyone who has to pay a shared responsibility penalty for
2014. It
could clearly do so under its authority to authorize special enrollment periods
for “exceptional circumstances [8].” Doing this could not
only extend coverage to many otherwise uninsured individuals and draw into the
exchanges a group that is likely to be relatively low risk, but could also
diminish hostility to the ACA which will surely increase if individuals are
blind-sided by a penalty they can do nothing to avoid.
Article printed from Health Affairs Blog: http://healthaffairs.org/blog
URL to article: http://healthaffairs.org/blog/2014/11/11/implementing-health-reform-new-hhs-2015-marketplace-enrollment-estimates/
URLs in this post:
[1] How Many Individuals Might Have Marketplace
Coverage After the 2015 Open Enrollment Period: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCAQqQIwAA&url=http%3A%2F%2Faspe.hhs.gov%2Fhealth%2Freports%2F2014%2FTargets%2Fib_Targets.pdf&ei=Cf1hVILiJ_T9sATw7oKYDA&usg=AFQjCNFRhlWefjBWqizQsUEyFyfbbbs_sw&bvm=bv.79189006,d.cWc
[2] Navigator resources will be less for 2015 than
they were for 2014: http://healthaffairs.org/blog/2014/09/08/implementing-health-reform-medicaid-eligibility-2015-open-enrollment-and-faqs/
[3] a steady barrage of anti-Affordable Care Act
advertising: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=1&ved=0CB8QqQIoADAA&url=http%3A%2F%2Fkff.org%2Fhealth-reform%2Freport%2Faca-advertising-in-2014-insurance-and-political-ads%2F&ei=ggtiVPvQHs3esASIsIDADQ&usg=AFQjCNHhsfn6D-NTbCb-VBF216YrIRdU3A&bvm=bv.79189006,d.cWc&cad=rja
[4] the Supreme Court’s grant of certiorari in the
King case: http://healthaffairs.org/blog/2014/11/07/implementing-health-reform-supreme-court-will-review-tax-credits-in-federal-exchanges/
[5] a very user-friendly window-shopping tool:
https://www.healthcare.gov/see-plans/
[6] Medicaid enrollment has grown by 8.7 million in
2014: http://www.hhs.gov/healthcare/facts/blog/2014/10/medicaid-chip-enrollment-august.html
[7] It is important that the marketplaces enroll
enough individuals to ensure a viable and stable market: http://healthpolicyandmarket.blogspot.com/2014/11/is-administration-low-balling-their.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+HealthCarePolicyAndMarketplaceBlog+%28Health+Care+Policy+and+Marketplace+Blog%29
[8] It could clearly do so under its authority to
authorize special enrollment periods for “exceptional circumstances: http://www.law.cornell.edu/cfr/text/45/155.420