Insurers, brokers and analysts are preparing for re-opening of the federal and state Affordable Care Act marketplaces on Monday, with some carriers adjusting their projected revenue for 2021, switching up their marketing strategy and worrying over the unexpected impact to their risk pools.
HHS will allow individuals to enroll in coverage through HealthCare.gov from Feb. 15 to May 15, which covers 36 states. The 14 states that operate their own marketplaces are also opening up enrollment during this time. Ordinarily, signing up for an exchange plan is tightly restricted outside a six-week period late each year.
The Trump administration refused to create a special enrollment period during the COVID-19 pandemic, despite requests from providers, insurers, consumer groups and Democrats to do so. The administration said the special period would be unnecessary, as people could enroll due to changes in employment coverage or other circumstances without the designation. Several states reopened their own exchanges shortly after the crisis began to alleviate concerns that people without insurance would be reluctant or unable to access care during the pandemic.
The Kaiser Family Foundation found that opening the exchanges would give 15 million people access to plans. Four million of those people would qualify for a free plan under the ACA and 4.9 million would be eligible for subsidies to lower the cost of their coverage.
While insurers' prices and plan designs won't change from what was offered during enrollment in the fall, companies still expect this new period to shake up their operations. Here are five things to watch regarding how this will impact insurers' operations:
1. New members mean new risk. Insurers set their 2021 premiums without accounting for a special enrollment period, and a new influx of customers could add some uncertainty to their risk pools. Insurers that serve as the only option in an area's exchange will be disproportionately impacted by the extension of the enrollment period and uncertainty over COVID-19 costs.
"One of the reasons that there's a limited enrollment period is so that people don't just come on who are sick," said Brad Ellis, a senior director at Fitch Ratings. "There may be some adverse selection."
2. New members also mean new revenue. During Molina Healthcare's fourth-quarter earnings call on Thursday, CEO Joe Zubretsky estimated that the special enrollment period could add up to 30,000 people to the insurer's rolls and $150 million in revenue for the year. At the end of 2020, Molina had approximately 400,000 marketplace enrollees.
"With the executive order in the White House, it just couldn't be better for government-sponsored managed care," Zubretsky said.
3. Medicaid insurers stand to see membership increases too. If enrollees look for exchange coverage, they may be pleasantly surprised to find they qualify for Medicaid, Centene Corp. CEO Michael Neidorff said during an earnings call. The St. Louis-based insurer expects to see those rolls grow. Since the public health emergency started, the company has added 1.7 million lower-income adults and children, with Medicaid membership reaching 13.6 million people at the end of 2020.
The Urban Institute in January found that just 29% of uninsured adults tried to obtain Medicaid.
"It's not all marketplace. A lot of these individuals will qualify for Medicaid," Neidorff said during the call. "As we saw last year, that was a positive."
4. Congress could increase insurance subsidies. On Feb. 8, the House Ways and Means Committee proposed a plan to subsidize coverage in 2021 and 2022 for higher-income people who don't qualify for subsidies currently and boost contributions for lower-income people who already qualify for financial help and max out allowances for anyone collecting unemployment benefits in 2021. Two days later, eight organizations across the healthcare industry came together to form the Affordable Care Act Coalition, and advocate for increased subsidies for consumers and states that expanded Medicaid.
"While we sometimes disagree on important issues in healthcare, we are in total agreement that Americans deserve a stable healthcare market that provides access to high-quality care and affordable coverage for all," the Affordable Care Act Coalition said in a statement. "Achieving universal coverage is particularly critical as we strive to contain the COVID-19 pandemic and work to address long-standing inequities in healthcare access and outcomes."
5. ACA marketing funds could make a comeback. The White House said it plans to run an outreach campaign with paid advertising and direct-to-consumer marketing. This represents a dramatic shift from the Trump administration, which cut the ACA's advertising budget by 90%. California and other states have already announced plans to increase their marketing budgets for the special enrollment period.
"Covered California does not skimp on the marketing and awareness," said Christina Inglese, executive director of commercial products at L.A. Care Health Plan. "They are very in tune with how that is actually critical to the success of open enrollment, and we're glad to hear that it's being shepherded across the nation."