On August 12, 2019, the Centers for Medicare and Medicaid Services (CMS) released two new reports on Affordable Care Act (ACA) marketplace enrollment and trends. The first report includes a full year of marketplace enrollment data for the 2018 plan year and preliminary effectuated marketplace enrollment data for the 2019 plan year. The second report discusses trends in both on- and off-marketplace enrollment for 2018.
The reports show that marketplace enrollment has remained stable, albeit with a slight decline, on a year-over-year basis. Similar to last year, 10.6 million individuals effectuated their coverage for February 2019. Yet, even as marketplace enrollment remains steady, CMS remains concerned about the overall individual market, and the second report documents the decline in individual market enrollment among consumers who are not eligible for advance premium tax credit (APTC). More than 2.5 million of these unsubsidized consumers exited the individual market—a drop of about 40 percent—from 2016 to 2018.
CMS released similar reports in 2018. At that time, CMS issued a third report on marketplace stabilization efforts, which discussed consumer satisfaction rates, the utilization of special enrollment periods (SEPs), and the SEP verification process; CMS did not release a similar report this year. The agency intends to issue additional effectuated enrollment data for 2019 later this year.
Effectuated Enrollment For 2018 And Early 2019
For a consumer’s insurance policy to go into effect (or, effectuate), they must both select a plan during the enrollment process and pay their premium. Thus, effectuated enrollment refers to the number of individuals with an active health insurance policy who paid their premium.
As of February 2019, more than 10.6 million individuals had effectuated their 2019 marketplace coverage. This reflects data from the marketplaces in all states (both through state-based marketplaces and HealthCare.gov) and roughly equals the number of effectuated consumers at the same time last year. About 92 percent of the 11.4 million consumers who selected a plan during the 2019 open enrollment period effectuated their enrollment. Effectuated enrollment remained largely the same as in 2018 (when more individuals effectuated their coverage compared to 2017).
Of the 10.6 million people who effectuated coverage, the vast majority—87 percent, or nearly 9.3 million people—received APTC. This is the same level as in 2018. A little more than half of 2019 effectuated enrollees were also eligible for cost-sharing reduction payments (meaning that about 52 percent of those who effectuated their coverage had incomes between 100 percent and 250 percent of the federal poverty level).
For 2019, the average total monthly premium was $594.17 and the average monthly amount of APTC was $514.01. Both are down by about one percent compared to 2018. The states with the highest proportion of subsidized enrollees were Alabama, Florida, Mississippi, Nebraska, and Oklahoma.
Effectuated enrollment varies over time. There are a variety of reasons why a consumer might drop their marketplace coverage. Based on a 2018 CMS report, most individuals—up to 75 percent—reported dropping their marketplace coverage because they gained access to new sources of coverage (such as job-based coverage, Medicare, or Medicaid). Consumers also dropped coverage due to affordability (15 percent) or dissatisfaction with their plan (under 10 percent).
Effectuated coverage dropped from 10.5 million individuals in February 2018 to 9.2 million individuals in December 2018. Although coverage was lower at the end of the year, the average monthly effectuated enrollment in 2018 was 9.9 million individuals (which is slightly higher than the 9.8 million individuals in 2017). This means that more enrollees remained covered through their marketplace plans throughout 2018 relative to 2017. This was largely consistent with a 2018 projection by the Congressional Budget Office of 9.7 million individuals.
The effectuated enrollment report released yesterday also includes a significant amount of state-specific data for effectuated enrollment for 2018.
Enrollment Trends From 2014 To 2018
A second CMS report provides enrollment data from 2014 to 2018, with an emphasis on separating enrollment trends among consumers who qualify for APTC and those who do not. This data covers enrollment in the individual market, both inside and outside of the marketplaces, in all states except Massachusetts and Vermont. (The analysis does not include non-ACA coverage, such as grandfathered plans, grandmothered plans, excepted benefit plans, or student health insurance plans.) The report—which includes both national and state-specific data—uses data from the ACA’s risk adjustment program and effectuated marketplace enrollment data.
Average monthly enrollment peaked in 2016—reaching 14.5 million—after steady increases from 2014 (8.4 million) and 2015 (13.6 million). However, this trend reversed in 2017 when enrollment declined by about 10 percent, the first time there was a decline since the marketplaces opened in 2014. This was followed by a decline of an additional 7 percent in 2018. The decline in enrollment in 2018 was attributed to a spike in premiums of about 26 percent (compared to a 7 percent increase in 2016 and a 21 percent increase in 2017).
Overall, CMS estimates that unsubsidized enrollment declined from 6.3 million in 2016 to 3.8 million in 2018. This drop of about 2.5 million people amounts to a 40 percent drop nationwide. In 2014, enrollment of subsidized consumers was 23 percent larger than unsubsidized consumers. By 2018, subsidized enrollment was more than double, about 122 percent, the size of the unsubsidized enrollment. The drop in unsubsidized enrollment for 2018 was slightly offset by an increase in subsidized enrollment: unsubsidized enrollment declined by 1.2 million people (24 percent) in 2018 compared to an increase in subsidized enrollment of 330,000 people (4 percent).
The report also includes state-specific data on enrollment trends. State enrollment varies significantly and is affected by state decisions that expand or reduce the size of the individual market. Decisions to, for instance, expand Medicaid or adopt the Basic Health Program can significantly reduce the number of subsidized enrollees, leading to a smaller individual market risk pool. CMS asserts that 10 states began to see enrollment declines in the individual market from 2015 to 2016. In response, some states—including Alaska and Minnesota, which were among the 10 states to see early declines in enrollment—have established state-based reinsurance programs to help stabilize their individual markets.
Nine states lost over 40 percent of their unsubsidized enrollment from 2017 to 2018. States with the largest declines in enrollment among this population included Arizona (79 percent), Georgia (71 percent), Iowa (91 percent), Nebraska (78 percent), Oklahoma (71 percent), and Tennessee (76 percent). Other states—such as Alaska (7 percent) and North Carolina (4 percent)—saw an increase, albeit slight, in the enrollment of unsubsidized consumers.