What to Expect During the COVID Marketplace Enrollment Period

On February 15, 2021, HealthCare.gov, the federal health insurance market in 36 states, reopened for registration for 12 weeks. Although it is designed as a “special” enrollment period, it is more like an open enrollment period. No qualified life event is required for application. People who are currently uninsured can sign up, and people who are already enrolled in market plans can switch to other policies. Almost all state marketplaces have also reopened registration for their residents. At the outset, this COVID registration period may not seem much different from the open registration period that has just ended, although other changes (planned or under discussion) might make it easier for users to sign up this time.

How many people can register?

An estimated 8.9 million uninsured Americans are eligible for market subsidies today but are not enrolled. Racial and ethnic minorities are disproportionately represented in this population. (Illustration 1)

Another 6 million uninsured people can purchase unsubsidized coverage through the market today. That includes 3.4 million whose income is too high (over 400% FPL) to qualify for subsidies. Additionally, individuals who have already signed up for market coverage through HealthCare.gov (8.3 million) will have the option to change their plans during the COVID registration period. In some state marketplaces, already registered consumers can also change their plans during this period. Consumers should check with their state market for more details.

Are Market Health Plans Affordable?

In 2020, 84% of market participants received Premium Tax Credits (PTC), which reduced their monthly premium. 49% also received cost sharing reductions (CSR), which lower the deductibles in silver plans.

Premium grants for market plans are available for people with an income between 100% and 400% of federal poverty. The subsidies cover the cost of a benchmark silver plan (second lowest cost) minus a required individual contribution linked to income on a sliding scale. Even with an income at the poverty level ($ 12,760 in 2021), an individual must pay $ 22 / month, or 2.07% of household income, for the benchmark silver plan. Subsidies decrease sharply with increasing income. In double poverty, a person must contribute $ 139 / month (6.52% of income) and in triple poverty they must contribute $ 314 / month or 9.83% of income. Market subsidies end above fourfold poverty, so people have to pay a significant portion of their income for coverage. With age rating, the premiums for older people can exceed 20% of income. (Figure 2)

Figure 2: Premium for the National Average Benchmark Plan after Tax Credits for Premiums, 2021

Incentive tax credits can be applied to any metal-level market plan and cover a greater proportion of the total premium for plans that cost less than the benchmark plan. In some cases, the grant can cover the full cost of a bronze-level plan. An estimated 4 million uninsured people are eligible for a zero-cost bronze plan this year. However, since cost-sharing subsidies are only available through silver plans, choosing a “free” bronze plan involves serious tradeoffs. Deductibles in bronze plans typically approach $ 7,000 per year, while deductibles in silver plans with CSR can be as low as $ 200. A KFF survey found that 75% of uninsured people are not interested in free bronze plans with such high deductibles. Affordability concerns are cited by two-thirds of uninsured as the main reason for insufficient coverage.

Could Market Subsidies Improve?

Congress is considering new COVID relief laws that would, among other things, increase the level of market subsidies and eligibility. A home bill would give bonus tax credits to individuals with incomes greater than 400% FPL and significantly increase the tax credits for those on lower incomes. Millions of currently subsidized market participants would be entitled to cheaper cover. The greatest impact would be felt by approximately 3.4 million current subscribers with incomes up to 150% FPL (as well as eligible uninsured individuals on that income level) who would be able to purchase a zero-premium silver plan with generous cost-sharing grants. In addition, uninsured individuals with incomes greater than 400% FPL could receive new tax credits, with older adults facing old age premiums receiving the greatest relief.

What other factors affect registrations?

The Biden Administration will invest in a national outreach campaign to educate people about the new market registration option. Previously, the Trump administration had cut marketing spending by 90%. The KFF tracking survey for December 2020 found that during the last open registration, less than one in five consumers knew the registration deadline, even as it approached.

The Trump administration had also slashed spending on assisting navigator registration to $ 10 million a year from $ 63 million in 2016. Navigator companies tended to pre-load their federal awards, to maximize the help they could offer during open registration. Many programs have limited resources to help consumers during the COVID registration period. At this point, the Biden administration has not disclosed whether or how much additional Navigator funding could be released to HealthCare.gov states during the COVID registration period. During the Trump administration, more than $ 1.3 billion in unspent user fee revenue was accumulated in the federal market, leaving money to invest in consumer aid, which could have a material impact on filings.

A recent KFF survey found consumer help is important – 60% of market participants had difficulty applying for coverage in 2020 and 40% of those who got help with registration said they would not be without it could have registered. The survey also found that in 2020, nearly 5 million consumers were looking for help but couldn't find it.

The Biden Administration announced that it will regularly release data on registrations during the COVID registration period. With the aim of expanding health coverage to as many people as possible during the pandemic, success may depend on the impact of increased premium subsidies (if in place), as well as the effectiveness of public relations.