President Biden recently signed an Executive Order re-opening the health insurance marketplace from February 15th to May 15th. This directive will allow individuals who lost access to health insurance due to the pandemic an extra (and one-time-only) opportunity to enroll in health insurance for 2021.
Before we jump in to what this decision actually means, let's hone in on who it is helping and what problem it is intended to solve. According to Kaiser Family Foundation, a very rough estimate of 2 to 3 million people may have lost employer-based coverage between March and September due to pandemic-related loss of employment. The Commonwealth Fund's estimates were far greater, with research citing that as many as 7.7 million workers lost jobs with employer-sponsored health insurance as of June 2020 because of the pandemic-induced recession. Those lost health plans covered 6.9 million dependents, which brings the grand total to 14.6 million individuals finding themselves without coverage due to the pandemic.
While we are working with really rough numbers and missing accurate numbers for self-insured employers, one conclusion remains clear. There are individuals out there that lost insurance who haven't enrolled in a new plan, despite the possibility of being eligible for Medicaid and other government subsidies. Unsurprisingly, Obamacare enrollments were up this past year, but it wasn't enough to indicate that the millions that lost insurance signed up for coverage.
And don't forget that loss of employer-sponsored insurance isn't the only reason why some Americans don't have coverage. For those that have to purchase insurance on their own, it can come down to a matter of timing (where they miss the deadline altogether) or more likely, cost (a factor made exponentially worse during the economic fallout of the pandemic).
On that note, Forbes reported that four million uninsured Americans could qualify for the lowest level marketplace plans during the re-opening of the marketplace without any out-of-pocket costs, and 4.9 million uninsured individuals could qualify for subsidies to offset the cost of basic coverage. What's the disconnect there?
What Forbes' article points to is that perhaps it's not cost that's standing between individuals and coverage. That leads us to attributing this trend to the constrained deadlines, which opening up the federal exchanges might remedy, and general awareness, which may have taken a hit in recent years due to funding cuts.
A relevant data point to look at is former President Trump's move to decrease funding by 41% for "navigators" to help individuals enroll in Healthcare.gov plans as well as cutting Obamacare advertising by 90%. President Biden hasn't specified what changes he will make to increase funds for awareness, navigation, and advertising but it will be interesting to see how that potentially affects signups with this bonus enrollment period and the user experience in general.
Let's dig in to what opening up the health insurance exchange means practically (and symbolically).
But first, a brief history of open enrollment
When you look back at the history of open enrollment and its purpose to mitigate the risk of adverse selection (i.e., individuals only signing up for insurance when they need it), it was initially six months long in accordance with the Affordable Care Act. This was seen as a one-time shot in the arm to enroll individuals who needed coverage and jumpstart the program. It eventually was abbreviated to three months and then to six weeks.
The problem Biden is attempting to solve is clear: There is a disconnect between uninsured individuals and access to affordable health insurance. Removing the barrier of specific timing requirements is meant to bridge that disconnect.
Don't laid off workers qualify for a Special Enrollment Period anyway?
The shrinking window of open enrollment limits signups but the ACA also included provisions for Special Enrollment Periods (SEPs), which grant individuals 60 days to sign up for a plan if they've experienced qualifying life events, like losing health coverage, moving, getting married, having a baby or adopting a child, among other circumstances. Remember, you can enroll in Medicaid or the Children’s Health Insurance Program (CHIP) any time of year if you're eligible, whether you qualify for a Special Enrollment Period or not. That means they don't have to wait until next open enrollment to sign up for a health plan that wouldn't go into effect until the following year.
If you lose your employer-sponsored health insurance, you qualify for an SEP. So what's the point in opening the federal exchange again to accommodate individuals who have undergone this exact scenario?
Many are wondering why President Biden would opt to open the exchanges to allow people to enroll in health coverage when they should have already had an opportunity, but the truth is that the insurance enrollment process is confusing (even without the added burdens of job loss and a global pandemic).
While it may be largely symbolic to open up the exchanges as a way to offer more affordable and accessible health care (a central campaign promise), giving those who have had a rough year another shot at securing coverage when they need it most is a step in the right direction, even if it sounds a bit redundant. It removes one barrier, at least.
Remember, signing up for health insurance on your own is confusing. Some were signing up for health insurance for the first time outside of an employer-sponsored option. Others might have been focused on the immediate needs of their health or their finances and forgot to enroll or missed the deadline. There's others who may have literally never heard of open enrollment or know they could access insurance following their layoffs. This re-opening of the health insurance marketplace is for them. It delivers on one of Biden's key goals of more accessible healthcare for everyone with the added bonus of simultaneously boosting enrollees on the ACA exchange. The more people that sign up on the exchange, the bigger the risk pool and theoretically, the lower health care costs.
Choose a new plan, even if you already signed up for health insurance this year
From a practicality standpoint, if you've lost your job (due to the pandemic or other factors) and are currently without coverage, you have a bonus three month period Feb. 15 - May 15 where you can sign up for a new plan for the current 2021 year. This (almost) never happens. If you missed your window of opportunity previously to sign up for a plan, or if you simply aren't happy with the option you chose, you can choose a new plan during this time.
Lastly, we expect most state exchanges to re-open in a similar fashion even though they aren't a part of the Executive order. Our best guess it that off-exchange plans will be offered at the carriers' discretion.
We'll be keeping an eye on this as the situation develops.