ACA Health Insurance Enrollment Sets New Record

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American Rescue Plan
The $1.9 trillion COVID-19 relief plan awaits formal bill enrollment at the US Capitol on March 10 before it was signed by President Joe Biden the next day. The plan included new financial assistance for Affordable Care Act marketplace health plan enrollees. Photo: OLIVIER DOULIERY / AFP via Getty Images

A record 31 million Americans enrolled in Affordable Care Act (ACA) marketplace or Medicaid expansion coverage nationally this year — nearly 4 million more than signed up in 2020, according to new data from the Department of Health and Human Services (HHS).

Essential CoverageThe total includes about 15 million adults who were covered as of December 2020 through the ACA’s Medicaid expansion.

The ACA enrollment record is likely an undercount, because it doesn’t include some categories of people with private coverage, such as those under age 26 who are covered through a parent’s employer-sponsored insurance plan under an option created by the ACA, Katie Keith reported on the Health Affairs blog. The figures reflect ACA marketplace enrollment as of February 2021 and therefore exclude subsequent signups through Healthcare.gov and state-based marketplaces, which extended open enrollment in response to the pandemic. For Californians, open enrollment through Covered California, the state ACA insurance marketplace, will continue through December 2021.

The federal figures also do not capture the impact of enhanced premium support provided through the American Rescue Plan Act, which became law in March 2021. Millions of people nationwide took advantage of the benefit, officials said.

New Subsidies Helped Enrollment Surge

As of February, more than 1.5 million Californians were insured through Covered California (PDF), according to the June 5 HHS data release. More than 76,000 Californians signed up for health insurance during Covered California’s special enrollment period between April 12 and May 15, according to Covered California.

Peter Lee, the executive director of Covered California, noted that much of the national growth occurred in states where people buy ACA insurance through HealthCare.gov. Marketing efforts for HealthCare.gov withered under the Trump administration. “Now we’ve had a Biden administration that did marketing, that actually got the word out and affirmatively said, ‘If people are uninsured, they should know they’ve got options.’ They’ve also added what I would call fertilizer, which is the new subsidies from the American Rescue Plan,” Lee told NBC News.

I was shocked at the amount of reduction in cost. I was like, ‘Holy cow!’

—Darci Gutierrez, insurance agent

The Biden administration invested millions in publicity efforts and health navigators to inform people about the new benefits and urge them to sign up for coverage. The sizable subsidies for plans have helped make coverage through the ACA more affordable and comprehensive. Once the subsidies became available in April, more than two million people already insured through the ACA returned to HealthCare.gov to adjust their coverage. “After the changes kicked in, the median deductible among people signing up for plans fell from $450 to $50,” Maureen Groppe reported in USA Today. Average monthly premiums dropped from $117 to $86 after the subsidies took effect.

The premium reductions have been sizable for Californians, Bernard Wolfson wrote in California Healthline. Darci Gutierrez, an insurance agent in the Bay Area suburb of Dublin, told Wolfson that one client with a large family saved $425 a month on a silver plan from Blue Shield PPO. “I was shocked at the amount of reduction in cost,” Gutierrez said. “I was like, ‘Holy cow!’”

Lee told NBC News that the subsidies have been a boon for workers whose income makes them ineligible for Medicaid and helped others by capping premiums at 8.5% of total income. “It really is a sea change.”

Enrollment also likely increased this year in part because of “health fears related to the pandemic” and the loss of coverage due to pandemic-related job loss, wrote Margot Sanger-Katz and Sarah Kliff in the New York Times.

Unclear Path for Federal Public Option

Biden’s proposed federal budget, released at the end of May, included a statement of support for but no plans or funds dedicated to a public option, suggesting that Biden’s campaign promise of a federal public option has been shelved for now by the administration.

Supporters have long wanted to create a so-called public option — a health insurance plan offered by the federal government in all Affordable Care Act marketplaces — as a means of putting pricing pressure on private insurance plans.

“The budget proposal does not detail how the administration plans to make any of these changes, several of which were campaign promises, nor does it include the expected price tag of these reforms in the overall budget costs,” Justine Coleman reported in The Hill.

Instead, the proposed budget looks to make ACA marketplace subsidies permanent, a benefit that would cost an estimated $163 billion over the next decade, Coleman reported.

Meanwhile, Representative Frank Pallone (D-N.J.) and Senator Patty Murray (D-Washington) intend to revive the public option in Congress. They “plan to work with our colleagues to craft comprehensive legislation to create a federal public option,” Murray wrote in a tweet. They’ve sent a letter to stakeholders requesting feedback on a public option by July 31.

Democrats are divided over the public option. Some prefer a single-payer health care system to a public option, which they view as a half-measure that will preserve many undesirable characteristics of the current health care system. In light of the lack of support from any Republicans, a public option appears to be unlikely in the near future, Stephanie Armour reported in the Wall Street Journal.

“Many progressive Democrats and President Biden are facing the political reality that far-reaching health care overhauls aren’t likely to succeed in the short term, which means their hopes may rest instead on building on recent Affordable Care Act changes and reducing prescription drug costs,” Armour wrote.

States Debate Their Own Public Options

Nearly a dozen states are exploring the possibility of some form of public option for their residents, according to a CHCF issue brief released in March. Nevada’s legislature is considering a public option, and Governor Steve Sisolak has said that he would sign the bill. For the third year in a row, Connecticut has shelved a bill to create a public option after Governor Ned Lamont said he would not sign it. Washington is the only state currently offering health plans from a public option, and the plan is available in only 19 of the state’s 39 counties, Tami Luhby reported for CNN.

California policymakers are exploring the feasibility of a single-payer health care system. The state created the Healthy California for All Commission in 2019 to study the issue.

CHCF President and CEO Sandra R. Hernández is a board member of Covered California and a member of the Healthy California for All Commission.

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