May 8, 2014 | Rosemarie Day

First Year Finish Line

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The Affordable Care Act’s first open enrollment period for the individual Marketplace is officially over and the results are in:  8 million1 people signed up for health insurance through the state and federal Marketplaces.  This is a respectable number – it exceeds the original goal of 7 million and leaves some room for attrition due to nonpayment of premiums.  It’s a remarkable number when you consider all of the technical difficulties that people encountered initially with the exchange websites.

HOW’D WE GET THERE?

As expected, there was a last minute surge in enrollments – almost half of all Marketplace enrollments occurred at the end (between March 1st and April 19th), compared to the first 5 months of open enrollment. Who were the biggest procrastinators?  Young adults!  They were 24% of enrollees in the fall, and 31% of enrollees during the final surge.

WHO SIGNED UP?

In the final analysis, here are a few key metrics:

  • YOUNG PEOPLE:  Young adults (ages 18-34) are 28% of the enrollees.  This is a closely watched number, because a healthy share of young people will help to keep overall Marketplace premiums down.  While 28% is a lower share than the approximately 40% of the population who are young adults, it’s not enough of a disparity to drive premiums up much – one estimate is that premiums would need to be 2% higher, which many insurers may have already accounted for.2
  • SUBSIDIES:  90% of Marketplace applicants applied for financial assistance and 85% of enrollees (6.7 million) qualified for some level of financial assistance.  The remaining 1.2 million enrollees have no subsidies.  To complete the picture, there are a significant number of people projected to enroll in plans that meet the new Affordable Care Act standards outside of exchanges (5 million, CBO estimates), and none of these enrollees will receive financial assistance.
  • HEALTH STATUS:  This is not something that exchanges are publicly tracking, but insurers will be analyzing this over the coming months to see if their enrollees’ health status is in line with their projections.
  • PREVIOUSLY UNINSURED:   As I mentioned in my last blog, the federal government isn’t tracking this number in a complete way, so we need to rely on survey data.  A McKinsey survey indicates that 27% of Marketplace enrollees were previously uninsured.3  And other surveys show that the number of uninsured people is decreasing (from 20.5 to 15.8% or 17.9 to 15.2%, depending on the survey)4, which suggests that many of the people signing up for health insurance through the Marketplaces and Medicaid were previously uninsured.

ROOM TO GROW

While many are pleased with these first year results, there’s a lot of room to grow.  Here are a couple of the missed opportunities:

  • LIMITED OUTREACH:  There were limited funds for outreach and marketing in the 34 states with federal Marketplaces.  Navigator funds averaged $1.50 per uninsured person in those states, but were significantly higher in states that ran their own Marketplaces, ranging from $7 per uninsured person to $34 per uninsured person (as a comparison, Massachusetts spent about $7 per uninsured person on a community based outreach program during its successful rollout of health reform in 2006-2007). Large states with a high percentage of uninsured people (like Texas) suffered the most from this uneven access and distribution of funding.
  • WHAT MANDATE?  There was very little publicity of the individual mandate, i.e. the tax penalty that people will have to pay if they don’t sign up for insurance.  It’s almost a taboo subject, but there’s evidence that letting people know about the mandate matters – more people are likely to sign up for insurance, and a higher proportion of those will be healthy.5  

LOOKING AHEAD

In the coming months, here are a few things that we’ll be focusing on:

  • CLOSING THE BOOKS:  How many exchange enrollees make their payments?  How well is the subsidy administration process working?
  • LESSONS LEARNED:  What did exchanges and insurers learn from the first open enrollment period?
  • PREPARING FOR NEXT OPEN ENROLLMENT:  There will be new enrollees to recruit, and there will be current ones to retain.   Both of these initiatives will be key to the long term viability of Marketplaces.

 


  1. ASPE Issue Brief, Health Insurance Marketplace for the period 10/1/13-4/19/14.  May 1, 2014.
  2. Kaiser Family Foundation: The Numbers Behind Young Invincibles and the ACA, Dec. 17, 2013.
  3. McKinsey Individual Market Enrollment: Updated View. March 6, 2014.
  4. The survey released by the Robert Wood Johnson Foundation suggests the number of uninsured has decreased from 17.9% to 15.2%, while the RAND study states that the number of uninsured has decreased from 20.5% to 15.8%
  5. New England Journal of Medicine. The Importance of the Individual Mandate: Evidence from Massachusetts. Chandra, Gruber & McKnight, January 2011.