It’s that time of year again: Health marketplace open enrollment is about to begin.
Open enrollment, which starts Nov. 1, is the annual period when people can enroll in a health insurance plan for the next calendar year. Individuals, families and small businesses may sign up for a new plan, change their current coverage or reenroll in their current plan through a state or federal marketplace also known as an exchange.
The national uninsured rate hit an all-time low of 8% in early 2022. Increased coverage is partly attributable to record enrollment for marketplace plans. Nearly 14.5 million plans were purchased across 33 states in 2022, compared with about 12 million in 2021, using the federally facilitated marketplace on HealthCare.gov and state-run marketplaces. Several states—including Kentucky, Maine and New Mexico—transitioned away from the federal marketplace and launched state-based options for the first time in 2022.
Federal Efforts to Reduce Premium Hikes
Marketplace premiums have been relatively stable in recent years. However, preliminary data from the Kaiser Family Foundation suggests a change could be on the horizon. An early look at premium rate filings from 72 insurers across 13 states and Washington, D.C., estimates a 10% increase, with most rises between 5% and 14%. Insurers attribute the increases to several factors, including inflation and increased utilization of services.
The American Rescue Plan Act, which Congress passed last year, included temporary premium subsidies to reduce costs to consumers. In 2022, Congress extended those subsidies for three years through the passage of the Inflation Reduction Act. With these subsidies, data suggests that premiums could remain mostly flat for marketplace enrollees in 2023, as the credits lessen the effect of premium increases. For example, premiums would have been 53% higher in 2022 without subsides.
To bolster access to marketplace plans, the Centers for Medicare & Medicaid Services is allocating nearly $100 million to navigator programs that help people find and enroll in marketplace plans; this includes a focus on outreach to help underserved communities.
Health Emergency Expiring: What Next?
The federal COVID-19 public health emergency brought with it more help for the states. In particular, the Families First Coronavirus Response Act provided a 6.2 percentage point increase in the Medicaid match rate (the Federal Medical Assistance Percentage) to qualifying states in anticipation of increased program enrollment. To receive the enhanced rate, states were required to maintain continuous Medicaid coverage for all individuals who enroll over the course of the pandemic, even if they experienced a change in circumstance that would normally make them ineligible for the program.
The enhanced federal funding and continuous coverage requirement will expire with the end of the health emergency, currently set for January 2023 . The Department of Health and Human Services will give states a 60-day notice prior to the emergency expiration, allowing time to prepare.
Estimates suggest that one-third of adults who are set to lose Medicaid coverage could be eligible for subsidized insurance coverage through the federal marketplaces. To ensure continuous coverage for people, states can work with Medicaid agencies to locate past enrollees no longer eligible for the program and provide notice and opportunity to transfer to a state marketplace. Individuals would then need to apply during a 60-day special enrollment period.
Many states are already pursuing policies to help those eligible transition to marketplace plans and maintain coverage:
- California’s state-based marketplace will now automatically enroll some consumers into the lowest-cost silver plans.
- Arizona, Colorado, Georgia, Indiana, Iowa, Michigan, New Hampshire, Rhode Island, Utah, Virginia and Washington created webpages to alert enrollees about the upcoming changes to help maintain coverage. The webpages contain information such as contact information for state navigators who can help those during the transition as well as answers to frequently asked questions.
- Massachusetts is increasing its 2022 navigator budget to allow more workers at call centers to reach out to those dropped from Medicaid and assist their transition to the state marketplace.
- Oklahoma plans to alert affected enrollees as soon as the health emergency ends and send three notices to those members across multiple communication channels.
- Pennsylvania is doubling the special enrollment period to 120 days.
States Adding Public Options
A public option is a government-run health plan that competes with private plans on the marketplace and is available to anyone to purchase. Three states have enacted legislation to offer public option plans as part of their state insurance markets.
Washington was the first state to offer a public option, the Cascade Select. Legislation required the state Health Care Authority, in consultation with other agencies and stakeholders, to offer multiple government-sponsored public option plans available through the marketplace. The bill limits provider reimbursement rates by capping payments at a percentage of what Medicare pays for similar services. Two years into implementation, the program offers plans in 25 of the state’s 39 counties.
Colorado launches its public option plan in 2023. The state’s methodology for premium-reduction targets requires plans to lower premiums by 5% in 2023 (compared with 2021 plans), by 10% in 2024 and by 15% in 2025.
Nevada also passed a bill to offer public option plans starting in 2026. The bill requires health insurers that want to continue to participate in the state’s Medicaid managed care program to submit good-faith bids to offer public option plans. Additionally, the bill allows state to accept bids from non-Medicaid insurers as well. One of the bill’s main goals is to use state purchasing power to lower premiums and costs for Nevada residents.
Kevin Davenport is a policy associate in NCSL’s Health Program.