ACA & The New Normal

Individual Marketplace Enrollment Remains Stable in the Face of National Uncertainty

State-Run Marketplaces’ Enrollment Outpaces Federal Sign-ups

New research from the National Academy for State Health Policy (NASHP).

New data show that overall plan selections in the 2018 open enrollment period in state-based marketplaces (SBMs), the state-based marketplaces that use the federal platform (SBM-FPs) and the federally facilitated marketplace (FFM), remained generally stable despite facing significant national uncertainty.

The National Academy for State Health Policy (NASHP) released new plan selection data that include the three SBMs that wrapped up their open enrollment periods as late as yesterday. With these final enrollment figures, the national total of consumers who selected a plan for 2018 comes to 11.8 million, which is about 3.7 percent less than the 12.2 million consumers who selected a plan in 2017. States that operate an SBM or SBM-FP show an aggregate increase of .2 percent over last year; states that use the FFM show an aggregate decrease of 5.3 percent according to NASHP’s data.

A ‘picture of stability’

“For the first time we now have the full national picture of how the individual marketplaces did this year and it is a picture of remarkable stability,” said Trish Riley, Executive Director of NASHP. “Despite all the uncertainty and challenges we have seen, particularly for consumers living in states supported by state-based marketplaces, we see millions of Americans continuing to benefit from the coverage they get in the individual market.”

According to the data, plan selections in states that operate SBM or SBM-FPs outpaced selections in states that use the FFM, with plan selections in the 17 SBM and SBM-FP state-based marketplaces and the District of Columbia showing a slight increase over last year compared to a 5.3 percent total drop in the 34 states using the federally-facilitated marketplace (See Table 1). In addition, the five states that operated their own marketplaces but utilized the federal platform – called “State-Based Marketplaces on the Federal Platform” – also outpaced federal enrollment, showing an average increase of 1 percent.

The difference in enrollment between state-based marketplaces, that are charged with conducting outreach and education to promote enrollment, and the enrollment in states that rely on the federal government to promote enrollment through the federally facilitated marketplace, is even larger when comparing the changes in enrollment over the two-year period from 2016 to 2018 (See Table 2). Over the two-year period, while the enrollment in FFM states declined by 10.5 percent — enrollment in those states that state-based marketplaces increased by 1.5 percent.

Leaders of the state-based insurance marketplaces stressed a number of reasons that allowed them to attract new customers and re-enroll existing ones including larger tax subsidies that lowered costs for millions of Americans; effective communication and targeted outreach to key populations; heightened news coverage and improved enrollment operations. These efforts combined helped SBM and SBM-FP states to overcome the national uncertainty, shortened enrollment periods in most states, dramatic reductions on marketing for FFM states, premium increases, and confusion over the availability of marketplace coverage in 2018.

In the end, health insurance coverage and enrollment is a state issue

“In the end, insurance coverage and enrollment is a local issue and states all have different priorities and goals,” said Heather Korbulic, Executive Director of Nevada Health Link. “We worked hard to communicate the message in every corner of our state that we had affordable health insurance available despite the market uncertainty.”

This year, on average, state-based marketplaces have performed better, and have been more successful in negotiating with insurers to continue to provide marketplace coverage in their states. The five years of experience administering marketplaces has allowed states to refine their goals and improve their outreach. For example, while overall enrollment in Maryland decreased this year, the state successfully increased enrollment by 12 percent in African-American communities and by 10 percent in Hispanic communities.

In the end, insurance coverage and enrollment is a local issue and states all have different priorities and goals

Across the nation, for people who receive subsidies, many paid less for their plan in 2018 than in 2017. Subsidized consumers are insulated from premium increases because as the cost of their coverage rises, so does the amount of assistance they receive. In 2018 the increase in financial assistance was often greater than the change in their plan’s premiums.

“We know that in California the 1.1 million people who receive financial help saw the price that they pay go down by an average of 10 percent,” said Peter V. Lee, executive director of Covered California. “This dynamic played out across the country and I believe this is a key factor why we saw strong enrollment.”

A common message sent by several of the marketplaces was that lower-cost plans were available for individuals eligible for tax subsidies (individuals between 100-400 percent of the federal poverty level). Minnesota, for example, reported that more than 60 percent of their 2018 enrollees qualified for tax credits, resulting in an average savings of $7,000 per household this year. This was especially true where there was an increase in overall tax credits resulting from state decisions to adjust premium rates in response to the Trump Administration’s decision to end cost-sharing reduction payments.. While the average costs of premiums went down in 2018 for many subsidized consumers, unsubsidized consumers were more likely to be effected by the premium rates. The increases are one possible reason some enrollees sought coverage outside of marketplaces.

The Keys to Strong Enrollment

While pricing plays a huge role in insurance plan sign-ups, marketplace directors credited state flexibility and effective marketing and communications as key to maintaining strong enrollment. Every year, the marketplaces have improved their online and operation systems to better meet consumer needs. To compensate for the shortened enrollment season, Idaho built up momentum weeks before sign-ups began by enabling consumers to shop online ahead of time to make the actual sign-up process more predictable and easier. Many state based marketplaces extended their open enrollment periods beyond the federal six-week period to ensure that their residents had a longer time period to enroll.

The states with home-grown marketplaces also report some of the lowest uninsured rates in the country, suggesting that some states may be approaching a saturation point of covering individuals in their states. Connecticut, which saw enrollment growth of 2.3 percent this year, for example, reports an uninsured rate of 3.5 percent in the state.

State marketplaces and state insurance departments are bracing for new challenges in 2019, when the repeal of the federal penalty takes effect, escalating health care costs, and anticipated growth of association health plans and short-term insurance plans could lead to higher premium prices.

In an effort to provide some relief, 10 state marketplace executive directors have written to Senate leaders asking them to fund a federal reinsurance program to provide federal subsidies to help fund coverage for high-risk, high-cost individuals so premium prices for healthy, young enrollees can be kept low and marketplaces can retain these less-costly consumers. “Minnesota is an example that reinsurance works to stabilize markets,” said MNsure CEO Allison O’Toole. “But Minnesota’s state-funded reinsurance program is just a band aid, and we need a long term federal reinsurance program to help Americans across the country.”

“The increase in enrollment numbers for state-based marketplaces underscores the enduring demand for health care coverage and is a testament to the power of states to ensure coverage is accessible to all consumers,” said Trish Riley, NASHP executive director.


State-by-state chart detailing Marketplace enrollment figures in all 50 states and Washington, DC.

The National Academy for State Health Policy (NASHP) is an independent academy of state health policymakers who are dedicated to helping states achieve excellence in health policy and practice. A non-profit, non-partisan organization, NASHP provides a forum for constructive work across branches and agencies of state government on critical health policy issues.