Sara Hansard | Bloomberg Law | 10/29/2019
- California expects to draw 200,000 more consumers with increased state subsidies
- Enhanced enrollment system for brokers and insurers will attract private marketers
States are aggressively seeking to pull more people into the Obamacare markets as open enrollment nears for 2020.
States from Pennsylvania to California are setting up their own exchanges, expanding subsidies, and bolstering their outreach in an effort to boost enrollment and take greater control over their health insurance markets.
The efforts come as the Affordable Care Act markets continue to show signs of stabilizing for 2020 after experiencing turbulence in their early years.
Average premiums for “benchmark” plans on which premium subsidies are based will drop 4% for 2020 in the 38 states using the federal HealthCare.gov exchange, the Department of Health and Human Services reported earlier this month. In addition, 20 more insurers are selling plans in those states, the HHS said.
Open enrollment in those states is set for Nov. 1-Dec. 15. In 2019, 10.6 million people enrolled in both the federal and state-based exchanges. HealthCare.gov opened for “window shopping” Oct. 25, allowing consumers to view plan offerings and prices before open enrollment begins.
Twelve states and the District of Columbia will fully operate their own state-based exchanges in 2020, with Nevada joining the group.
Nevada will save money by setting up its own state-based exchange, Heather Korbulic, executive director of Nevada Health Link, said in an interview. The Nevada exchange enrolled about 83,000 people in 2019.
For plan year 2019 Nevada expects to spend about $12 million on HealthCare.gov, but its 2020 plan year expenditures are only expected to be $5 million operating its own exchange.
In 2020 Nevada also is offering dental plans on its exchange without requiring consumers to buy ACA plans, which is likely to be useful for Medicare beneficiaries, Korbulic said.
In addition, six states are moving to partially operate a state-based market. Under that model, states take on more responsibility for running their health insurance market by engaging in activities such as outreach and promotion, but they continue to use HealthCare.gov to enroll people and determine eligibility for subsidies.
Of those six states, New Jersey, New Mexico, Oregon, and Pennsylvania are Democratic-leaning, but Arkansas and Kentucky are also on the list, indicating some Republican states may be warming a bit to more involvement with the ACA.
Meanwhile, some states are also taking steps to steer people who need individual market coverage into ACA plans, such as by adopting their own penalties for individuals who don’t have health coverage. Republicans in Washington reduced the federal penalty to zero as of 2018.
One of those states is California.
Carrots and Sticks
California, where Covered California is the largest state-based marketplace with 1.4 million enrollees, is making dramatic changes for 2020.
The state will become the first to expand premium subsidies to help people with incomes up to 600% of the federal poverty level. The federal government offers subsidies to those making up to 400% of the poverty level. The state will also fund higher subsidies for households with incomes between 200% and 400% of the poverty level.
The increased subsidies will provide help to families earning up to $150,000 a year.
The subsidies for people between 400% and 600% of the poverty level will help about 230,000 people, Peter Lee, executive director of Covered California, said in an interview.
“Many of those people have insurance today,” but many are expected to move from the off-exchange individual market to Covered California to take advantage of the subsidies, he said.
The $420 million estimated cost for 2020—the first year of the three-year program—is to be partly funded by $300 million in penalties the state expects to collect from people who don’t have qualified health insurance, Lee said.
“Both of those factors—the adding subsidies and bringing back the requirement to have health insurance—the main thing both will do, we hope, is encourage people to see how affordable health care is,” Lee said.
Three-quarters of people eligible to get federal support don’t know or think they’re not eligible, he said.
States are also taking a greater role in marketing and outreach efforts.
The Trump administration has reduced funding for outreach and taken other steps that could reduce enrollment for the federal marketplace, Rachel Schwab, a research associate at the Georgetown University Health Policy Institute, said in an interview.
At the same time, “Many states that run their own marketplaces, you’re seeing them dig their heels in and make sure that they’re funding their navigator programs, making sure that they’re funding their outreach and marketing efforts,” and some states are expanding enrollment periods, Schwab said.
One of the partial state exchanges, Pennsylvania, will spend $400,000 on navigators who will help people get enrolled for the upcoming sign-up period, insurance commissioner Jessica Altman said.
That’s $100,000 more than would have been spent by the federal government, Altman said.
Pennsylvania expects to have a full state-based exchange by plan year 2021, she said.
Role of Web Brokers
The 2020 plan year will also be the first year that web-based brokers and health insurance companies can fully enroll people in ACA plans without having to redirect them to HealthCare.gov to determine their subsidy eligibility.
Web broker Stride Health, headquartered in San Francisco, sells health insurance and other benefits to people in the “gig” economy who work for themselves. That includes people who are independent contractors for Uber, Doordash, Postmates, and Instacart, as well as for self-employed professionals with companies such as realtor Keller Williams.
Stride Health expects to assist millions of those workers during the open enrollment period, most of whom receive ACA subsidies, Noah Lang, chief executive officer and co-founder, said in an interview.
“You’re going to see more of the private sector, I think, leaning in to help grow the market this year as a result,” he said.
To contact the reporter on this story: Sara Hansard in Washington at firstname.lastname@example.org