State-Based Marketplaces See Enrollment Growth in 2018, Despite Roadblocks and Confusion

While national enrollment in Affordable Care Act (ACA) marketplaces reached 11.8 million for 2018 – about 3.7 percent less than in 2017 — enrollment in states that have more control over their marketplaces grew by 0.2 percent. Meanwhile, enrollment fell by 5.3 percent in states that use the federally-facilitated marketplace, according to data released by the National Academy for State Health Policy (NASHP).

State control, carefully calculated outreach, and responsiveness to changing markets were key factors in enrollment increases in the 16 states and Washington, DC, that control at least some aspects of their insurance marketplaces. Eleven of these states and Washington, DC, operate their own marketplaces, known as state-based marketplaces (SBMs). These states design their enrollment websites, control outreach and marketing, and manage the health plans offered through the marketplace.

Five other state-run markets use the federal platform (SBM-FPs), including the federal website Healthcare.gov for eligibility and enrollment, but manage their own outreach strategies and oversee plan management.

In this first of a three-part blog series, NASHP explores how the SBMs and SBM-FPs used five years of experience to develop marketing strategies to improve systems and boost enrollment in 2018.

State Marketplaces Promoted Affordable Options Amid Market Uncertainty

During the 2018 enrollment season, both state-based and federally-facilitated marketplaces contended with shortened enrollment periods, rising premiums, and consumer confusion over the availability of marketplace coverage spurred by federal debates over the repeal of the ACA. Moreover, the Administration’s  decision to discontinue cost-sharing reduction payments (CSR) just one month prior to the beginning of the open enrollment period resulted in delayed premium rate setting, which gave marketplaces limited time to review and adapt their systems and outreach materials based on accurate 2018 pricing. (For more on the impact of CSRs on states and premiums, read: The Administration CSR Subsidy Payments—What Comes Next?)

In response to these changes, many SBMs redoubled their efforts, extended enrollment periods, invested in new marketing strategies and consumer tools to reassure consumers that marketplaces were open for business in 2018 and that affordable options remained available to many consumers.

A common message SBMs relayed repeatedly was the availability of lower-cost plans for residents earning between 100 to 400 percent of the federal poverty level (FPL) who were eligible for advance-premium tax credits (APTCs). Under the income guidelines, the tax credits were available to individuals earning between $12,060 and $48,240 per year, and families of four earning between $24,600 to $98,400 annually. This was especially critical after states took action to shield consumers from premium increases caused by CSR losses.

To protect lower-income enrollees from high out-of-pocket costs, insurers maintained lower deductibles and made up for CSR funding losses by raising premiums. Those increases were added as higher premiums onto silver-level health plans only (CSR benefits are only available through silver-level plans). Consumers who qualify for APTC were protected from these higher premiums as APTCs are calculated based on silver-level premiums, meaning that as silver-level premiums grew, so too did the amount of tax credit individuals could qualify for.

Maryland’s marketplace, for example, reported a nearly 68 percent increase in average APTC received by households in January 2018 over what households received in January 2017. Maryland’s marketplace also reported a 2 percent increase in plan selections made by individuals qualifying for APTC this year, despite an overall 2.7 percent decrease in total plan selections — indicating a drop in selections by individuals in the over 400 percent FPL population. This effect may also have influenced the reported drop in total plan selections in Vermont, which encouraged individuals who did not qualify for APTC to explore purchasing insurance plans through private insurers ( outside the state marketplace) where more affordable options may have been available.

State Marketplace Gains Are Notable as Uninsured Rates Hit Historic Lows

Strong enrollment is notable as many SBM states are reporting historic lows in uninsured rates, including Massachusetts (2.5 percent), Washington, DC, (3.9 percent), and Vermont (3.7 percent). As SBMs expand their coverage reach, many have shifted their focus from attracting new enrollments to retaining consumers who remain eligible for marketplace coverage.

Access Health CT of Connecticut, which saw enrollment growth of 2.3 percent this year, reports a state uninsurance rate of 3.5 percent. Access Health CT reported a 10 percent increase in re-enrollments for 2018. Minnesota and Washington saw a similar trend, reporting a 40 percent and 22 percent growth in renewals, respectively.

Other states continued to see significant growth among new enrollees, indicating effective efforts to break into new communities. This was especially evident in California, which reported 423,484 new enrollees this year, a 3 percent increase over last year.

In upcoming blogs, NASHP will explore the strategic decisions made by SBM and SBM-FPs to enhance marketing and outreach strategies and improve marketplace technology, which are credited with generating gains during this enrollment period. NASHP will also report on emerging strategies as state marketplaces and insurance departments brace for similar market uncertainty in 2019 (see State Health Watch—What’s Ahead in 2018?).