Affordable Care Act Marketplace Sees Boost in Diversity, Savings

Demographic data shows larger minority population

The report found that 738,000 people received coverage through the 15 state-based marketplaces.

Most of the new enrollees received reductions to their premiums during the special enrollment period through tax credits. Medicaid and Children’s Health Insurance Program (CHIP) gained more than 82.3 million enrollees, an increase of 16.4 percent beyond pre-pandemic levels, CMS shared.

HHS noted that the share of African American enrollees who conveyed their race and ethnicity data increased from nine percent in 2019 and 11 percent in 2020 to 15 percent in 2021. The portion of the population that shared their Hispanic or Latino identity grew from 16 percent in 2020 to 19 percent in 2019.

The largest share of new enrollees were between the ages of 35 and 54 (36 percent). Enrollees ages 18 to 34 made up the next highest share (32 percent).

Policy changes around income requirements shifted the share of individuals with incomes at or above 400 percent of the federal poverty level. Whereas before the pandemic, this population only made up two percent of marketplace enrollment, the American Rescue Plan policy boosted that share to seven percent in 2021.

On track with experts’ anticipations, Florida experienced the highest influx of new enrollees through HealthCare.gov, excluding state-based marketplaces. Florida accepted over 543,000 new enrollees—more than 340,000 higher than its 2020 enrollment.

Experts warned that these spikes in enrollment could require payers to change certain strategies around enrollment.

“Whether the new enrollees are coming from employer plans—folks who lost their coverage during the pandemic—or they are people who were uninsured or now newly-able to be insured because of the subsidy increases, if they do not have familiarity with this type of insurance then there is a real learning curve for the enrollees,” Myra Simon, principal at Avalere, told HealthPayerIntelligence. 

“So that could be a resource demand throughout the year that usually is focused on the first quarter of the year.”

Enrollees see premium cost savings

On average, enrollees who were already on the marketplace saved $67 per month on their premiums, representing approximately 50 percent savings. In total, consumers saved $537 million per month.

Slightly less than 50 percent of the newcomers to the Affordable Care Act marketplace achieved a premium of $10 per month or less. In state-based exchanges, however, a third of enrollees had a monthly premium of $10 or less. The median deductible dropped by more than 90 percent.

Less than one in ten new enrollees did not see a reduction in premiums due to tax credits.

Nearly two-thirds of enrollees (62 percent) entered silver tier health plans, an increase from the share in 2020. Fewer enrollees took up the bronze plan, compared to 2020—30 percent entered a bronze plan, compared to 33 percent in 2020. Gold enrollment stayed steady as did platinum and catastrophic plan enrollment

During original enrollment period, 13 percent of individuals selected a plan with a zero dollar premium. In contrast, during the special enrollment period, 37 percent enrolled in plans with no premium costs. 

During both original and special open enrollment in 2021, individuals with premiums that cost between $0 and $50 made up around 30 percent of the plan selections.

Existing consumers also saw cost savings. The state with the highest cost savings for existing consumers was by far California. Average monthly premium savings amounted to approximately $90 due to the American Rescue Plan, totaling an aggregate of more than $126,400,000 per month.

However, California did not see the highest premium cuts. Vermont, Maryland, New York, Nevada, Pennsylvania, Connecticut, and the District of Columbia all saw average monthly premium savings of $100 or more due to the American Rescue Plan’s advanced premium tax credits.

These savings and influxes of new enrollees could change enrollment and cost-related factors for states in 2021 and 2022.

“Insurers should be looking at their mid-year enrollment trends this year and getting out ahead of whether they need to revisit the assumptions they made about risk adjustment and medical loss ratio when they filed their 2021 plans before the American Rescue Plan was passed,” Simon added in her conversation with HealthPayerIntelligence.