Costs Continue to Drop on Federal Health Insurance Marketplace

Enrollees are taking advantage of the opportunity to secure lower out-of-pocket healthcare costs on the federal health insurance marketplace during the special enrollment period, a recent CMS report found.

CMS Administrator Chiquita Brooks-LaSure, who was confirmed as CMS Administrator on May 25, pointed to the American Rescue Plan as central to this influx of enrollees accessing lower healthcare options. 

"The Biden-Harris Administration’s Special Enrollment Period and the American Rescue Plan give the American people a chance to find a quality health care plan that works for them, with costs at an all-time low for millions of Americans,” Brooks-LaSure said in a press release. 

The American Rescue Plan passed in March 2021. It implemented temporary advance payments of premium tax credits (APTCs) in order to lower premium costs for consumers. Since this special enrollment period did not require consumers to have a qualifying life event to enroll, enrollment has been higher than in the previous two years.

APTC amounts have also increased during the special enrollment period as of April 1. This attracted even more consumers to the federal health insurance marketplace. Comparing premiums before the increase in APTC on April 1, the costs for new consumers dropped 26 percent from the February through March timeframe to the April through May timeframe. 

Overall, premiums for returning consumers have dropped over 40 percent for returning consumers on HealthCare.gov since April 1.

The median deductible declined 83 percent for new consumers post-April 1 when compared to new consumers who enrolled during the special enrollment period before April 1.

Of the more than one million individuals who chose a health plan that has a monthly premium of $10 or less, more than 347,000 were new enrollees, representing 43 percent of all new enrollees. 

Meanwhile, the remaining population of enrollees that secured $10 monthly premiums—which amounted to over 687,000—made up 30 percent of all returning consumers.

In total, over a third of all consumers who enrolled in a federal health insurance marketplace plan during the special enrollment period (34 percent) have chosen a plant that has a monthly premium of $10 or less, the press release summarized. 

The state with the highest share of enrollees who are eligible for a $10 or less monthly premium was Mississippi. Half of the state's enrollees selected a health plan with a premium of $10 per month or lower.

“Thanks to the Biden-Harris administration’s Special Enrollment Period and expanded premium tax credits from the American Rescue Plan, each week we continue to see more Americans experience the relief and security that comes with affordable, quality health coverage,” HHS Secretary Xavier Becerra said. 

According to the CMS report, plan enrollees continue to be predominantly female. Approximately a tenth of all enrollees reported their ethnicity as Hispanic or Latino, similar to the share of Hispanic and Latino enrollees during the same timeframes in 2020 and 2019.

A large portion of the respondents withheld race and ethnicity information, a common challenge for data collection in the healthcare industry. Almost four in ten enrollees withheld ethnicity data and more than half of all enrollees (54 percent) withheld their racial information.

Florida and Texas have seen the highest number of new plan selections by a large margin. Florida gained nearly 340,000 new plan selections as of May 31, 2021. Texas added nearly 240,000 new plan selections and the closest runner-up was Georgia with almost 88,000 new plan selections.

This continues a trend seen in April 2021 in which states that have resisted Medicaid expansion have witnessed the highest number of new plan selections.

“Having access to quality, affordable health coverage gives Americans peace of mind when they need to seek care,” said Becerra.

“I encourage consumers to visit HealthCare.gov and apply to enroll in a plan before the deadline on August 15,” Brooks-LaSure added.

Federal health insurance marketplace enrollment during the special enrollment period has surpassed 1.2 million enrollees, contributing toward the year’s record-breaking 31 million total enrollment under the Affordable Care Act, a separate HHS report noted.