In the United States, as the COVID-19 pandemic shuttered non-essential businesses, millions lost their jobs and with them, employer-sponsored health coverage. This drove a spike in the rate of uninsured patients, along with a shift from commercial employer-sponsored plans to other coverage options, such as coverage bought through state- and federal government-run health insurance exchanges, Medicaid and short-term health insurance plans.
Implemented as part of the 2010 Affordable Care Act reforms, health insurance exchanges vary from state to state. For the 2021 plan year (patients enroll annually), there are 15 fully state-run health insurance marketplaces (SBMs), six state-based marketplaces that use the federal platform (SBM-FP), six state-federal partnership marketplaces and 24 fully federally-run marketplaces. Some state specific changes influenced the open enrollment period in a positive way.
Here are a few notable developments from states with federally-run exchanges for 2021:
- Delaware: Delaware passed a law to reduce the out-of-pocket cost of insulin to patients by capping it at $100 a month. The law ensures that all plans regulated by the state should have at least one insulin product included on the lowest tier of their formularies. Delaware is unique in that it has only a single insurer (Highmark) offering a plan on its exchange in 2021.
- Florida: Not only does this state have a new insurer (AvMed) joining its exchange, its insurers – Ambetter, Oscar Health, Bright Health Insurance Company, Cigna and Florida Blue – added more counties to expand their coverage area.
- Georgia: This state will be exiting the HealthCare.gov platform as of 2023, having attained a waiver to do so from the Trump administration’s Centers for Medicare & Medicaid Services (CMS). Residents seeking enrollment will have to go through private brokers or directly approach an insurer.
- Iowa: Along with a drop in average premium rates, this state posted a 29% decline in its benchmark premiums -- the largest benchmark premium decrease in the country.
CMS releases weekly enrollment updates of states that use the HealthCare.gov exchange portal. Here is a glimpse of the plan selection results for these states:
- The share of members renewing their coverage increased by 2.7%, but new enrollees to the exchanges decreased by 9.7% – possibly because many members who lost income were eligible for Medicaid too.
- Overall, the highest year-over-year enrollment increase was in Texas, which has the highest uninsured rate in the country (per Clarivate’s Managed Market Surveyor Suite, as of July 2020). Although the state’s Medicaid enrollment was higher than that of exchanges through December 2020, corresponding with the national trend (per Clarivate’s HPA COVID-19 Dashboard, which captures both historic and forward-looking trend data), a spike in its exchange enrollment might have been because Texas is the most populous state on the federally-run exchanges.
Among factors likely influencing enrollment:
- The average premium for benchmark (second lowest cost silver plan) plans reduced by 2%. Several new insurers - including Oscar Health, Friday Health Plans, and UnitedHealth Care - joined or rejoined the market, and many expanded within their existing markets. Idaho, Nebraska, and Utah expanded Medicaid, adding a coverage option in these states.
- New Jersey and Pennsylvania started using state-based exchange platforms in 2021. Together, they accounted for 7% of enrollment through HealthCare.gov in 2020.
President Biden signed an executive order establishing a special open enrollment period for the federally-run exchange, HealthCare.gov, to run from February 15 to May 15, with the aim of mitigating pandemic-related coverage needs. Job loss is considered a qualifying event for enrollment through state or federal exchanges at any time of the year.
Exchanges became a popular choice for many newly-uninsured Americans during the 2020 economic shock, offering those lacking employer-based policies affordable coverage. As the profitability of these plans has become more predictable, insurer participation in these plans has increased, leading to more competitive pricing in many state markets.
As the economy mends, we may see a shift back from exchange plans to employer-sponsored policies, but the exchanges are likely to emerge from the pandemic with a lasting gain in utilization (per Clarivate’s HPA COVID-19 dashboard).