Last week, Healthcare.gov reopened for business, thanks to an executive order President Joe Biden signed in January. The move may help millions of uninsured Americans get health insurance. For many, getting covered may cost less than they think.
Now through May 15, 2021, people in 36 states can sign up for coverage through the federal health insurance marketplace. Several states which operate their own health insurance marketplaces have extended already-prolonged open enrollment periods or reopened according to the federal timeline.
“I think this is a really good thing,” said Dan Hilferty, former CEO of Independence Health Group, a Blue Cross Blue Shield-affiliated health plan with eight million members nationwide.
“Opening enrollment again in mid-year can only begin to turn the tide toward a direction of creating a system where more people are included,” Hilferty said.
Many people don’t realize the Marketplace is an option. A 2018 Commonwealth Fund survey showed that two-thirds of uninsured adults hadn’t even tried to get coverage; 36% assumed they wouldn’t be able to afford it, 8% said they didn’t think they were eligible, and 7% were unaware of the Marketplace.
But health coverage via the Marketplace has gotten more affordable. The choice of plans expanded in 2021 and average premiums went down.
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In 2021, 8.5 million people qualified for subsidies and millions more may be eligible. Of the nearly 30 million uninsured Americans before the pandemic, an estimated 9.2 million could have qualified for subsidized Marketplace plans—a figure that may be higher now given widespread unemployment due to the pandemic.
The Biden Administration is trying to close the awareness gap with a new $50 million advertising and outreach campaign. These funds could be the key to getting people enrolled.
The Trump Administration had slashed funding for open enrollment advertising and outreach by 90%—to just $10 million nationwide—and enrollment support by 84%. These cuts appear to have depressed new sign-ups. Before 2021, new Marketplace enrollments fell each year since the high point in 2016.
Restoring funding may be critical to lowering the number of uninsured Americans.
In a survey conducted by the Kaiser Family Foundation, 94% of consumers who got enrollment assistance in the past year said it was helpful, and four in ten said they wouldn’t have gotten the same coverage without help.
Advertising and outreach spending may also help attract a wider swath of consumers and allay economists fears of adverse selection—the phenomenon where people wait to sign up until they need healthcare services. When only the sickest people enroll, insuring them is more expensive. The more people who sign up, typically, the more likely it is that healthier, less costly people will join the risk pool. Spreading the costs across more people helps keep insurance costs in check.
Fears of adverse selection may not be founded for this special enrollment period.
According to the Commonwealth Fund, during special enrollment periods offered by state-based exchanges in the first half of 2020, more people—including more young people—signed up. For example, in Washington, D.C., 53% of special enrollment sign-ups were people ages 18 to 34, who are generally less costly and more attractive to health insurers.
“It’s less about worrying about adverse selection,” said Hilferty. “It’s more about expanding to as many people as possible to broaden your risk pool and to spread costs across a broader population.”
The more people who are included, said Hilferty, the better chance insurers and healthcare providers have of creating relationships with consumers, improving health status, and lowering costs.
To build effective relationships with consumers, though, health insurers need to use the reopening of Healthcare.gov to make a good “first impression,” according to James Brown, CEO of Smart Communications.
“It’s important for carriers to review the emotional tone of their onboarding process and communications as this can also adversely affect customer satisfaction and retention after enrolling,” said Brown.
The Marketplace Helps Mental Health
The special enrollment period may help millions of Americans get coverage for much-needed mental health care.
Greater access to mental health care can also help lower overall medical costs. People with mental health conditions are more likely to have physical health conditions. People with both can cost two and a half times more than people with a physical condition alone.
Improving access to mental health care, especially during the Covid-19 crisis, is therefore, good for insurance companies as well as consumers. And it should not be a political issue, according to Hilferty.
“People with cognitive, behavioral, or mental health issues, they’re not Republican [or] Democrat, they’re all of us,” Hilferty said. “Unless we treat behavioral health equally to physical health, we’re never going to treat the whole individual or never going to get to a system that really takes care of people.”
Hilferty, who was also chair of the Blue Cross Blue Shield Association board, has long advocated for universal coverage.
“Healthcare is a right, not a privilege,” Hilferty said.
If you can agree on that, he said, and that more people with health insurance is a good thing, then it’s hard to argue against reopening the Marketplace.