The potential downside of shortening ACA open enrollment

Healthcare.gov site on computer
A newly finalized federal rule would shorten the annual enrollment period for Affordable Care Act exchange plans.

The Trump administration’s decision to shorten the Affordable Care Act’s open enrollment periods—which was meant to help stabilize the individual marketplaces—may do more harm than good.

As part of a newly finalized federal rule, the annual sign-up window for ACA exchange plans will start Nov. 1 and end Dec. 15, whereas it previously ended Jan. 31. The idea, according to the rule, is to encourage healthier individuals to enroll in full-year rather than partial-year coverage and thus “reduce opportunities for adverse selection.”

However, enrollment patterns from Kentucky’s ACA exchange suggest that change could have negative consequences, researchers Paul Shafer and Stacie Dusetzina wrote in a new Health Affairs Blog post.

For one, data from the state’s exchange in 2015 show that many people switched plans during the second half of the open enrollment period. Therefore, reducing the length of that enrollment period could result in consumer “inertia” that leads them to stick with less optimal plans, the post said.

About a quarter of new enrollments—sign-ups by those previously uninsured or insured elsewhere—took place during the last week of open enrollment in 2015. It was unclear, though, whether new enrollees in 2015 were a higher risk for insurers than their previously enrolled counterparts, the researchers noted.

To try to answer that question, they examined data from the Kentucky Health Issues Poll to tease out characteristics of those who were uninsured in 2014. They found that the majority reported being in at least good health, and most were 45 years old or younger.

Those findings suggest that reducing the length of the open enrollment period in 2018 may not do much to reduce adverse selection for insurers, the researchers said. In fact, limiting enrollment periods could reduce sign-ups among younger and healthier people—a group critical to balancing the risk pool in the exchanges.  

During the most recent open enrollment period, 12.2 million people signed up for plans through Healthcare.gov and the state exchanges, a slight dip from the 12.7 million enrollees for 2016. Of the 12.2 million sign-ups, 31% were new marketplace customers, 43% actively re-enrolled in plans and 23% were automatically re-enrolled.