Avalere: ACA's exchange enrollment could increase by 1M due to COVID-19 job losses

The Affordable Care Act’s (ACA's) insurance exchanges could add more than 1 million new members because of the COVID-19 pandemic.

The analysis, released Thursday by Avalere, attributes the spike to special enrollment due to massive job losses caused by COVID-19. The boost in customers could cause more insurers to return to a market they have left after financial losses over the past few years.

“With unemployment rates at or near 10% in almost all states, many consumers have been separated from their previous employer-sponsored plans,” the analysis said. “The economics of Medicaid eligibility in many states and the recent boost to unemployment assistance indicate that many are turning to the exchanges for coverage.”

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Currently, there are more than 750,000 new exchange enrollees that have signed up since the end of open enrollment.

A new report from federally run HealthCare.gov found 487,000 enrollees bought coverage since the close of open enrollment last December. The increase is 47% higher than the use of special enrollment periods at the same time in 2019.

A majority of state-run exchanges such as Colorado reopened enrollment as the pandemic caused businesses across the country to close.

Nearly 263,000 people signed up for coverage since March in the 12 states and Washington, D.C., that run their own exchanges.

Enrollment numbers have only been released for eight of the 12 exchanges so the total could be higher, Avalere said.

Avalere’s proprietary COVID-19 enrollment model also predicts the enrollment in the exchanges is going to last due to the availability of premium subsidies.

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But Avalere cautioned that consumers should be aware that the most popular types of plans on the exchanges have fewer covered benefits and more limited drug formularies than employer-sponsored insurance.

“Even for individuals who are able to enroll in exchange coverage, the transition from employer-sponsored coverage to the exchanges is not seamless, and can have implications for access and affordability,” the analysis said.

The ACA exchanges have started to recover in terms of premium hikes and plan participation. Major insurers such as UnitedHealth who left the exchanges have announced they are expanding their presence again.