Covered California ACA signups slightly increase as new coverage mandate, subsidy boost go into effect

California’s state-run Affordable Care Act exchange signed up 1.5 million people for coverage for 2020, a 1.6% increase compared to 2019 that was backed by a massive 41% spike in new customers.

The exchange’s enrollment figures released on Tuesday factor in a state-mandated penalty for not buying insurance and a boost in subsidies to help low-income customers pay for insurance. The figures show that while new signups saw a major increase, the number of renewing customers declined by 8%.

Overall the exchange called Covered California saw 418,052 new customers picking a plan for 2020 compared to 295,980 for 2019. There was a 23% decline in new plan selections in 2019 compared to 2018 when 388,344 newcomers signed up.

“This dramatic rebound in new enrollment shows how effective state policies can make quality coverage more affordable and encourage people to get covered,” said Covered California Executive Director Peter Lee in a statement.

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Starting this year, several state policies went into effect to bolster the exchange. Chief among them was a new penalty for not getting insurance coverage, replacing the federal penalty that Congress zeroed out as part of tax reform in 2017. The state also boosted subsidies under the ACA and created a new program to help middle-income consumers to afford coverage. The program would provide subsidies to consumers who earn too much to qualify for ACA subsidies.

Covered California also will extend a special enrollment period until April for any consumers that may not have been aware of the new coverage penalty.

“We are still hearing that far too many people do not know about these policies, so Covered California wants to continue to get the word out,” Lee said.

But the major increase in new enrollment is offset by an 8% decline in renewing consumers, with 1,120,7767 renewals for 2020 compared with 1,217,903 in 2019.

Covered California attributed the drop to Congress’ decision to zero out the penalty for the ACA’s individual mandate, which went into effect in 2019. Without the penalty, the number of new consumers signing up for coverage for 2019 was down.

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“Historically, a decrease in new enrollment translates to a decrease among renewing consumers because there are fewer consumers in the system to carry forward into renewal,” the exchange said in a release. “Covered California entered this renewal season with nearly 40,000 fewer members covered in October 2019 (for 2020 coverage) than it did in October 2018 (for 2019 coverage).”

California fared better in signups than, which residents in 38 states use to buy ACA coverage. California is one of 12 state-run exchanges that hold their own open enrollment. signed up nearly 8.3 million people for the 2020 coverage year, slightly down from the 8.4 million that signed up in 2019. But the number of new consumers was slightly up on the federally run, with 2.08 million new consumers for 2020 compared with 2.07 million in 2019.