Insurers don't appear to be sweating possible adverse selection from new ACA open enrollment period: experts

Health insurance form payer plan enroll
Health insurers' concerns about adverse selection from a new special enrollment period for the Affordable Care Act exchanges appear to be allayed by a renewed commitment to advertising and outreach, experts say. (Valeriya/Getty)

Insurer groups are praising President Joe Biden’s move to create a three-month special enrollment period despite concerns about the potential for adverse selection.

The support means insurers likely believe they could get a large enough pool of new sign-ups to mitigate any changes to the risk pool, several experts said. Biden signed an executive order Thursday that creates a special enrollment period from Feb. 15 to May 15.

“The global pandemic has just intensified the value of health insurance for everyone, making it much more clear at any moment you could get sick,” said Michael Kolber, a partner with law firm Manatt Health, in an interview with Fierce Healthcare.

America’s Health Insurance Plans, the top insurance lobbying group, praised the call for a special enrollment period—which is double the length of the normal period for 2021 that ended Dec. 15—that is “accompanied by robust consumer outreach and education,” according to a statement.

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Insurers praised the Trump administration for shortening the open enrollment period when it came into power in 2017. The administration claimed cutting the period in half was to combat adverse selection.

Insurers know they tend to get smaller populations from special enrollment periods, which are when people can sign up if a certain life event happens like a divorce or job loss.

But insurers could get a larger pool of sign-ups during the new period thanks to a boost in advertising and a greater awareness of health insurance due to job losses from the pandemic, said Joel Ario, managing director of Manatt, during the interview.

The Centers for Medicare & Medicaid Services aims to spend $50 million on outreach and education, including targeted advertisements and other tactics to boost awareness, according to a fact sheet from the agency.

Current enrollees on the exchanges can also change to any available plan in their area “without restriction to the same level of coverage as their current plan,” the agency added.

It remains unclear how many people will sign up during the new coverage period.

An analysis from the Kaiser Family Foundation published Wednesday predicts nearly 9 million Americans could get free or subsidized insurance through the exchanges. Dan Mendelson, founder of consulting firm Avalere Health, also estimates sign-ups to be in the millions.

“It could be very substantial,” he told Fierce Healthcare in an interview. “There is a real power to aggressive marketing, particularly when states and the federal government are completely aligned.”

So far, enrollment on HealthCare.gov—which is used by residents in 36 states to pick an Affordable Care Act plan—was 8.2 million people at the end of open enrollment on Dec. 15. That figure is below the 8.3 million that signed up in 2019, but it doesn’t include sign-ups from New Jersey or Pennsylvania, which created their own state-based exchanges, Ario said.

“We haven’t seen the final numbers in states, but some of them have growth rates similar to 7% or 8%,” he added.

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Several state-based exchanges also said they are reopening enrollment to coincide with the HealthCare.gov period.

Mendelson said he was not surprised by the long duration of the special period.

“It gives the administration time to go out and aggressively promote these plans and re-energize the market for exchange coverage,” he said.

The new period is a likely harbinger of things to come from Biden, who made health coverage expansion a key pillar of his campaign. The exchange is a place where Biden has more control to affect coverage compared to Medicare and Medicaid, Mendelson said.

Other policies, like lowering the Medicare eligibility age to 60, will require congressional approval, which could be dicey as Democrats have a narrow majority, Mendelson said.