3 trends to watch as ACA open enrollment begins

Open enrollment on the Affordable Care Act's (ACA's) exchanges is about to begin for the 10th time, and federal officials Monday touted the record membership that's grown substantially under the COVID-19 pandemic.

Department of Health and Human Services (HHS) Secretary Xavier Becerra said on a call with reporters that recent trends on the exchanges have helped drive "greater access to insurance than we've ever seen in this country." Enrollment on the exchanges hit a record 14.5 million during 2021 amid enhanced premium subsidies and lengthy special enrollment windows due to the pandemic.

Overall, coverage under the ACA reached 35 million, HHS said earlier this year, through the exchanges, expanded Medicaid and basic health coverage.

The premium subsidies were extended under the Inflation Reduction Act this summer. Becerra said that four out of five people are enrolling in exchange plans where they'll pay less than $10 per month. He said it's an "astounding accomplishment" that coverage on the exchanges for many costs less than a trip to the movie theater.

"Don't wait to get covered," Centers for Medicare & Medicaid Services (CMS) Chiquita Brooks-LaSure said on the call. "The time to act is now."

As open enrollment begins Tuesday, here are key trends to watch:

Unsubsidized plan premiums are on the rise

While most people enrolling on the ACA exchange receive subsidies, those who don't qualify will see their premiums go up, analysts at the Kaiser Family Foundation noted. Benchmark premiums are increasing on average by 4% across all 50 states and the District of Columbia. Individually, these premium changes can range from an 18% decrease in Virginia to a 15% hike in New Mexico.

Though the premium changes do vary widely between states, the analysts said this is the first year in several years where premiums are increasing on a nationwide basis. Brooks-LaSure said on the call that there are likely several reasons for this trend, including utilization that is beginning to rebound from pandemic lows and medical cost fluctuations that can happen annually.

A typically 40-year-old would have paid $481 per month for a benchmark silver plan, KFF said, and that fell to $438 by 2022. For the 2023 plan year, Kaiser estimates that benchmark premiums will be about $453 before any subsidies kick in.

'Family glitch' fix may benefit many

In mid-October, the Biden administration finalized a rule that would eliminate the ACA's "family glitch," which prevented some low-income families from accessing premium assistance. Brooks-LaSure said on the call that CMS believes 1 million families might benefit from the regulatory change.

In addition to the "family glitch" preventing people from affording coverage, it posed a huge challenge for navigating enrollment and selecting plans, Brooks-LaSure said.

"Not only is it wonderful that people are going to have this coverage, but it also helps simplify the message," she said.

Insurers are largely beefing up their offerings

Several years of bad losses in the early days of the ACA exchanges led many major payers to flee from the market entirely. But a more stable market and record enrollment is luring them back and encouraging them to expand their offerings. UnitedHealthcare, the country's largest insurer, will offer exchange plans in 22 states for the 2023 plan year after significantly whittling down its footprint in 2016.

Aetna returned to the exchanges for the 2022 plan year after fully exiting the market in 2017. It is also expanding its footprint for 2023 even as its enrollment during the first year back fell short of expectations.

However, there is one high-profile exit from the exchanges for 2023: Bright Health. The insurtech has faced significant financial struggles, and to put a focus on its multiplayer model will eliminate its ACA exchange footprint.