Open Enrollment 2020: The ACA In A Key Election Year

We are quickly approaching the eighth open enrollment period for those purchasing individual and family insurance under the Affordable Care Act (ACA). Open enrollment begins on November 1, 2020 and continues through December 15 for those renewing through the federal Health Insurance Marketplace (www.healthcare.gov). People living in a state with a State-Based Marketplace may have a more flexible open enrollment period. For example, in my home state the open enrollment period for Covered California runs from November 1 through January 31, 2021.

 The ACA has been the law of the land for some time now, but the future of the ACA remains uncertain. The latest threat to the ACA is the case of California v. Texas, scheduled for oral arguments before the Supreme Court on November 10, 2020.

While the ACA has never been perfect, it has been largely effective at stabilizing the health insurance market. In 2015, the number of Americans with nongroup coverage increased from 11M to 17.9M [1] representing a 63 percent increase in covered lives. Health coverage through federal and state-based Marketplaces reached a high in the latter portion of 2015 with 12.68M covered lives.

SP Blog Pic 1 10212020png.png

Over time, due in some part to flaws in the program and in some part due to calculated attacks to undermine the law, the ACA has become less affordable with fewer options.  Since 2015, Marketplace coverage has decreased 10%, now at 11.41M [1]. The 2017 and 2018 plan years were marked by high premium increases. These increases coincided with a decline in coverage sign-ups, most notably from consumers who were not eligible for subsidies. Unsubsidized consumers are typically enrolled in plans with high deductibles, which have a lower premium. The average deductible for a single person in 2020 is $4,450 [2]. 

Those in the industry recognize these trends (reduction in membership, the increase in premiums and the tendency for consumers to choose high-deductible plans) and where they could potentially lead, which is a place of unaffordability for most. Again, the law isn’t perfect, as no new legislation is, but especially one of the scope of the ACA. Instead of addressing gaps and building upon the strengths of the law, there has been a successful effort by Republicans through executive order, legislation, and the courts to blunt elements of the ACA. Without a credible alternative that addresses the problems the ACA was intended to fix; this gap leaves American families at risk.

So, what can we do about it?

I have always been an advocate for fixing and improving on the ACA. It was a great first step for this country to take in order to cover more people, but we always knew that adjustments would need to be made as the law came into effect. Now, five years in, here are some steps that could be taken to improve and stabilize the program:

Allow an all-in or “public” type offering. A Public Option could fill the gaps, as when there is an insufficient number of carriers in a particular region. Such an option could be offered through the existing Marketplace(s). The creation of this option naturally adds competition to the market and may provide incentives for payers in the Marketplace to be more competitive and strategic with network development. A public option could also be made available in states that did not expand Medicaid, to serve low-wage workers who make too much money to qualify for Medicaid and too little to qualify for subsidies via the ACA. Kaiser Family Foundation [3] estimates that there are 2.3M people in the coverage gap.

Expand subsidies. One of the biggest issues with the ACA is affordability, and a way to make plans more affordable is by expanding subsidies. Through plan selection, the current subsidies have proved to be too low, and plan cost shares have, in turn, proved to be too high. Eliminating the 400% income cap on tax credit (subsidy) eligibility and lowering the limit on the cost of coverage (currently at 9.86%) could create a situation where someone buying coverage in the marketplace could be spending considerably less than they are currently.

SP Blog Pic 2 10212020png.png

Allow people with employer-sponsored coverage to participate in the Marketplace. The Kaiser Family Foundation [2] found that more than 12M people with employer-based insurance would pay a smaller percentage of their income to health insurance premiums by changing to a Marketplace plan with lower than current premium caps. This volume could balance out the risk pool, thereby lowering overall rates.

Align to better coverage. We know that in some cases, the prevalence of high-deductible plans is leading to delays in cancer screening and treatment [4]. The deductibles on Marketplace plans are too high. Changing the calculation of tax credits to be based off gold plans instead of the leaner silver plans will provide wider access to better coverage, and hopefully improve outcomes and system costs.

We are at the precipice of a major opportunity to improve the healthcare of this country. The overall goals must be to increase access and affordability throughout our system. And, I emphasize that the time to act is now. Those of us in the industry, particularly working in product management, understand the concept of a death spiral, which occurs when a health insurance product becomes so expensive that there are more incentives for heavy utilizers to keep it than those who are healthy. Over time this dynamic increases the cost of coverage and exacerbates the underlying problem, eventually leading to carrier withdrawal.  

 I’m encouraged to read Vice President Biden’s healthcare proposal [5]. It includes all of the elements I outlined and more. While I don’t think his plan goes far enough, particularly on the cost of coverage limit, I think it moves the ACA in the right direction. The Kaiser Family Foundation [2] has noted that Biden’s plan will lower the cost of Marketplace coverage for nearly all potential enrollees. That is a pretty staggering possibility, and one that needs to be explored by whomever ends up in the White House.

None of these proposed changes are free. But our current path of whittling away health coverage and consumer protections will have great costs for our economy as a whole and will have a destructive impact on the individuals who will face preventable suffering as a result of inadequate care. The system can do better.

Steph Passino leads the Market Insight and Consulting Operations at Spring Street Exchange - a services firm that focuses on transformation and social needs related to healthcare. She is an advocate for universal coverage and addressing issues related to social and healthcare access inequity.