The Affordable Care Act (ACA) has existed for a dozen years. In those 12 years, many changes have occurred. What’s happening in the under-65 health insurance market and how might it affect you?
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Many changes have occurred in the ACA market over time due to the ebb and flow of support for the ACA between administrations, drastic economic fluctuations, and the COVID-19 national emergency. But in 2022, the ACA is considered to be at its strongest by the Centers for Medicare & Medicaid Services (CMS) — and Ritter too! Selling under-65 health coverage in 2022 is a unique opportunity for agents because of this unprecedented strength, the extreme affordability of ACA plans, and upcoming health care innovations.
Note: The stats in this article are from CMS’ “2022 The State of the ACA Report,” unless cited otherwise.
Where It All Began
The establishment of the ACA was monumental for health care in the United States. Before the ACA, 50 million Americans were living without health insurance. After it was signed into law in 2010, 20 million Americans had the opportunity to access affordable health care.
The ACA changed the way many Americans access their health care coverage, as well as reduced national health care costs. In 2020 and 2021, it became even more vital for Americans to have affordable coverage options as they endured the COVID-19 pandemic. Once President Biden was inaugurated, he enacted several changes to the ACA to provide more Americans with access to health care. We’re already seeing the effects of some of those changes in regards to ACA enrollment and cost changes.
Current Marketplace Demand and Enrollment
Now more than ever, individuals are looking for affordable and accessible coverage, and the ACA can provide it to those who qualify. Three million new consumers enrolled in ACA marketplace coverage during the 2022 Open Enrollment Period (OEP), and an additional 2.8 million people newly enrolled in this coverage through the 2021 Special Enrollment Period (SEP). A record-breaking 14.5 million total Americans enrolled in ACA marketplace coverage during the 2022 OEP — a 21 percent increase in enrollments compared to the 2021 OEP!
Also of note, states that have not increased Medicaid coverage saw a 32 percent increase in enrollments from the 2021 OEP to the 2022 OEP. See the table below for a state-by-state breakout. This is compared to just a 12 percent increase in enrollments from the 2021 OEP to 2022 OEP in states that expanded their Medicaid programs.
|State||2021 OEP Marketplace Enrollments||2022 OEP Marketplace Enrollments||Percent Change|
Note: OEP Marketplace Enrollments numbers are from CMS’ 2021 OEP and 2022 OEP fact sheets. Ritter helps ACA agents in all states except SD and WY, since those are are FFM states with no products available.
Because of newfound awareness of coverage, ACA enrollment increased 32 percent in states that have not increased Medicaid coverage.
Black, Latino, and some Asian populations have had difficulty acquiring health coverage in the United States and are historically underinsured and uninsured. However, HealthCare.gov reports enrollment increased by 26 percent in Hispanic populations and 35 percent in Black populations for 2022. A total of 1.3 million Hispanic/Latino individuals and 686,875 Black individuals enrolled in ACA coverage in 2022 following an increased outreach from the Biden administration to underinsured states and populations in the U.S.
More Affordable Than Ever Before
More than one million more Americans were eligible for financial savings on 2022 marketplace plans. Additionally, four out of five consumers were able to find a plan for $10 or less a month. Of those who were able to find a plan that was $10 or less, 28 percent selected that coverage.
These extremely affordable options may be more attractive to consumers than they were pre-pandemic. As living costs continue to rise due to supply issues and so on, more individuals may be drawn to affordable health care through the marketplace.
Temporary Expanded Eligibility & Increased Savings, Thanks to the ARP & IRA
Eleven years after the Obama administration introduced the ACA, the Biden administration introduced the American Rescue Plan Act of 2021 (ARP) which broadened eligibility in light of the COVID-19 pandemic. Today, only 29 million Americans remain uninsured compared to 50 million Americans pre-ACA in 2010.
There is still a coverage gap that affects four million Americans who would financially qualify for Medicaid services if their state expands its benefits. In an effort to help more individuals access affordable health care coverage, the Biden administration temporarily expanded tax credits through 2022 and lowered health care costs with the ARP. It also increased and continued protections for those already covered by ACA health plans by decreasing the amount of out-of-pocket costs spent by the consumer.
In August, the Biden administration signed the Inflation Reduction Act (IRA) into law and extended subsidies for an additional three years — through the end of 2025. This helps to prevent significant premium increases. Due to the expanded tax credits, health coverage that originates from a marketplace is the most affordable it’s ever been. We expect marketplace sales to increase because of this excellent opportunity. Read more about what could happen because of these changes here
The ARP also incentivized the states that have not expanded Medicaid coverage to do so. It offered a five percentage point increase to the regular 90 percent federal matching rate. Those who are uninsured but would be eligible for Medicaid if their states expanded coverage are now able to access ACA premium tax credits to reduce costs that would be spent out of pocket.
The Future of the ACA Market
Throughout 2021 and 2022, many changes have taken place to affect the ACA. Many of these changes improve the user experience and make ACA health care more accessible. With these changes, it has been noted that more Americans will be able to access marketplace coverage. The ACA market is growing and the time to consider selling ACA plans is now!
New 150% Federal Poverty Level SEP For Those Who Qualify
The Biden administration recently created a new monthly SEP allowing individuals who fall under 150 percent under the Federal Poverty Level (FPL) to enroll in ACA coverage on HealthCare.gov. (Note: Individuals who qualify for coverage at this income level qualify for a $0 or very low-cost premium Silver plan!) Forty-five percent of those who enrolled in coverage during the 2021 COVID-19 SEP fell under 150 percent of the FPL. The new monthly SEP will allow more households to capitalize on the savings that were introduced with the ARP and receive health care coverage.
There is currently legislation proposing that these savings be made permanent. While state-run exchanges are not required to offer this SEP, several are choosing to provide this option. We may see more states adopt this SEP on their exchanges over the next year.
Targeted Campaigns for the Historically Uninsured
As noted by CMS, creating health equity is vital to advancement of the American population. As more focused advertising to Asian, Black, and Latino communities emerges, the administration projects a decrease in the number of the uninsured and underinsured in those populations. Affordable health care may also allow these populations to avoid long-term health issues, as well as better mitigate concerns related to COVID-19.
Affordable health care may also allow uninsured and underinsured populations to avoid long-term health issues, as well as better mitigate concerns related to COVID-19.
Eliminating the ‘Family Glitch’
Creating more affordable health care for more Americans doesn’t stop there. President Biden’s next goal is to eliminate the “family glitch.” The family glitch pertains to those who would be able to buy subsidized plans through the marketplace but can’t because of the way the eligibility is currently calculated for those who have access to a family plan through their employer.
Individuals can qualify for marketplace coverage if their employer’s health plan costs more than 10 percent of their household income. However, the ACA currently calculates eligibility based off the premiums for an individual employer health care policy. It does not account for the higher premiums of a family plan with the employee’s spouse and/or children. The Kaiser Family Foundation estimates that 5.1 million people fall into the family glitch and would be eligible for more affordable health care coverage through the marketplace if the law was amended. According to the White House, an estimated 1 million individuals would move into less expensive ACA plans if this were glitch were fixed, and 200,000 uninsured Americans would enroll in comprehensive health coverage.
Should Insurance Agents Enter the Under-65 Health Market Now?
Yes. The ACA market is stronger than ever. If you sell insurance but not ACA plans, now’s the perfect time to start! So many clients can reap the benefits of the expansions to the ACA granted by the ARP.
For agents, the advantages that come with selling ACA plans are endless. Many carriers are now paying competitive commission that are paid per member, per month. And with even more households eligible for ACA coverage, the opportunities never end! There’s limited training required, and the training is free to take. Still unsure of entering the ACA market? Read more about selling ACA health insurance here
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In the constantly changing insurance industry, it’s difficult to stay on top of all the changes. Partnering with a field marketing organization (FMO), such as Ritter, ensures that you’re always in the know. We’ve developed a series of tools and technology to help you be the best agent you can be for your clients. Getting started is simple — register with Ritter today!
Editor’s Note: This article has been updated following the release of the IRA.