Many changes have taken effect over the last year in the under-65 health insurance market. How do these changes affect your clients and your business?
Listen to this article:
Selling marketplace insurance plans is an excellent way to meet the needs of a large client base that you may not be reaching. Unsure if 2023 is the time to start selling Affordable Care Act (ACA) insurance plans? Keep reading to learn about the status of the ACA market.
Current Marketplace Enrollment
During periods of inflation and increasing costs, clients are looking for affordable health care options. Marketplace coverage is a great option for those who are eligible. In 2023, 3.6 million enrollees selected ACA coverage for the first time. These individuals were part of the record-breaking 16.3 million people who signed up for marketplace coverage in the 2023 Open Enrollment Period (OEP).
Basic Demographics of New Enrollees
According to a 2023 OEP report from the Centers for Medicare & Medicaid Services (CMS), individuals aged 35 to 54 were the largest enrollment group for 2023. Of all the individuals who enrolled in marketplace coverage, 37 percent were from this age group. CMS also found that 82 percent of enrollees in HealthCare.gov states were from non-rural areas.
These large groups of individuals were able to utilize tax credits and find Silver metal tier plans. In 2023, there were a significant number of plans available for clients, especially in some states that chose not to expand Medicaid options.
Plan Selection Increase
Across the country, the number of plan selections during the OEP increased 13 percent from the past year. States that have not expanded their Medicaid programs saw the largest growth. The following states had the most significant increases in plan selections from 2022 to 2023:
Efforts to make marketplace coverage increasingly affordable for more individuals, changes to subsidies, and the changing financial landscape for many Americans resulted in millions of new enrollments.
One of the hallmarks of the Biden administration is to increase access to affordable health care. The administration has made good on their promises by increasing the availability of subsidies to lower-income individuals. Because of these increases, 90 percent of individuals who enrolled in a marketplace plan during the 2023 OEP had their monthly premiums reduced by tax credits. Four out of five people signed up for coverage through HealthCare.gov for $10 or less after tax credits.
Individuals with income levels below 150 percent of the Federal Poverty Line (FPL) are also able to find a free or nearly free silver plan with a very low deductible. Some clients may find that they have to pay a few dollars a month for non-essential benefits.
ACA Subsidy Extension from the IRA
In August 2022, President Biden signed the Inflation Reduction Act (IRA) into law. This policy change extended the American Rescue Plan Act’s enhanced subsidy availability through the end of 2025. With the extension of these tax credits, clients will pay about the same for a plan in 2023 than they did the year prior. In fact, 1.4 million consumers reported household incomes over 400 percent of the FPL and would not have been eligible for the Advance Premium Tax Credit without the extension of subsidies through the American Rescue Plan Act (ARPA) and the IRA.
With the extension of these tax credits, clients will pay about the same for a plan in 2023 than they did the year prior.
The Kaiser Family Foundation (KFF) has found that, even though premiums are steadily increasing, there’s a direct correlation between higher enrollment numbers and an increase in subsidies. The changes that have resulted from the IRA have been in clients’ favor, and the ACA market continues to increase in its strength.
Tackling Last Year’s Goals
In our post looking at the state of the ACA market in 2022, we discussed some future goals for the ACA market. We’re happy to report these issues have all been addressed or resolved.
150% FPL SEP
Last year, a new special enrollment period (SEP) was created to allow individuals who fall under 150 percent of the FPL to enroll in a marketplace plan. This new SEP went into effect March 21, 2022, and allowed more individuals to save more on their health care coverage. While this SEP has not been made permanent yet, it was extended through 2025 due to provisions in the IRA.
Targeting the Historically Uninsured
Last year, we noted that CMS would like to reach audiences that are historically uninsured or underinsured. Enhanced advertising campaigns were targeted to reach Asian, Black, and Hispanic communities over the last year.
The marketing efforts seem to have been effective so far, as the uninsured demographic has decreased every year since 2019. KFF attributes increased affordability and increased educational efforts to the marketplace’s success.
Resolving the Family Glitch
Perhaps the most concerning of last year’s issues for the marketplace was the family glitch. Previously, the family glitch limited who had access to subsidies based off the income calculations used to determine eligibility. These calculations did not take into consideration the premiums for a group or family plan. A family plan could cost more than the specified percentage of the employee’s income (9.12 percent in 2023), but because the individual health care plan cost less than it, they were not eligible to enroll in subsidized coverage (regardless of the number of dependents on the plan).
To allow equal access to subsidies regardless of the type of coverage, the U.S. Treasury and Internal Revenue Service (IRS) finalized a rule to fix the family glitch in October. This new rule created a separate affordability test for family members based on the individual’s/employee’s contributions towards the family’s coverage and the family’s household income. Individuals with children or spouses on their plans are now better able to access cost-saving subsidies!
Individuals with children or spouses on their plans are now better able to access cost-saving subsidies.
An estimated 5.1 million individuals were impacted by the family glitch; this is why the Biden administration prioritized fixing this issue for the 2023 OEP.
What’s Next for the ACA?
The under-65 market is constantly changing to make health care even more affordable. These are the issues we see impacting the ACA agents and clients the most in the upcoming year.
The Medicaid Unwinding
Beneficiaries who currently receive Medicaid but are losing benefits with the end of the Medicaid continuous enrollment requirement may transition to coverage from the marketplace. We covered the opportunities for agents looking to assist clients in this transition in our post on the Medicaid unwinding. The timeline for these changes and Medicaid benefits vary state to state, check with your clients’ state Medicaid office to stay up to date on the most current information.
The End of the COVID-19 Public Health Emergency
The COVID-19 Public Health Emergency (PHE) is set to expire May 11, 2023. The end of the PHE will affect many groups of beneficiaries — from those in the Medicare market, in the marketplace, or on Medicaid. ACA clients will feel some effects from this transition.
Individuals who receive coverage from a private insurer may experience changes in coverage for vaccines, testing, and telehealth services. Double-check with your clients’ insurers to see what services are still covered at the end of the PHE.
A Focus on Consumer Protections
In June 2023, agents selling marketplace insurance plans will need to begin documenting consumer consent forms in order to conduct business on consumers’ behalf. This is a result of the 2024 Marketplace Final Rule. Agents must collect consumers’ consent before aiding in enrollment and conducting a eligibility search.
CMS has prioritized consumer protections for the upcoming plan year and the new consumer consent requirements are an added layer of security for clients. Ritter has created a consent form for agents to use to make this process easier.
Why Sell Marketplace Plans?
The benefits of selling marketplace plans are numerous, especially with the state of the ACA market for 2023. Increased affordability due to subsidy increases means that the net premiums that most clients pay have been significantly reduced. And with the closing of the family glitch, new clients may find themselves eligible for a marketplace subsidy. Additionally, new client protections have been built into the law that almost guarantee the ability to find an affordable health care option.
● ● ●
If you are considering selling ACA plans, Ritter has developed free resources to help you along your journey! We also have an experienced team who is ready to answer the tough questions you may have or guide you through the difficult situations you may encounter. If you’re not already a Ritter agent, register for free today!