Where ACA Marketplace Enrollments Are Growing Fastest and Why | KFF - Latest Global News

Where ACA Marketplace Enrollments Are Growing Fastest and Why | KFF

In 2024, enrollment in the Affordable Care Act (ACA) Marketplace reached a new record high, reaching over 21 million people, nearly double the number in 2020, when 11 million people were enrolled. This growth is largely due to the enhanced subsidies provided by the American Rescue Plan Act (ARPA) in 2021 and renewed under the Inflation Reduction Act (IRA) of 2022. These enhanced subsidies increased premium payments for ACA Marketplace participants significantly reduced overall – including providing 100% premium subsidies for the lowest income participants – and some middle-income people who were previously excluded from coverage now became newly eligible for financial assistance.

Although the Inflation Reduction Act’s expanded subsidies are available nationwide, some states experienced faster growth than others. In 15 states, ACA Marketplace enrollment has more than doubled since 2020 (Figure 2). One of those states is Texas, where ACA enrollment numbers have more than tripled since 2020. Marketplaces in three states have seen enrollment declines since 2020.

The five states with the fastest growth in Marketplace signups since 2020 – Texas (212%), Mississippi (190%), Georgia (181%), Tennessee (177%) and South Carolina (167%) – share certain characteristics : They all started with high uninsurance rates before expanded subsidies were implemented, they did not expand Medicaid under the ACA, and they all use the Healthcare.gov enrollment platform.

It is difficult to disentangle the impact of each of these factors (uninsured rate, Medicaid expansion, and enrollment platform) because they are correlated and closely related. Still, the data suggest that large numbers of uninsured people in these Southern states with high uninsurance rates wanted health insurance, and recently increased subsidies have made it possible for them to afford this coverage. However, these subsidies are temporary and will expire at the end of 2025 unless extended by Congress.

Uninsured rate

When considering the varying growth rates of Marketplace enrollment across states in recent years, it is important to remember that states had different starting points prior to the implementation of the expanded subsidies in the ARPA and IRA. The proportion of uninsured nonelderly adults in 2019 ranged from less than 5% in Massachusetts, the District of Columbia, and Hawaii to more than 15% in Mississippi, Georgia, Florida, and Oklahoma, and more than 20% in Texas. In general, states with higher uninsurance rates in 2019 experienced faster growth in ACA Marketplace enrollment from 2020 to 2024, while states with the lowest uninsurance rates generally saw their market size grow less or even shrink somewhat. On average, states where the non-elderly uninsurance rate was below 10 percent in 2019 experienced an average growth of 31% in ACA Marketplace enrollment, while states with uninsurance rates of 10 percent or greater experienced an average growth of 31% from 2020 to 2024 136% recorded.

Medicaid expansion

Another closely related factor that may explain why some states are experiencing faster growth in their ACA markets is Medicaid expansion. On average, non-expansion states saw their ACA marketplaces grow by 152% since 2020, compared to an average growth of 47% in expansion states.

The Inflation Reduction Act subsidies reduce premiums for ACA Marketplace silver plans to just $0 per month for people with incomes between 100% and 150% of the poverty level. Meanwhile, in states that have expanded Medicaid, people with incomes up to 138% of poverty are eligible for Medicaid and are therefore ineligible to purchase ACA Marketplace plans. Therefore, there are relatively fewer people in Medicaid expansion states who would qualify for one of these “free” silver plans on the ACA marketplaces. This may partly explain why the marketplace has grown faster in several non-expansion states. (Because North Carolina recently expanded Medicaid, ten states, mostly in the South, have now opted not to expand the program.)

The elimination of the pandemic-era Medicaid continuous enrollment policy, which caused millions of people to lose Medicaid in 2023 after maintaining their coverage during the pandemic, likely contributed to the larger increase in Marketplace enrollments during the open registration period 2024. As states phase out the Medicaid continuous enrollment policy, these $0, low-deductible ACA Marketplace plans can make the transition from Medicaid to Marketplace insurance easier, especially for people with incomes just above Poverty line in non-expansion states.

Registration platforms

The growth of enrollment in the ACA marketplace in recent years also correlates with enrollment platforms. The 23 states with the fastest growth in ACA Marketplace enrollment from 2020 to 2024 all use the Healthcare.gov enrollment platform. States using Healthcare.gov experienced 126% weighted average growth in enrollment in the ACA marketplace from 2020 to 2024, compared to 22% growth in states using state enrollment websites. All 10 states that have not expanded Medicaid use the Healthcare.gov platform.

Another difference is that only Healthcare.gov states have enhanced direct enrollment, which allows health plans and insurance brokers to enroll directly and provide year-round customer service to participants without the consumer having to go through the Marketplace website (Healthcare.gov). .gov). In recent years, brokers have played a growing role in supporting Marketplace customers.

However, states using their own registration websites also had different starting points in 2020 prior to the passage of expanded subsidies in 2021. Some state marketplaces were already using federal funding to offer additional health insurance subsidies beyond those offered by the federal government. In addition, several states with their own marketplaces have long adopted the ACA and have dedicated state resources to outreach and marketing efforts for a decade. In contrast, states that rely on Healthcare.gov experienced significant cuts to outreach and marketing budgets during the Trump administration, with these investments renewed in 2021 under the Biden administration.

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