Demand for the ACA Marketplace: Over 45 Million Americans since its 2014 Launch

The Wall Avenue Journal editors of the editorial website would like us to believe that “safety” for people with pre-existing conditions is a scam.

The editorial states that only 3% of people with pre-existing conditions are insured through the Affordable Care Act; that the ACA rules guaranteeing equal access to individuals with preexisting conditions pertain to almost exclusively the individual market; and that there are better ways to cover those who lack employer-sponsored coverage than rigging guidelines to make it profitable for private insurers to provide insurance to the sick.

All of that is arguably true. What’s also true?

  • Anyone of us can lose access to the employer-sponsored insurance at any moment.
  • The ACA offers affordable insurance options to the majority of people below age 65, who otherwise would not have access to affordable insurance.
  • Republicans, through a case now before the Supreme Courtroom seeking to declare the ACA unconstitutional, would eliminate programs that cover 25 million people. The ACA Medicaid expansion (14 million), the subsidies in the private-plan ACA marketplace (9 million), and the ability for grownup children up to age 26 to remain covered by their parents’ health plans (2 millions) are all included.

The WSJ editors state that it is unlikely the Supreme Courtroom would invalidate these packages. This is not certain if Amy Coney Barrett – Trump’s extreme right-wing replacement for the recently deceased justice Ruth Bader Ginsburg – is confirmed. At Trump’s request, the Department of Justice has requested that the Courtroom nullify the entire legislation. The Republican intention to sabotage its core programs is reflected in the failed ACA reform payments that were supported by a majority of Republicans in Congress. These repeal payments would have defunded Medicaid expansion and drastically reduced subsidies in the individual marketplace for health insurance.

The ACA has also prohibited employer-sponsored health plans from imposing waiting periods for coverage of pre-existing conditions. About 13 million people are covered by the individual market, of which 10.7 millions obtained their coverage through and state-based ACA Exchanges. The ACA also prohibits insurers to base premiums for small businesses on the health of their employee group. This is about 5 percent of the population that is not elderly, which at present amounts to about 275 millions.

42-50 Million served

The current enrollment is a snapshot. The most relevant question is not how many people enter the individual market at any given time but what percentage will do so in the future. Many enrollees use the individual market as a temporary solution, either between jobs or before acquiring a new job with insurance or after an early (often involuntary), premature retirement.

On November 1, 2013, the ACA market opened its doors to business, and protection began on January 1, 2014. How many people have used it in the seven years since its launch?

It is advisable to piece together the answer from different authorities sources. The spread could be: somewhere between 42 and 50 million individuals are believed to have enrolled in ACA compliant plans since 2014. Here is the breakdown.

  • According to reports from the Center for Medicaid and Medicare Services (CMS), who tallied enrollment at the end of each year’s Open Registration period, “new enrollees”, or those who purchased coverage through the ACA exchanges in 2014-2020 ( exchanges), totaled 31.42 million. In these years, approximately 11% of the enrollees never paid their first premium. If you only count those who “implemented” coverage, the total number of new enrollees drops to 27,7 million. Those who had dropped coverage and then returned to it could have been counted twice as “new”.
  • Through Special Enrollment Periods (SEPs), thousands of people enroll each day in ACA-compliant insurance plans on and off the exchange, despite Open Enrollment. They are given to individuals who have not had insurance or experienced other “life changes” such as divorce or childbirth. We have now partial data for SEPs for 2017-2020, and 2015 as well. This information allows us to estimate that between 8 and 12 millions people received protection through SEPs.
  • It’s reasonable to assume that between 32 and 40 millions people have accessed the ACA Exchanges since 2014. Approximately 85% of exchange enrollees have a backed plan, which would translate to approximately 31 million backed members at the mid-point estimate.
  • ACA-compliant insurance plans can also be purchased outside the ACA exchanges. These include direct from insurers and brokers as well as business online platforms. According to Kaiser Household Basis, off-exchange enrollment for ACA-compliant insurance plans has dropped from 5.4 millions in 2015 to 2.1million in 2019. This is due to the sharp increase in premiums in 2017 and 2018. If we assume that off-exchange enrollment is the same as that on-exchange from 2014 to 2020 and include about 2 million for 2020, then 9-10 million people have accessed ACA compliant plans off exchange.

This is the source of the estimate that 42 to 50 million people have accessed ACA compliant health insurance on the individual market because 2014. Please see this post for more information about the calculations.

Republicans would reduce it to a shadow under-subsidized, under-regulated marketplace. Democrats would bolster subsidies, while Democrats would add public possibilities.

According to the Kaiser Household Foundation, 27% have conditions that could prevent them from obtaining protection on a market underwritten by medical professionals. Around twice as many have pre-existing conditions that could affect their coverage, either by increasing the cost or by excluding it. The ACA guarantees equal protection for all regardless of medical status. All of us, however, want this, because health is not guaranteed.

An underperforming market

The ACA market could better serve its intended function. The Congressional Funds Office (CBO), on the eve before the ACA was enacted in March 2010, predicted 24 million market enrollments each year in 2019. Kaiser estimates that the individual market off-exchange will drop by 5 million people in 2013. This means that about 30 millions people will enroll in ACA-compliant health plans each year. Currently, there are about 13-14 millions enrollees.

The’marketplace’ has not performed as well as it should have. This is partly because of the Republican sabotage and widespread ignorance about what products are available, but also partly because the market is under-subsidized. Some enrollees find that their insurance is affordable and comprehensive, but those who earn too much to qualify for subsidies, (more than 400% of federal poverty level, which will be $51,040 for an individual in 2021, or $104,800 per year for a family of four) often do not. The coverage is more complete and reliable than pre-ACA. However, it is weakened due to high out-of pocket costs (especially for those who earn over 200 % of FPL and do not qualify for the strong Value Sharing Discount).

On Democrats’ agenda: ACA 2.0

In recognition of these limitations, House Democrats (which have been stalled in the Senate) passed laws that would increase premium subsidies for all income levels and eliminate the earnings cap to qualify for subsidy eligibility. This will ensure that no one pays more than 8.5% on premiums. Joe Biden, the presidential candidate’s health care plan, would also reduce premiums and remove the earnings cap. It would also lower out-of pocket costs for the benchmark plan against which premiums are determined. Biden also proposes to introduce a public option into “the marketplace” and to allow people whose employers offer affordable coverage to switch to the “marketplace” and qualify for subsidies. These proposals could increase market enrollment to levels that are higher than those initially predicted by CBO. Biden’s plan will also encourage many people to switch from employer-sponsored insurance plans, according to Kaiser Household Basis estimates.

Market protection curiosity is normal

The ACA offers protections to people with preexisting conditions. This is a great assurance for all of us. In a world ravaged by pandemic, the eighth open enrollment period begins on November 1. Demand is likely to be high. The third consecutive year that premiums were basically flat, the total individual market enrollment may only increase marginally in 2021. (New state Medicaid expansions might offset any positive effects.)

Biden and the House Democrats have both proposed ways to fix this problem. The main difference between the parties is whether to spend more federal “dollars” to provide affordable protection to more People or to roll back current programs and protections.