Healthcare Coverage Grows in Second Year of Enrollment

The latest tally shows that more than 11 million people signed up for private health insurance coverage under the Patient Protection and Affordable Care Act (ACA), which was adopted in 2010 without any Republican votes. This estimate represents consumers who selected a plan or were automatically re-enrolled through Healthcare.gov between November 15, 2014, and February 22, 2015. Healthcare.gov sells plans in 37 states, while the other states and Washington, DC, operate their own online exchanges.

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The Department of Health & Human Services (HHS) extended the deadline from February 15 to February 22 to accommodate individuals who were unable to get through to the federal call center or onto the Web site by midnight on February 15. Originally, HHS reported that an estimated 11.4 million had signed up for healthcare coverage under the exchange, then the agency dropped that estimate to 8.8 million people, only to announce the latest estimate of 11.7 million.

HHS data showed that more people shopped around for a new plan instead of being automatically re-enrolled. Of the 4.2 million people who were re-enrolled from 2014 to 2015 coverage, 2.2 million updated their information and actively selected a plan in the second year of open enrollment. In addition, 1.2 million of the 2.2 million enrollees actively chose a different plan for 2015 than they had in 2014.

“This shows that marketplace enrollees shopped more actively than expected,” said Larry Levitt, senior vice president, Kaiser Family Foundation. “People generally go on auto-pilot when it comes to insurance, but many marketplace enrollees did shop around and, in some cases, changed plans.”

Sylvia Matthews Burwell, secretary, HHS, had set a relatively modest goal for the 2015 enrollment, seeking 9.1 million people signed up and paying premiums at the end of the year. The Congressional Budget Office projected a higher enrollment of 12 million enrolled in the 2015 exchange coverage. It is likely that the number of enrollments will drop throughout the year as evidenced by 2014 figures. In April 2014, 8 million people had signed up during the initial enrollment period that ended on March 31, 2014. The number dropped to 7.1 million people by October 2014 because people did not pay premiums or were found ineligible because of unresolved questions about their citizenship or immigration status. The number declined again in November 2014 to 6.7 million after the House Oversight and Government Committee discovered that President Barack Obama’s administration had included as many as 400,000 people with dental insurance.

Special Enrollment Period
While open enrollment officially ended in February, the Centers for Medicare & Medicaid Services (CMS) announced a special health law enrollment period from March 15 to April 30 for individuals and families who did not have health coverage in 2014 and are subject to the fee or “shared responsibility” payment when they file their 2014 taxes. If consumers do not purchase coverage for 2015 during this special enrollment period, they may have to pay a fee when they file their 2015 income taxes, according to a CMS press release. The special enrollment period applies to people in the 37 states with a federally facilitated marketplace (FFM), though some state-run exchanges were also expected to follow suit. Those eligible for this special enrollment period live in states with a FFM and:

• Are currently not enrolled in coverage through FFM for 2015
• Attest that when they filed their 2014 tax return they paid the fee for not having health coverage in 2014
• Attest that they first became aware of, or understood the implications of, the shared responsibility payment after the end of enrollment (February 15, 2015) in connection with preparing their 2014 taxes

This year’s tax season is the first time individuals and families will be asked to provide basic information regarding their health coverage on tax returns.

“We recognize that this is the first tax filing season where consumers may have to pay a fee or claim an exemption for not having health insurance coverage,” said Marilyn Tavenner, administrator, CMS, in a press statement. “Our priority is to make sure consumers understand the new requirement to enroll in health coverage and to provide those who were not aware or did not understand the requirement with an opportunity to enroll in affordable coverage this year.”

The majority of taxpayers (75%) will only be required to check a box when they file taxes to indicate that they had health coverage in 2014 through an employer, Medicare, Medicaid, veterans care, or other qualified health coverage that qualifies as “minimum essential coverage.” About one-quarter of taxpayers will be required to take different steps. It is expected that 10% to 20% of these individuals who had health coverage for all or part of 2014 will qualify for an exemption from the requirement. Only an estimated 2% to 4% will pay a fee because they made the decision to go without coverage and therefore were not eligible for an exemption.

Individuals taking advantage of this special enrollment period will still have to pay a penalty for the months they were uninsured and did not receive an exemption in 2014 and 2015. Anyone who was uninsured in 2014 will be hit with penalties of $95 or 1% of their income—whichever is higher. This fine will jump to $325 or 2% of their income for 2015.

Recent data from Urban Institute’s Health Reform Monitoring Survey, which explored awareness of the penalty and expectation for paying the penalty, as well as other issues surrounding the ACA, found that more than 4 in 10 adults who may be subject to the penalty have heard little or nothing about it. Among adults 18 to 64 years of age who were uninsured as of December 2014 and had family incomes above the federal poverty level, 19.3% had heard only a little about the penalty for not having coverage in 2014, and 24.8% had heard nothing at all about the penalty. A little more than half (53.5%) had heard some or a lot about the penalty.

Medicaid Expansion
The ACA’s Medicaid expansion continues to be a key issue, as many states that initially decided not to move forward are now considering it to draw down federal dollars to expand coverage to more low-income adults.

“Medicaid is in a period of historic transformation,” said Laura Synder, senior policy analyst, Kaiser Family Foundation, which held a webinar in February for journalists to discuss key issues around the Medicaid expansion. “As enacted, the ACA expands Medicaid to groups historically excluded from this program, up to 138% of the [federal] poverty level [and] provides new federal financing for this coverage for the first 3 years.”

Through December 31, 2016, those made newly eligible by the Medicaid expansion will be covered at 100% federal match. This match will phase down gradually over time to 90% beginning in 2020 and remain thereafter, according to Ms. Synder. The ACA also seeks to modernize and simplify enrollment processes and to support and assist states in delivery system and payment reform efforts. As of press time, more than half of states had moved forward with expanding Medicaid coverage (Table).

“There is [no] time limit for states to adopt the Medicaid expansion,” said Ms. Synder. “They can come in and out of the Medicaid expansion at any point in time; however, the financing levels at 100% federal match is by specific calendar year. These different decisions across states have implications for Medicaid spending and enrollment.”—Eileen Koutnik-Fotopoulos