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The latest information from the Centers for Medicare & Medicaid Services (CMS) on the number of plan selections for the current Open Enrollment Period (EOP) has been a positive sign for stakeholders that are hoping for a large and stable enrollment cycle. While the number of plan selections has been higher than in the previous two years, the burning question remains: Is the pace of enrollment enough to attain results as high or higher than previous years, given that the 2018 OEP is half as long?
Entering the 2018 OEP, there was a fair amount of concern that enrollment would take a significant step back given the number of issues combatting the market. Funding for outreach and navigator support was cut dramatically, premiums rose by double digits across most states, and Congress spent much of the year attempting to repeal the ACA. Despite these obstacles, recent numbers for the first five weeks of open enrollment through healthcare.gov are higher than through the same amount of time in the previous two years’ OEPs.
Chart 1 – Plan Selections during Open Enrollment Periods (2016-2018)
However, the numbers may not look as rosy when examined from the perspective of the amount of time remaining in the OEP. With only one week left as of the release of this post, the currently reported numbers look to fall far short of the final results of 2016 and 2017. Previous OEPs also achieved over 80 percent of their growth shortly after their respective halfway points (Chart 1), which would be a very bad sign if that were true for the 2018 OEP. While the concern regarding timing is understandable, it overlooks the fact that there are two key factors that drive significant enrollment growth around the December 15 time-period. First, most consumers must sign-up by December 15 to ensure they can enroll coverage that starts January 1 the following year. Second, consumers that are actively enrolled in a health plan in December are generally automatically re-enrolled into a plan for the following year which is generally processed around December 15. As seen in Table 1, over one-third of re-enrollees and just under one-quarter of all consumers that enroll in coverage are actually auto-enrolled. While quarterly carrier filings in 2017 have shown slightly lower enrollment in the individual market, the jump in the number of auto-enrollees will likely to count toward the total plan selections on December 15.
Table 1: Share of New and Re-enrollment figures (2016-2018)
Given the final re-enrollee figure is largely dependent on how many individuals are currently signed-up for coverage, the decision to manually re-enroll or auto-enroll doesn’t make much of a difference in the final count. However, the number of new consumers that select a health plan for 2018 will likely determine the success of the EOP and the current pace is ahead of previous years (Chart 2).
Chart 2: Open Enrollment – New Plan Selections (2016-2018)
If the new enrollment figures continue to pace above the previous two years over the final two weeks, then the net figure will likely be above the final 2017 number but below the result achieved at the end of 2016. In both the 2016 and 2017 open enrollment periods, a large number of “procrastinators” signed-up after the December 15 deadline to be eligible for coverage January 1 the following year. The 2016 open enrollment period experienced a particularly high surge of individuals sign-up for coverage in the final two weeks. Given the last day for the 2018 OEP has been moved up to December 15, there is a possibility that a surge of procrastinators may act on the deadline which would accelerate the pace of enrollment even higher over the final two weeks this year. In the end, it appears the individual market has managed to navigate this turbulent time and continue to attract consumers to purchase coverage. The final verdict on enrollment numbers for the states that use healthcare.gov as well as those running state-based marketplaces will be known soon and planning for 2019 will start shortly after.
Leavitt Partners is committed to monitoring the latest information and key trends in the commercial health insurance market. Recently Leavitt Partners examined issues such as the impact of concentration in the Medicare Advantage market (here), the medical trends in the commercial group and non-group business lines (here), and the complexity of rate filings for the 2018 plan year (here).