CMS Reports Exchanges Stable, but Individuals Without Federal Subsidies Have Few Options

Three reports released by CMS provide an update on the current status of the federal and state-based health insurance exchanges and the individual health insurance markets. While measures implemented in 2017 stabilized the individual marketplace and improved performance of the exchanges, those without subsidies have limited coverage options, according to the reports.

The 3 reports are:

• Early 2018 Effectuated Enrollment Snapshot
• Exchange Trends Report
• Trends in Subsidized and Unsubsidized Enrollment

The reports focused on the following aspects of the exchanges:

• Enrollment in 2017 and 2018
• Operational and programmatic performance
• Trends in enrollment between 2014 and 2017

The individual health insurance marketplace saw a decline in 23 states between 2015 and 2016, particularly among the unsubsidized individuals, with double-digit declines in 10 states. A big cause for concern is the disparity in reduction between subsidized versus unsubsidized enrollment seen for the 2017 plan year: a 3% drop versus a 20% drop, respectively. This drop coincided with a 21% growth in average monthly premiums.

In response to this troubling drop in the individual exchanges, CMS utilized and expanded the role of private brokers and insurance agents who were documented to have assisted with 3,660,668 health plan enrollments and 42% of 2018 plan open enrollments on the federal exchanges. This was a big success compared with navigators, who enrolled less than 1% of total enrollees.

Another significant change was enhancement of the risk pool—CMS forced people to verify their qualification for Special Enrollment Periods, or SEPs, which caused a 56% decline in SEPs granted for the 2017 plan year.

The reports claim that enhancements to the federal exchange platforms helped maintain a steady effectuated enrollment rate for subsidized individuals who were moving into the 2018 plan year—a 3% growth was noted in effectuated enrollment by February 2018, compared with the same time last year. Enrollees on the exchanges rely on federal subsidies, the report shows; 87% enrolled in the 2018 plan year are dependent on Advance Premium Tax Credits—a 3% increase over the prior year.

Rising premiums on exchange plans exerted significant stress on the overall system and pushed federal spending on premium subsidies. Monthly premiums rose by 27% in 2018 following a 21% increase in 2017. Subsequently, the average federal premium subsidy rose by 39% in 2018, which is projected to increase federal spending on premium subsidies by $17 billion in this year.

The Exchange Trend Report, which delved into affordability, financial assistance, and plan choice for consumers on the Exchanges, found that lack of affordability remains a driving force that influences currently uninsured consumers’ decision to buy their healthcare coverage on the exchange through the federal platform.