In American Rescue Plan, ACA Exchanges Start Clock for New Enrollees

This story has been updated to reflect that the president has signed the bill.

For health insurers, it’s go time, as President Joe Biden signs the $1.9 trillion American Rescue Plan (ARP) Thursday.

The mammoth spending package aimed at providing COVID-19 relief for those with low and middle incomes and across different sectors of the economy also represents the biggest investment in the exchange marketplaces created by the Affordable Care Act (ACA) since the landmark law was passed 11 years ago.

The measure covers premiums for those with incomes 100% to 150% of the poverty level and allows more individuals to qualify for subsidies, up to those with incomes over 400% of the federal poverty level. That affects the subsidy cliff, where currently income cutoffs (as low as $51,040 for a 60-year-old) mean that a monthly insurance premium doubles.

It also completely subsidizes marketplace insurance for those receiving unemployment insurance this year and provides tax relief for people who received too many premium tax credits in 2020. In addition, it subsidizes COBRA premiums until September 2021 for laid-off workers who want to remain on their employer’s insurance.

Moreover, the new subsidies are retroactive to January 1, 2021. The White House originally announced the bill would be signed Friday.

Why is it go time for payers? Since the bill got through Congress through the reconciliation process, the measures are set to expire at the end of 2022—unless they are made permanent.

During the second day of the America’s Health Insurance Plans (AHIP) National Health Policy Conference, a session about the marketplace and commercial insurance pivoted to discuss what comes next given the law’s passage.

Due to a January CMS change allowing a special open enrollment period by the Biden administration in response to the pandemic, the 36 states using the federal marketplace exchange on HealthCare.gov were allowed to reopen enrollment from February to May to enroll people in marketplace plans.

Now, the provisions in the ARP will give insurers another opportunity to show that getting people connected to care through the ACA is a good thing, said the panelists, who run the exchanges in California, Colorado, and Nevada.

“The American Rescue Plan is a very big deal, “ said Peter V. Lee, executive director of Covered California.

As many as 13 million uninsured individuals could be eligible for monthly household subsidies as high as $800 per month, he said.

An analysis released last month by the Kaiser Family Foundation said the additional subsidies could lower premiums both for the 14 million people insured on the individual market and nearly 15 million uninsured individuals. The subsidies are linked to the second-lowest costs silver plan.

“These are folks that are enrolled in many of your health plans. Your job is to get them subsidies, because otherwise they're going to drop heavily,” he said. “Let me be really clear: if you and we don't do a good job, these American Rescue Plan changes will be temporary and not made permanent,” said Lee. “Congress is going to consider whether or not to make these changes permanent this summer. If we sit on our hands and don't enroll people and show the value of the ACA, this is not going to be permanent.”

The panelists also discussed the challenges to enrollment, noting that a Congressional Budget Office analysis said that health plans would only be able to sign up 10% of the eligible 15 million for subsidies.

Messaging will be key to getting the word out, they said.

Kevin Patterson, MPA, MURP, the CEO of Connect for Health Colorado, noted that while insurance and policy professionals use the frame of annual income to discuss affordability, those who qualify for subsidies don’t think in those terms, and any messaging has to be put the same way, by contrasting their savings with their hourly wage.

During the current special enrollment period, Colorado has enrolled 14,000 more residents, Patterson said.

Nevada has enrolled an additional 6000 so far, said Heather Korbulic, executive director of the Silver State Health Insurance Exchange; about 1 in 4 state residents are covered by Medicaid.

“How are we getting the word out that…exchanges are, they're on sale, for lack of a better term, as a new opportunity,” asked moderator Kelley Schultz, executive director of Commercial Policy for AHIP.

Be prepared to spend, the panelists said.

One advantage working in the plans’ favor during these new open enrollment periods is that the cost of marketing and advertising will be significantly less than the annual enrollment period at the end of the year, which coincides with Medicare enrollment, Medicare Advantage advertising, competitive political spending, holiday advertising, and employer-based open enrollment periods.

California is considering an extra-long enrollment period, with an expected announcement for April, Lee said.

“I'd like someone to tell me the rationale that you are going to be the health plan, or the marketplace, that tells an uninsured person who has $800 to spend on insurance in July, 'Sorry, you're after my special enrollment period, come back in January,'” Lee said. “That is not responsive to Americans.”