Michele Eve Sandberg/Sipa USA via AP Images
Waiting in line for a COVID-19 vaccine, August 6, 2021, in Miami
With the conclusion last Sunday of the special enrollment period for coverage from the Affordable Care Act, millions of uninsured Americans lost access to low-cost health insurance. Low-income Americans who don’t qualify for state Medicaid programs won’t get another chance to secure affordable insurance until the annual open enrollment period in November.
As was not the case with some other novel initiatives of the pandemic welfare state, the Biden administration let the special enrollment period end quietly rather than push for an extension. And as was not the case with their successful lobbying to protect the student debt and eviction moratoriums, progressive activists have not spoken out in force to demand that open enrollment in the ACA—another key pandemic policy—remain in place. Despite the fact that the extension would enable more Americans to access medical care just as the delta variant surges, and provide President Biden with an opportunity to once again tout both the Affordable Care Act and his efforts to conquer the COVID threat, the extension was unceremoniously ended.
The Affordable Care Act gives the executive branch broad authority to open additional enrollment periods beyond the annual period that begins each November. States with their own marketplaces have also reopened them under this authority. But while many state-level marketplaces continue to offer special enrollment, there has been no indication that the Biden administration intends to follow suit.
The Affordable Care Act gives the executive branch broad authority to open additional enrollment periods beyond the annual period that begins each November.
What is certain is that the special enrollment period has provided a crucial lifeline to uninsured Americans during the pandemic. More than 1.8 million Americans signed up for new health plans through the federal marketplace from February 15 to July 31 of this year. During this same period in 2020, at the height of the pandemic, only 713,024 Americans enrolled in new plans. The special enrollment period and increased subsidies from the American Rescue Plan provided affordable insurance to one million Americans who may have otherwise remained uninsured.
There are several reasons the Biden administration may have opted to suspend enrollments. One explanation is that officials simply believed the policy was not worth prioritizing given numerous other competing priorities. Karen Pollitz, a senior fellow at the Kaiser Family Foundation, thinks this might have been the case. “They’ve got a lot of stuff that’s going on now, so my guess is they just thought that was long enough for now. They’re just going to move ahead and try to make the next open enrollment period better,” she said. For their part, many health policy advocates are currently focused on the health care provisions in the upcoming reconciliation package, which progressives are looking to as a once-in-a-generation chance to expand the health care safety net.
Another possible explanation is the administrative burden. The annual open enrollment period begins in three months, and policymakers will be working to automatically apply the new subsidies from the American Rescue Plan to current enrollees and to ensure this new assistance is properly set up for future enrollees. To the administration’s credit, it has already announced an extension to this upcoming annual enrollment period, which will now last ten weeks instead of the usual six. Federal agencies are also working to undo much of the damage that President Trump inflicted on the Affordable Care Act during his time in office. However, it’s unclear that the burden of maintaining open enrollment for another few months would really be a logistical stretch, especially since some state-level exchanges are remaining open.
What’s clear, though, is that by not extending enrollment, the administration has soothed some anxieties within the insurance industry. For one, extensions of enrollment season threaten to undermine insurers’ business model, which relies on fixed enrollment terms to optimize their ability to set rates at profitable levels. Insurers also argue that without limiting enrollment periods, the potential for large-scale “adverse selection”—people enrolling in insurance only when they have considerable health care needs—is too high. According to data from the Centers for Medicare and Medicaid Services, a disproportionate number of low-income Americans received insurance during the just-ended enrollment period. The pent-up health care demands those families are more likely to have may be so considerable that they offset some of the increased profits to insurers.
According to Pollitz, though, there does not appear to be any data from the past five months that indicates adverse selection has been an issue during the special enrollment period. During this period, insurers have seen very healthy profits. The worries about adverse selection, she argues, are likely overblown.
But the precedent of an enrollment period that lasts nearly the entire year, coupled with the substantial subsidies available to buyers, would likely pose another kind of threat to the industry. If such insurance was available all the time from a centralized government source, many Americans might start to wonder why we bother with our elaborate employer-based health care system to begin with.
As Pollitz puts it, “We live in [these] constraints when we decide to finance health care through commercial insurance. There are other ways to finance health care where we wouldn’t have to worry about any of them” (one reason why progressives are focusing on the Medicare expansions in the reconciliation bill).
“We would have different worries, but you know if you had Medicaid for everybody and that was just a taxpayer-financed program, then we wouldn’t worry about people paying premiums and we wouldn’t worry about selection. People would just be able to enroll.”
