Countdown to Coverage: Opportunities to Enroll Year-Round
The third open enrollment period for the Health Insurance Marketplace created by the Affordable Care Act officially closed on February 1, 2016. This year 1.3 million Texans selected a 2016 plan during open enrollment, up slightly from 1.2 million last year. Now that open enrollment has ended, the only way to enroll in coverage through the Marketplace for 2016 is during a “special enrollment period” or SEP.
SEPs are available when individuals experience a life event that may cause a need to enroll in coverage or change plans. Examples include: losing job-based insurance, getting married, having or adopting a baby, and moving to a new location. According to estimates from the Urban Institute, millions of uninsured individuals in the U.S. could obtain Marketplace coverage outside of open enrollment through a SEP.
Recent Controversy and What’s Changing This Year
Recently health plans have been pushing Centers for Medicaid and Medicare Services (CMS) to tighten oversight of the use of SEPs because they have reported that the individuals who enroll in coverage using SEPs tend to be higher utilizers of health care. This should come as no surprise to insurers. Before the ACA, people who chose to enroll in COBRA coverage (temporary continuation of the employer-based health plan, paid for by the employee) after losing job-based insurance also tended to have high health care needs. Most people who are eligible for a SEP don’t use them; Urban Institute estimates that fewer than 15 percent of eligible people use SEPs to sign up for coverage. However, it makes sense that individuals are more likely to use the SEP they have available to them if they are in need of healthcare.
In response to the concerns of health plans, CMS announced that certain SEPs would no longer be available starting February 1st. Most of these SEPs were created in response to technical barriers to during open enrollment, and most of those technical issues have been addressed. In addition, CMS has made clear that there will not be a SEP provided this year for individuals who face a penalty on their 2015 taxes for not having health insurance. Last year, 24,000 Texans were able to enroll in insurance through a SEP after paying the penalty on their 2014 taxes.
SEPs are a good thing
Special enrollment periods are an essential component of the Marketplace and follow in a long tradition of qualifying life events that allow changes to job-based insurance outside of open enrollment. SEPs provide an opportunity for individuals to stay covered while moving between jobs and help families enroll in the same insurance product after a marriage or birth. While it may be true that people who enroll using SEPs tend to have higher health costs, cutting off appropriate access to SEPs is the wrong response. In fact, increasing outreach and awareness about the availability of SEPs could lead to increased enrollment of healthier people into coverage during the year, helping to offset the cost of high the healthcare utilizers that are currently using SEPs more frequently.