The Coverage Gap: Four Factors Impacting ACA Health Plan Enrollments

The numbers are in: The Centers for Medicare and Medicaid Services (CMS) released a final tally of the number of consumers who enrolled for healthcare coverage during the 2016 open enrollment period, and the results are encouraging. Roughly 12.7 million individuals selected health plans through HealthCare.gov and the state-operated marketplaces, which is one million more than those who selected plans during the 2015 open enrollment period.

The 12.7 million falls within the range of the 11 to 14.1 million enrollees projected by CMS for the 2016 open enrollment period. However, approximately 32.3 million Americans were uninsured last year and even though the ACA has made a significant dent in the number of uninsured Americans, millions remain. Here’s a look at the factors that could impact efforts to help more consumers enroll for health insurance moving forward.

Increased Consolidation

In the second half of 2016, the Federal Government is expected to rule on proposed mergers for Aetna/Humana and Anthem/CIGNA. A wave of consolidation in the healthcare industry will leave consumers with fewer coverage choices, potentially higher prices, and greater churn.  Healthcare organizations will be challenged with helping consumers maintain a “frictionless” customer experience.

Reassessing Coverage

UnitedHealth Group sent a chill through the ACA marketplaces when it announced that it was reducing efforts to attract customers from insurance exchanges created under the ACA and is considering withdrawing from the marketplaces altogether in 2017. Health insurers are reassessing their participation in the federal exchanges based on the argument that the health needs of many plan participants are greater than they had anticipated. Needless to say, fewer insurers participating in the ACA marketplaces will negatively impact the service consumers receive and more incentives may be needed to persuade insurers to remain in the program.

Additionally, UnitedHealth, Aetna, and Anthem announced that they would no longer pay commissions for policies sold outside of the open enrollment period and in many cases would not pay commissions for Gold and Platinum policies sold during open enrollment.

Star Ratings

Star ratings is a central focus of payers and providers in government programs. The federal government already uses a five-star system to rate private health plans for individuals who are over age 65 (Medicare).

Star ratings data also is increasingly being collected by ACA plans, and over a dozen state Medicaid programs are using CAHPS surveys and star ratings data in contracting with plans for dual-eligible and managed long-term care initiatives. Expect to see more discussions about the ratings criteria from insurers who are hoping the ratings take into account the fact that people who are eligible for Medicaid benefits typically have higher healthcare needs.
 
Higher Penalty Fees

In 2015, the fee for not having health insurance coverage was $325 per person or 2 percent of a consumer’s annual household income, depending on whichever was higher. For 2016, uninsured consumers will be fined $695 or 2.5 percent of their income. By 2020, the tax penalty will be equal to the cost of a premium. While raising penalty fees will surely push more people to enroll for coverage, greater outreach efforts are also needed to combat confusion about the eligibility rules and benefits to bring the U.S. closer to universal coverage.

Ultimately, insurers must understand the needs and expectations of the consumers they're targeting in order to offer the exact information and services consumers are searching for. Only then will health organizations be able to cultivate the level of engagement and communication necessary to improve member retention and drive greater ROI.


Matthew Cocks, Vice President, Healthcare Solutions, and Clay Heinz, Vice President, Healthcare Services, contributed to this piece.


Interested in learning more about the factors that are impacting open enrollment? Visit our open enrollment resource center. 


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