When President Biden opened up the Affordable Care Act (ACA) exchange for a Special Enrollment Period on February 15, 2021, I was surprised. After all, we’d just had Open Enrollment November 1 - December 15, 2020, and anyone who wanted to sign up for health insurance could have done so at that time. As a result, the first question I wondered is: Will people actually use it?
The reason I was curious is those who lose their job already qualify for enrollment in an ACA plan, so my assumption was that the only people who would be interested in the Special Enrollment Period are the uninsured. To my surprise, in a recent survey, 33% said they know someone who will take advantage of the Special Enrollment Period.
In reality, what has transpired is that more than 500,000 people have signed up for an ACA plan in the first 45 days, between February 15 and March 31. With so many signing up for ACA plans mid-year, what is causing so many people to embrace the ACA? Since the plans have not changed, other factors are driving their decisions.
The Feds are Advertising
Running concurrently with the Special Enrollment Period through August 15, 2021, CMS is spending $50 million to advertise the Special Enrollment Period. The federal government is using TV commercials, radio and digital advertising campaigns to highlight the opportunity for Americans to buy an ACA plan now. These advertising campaigns are raising consumer awareness and likely responsible for many of the sign-ups we are seeing.
Health Coverage During a Health Pandemic
It’s not surprising that during a health pandemic, health insurance would become more important to Americans. Especially when the costs are high. The average cost for an uninsured person who is hospitalized for COVID-19 is $73,300 and the average cost for an insured person who is hospitalized for COVID-19 is $38,221. With costs this high, health insurance becomes immediately more attractive and necessary.
Increased Subsidies = More Affordable
Perhaps the biggest barrier for those who have been uninsured is the cost of the ACA. When the average premium for an ACA is over $400 per month, many decide to take their chances and remain uninsured.
With the affordability question in mind, President Biden temporarily increased subsidies available with ACA plans for the next two years in the America Rescue Plan. What this means to the uninsured is starting on April 1, 2021, they are more likely to be eligible for a subsidized (discounted) ACA plan – or even a free ACA plan. By giving Americans a financial break in the price of the ACA plans, the plans suddenly become more affordable and will be more attractive to those who are interested in health insurance.
Since over 500,000 people signed up for ACA plans in the first 45 days, we may see many more sign up as the pandemic continues and the temporary subsidies make the plans even more attractive. The next question will be what happens after the pandemic? Will Americans continue to value their ACA plans? Or will they cancel the plans and take a risk? Only time will tell.
Jan Dubauskas is a healthcare expert, enthusiastic insurance pro, attorney and mom serving as Vice President of healthinsurance.com
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