Last night, CMS released the 2021 Healthcare.gov Open Enrollment Public Use Files. One of the things that immediately stood out to me was the wide variance in the importance of automatic re-enrollment for Healthcare.gov. We have found that it has a massive association with increased enrollment. Automatic re-enrollment significantly reduces administrative burden by allowing people to not have to do anything to keep their current plan for the next year.
There is tremendous variation though. Nationally, about 21% of enrollment was through the automatic re-enrollment channel. Sargent County, North Dakota has less than 5% of the county enrollment coming through the automatic renewal channel. Rosebud County, Montana and Rolette County, North Dakota each have more than 60% of their enrollment coming through the automatic re-enrollment channel.
Why does this matter?
Automatic re-enrollment significantly lowers the cost to maintain coverage. However, it also likely to significantly increase the risk of an objectively poor choice for the future year plan. This is true in all insurance markets. It is especially true in the ACA markets as the combination of a price linked benchmark that is dependent on both own-insurer strategy, own-insurer pricing changes and other insurers’ choices, people can yo-yo from low cost to high cost insurance if they do nothing.
This will be especially true for the 2022 plan year as there will be a massive price shock of the new ARP subsidies that will both rejigger relative prices (a lot more people will see zero premium plans) and change insurer strategy as to what they offer and at what relative and absolute price point.
Automatic re-enrollment is a powerful tool but it comes with trade-offs on the quality of choice. I think that there are behind the scene tweaks and technocratic tinkering opportunities that can amerliorate some of those trade-offs and that these tweaks can be implemented fairly quickly.