COVID-19, Open Enrollment, and the Importance of Insurance Coverage

2021 Marketplaces and COVID-19

Open enrollment is the annual time period to change or update consumers’ health insurance plans. This time is critical for people who don’t get their insurance from their job or from Medicare, and must buy it themselves. Once the open enrollment period ends, consumers must wait until the next open enrollment period unless they qualify for a special enrollment period due to extenuating circumstances, like marriage, the birth of a child, or moving. 

Open Enrollment for marketplace coverage in 2021 is currently happening, with only 6 days to go. The open enrollment period runs from November 1 through December 15, 2020, with coverage beginning on January 1, 2021. However, states with state-based marketplaces, including Minnesota, Rhode Island, and Nevada, differ on how they operate their open enrollment periods, with some allowing people more time to choose and enroll in plans. It’s critical that people check their state’s marketplace to determine when they need to enroll in coverage so they don’t miss the opportunity to choose a plan that best fits their needs and budget. HealthInsurance.org lists the special enrollment periods for the 2021 coverage year, including states who have enacted legislation to extend enrollment due to concerns with the ongoing COVID-19 pandemic. For enrollment assistance, visit the HealthCare.gov hotline or find local assistance. If your preferred language is not English, you have the right to interpreter services here.  

Importance of Consistent, Reliable Coverage in 2021

The Georgetown University Center on Education and the Workforce data shows that as of October, the economic downturn happening as a result of the COVID-19 pandemic is primarily affecting lower and moderate-income Americans. Over 50% of workers making less than $75,000 per year have experienced a decrease in income, and unemployment creates uncertainty surrounding access to reliable, affordable health insurance for millions of struggling families. Marketplace coverage can provide consistency during times of uncertain job prospects, and as many as 85% of people who are at risk of becoming uninsured due to loss of their job-based coverage could be eligible for Medicaid or subsidized marketplace coverage. Coverage through Healthcare.gov or state marketplaces guarantees:

• Coverage of essential health benefits.
• Free preventive care services, such as annual check-ups and immunizations.
• Coverage with no exclusions of, or higher costs for, pre-existing conditions.

Where Current Marketplaces May be Falling Short

However, the Marketplace has its shortcomings. COVID-19 and its impact on the current health insurance landscape has had varying effects, depending on insurance companies and their 2021 premium rates. Kaiser Family Foundation cites that the most common factors that insurers cited as driving up health costs in 2021 were:

1. The continued cost of COVID-19 testing.
2. The potential for widespread vaccination.
3. The rebounding of medical services delayed from 2020.
4. Illness or complications of pre-existing conditions from lack of care. 

Simultaneously, however, there is a ‘catch-22’ that insurance companies currently grapple with. Many expect individuals to use the health care system less next year to avoid previously common care, such as checkups and screenings. The unpredictable nature of health care usage rates during and after the pandemic means insurance companies may not be able to calculate their bottom line accurately. In turn, depending on who your insurer is, you could see costs increase or decrease. 

In addition to the pandemic, longstanding problems continue in the Marketplace, including access to multiple insurance providers. 10% of counties have only a single insurer offering in 2021, concentrated in highly rural areas. Without competition in the marketplace, costs skyrocket for the average consumer. While the average costs of premiums are projected to decrease in 2021, this varies by type of plan, location, age and income. As individuals search for alternative plans, it is important they use trusted, reliable sources for information, such as State-Based Marketplace Exchanges or Healthcare.gov. 

Opportunities to Improve Coverage Moving Forward

Regardless of how 2021 plan costs may vary, people continue to struggle affording health coverage as premiums, out-of-pocket, and prescription drug prices rise at unprecedented rates. The costs associated with health care coverage remain a top concern for a majority of Americans. The increasing cost of out-of-pocket health spending means a smaller share of monthly income can go towards other daily necessities, particularly for low-income families and individuals with chronic health conditions. Rising health care costs keep people from receiving necessary care, with over 50% of adults saying they’ve put off care due to costs and 13% reporting their condition got worse as a result. United States of Care highlights three policy goals to increase affordability and improve coverage during these critical times: increasing funding for enrollment support, creating subsidies and addressing the ‘Family Glitch’, and expanding coverage through state-based coverage options. 

Increase Funding for Enrollment Support

While open enrollment can be a lifeline to many, some may find trouble navigating and understanding the program. It is critical to restore funding to help people utilize the program and navigate their coverage options before deadlines. Increasing outreach and advertising funding can increase enrollment, particularly among unenrolled yet eligible populations. As people cycle on and off health insurances, outreach becomes even more important. Similarly, enrollment assistance can help consumers navigate their health care plan needs and budgetary constraints during uncertain times such as these.

Create Subsidies and Address the Family Glitch

Colorado passed a legislation package that extends their state reinsurance program and funds it for five years with a state fee assessed on health insurance premiums for health plans. This replaces the federal Health Insurance Tax, set to expire at the end of 2020. This program aims to provide more affordable coverage options, including to undocumented immigrants and people who are in the “family glitch,” which leaves people out of options for affordable coverage due to how affordability–and thus subsidies for coverage–of job connected health insurance is measured. Because the current federal measures are the affordability of the individual, rather than the family, meaning families seeking insurance coverage are often not eligible for federal subsidies to help pay for their coverage. Colorado’s new law reaches these individuals who normally would be shut out from the Marketplace, one of many innovative solutions that states can take to address the problem. They will do so by creating state-based subsidies for consumers, including those with income up to 300 percent of the poverty level who don’t receive federal subsidies, undocumented individuals, and those in the family glitch.

Expand Coverage through State Based Coverage Options

Affordability and access continue to be the most pertinent concerns regarding health insurance. States can play an important role in addressing both concerns through state-based coverage options, such as a public option. As United States of Care has highlighted, a well-designed state public option can reduce the cost to consumers, expand access to care, and decrease out-of-pocket expenses. Reducing costs for low and middle income families, especially during a time of economic crisis, is urgent and essential. Encouraging competition is perhaps the most American value, as competition drives down costs and encourages innovation. Introducing public options can invigorate competition in areas traditionally lacking insurance coverage options, like the 10% of counties with only one option. Public options also can be tailored to benefit those disproportionately disadvantaged under the current system, including racial minorities and rural communities. 

Our Take

Health care continues to cost the Americans too much. In an economic downturn, money is tight and health care is continuing to strain our wallets. Open enrollment has played a key role during the pandemic to help consumers who lost coverage from employment; however, open enrollment has its limitations. We need to invest in funding for enrollment navigation support, to be sure consumers have access to assistance. And it is critical that we make health insurance more affordable for families. 

This pandemic has taught us that the American health care system needs to work better for all of us. As we head into 2021, policymakers must heed this call to action for states to take the lead on accessible, affordable health care.