Costs Are Higher For Marketplace Members Who Enroll During Special Enrollment Periods Compared With Open Enrollment

More than 20 percent of Affordable Care Act (ACA) exchange market (Marketplace) members insured by a large national insurer in 2015 and 2016 enrolled during a special enrollment period (SEP), defined as any enrollment outside the annual open enrollment period. These members were younger and had approximately 34 percent higher average monthly total costs than members who enrolled during open enrollment. SEP members had 69-114 percent higher inpatient costs and 11-19 percent higher emergency department costs than open enrollment members. Higher costs, especially among a slightly younger population, may suggest potential adverse selection among SEP members, which could contribute to increased premiums and insurer exit from ACA Marketplaces. Although SEP members had a shorter average enrollment length per calendar year, they were more likely than open enrollment members to stay insured through the end of the calendar year and to renew in a Marketplace plan offered by the insurer in the following year. However, renewing SEP and open enrollment members were older, sicker, and costlier than nonrenewing members of both enrollee types, which suggests that healthier members are switching carriers or leaving the market over time. Additional research is urgently needed to inform evidence-based policy regarding Marketplace risk adjustment and SEP eligibility rules and to improve outreach to people who are eligible for SEP enrollment.