Growth In ACA-Compliant Marketplace Enrollment And Spending Risk Changes During The COVID-19 Pandemic

Area of Science:

• Health Policy and Economics
• Public Health Insurance
• Healthcare Access

Background:

• The COVID-19 pandemic led to widespread job losses and loss of employer-sponsored health insurance in 2020.
• The Affordable Care Act (ACA) established health insurance Marketplaces and expanded Medicaid to provide coverage options.
• Understanding the ACA Marketplaces' role in mitigating coverage loss during economic shocks is crucial.

Purpose of the Study:

• To assess the impact of the COVID-19 pandemic on Affordable Care Act (ACA) Marketplace enrollment and associated spending risks.
• To examine how state-level decisions on Medicaid expansion and Marketplace enrollment criteria influenced these outcomes in 2020.
• To evaluate the effectiveness of ACA Marketplaces in buffering employment-related insurance disruptions.

Main Methods:

• Utilized a novel national dataset of ACA-compliant individual insurance plans.
• Compared Marketplace enrollment and spending risk indicators in 2020 against 2019 data.
• Analyzed variations across states based on Medicaid expansion status and Marketplace enrollment policy changes.

Main Results:

• Observed significant increases in Marketplace enrollment in 2020 compared to 2019.
• States that did not expand Medicaid experienced both enrollment and spending risk increases.
• States expanding Medicaid but not relaxing enrollment criteria also saw increased spending risk; those that expanded Medicaid and relaxed criteria saw enrollment increases without increased spending risk.

Conclusions:

• ACA Marketplaces demonstrated a capacity to absorb increases in enrollment due to employment shocks.
• Medicaid expansion and flexible Marketplace enrollment criteria are key to mitigating increased financial risk.
• Absence of Medicaid expansion or constrained Marketplace access may lead to rising insurance risks and premiums.