Significant Annual Turnover, Shopping Around Disrupts ACA Exchange Enrollment

Between individuals coming in and out of the market in a given year and those who switch plans, the majority of people in exchanges are enrolled in their plans for one year or less.

Only 33% of those who enrolled in a health insurance plan on HealthCare.gov this year picked the same plan as last year, according to research from Avalere. Out of the total 9.6 million exchange shoppers in 2016, only 3.2 million (one-third) kept their previous plan. More than 2.4 million people (25%) of all HealthCare.gov shoppers chose a different plan from the 2015 choice. And more than 40% were new enrollees to the market.

For research purposes, Avalere examined the exchange enrollment data released in the ASPE Health Insurance Marketplaces 2015 Open Enrollment Period: March Enrollment Report and Health Insurance Marketplaces 2016 Open Enrollment Period: Final Enrollment Report. The study assumed that automatic re-enrollees were re-enrolled in the same plan. These automatic re-enrollees were then grouped with active re-enrollees who remained in the same plan.

Between individuals coming in and out of the market in a given year and those who switch plans, the majority of people in exchanges are enrolled in their plans for one year or less. The enrollment in the exchanges is slower than initially projected. This degree of plan switching in exchanges is distinct from other markets. For example, Medicare beneficiaries are more likely to choose a plan and stick with it from year to year, despite significant increases in premiums. The study authors fear that the enrollment will in fact reach saturation after 2022.

“These data underscore how turbulent enrollment in the exchange market has been,” said Caroline Pearson, senior vice president at Avalere. “Significant annual turnover is challenging for plans aiming to manage enrollees’ health and patients seeking continuity of care.”

The study also used the Kaiser Family Foundation To Switch or Not to Switch: Are Medicare Beneficiaries Switching Drug Plans to Save Money? To demonstrate inherent volatility among the low income population, the researchers used the Kaiser Family Foundation report to compare the propensity of enrollees to switch to Medicare and the Low-Income Households and Income Volatility report by the University of Washington Evans School of Public Affairs.

The study contends that some exchange enrollees are leaving the market for other sources of insurance, including Medicaid or employer coverage, particularly because most exchange enrollees are low-income. In 2016, 66% of individuals selecting a plan on Healthcare.gov had incomes at or below 200% of federal poverty line (FPL). Indeed, significant academic research has found that low-income households generally experience significantly more income volatility throughout the year. Furthermore, those who remain in the market are frequently re-shopping to find a lower premium plan.

“Exchange consumers are extremely price sensitive,” said Elizabeth Carpenter, also a senior vice president at Avalere. “As premiums change from year to year, consumers shop around for the best deal. This may lower monthly costs, but may disrupt care continuity.”