Krista Nelson, Chief Growth Officer for UnitedHealthcare Government Programs, discusses the impact of the ACA’s Special Enrollment Period on uninsured Americans.
This week we’re taking a closer look at recent changes to the ACA individual exchanges and what impact that is having on uninsured Americans. 1 million Americans have signed up for covers through the federal exchange during the first 10 weeks of a special enrollment period opened up by the Biden administration on February 15. Nearly half of those new enrollees purchase coverage after Congress passed legislation, adding billions in subsidies that reduced the average monthly premium from $117 to 86. The Biden administration has extended that special enrollment period until August 15, and is advocating to permanently extend those premium subsidies.
Evan Sweeney 00:05
Hello, and welcome to UnitedHealth Group's weekly dose Podcast, where we'll get you up to speed on the latest trends shaping the future of healthcare. I'm your host, Evan Sweeney. This week we're taking a closer look at recent changes to the ACA individual exchanges and what impact that is having on uninsured Americans. 1 million Americans have signed up for covers through the federal exchange during the first 10 weeks of a special enrollment period opened up by the Biden administration on February 15. Nearly half of those new enrollees purchase coverage after Congress passed legislation, adding billions in subsidies that reduced the average monthly premium from $117 to 86. The Biden administration has extended that special enrollment period until August 15, and is advocating to permanently extend those premium subsidies. Joining us today to talk about the special enrollment period. And what's next for the individual exchange is Kristin Nelson, Chief Growth Officer of UnitedHealthcare. Krista, welcome to the podcast.
Krista Nelson 01:04
Thank you. Thank you so much for inviting me.
Evan Sweeney 01:06
Yeah, great timing for you to be on. There's a lot going on in the individual exchange market. So maybe you can just start by, you know, a lot has happened this year, and especially over the last couple months, could you just kind of walk us through sort of the biggest changes to date?
Krista Nelson 01:23
Absolutely. Yep, happy to. So I think it's fair to summarize the biggest changes into two big buckets that are associated with the special enrollment period, or what we call SEP as part of the Affordable Care Act and the individual exchanges. So the first is really extending the SEP period. So the Biden administration opened this SEP in response to the COVID public health emergency, originally from February 15, to May, and then they extended it again, to August 15 of 2021. In previous years, people could really only enroll during this time if they had a qualifying life event. However, this SEP allows all Americans regardless of if they have a qualifying life event to enroll through healthcare.gov, as well as most state-based exchanges for individual coverage. The second big change is really around the subsidies. So the COVID-19 stimulus plan, also known as the American rescue plan, allows and expands tax credits to those purchasing coverage on the individual exchange. And really, those tax credits come in two different forms. They extended tax credits to people who did not previously qualify for tax credits or subsidies, those who are over 400% of the FPL level. It also increased the generosity of the current subsidies for people who already qualify, so those under the 400% FPL. And interestingly enough, almost 15 million people who currently lack health insurance are now eligible to receive financial support as a result of the subsidy increases.
Evan Sweeney 03:09
Okay, so to summarize, much, many are higher subsidies for more people in this current special enrollment period. And the proposal, although not yet in place would be to extend those permanently.
Krista Nelson 03:23
Exactly. Yep.
Evan Sweeney 03:25
Okay. And so obviously, I would think this would be an incentive for more people to sign up, are they are the more people signing up to the exchange plans?
Krista Nelson 03:34
You got it. So actually, as of yesterday, we just heard from Biden that over a million people have actually enrolled through healthcare.gov, since February 15. Which is, which is amazing. Again, for context, at this same time, last year, there were only about 391,000 people. So this is, you know, almost three acts of that. And really, it's probably broader than that 1 million, because that's really just those who enrolled in healthcare.gov. And there's people who also enrolled directly with their state-based exchanges. So yes, a lot of people are signing up. In context, you know, we UHC also participate on the exchanges. We expanded our footprint this year into seven new states. And just like the market is seeing, you know, we've seen growth during this special enrollment period, about 20% of our members are actually coming through in these growth markets during this SCP since February 15. And so signaling that our offerings are really continuing to resonate, and we're also seeing that growth in the market.
Evan Sweeney 04:40
Yeah, can you? Can you talk about that for a little bit because I know, UHC re-entered the market or the exchanges recently in a few states and just curious if you can explain sort of what was behind that? What went into that decision?
Krista Nelson 04:54
Absolutely. Yep. So there are a couple of things actually. One from a regulatory perspective, a few of the states that where we offer Medicaid have actually asked us to also participate in the exchanges. So for a couple of reasons, we did participate in a few states where, where it's kind of linked to our Medicaid contract. And in addition to that, we also saw the marketplace as a strategic opportunity. Many of you know that we participated in the individual exchanges back in, you know, 20 1516 and 17. And we, we exited for a couple different reasons. But, you know, the market has really stabilized. And the market is growing. And we're, you know, seeing evidence of that in the last couple of months here. And we actually strategically evaluated some additional markets to reenter based on the competitive landscape, you know, the viability and stability of the marketplace, as well as the, you know, what were where we were offer able to offer, you know, unique products and services, to support members getting expanded coverage.
Evan Sweeney 06:01
And so, give me a sense for Who are the people that sign up for this coverage, especially now that that there are higher subsidies? Is there sort of a general sense of who those folks are?
Krista Nelson 06:12
Yeah. So generally, people that are enrolling on exchange are people who have, you know, they've maybe lost their employer or commercial coverage, maybe they're in between employer coverage and government program, you know, Medicare or Medicaid. You know, typically, it's people may be aging off their parents plans, again, in between like a, you know, a job, maybe they're freelance workers or early retirees. You know, what's interesting is the data that we've seen, from the Biden administration, you know, suggests actually a more diverse set of American consumers are actually enrolling in health insurance coverage during this special enrollment period. So of the enrollees, again, that kind of over a million that we've seen over the past couple months, we've actually seen more identify as black compared to the same period last year, so about 17%. Today, compared to about 11%, last year, and then in 2019. So it is suggesting, obviously, more people enrolling a more diverse set of people enrolling, we're also seeing lower income Americans representing a larger percentage of enrollees compared to last year. So again, overall, not only, you know, diversity and demographics, but also in consumer preferences, you know, participating in the exchanges this year.
Evan Sweeney 07:40
Yeah. And is there a sense of why that is? I mean, even beyond, you know, the added subsidies, which I'm sure plays a role, but more outreach or sort of understanding that that these plans are available?
Krista Nelson 07:51
Yeah, you know, the Biden ministration has invested a lot in marketing. So in January, and in February, and then, of course, with the American rescue plan, and American families plan, there's more marketing about the programs, I think, so I think that is definitely a piece to it. I do think the extended SAP creating more flexibility for people again, not having have that qualifying life event enables them, you know, to enroll when they maybe would have you waited or, you know, not gotten coverage. And then yeah, absolutely those subsidies, again, it creates a strong value proposition for people to enroll Now, given the subsidies and the financial benefits, and what's I guess the potential impact, at least, I mean, how many people could this sort of, you know, help get coverage to who maybe don't have coverage currently? Yeah. So the way we're thinking about the way the industry is thinking about it is between 2021 and 2022, we think the market will actually grow about 15%, which is almost 2 million enrollees treated, you know, the past couple years, that enrollment has really been pretty stable and consistent. So we've seen about, you know, 11 to 12 million or so enrolled in the individual exchanges, and now we're going to see that grow about 2 million lives over, you know, the next year, we would expect to see some additional growth if those subsidies remain permanent. So, again, that's not final, but that is in the, you know, kind of recent proposal. If those subsidies that are permanent beyond 2022, we could see additional growth.
Evan Sweeney 09:24
Got it. You know, the exchanges have been around now for about a decade. I'm curious sort of what has changed in that in that time period, or even over the last five years or so. And what, you know, what is the marketplace look like? What are competitors doing well, and sort of doing to be successful in this area?
Krista Nelson 09:43
Yeah. You know, I would say early in its inception, the marketplace was a little bit more, you know, volatile, you know, some carriers kind of scaled up and then scaled back their footprints just due to the you know, the nature of the program and the newness of the product. You know, I would say that has absolutely changed, the market has really stabilized over the past few years, the exchanges have matured, they're more predictable states have provided more funding, you know, several carriers have reentered the market and are expanding their footprints and expanding their, their products that so all of those things kind of indicate more stability in the marketplace. You know, today, nearly 80% of people have access to three or more carriers, which is up significantly, even this time last year, it was closer to 60%. So, again, more choices for individuals now, which is great. It goes even beyond sort of the major players, right startups, new companies sort of getting into this space. Yeah, absolutely. We're seeing a lot of new entrants, those kind of venture backed startups as well as you know, some of the traditional carriers as well.
Evan Sweeney 10:54
Yeah. I'm curious. You know, we talked a bit about outreach and, you know, sort of what the administration has done, but how is UAC specifically reached out to, you know, this pool of potential beneficiaries who could be covered?
Krista Nelson 11:08
Yeah, you know, we've reached out to consumers through a number of different channels, you know, digital being one that's really popular among this population, email, mail, through some of our own owned and partnered assets, i.e. alliances, broker partners, etc. We've also added a lot of content to our website, you know, trained a lot of our you know, telesales, and our frontline employees who are, you know, talking directly with members. So they're able to explain the changes and help guide them through the process. We're really focused on helping people navigate to ensure that they can get the best plan for their unique needs. And we're collecting feedback this year, as we're going through this process to really make sure we tailor our products next year to meet the needs of our consumers.
Evan Sweeney 11:56
What's next after I mean, the special enrollment period, again through August, but and you've touched on a little bit, but how could this market change or evolve in the coming years?
Krista Nelson 12:07
Yeah, so what's really, next for us is preparing for open enrollment. So this special enrollment period ends in August. And you know, shortly thereafter, we're you know, preparing for open enrollment, which begins in November. We're seeing a lot of reports, you know, suggest this growth and continued growth in the market. So we're just we're really excited to offer our product suite in more markets this fall during open enrollment, and we're excited about the momentum for future years to come and about the opportunity to serve more people.
Evan Sweeney 12:41
Yeah, now that sounds that sounds very interesting. So Krista, thank you so much for joining us.
Krista Nelson 12:47
Thank you.
Evan Sweeney 12:48
That's it for this week's episode of UnitedHealth group's weekly dose podcast. We're off next week for the Memorial Day holiday. We'll be back on June 10. for discussion about improving healthcare quality. Thanks for listening, and have a great rest of your week.