CMS Releases Data On Effectuated Enrollments, Plan Cancellations

On June 12, 2017, the Centers for Medicare and Medicaid Services released effectuated enrollment data for the 2017 open enrollment period. (press release) They also released a Health Insurance Exchanges Trends Report, which summarizes information CMS has collected from a voluntary exit report in force since August of 2016.

The effectuated enrollment report shows that 10.3 million of the 12.2 million consumers who actively selected or were passively re-enrolled in a health plan for 2017 remained enrolled as of March 15, 2017. Of these, 8.7 million or 84 percent received premium tax credits (averaging $371.46) and 5.9 million, or 57 percent, received cost-sharing reduction payments. This is the first year that the effectuated enrollment report also includes average monthly enrollment. Enrollment averaged 10 million for 2017, with average monthly effectuated enrollment beginning 2016 in March at 10.8 million and declining to 9.1 million by December.

The Trends report explores why consumers either cancelled coverage after they selected a plan but before they effectuated enrollment or terminated a plan after effectuating enrollment. The most common reasons for cancelling coverage before paying the first month’s premium were premium increases over the prior year or previous plan (20 percent) and ineligibility for financial assistance (17 percent). Consumers who did not receive premium tax credits were 2.4 times more likely to cancel or terminate their coverage between the close of open enrollment and April 25, 2017 (when the survey closed for this report) than those with APTC (31.9 percent vs. 13.1 percent respectively). Consumers without cost-sharing reductions were 1.7 times more likely to cancel or terminate coverage than those with such reductions. (20.9 percent vs. 12.7 percent, respectively). Those who dropped coverage between the close of open enrollment and April 25 faced average net premiums of $209 compared to $153 for those who retained coverage.

It would be interesting to know what accounted for the other half of plan cancellations. In 2017, effectuated enrollment in March declined 1.9 million from the end of open enrollment at the end of January. In 2016, it declined 1.6 million, from 12.7 million plan selections and auto-enrollments to 11.1 million effectuated enrollments. The increase in plan cancellations may be related to a belief that the Trump administration is not going to enforce the individual mandate.

Not surprisingly, the biggest reason for terminating coverage after paying the first month’s premium was gaining coverage elsewhere, which accounted for 49 percent of plan terminations. Of these, 58 percent of disenrollees stated that they gained employer coverage and 22 percent Medicare. Only 27 percent of consumers terminated coverage because of affordability issues.

Enrollees were more likely to retain coverage for 2017 if their 2016 insurer remained available. Overall, 75 percent of those who enrolled in 2016 returned for 2017. But 77 percent of those whose insurer remained in the marketplaces reenrolled, compared to only 70 percent of those whose insurer left the marketplaces.

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