Exchange enrollment still increasing, with growth from non-subsidized customers

The Washington Health Benefit Exchange’s new Spring enrollment report shows that in February 2017, 182,232 customers had purchased qualified (private) health plans (QHP). The chart below shows the monthly enrollment numbers, as revised by the current report. (These are all plans that have been paid for.) 

Interestingly, there were fewer enrollments in December 2016 than in December 2015. So far, that’s the only month in which enrollment hasn’t grown year over year (the 2016 number could potentially be revised up in the next enrollment report).

The February 2017 figure represents a significant increase over February 2016 (9.1 percent). According to the Exchange, as of April 2017, QHP enrollments are even higher—204,334. The 204,334 figure will almost certainly be revised down. For example, in February, the Exchange announced that “more than 225,000 people” had selected QHP on the Exchange and that “more than 60,000 added family dental coverage.” (Dental coverage is new this year.) But, as the Spring enrollment report shows, only 182,232 actually paid for their plans, and only 20,853 purchased family dental plans. 

Although total QHP enrollment increased by 9.1 percent from February 2016 to February 2017, non-subsidized enrollment increased by 33.9 percent over that period. Further, non-subsidized enrollment as a percent of total QHP enrollment has been increasing, as shown in the chart below. In February 2017 it is 37.8 percent. Non-subsidized enrollees either earn too much to qualify for tax credits or did not apply for them. The average monthly premium is $231 per month for subsidized enrollees and $388 per month for non-subsidized enrollees.

Non-subsidized enrollment increased substantially in 2016 (and so far in 2017). This could be due to the fact that the penalty for not being insured has been increasing. In 2014, the penalty was $95 or 1 percent of income (whichever was higher). In 2015, it was $395 or 2 percent of income. In 2016 and 2017, it is $695 or 2.5 percent of income. Going forward, the 2.5 percent will continue to apply and the dollar amount will be adjusted for inflation. Because the penalty is paid along with federal income taxes, the effect of the penalty on enrollment may show up on a lag. The large increase in the penalty from 2014 to 2015 may have induced people who didn’t have insurance in 2015 to purchase it in 2016. The same thing could be happening with 2017’s enrollment numbers—they could be showing the impact of the penalty jump in 2016. If this is the case, we shouldn’t expect to continue to see such large increases in future years. (Of course, at this point there is a lot of uncertainty about the future of the Affordable Care Act and the state exchanges in general.)

Meanwhile, how would the Exchange fare under the House and Senate 2017–19 budget proposals? The Exchange is funded by the health benefit exchange account (47.1 percent of total 2017–19 maintenance level spending), Medicaid (41.7 percent), the general fund–state (9.5 percent) and the general fund–federal (1.6 percent). The health benefit exchange account (RCW 43.71.060) is funded by premium taxes and assessments on plans sold through the Exchange.

For 2017–19, the House-passed budget would appropriate $121.6 million from all funds for the Exchange (including $10.6 million from the general fund–state) and the Senate-passed budget would appropriate $118.4 million from all funds for the Exchange (including $10.4 million from the general fund–state).

The main difference between the two budgets is that the House would appropriate $3.0 million from all funds for outreach and marketing. The Senate would provide no new funding for this purpose. According to the Exchange’s budget request, this would be used “for media buys to increase enrollment and retain existing enrollees.” The Exchange expects this appropriation would “increase QHP enrollment by 3 to 5 percent.” Additionally, the Exchange notes, “The 2015–17 enacted budget included about $1.5 million for outreach activities and advertising. This funding level represented an 80% reduction from the previous year’s open enrollment efforts.” Note, though, that from March 2015 (during the 2013–15 biennium) to March 2016 (during the 2015–17 biennium), enrollment increased by 11.5 percent. 

Add new comment