Opportunities and Resources to Expand Enrollment During the Pandemic and Beyond

Even before the COVID-19 pandemic began, signing up for health coverage and applying for financial assistance was often challenging.  A 2020 KFF survey found half (51%) of consumers who looked for coverage during the 2020 open enrollment encountered difficulties, and nearly 5 million consumers sought in-person help but couldn’t get it.  During the 2021 open enrollment, challenges compounded as consumers unfamiliar with the process needed to find replacement marketplace or Medicaid coverage for the first time, in-person assistance shifted to remote, and other pandemic-related complexities arose.  Last year, nearly all state based marketplaces (SBM) re-opened marketplace enrollment in response to the pandemic, and SBMs are beginning to announce COVID re-openings this year.  President Biden has said he favors providing a COVID-19 special enrollment period in the federal marketplace for people who are uninsured. (People who lose job-based insurance already qualify for a 60-day special enrollment period, but people who are already uninsured do not.)

Earlier this month, KFF convened a discussion with Navigators and other consumer assistance professionals from federal- and state-based marketplace states.¹  They offered observations about the 2021 Open Enrollment period, discussed general and pandemic-specific challenges facing consumers seeking coverage, and offered suggestions to improve enrollment outcomes. This brief summarizes those observations.

In addition, this brief reviews information about federal marketplace resources and spending priorities contained in Trump Administration budget documents.  Federal marketplace spending on consumer assistance, marketing, and other consumer assistance activities has declined during the Trump administration, even while revenue from user fees – which finance most of federal marketplace expenses – has held steady.  It appears that more than $1 billion in unspent federal user fee revenue has accumulated and could be used to invest in changes that would make it easier for consumers to enroll in health coverage.

Available Marketplace Revenue

Unspent marketplace user fee revenue has accumulated. The Trump Administration substantially reduced spending on key activities that support marketplace enrollment, including navigator consumer assistance, marketing and outreach, the HealthCare.gov marketplace website, and the federal marketplace call center.  At the same time, according to budget documents, the Administration did not spend all of the user fee revenue paid by marketplace health plans.  Unused funds appear to have accumulated to more than $1 billion over fiscal years 2018-2020.  Table 1 summarizes budget data from Fiscal Years 2013 and 2016, the first and last years of marketplace operations under the Obama Administration and from Fiscal Years 2017-2020 under the Trump Administration.

Spending cuts on consumer assistance and outreach activities, even as revenue held steady, contributed to the user fee carryover. Most spending for federal marketplace operations is for consumer information and outreach activities (navigator enrollment assistance, marketing and outreach, and the federal call center) and for information technology (HealthCare.gov).  Spending on these, as well as other eligibility and enrollment activities declined precipitously under the Trump administration and accounts for most of the reduction in overall spending for marketplace operations during that time.  Because of these spending reductions, marketplace expenses were cut below the level of user fee revenue collected.  From Trump Administration budget documents, it appears that for three years, FY 2018-2020, roughly $400 million per year in available user fee revenue was not spent, resulting in a cumulative carryover of revenue of more than $1.2 billion.²  Additional unused revenue likely accumulated during the current fiscal year, though that cannot be seen from budget documents released to date³.  A final regulation issued by the Trump Administration in its closing days would reduce the federal marketplace user fee rate from 3% to 2.5% starting in 2022.  Unless changed by the new Administration, this reduction in the user fee rate would make it difficult for the federal marketplace to reverse cuts in spending on consumer information, outreach, and assistance activities.

Supporting Enrollment During the Pandemic

Following the close of the 2021 open enrollment period in, Navigators stressed the importance of reopening the federal marketplace for enrollment in 2021.  For the first time in several years, marketplace enrollment increased in a number of states.  Nevertheless, Navigators noted address unresolved problems that hindered access for some consumers during the regular open enrollment period.  They also pointed to the importance of making every effort to get people covered during the pandemic.  Navigators offered several recommendations for ensuring a successful COVID-19 special enrollment period.

Navigators urged that an emergency COVID enrollment period extend for longer than the 6-week federal open enrollment period that just concluded.  They noted that time will be needed not only to sign up new consumers, but to follow up with those who experienced difficulties during the regular open enrollment.  As the pandemic took off in March 2020, 11 of the 12 SBMs reopened marketplaces for enrollment, most – initially – for a period of 6 to 8 weeks.  As the year progressed, however, most SBMs extended the enrollment opportunity, some into the summer, and several to year end. (Table 2)

Navigators also stressed the importance of investing substantially in publicizing a COVID re-opening of marketplace enrollment.  As KFF Tracking Polls have found for years, most consumers are unaware of marketplace open enrollment deadlines. The KFF tracking poll for December 2020 found that fewer than 1 in 5 respondents knew the then-upcoming deadline to sign up for 2021 coverage through the marketplace.  Greater publicity will be required to inform people when and how to sign up for a special, COVID-related enrollment opportunity.  Navigators also suggested the federal government could spend more on marketing and advertising, funding that had been cut by 90% by the Trump administration. At the same time, SBM navigators urged that federal marketing efforts be carried out in consultation with SBMs, whose timing and other rules for COVID-19 enrollment periods may differ from those of the federal marketplace.

Navigators noted the importance of targeted outreach strategies to reach some consumers, including those who do not speak English, non-citizens, and those who have been uninsured for a longer period of time.  These groups are typically more difficult to reach and may be less aware of extended enrollment periods.  The 2020 KFF survey found that 71% of uninsured individuals did not even try to find coverage for 2020.  The perceived high cost, lack of awareness about subsidies, fear of how getting coverage subsidies could affect their immigration status, and other factors discourage millions of uninsured consumers from even looking into coverage options.  Outreach from trusted individuals and community based organizations could be undertaken to reach such consumers, particularly during a special enrollment period.

As part of any marketing efforts, federal Navigators advised against describing the reopening of marketplace enrollment as a COVID-19 special enrollment period or SEP, and instead recommended it be characterized as a new open enrollment period. They noted that the term SEP can be confusing to for consumers, who may not realize the “special” enrollment opportunity applies to them, or who may have had difficulty applying for SEPs in the past.  Navigators also pointed out that while the Trump Administration revised rules during the pandemic, giving consumers more time to apply for a SEP following coverage loss, consumers still had to provide documentation of that coverage loss before they could enroll using the COVID-SEP.

To be effective, federal Navigators indicated they will need additional resources to provide consumer assistance during a COVID enrollment period.  Current year funding awards to federal marketplace navigators ($10 million) are less than 10% of the amount the Obama Administration invested in enrollment assistance during the first open enrollment period ($108 million).  While a few federal navigator programs have been able to find supplemental funding resources from their states or foundations, others have had to substantially reduce capacity as a result of federal funding cuts.  For example one statewide program that used to employ 30 full time navigators now has 6.  In addition, most navigator programs now “front load” their annual award, using most resources during the 6-week open enrollment period, and maintaining only skeleton capacity to help consumers during the rest of the year. Currently operating federal navigator programs said, with enhanced funding, they could respond immediately if a COVID enrollment period is established, but they noted it will take time to ramp up the number of people they can help as they re-hire and train staff, and hoped decisions about the length of a federal COVID enrollment period would take that into account.

Addressing problems that arose during the 2021 open enrollment period

Navigators described several issues that surfaced during the most recent open enrollment period, some related to the economic upheaval caused by the coronavirus pandemic. These issues included difficulties in estimating income for the year due to job loss or receipt of unemployment benefits, receipt of failure to file notices due to IRS backlogs in processing income tax returns, and policies discouraging enrollment among eligible immigrants.  They suggested policy changes in conjunction with a COVID enrollment period anticipate and try to respond to problems that affected consumer’s ability to enroll during the last Open Enrollment.

Navigators reported an increase in consumers facing difficulties in estimating annual income this year because of job loss, reductions in hours, or because of receipt of unemployment benefits which varied in availability and amount during 2020.  Marketplace subsidies are based on a consumer’s estimated income for the coming calendar year and when consumers apply for subsidies, the marketplace conducts real-time verification of their income estimate, comparing it to their most recently filed federal tax return.  Pandemic-related job loss or reductions in hours after years of steady employment can lead to problems verifying income.  In these cases, consumers may receive a notice of data match inconsistency (DMI) that requests further documentation.  Although subsidies will be temporarily approved based on the consumer’s estimated income, they will be reduced or terminated 90 days later unless required DMI documentation is received and approved.  Navigators expressed concern that DMI-related subsidy terminations could start happening in February-March for consumers who cannot successfully complete the verification process.  Navigators also heard from clients who worried they may have to repay some or all of the premium tax credit that they received during the pandemic if they their income increases later in the year.  In response to these concerns, Navigators suggested the marketplace could target outreach and assistance to consumers who received DMI notices during open enrollment.  Additionally, the federal government could waive repayment of excess premium tax credits during the pandemic.

Because of backlogs at the Internal Revenue Service (IRS), Navigators also reported that some consumers who filed their income taxes nevertheless received failure to file notices, putting their current subsidies at risk.  Recipients of marketplace premium tax credits in a year are required to file a federal tax return for that year if they want to continue receiving subsidies in the subsequent year.  Because of the pandemic, the 2019 tax filing deadline was extended to July 2020 and the IRS experienced delays processing returns. As a result, some consumers were notified they were at risk of losing marketplace subsidies even though they had filed their income taxes as required. The notice did not clearly indicate what steps to take next, leaving many consumers unsure of how to address the issue.  Navigators said providing targeted outreach and assistance for consumers who received failure to file notices could help ensure they are covered and subsidies continue.

Navigators are concerned about actions that have discouraged enrollment by immigrants.  Navigators reported that a series of Trump Administration policy actions, including recent changes to the “public charge” policy, have instilled fear and deterred enrollment in public coverage among immigrants.  Although the public charge policy does not apply to marketplace subsidies, Navigators said this policy has suppressed enrollment in marketplace coverage and Medicaid.  The Biden Administration has vowed to rescind the public charge rule changes. Navigators also suggested targeted outreach to immigrants during a COVID enrollment period.

While the Medicaid maintenance of eligibility (MOE) requirements tied to enhanced federal Medicaid funding for states during the public health emergency (PHE) have helped consumers maintain Medicaid, Navigators worried about potential loss of coverage when the PHE ends. Under the MOE requirements, states must provide continuous coverage through the end of the month in which the PHE ends for people enrolled in Medicaid.  Navigators said this policy has enabled consumers to maintain their Medicaid coverage during the pandemic.  However, they expressed concern that when the PHE ends and Medicaid redeterminations resume, some consumers could lose their Medicaid and need help finding new coverage.  Consumers who lose Medicaid coverage mid-year are eligible for a 60-day special enrollment period (SEP) during which they can sign up for marketplace coverage, although Trump Administration policy changes made this process more difficult for consumers.  Navigators suggested the  marketplace could coordinate with state Medicaid programs as they resume redeterminations and refer people for enrollment assistance if they need to transition to new coverage.

Ongoing Challenges Hindering Marketplace Enrollment

Navigators raised other concerns – some of them longstanding – that could be addressed to support in-person enrollment assistance and make the enrollment process more efficient and easier for consumers. The federal marketplace could begin to invest in improvements using some carryover funding, although investments will likely be needed beyond the time of any COVID-enrollment period.

Beyond additional funding during an emergency COVID-related enrollment period, navigators spoke to the restoration of federal funding for consumer assistance. Federal navigators said increased funding is necessary to rebuild a diminished workforce.  They stressed it will take time to rebuild after years of funding cuts but agreed immediate improvements could be achieved.  Federal navigators also noted the importance of re-establishing navigator services that have been eliminated altogether under the Trump Administration.  Currently no navigator services are offered in two federal marketplace states (South Carolina and Utah), and none are offered in most of the counties of six other states (Texas, Michigan, Ohio, Illinois, Kansas and Nebraska).  The Trump Administration also eliminated the requirement to have at least two navigator programs serving each state; in 2016 there were 100 federal navigator grantees, today there are 30.  In addition, the requirement for federal navigators to maintain a physical presence in the state they serve was eliminated.  While much more help was provided remotely during the pandemic, a small number of current federal navigator grantees only maintain web and phone services in the states they serve.

Federal navigators expressed frustration with the quality of the assistance provided by the federal marketplace call center. Concerns about the effectiveness and reliability of help from the federal marketplace call center date back years.  In a 2015 KFF survey, most marketplace assisters said help from the call center was rarely or only sometimes effective.  Current federal navigators noted some call center staff lacked the training and experience to provide adequate assistance.  They also said that the call center lacks an effective system for escalating complex cases to more highly trained specialists.  By contrast, navigators in several SBM states reported more positive experiences with their call centers.  Several said SBM call centers make dedicated lines and specially trained staff available for Navigators.  In some SBMs, the call centers also directly refer consumers to navigators when those consumers are in need of in-person assistance.

Federal navigators also raised concerns about the federal marketplace website and offered ideas for improvement they felt would streamline the enrollment process. Some concerns related to the Find Local Help tool – the Trump Administration redesigned this tool to steer consumers to brokers instead of marketplace assisters.  The tool also no longer identifies navigator programs, but rather lists them among other volunteer assister programs that the marketplace does not fund.  Other concerns related to design of the online application.  For example, when consumers need to correct or update information in their online application, they cannot go directly to the specific screen, but must scroll through each application question in order.  Federal navigators also noted that the federal government’s training program does not include access to the online application, making it harder for them to learn the flow of questions and required information and to identify changes in the online application from one year to the next.  Navigators in SBM states had few complaints about their marketplace websites and felt they were well-designed and included needed functionality.  In particular, the New York marketplace has created a secure portal for certified navigators so they can access their clients’ online accounts, input information, review the application status, and handle other basic administrative tasks, such as password changes.  Federal navigators said having this type of portal on healthcare.gov would enable them to help consumers more efficiently and reduce reliance on the call center.

Navigators reported ongoing challenges with coordination between the marketplace and Medicaid.  While most SBM states have integrated marketplace websites that determine eligibility for marketplace coverage and Medicaid, the process for determining eligibility for Medicaid in FFM states is less streamlined. Eight states that use healthcare.gov have delegated authority to the federal marketplace to make eligibility determinations for the Medicaid programs. In the remaining states on the healthcare.gov platform, the marketplace makes an initial assessment of eligibility for Medicaid, then refers the applicant’s information to the state Medicaid agency to make a final eligibility determination. How well this handoff operates in practice can vary.  Delays in processing Medicaid applications in some states can mean that some consumers initially assessed as eligible for Medicaid but ultimately determined ineligible cannot complete their marketplace application during the open enrollment period and instead must apply for an SEP to finish the application and enroll. 

Navigators reported that some consumers who signed up during open enrollment are already experiencing post-enrollment problems, such as not receiving their first premium invoice, having claims denied, or trouble learning to use new coverage.  While Navigators provide some post-enrollment assistance, by law, they are required to refer such problems to statewide consumer assistance programs (CAPs), established under the ACA. The ACA provided an initial appropriation for CAPs, but Congress has not provided further appropriations, and CAP programs have received no federal funding since 2012.  Navigators urged that CAP funding should also be a priority.

Discussion

As he takes office, President Biden faces a daunting list of challenges as he endeavors to make progress on the health reform proposals he made during the campaign.  Some, such as proposals to expand ACA subsidies, will require an act of Congress.  Others, including re-opening enrollment in the federal marketplace, require only executive action.  To make the enrollment process simpler and enable more people to enroll, additional investments would also be needed.  Beyond just reversing Trump Administration cuts, there are opportunities to make the make the marketplace more responsive to consumer needs and to work with Navigators to identify and address problems as they emerge.  The availability of unspent, carryover user fee revenue could make possible immediate investments in marketing and outreach, support for enrollment assistance, and other improvements.

A reopened ACA enrollment period has the potential to get more people covered during a public health emergency and in the midst of massive economic dislocation. There are, however, challenges and trade-offs involved. Without any increase in federal subsidies, many people who are uninsured may still find coverage unaffordable. A new enrollment period could also provide an opportunity for people who have recently developed health conditions to sign up, which would provide them greater access to care but could also worsen the risk pool and lead to an increase in premiums. A concerted outreach effort could help get more people covered, including those who are currently healthy, thus improving the risk pool and reducing the number who are uninsured.