This percentage is far below the 84 percent of enrollees who are ultimately expected to qualify for financial assistance. Furthermore, state-based exchanges (SBEs) are tracking behind states with federally-run exchanges. Based on the latest data, only 23 percent of eligible applicants in SBEs were determined subsidy-eligible in SBEs compared with 34 percent in federally-run exchanges.
Low Rates of Subsidy Eligibles: On Nov. 12, HHS released enrollment data for the health insurance exchanges from Oct. 1 to Nov. 2. The data showed that 106,000 people had enrolled in coverage and selected a health plan. However, nearly 1.1 million individuals had applied and been deemed eligible for coverage. Among those, 30 percent were eligible for subsidies, meaning they had incomes below 400 percent of the federal poverty level. By contrast, Avalere projects that 84 percent of final exchange enrollees are ultimately expected to qualify for subsidies.
There are several possible explanations for the fewer than expected subsidized applicants in October. First, many “eligible” applicants, particularly those who did not apply for subsidies, are unlikely to finish the application process. HHS defines eligible individuals as those who create an account and verify their identity via the federal data hub. Many of these people could be exploring the marketplace website and have other sources of coverage (e.g., through their employer) making them unlikely to complete the enrollment process. Second, subsidy-eligibles were more likely to be affected by website IT problems, since that application process is more complex. Finally, the initial numbers highlight the challenges associated with reaching lower income individuals via outreach and awareness campaigns.
State vs. Federally-Run Exchanges: Rates of subsidized applicants in states with federally-run exchanges are outpacing those in state-based exchanges. In the 15 state-based exchanges (including DC), only 23 percent of applicants deemed eligible for exchanges were below 400 percent of poverty, whereas subsidized applicants constituted 34 percent in federally-run states. Avalere projects that state-run exchanges will ultimately have 88 percent of subsidized enrollees and federally-run states will have 83 percent of subsidized enrollees.
“The figures show the potential for increased exchange enrollment in the coming weeks as we get closer to the deadline for 2014 insurance” said Dan Mendelson, CEO of Avalere. “As lower income Americans figure out that they have access to subsidized commercial insurance products, we can expect to see many enroll – irrespective of their politics.”