Enrolling in health insurance is hard. It is hard if you insured through work. It is hard if you get on Medicare. It is hard if you get on Medicaid. It is hard if you get insured via the ACA. One of the bigger challenges for people who get insured through overtly subsidized government programs is validating income. Different programs have different definitions and time frames for income. Another challenge is for individuals to collect the correct paper work to validate their income.
A common solution is that the government, at various levels, usually has most if not all of this information for individuals who don’t have complex tax or income situations. State governments with income taxes can transfer the burden of proving income from individuals to the state by changing the information sharing rules.
NEW JERSEY becomes latest state to create Easy Enrollment program to improve access to affordable healthcare coverage:https://t.co/VMA7C2u9mN
— Charles Gaba (@charles_gaba) July 18, 2022
New Jersey is following the lead of Maryland and other states by now allowing the state tax agency to share information with the state based marketplace. Previous year income can be used to estimate current year income. Some states will use these estimates to send letters to people who qualify for subsidized insurance. All of these actions are attempts to shift the burden of validation from the individual to the state which already has the data in a different database.
I’ve become more and more convinced over the past several years that at the current ACA subsidy system and price levels, that prices matter, but they aren’t everything when we think about enrollment and retention. We’re probably at the point where steps to improve the customer experience and smooth out the enrollment process by eliminating frictions and providing strong information and experience nudges that are targeted at marginal enrollees rather than broad based subsidies that mostly accrue to people who already were purchasing insurance anyways.
The political advantage of smoothing out the consumer experience is that quite a few of these practices can be done without any new legislation. This is a weakness as what can be done with executive authority can be reversed with executive authority but in these political configurations, it is a second or third best when the first best options are not feasible.