Extending OEP to January 15th

Last night, the Center for Medicare and Medicaid Services (CMS) released their proposed rule for the 2022 ACA playbook.  One of the significant rule changes that CMS wants to make is to extend the Open Enrollment Period (OEP) to 2.5 months.  Currently, OEP is from November 1 to December 15 for any state that uses Healthcare.gov.  State based marketplaces (SBMs) can do whatever they wish.  CMS wants to extend the OEP for Healthcare.gov from November 1 to January 15.

Open Enrollment Period Extension (§ 155.410(e))
We propose to amend paragraph (e) of § 155.410, which provides the dates for the annual Exchange open enrollment period in which qualified individuals and enrollees may apply for or change coverage in a QHP. The Exchange open enrollment period is extended by cross-reference to non-grandfathered plans in the individual market, both inside and outside of an Exchange, under guaranteed availability regulations at § 147.104(b)(1)(ii). HHS is specifically proposing to alter the open enrollment period for the 2022 coverage year and beyond so that it begins on November 1 and runs through January 15 of the applicable benefit year.

I’ll be engaging in active citizenship by commenting on this rule before the comment period closes out on July 28, 2021.

I am supportive of this change. Dr. Coleman Drake and I wrote in a Health Affairs blog in February 2021 that an extended OEP is valuable:

The Biden administration could decrease the administrative burden of Marketplace enrollment by extending Healthcare.gov’s open enrollment period into January, so that it ends on January 15, 2022, rather than December 15, 2021. As we explain below, such an extended open enrollment period would likely increase the number of individuals with health insurance coverage by allowing greater flexibility in signing up for coverage.

Currently, enrolling in a Marketplace plan in the federally facilitated Marketplace is a two-step process. Families must first choose a plan. They must then make their first premium payment to their insurer by January 1. The household’s policy is activated only after their insurer receives this payment. If payment is not received by January 1, the household remains uninsured….

The opportunity to obtain coverage after missing the January 1 payment deadline matters. In our research on Colorado’s Marketplace with Sih-Ting Cai and Daniel W. Sacks, we found that households enrolled in zero-premium plans were covered, on average, for 50 more days than those that were not. This increase was entirely due to households that enrolled in zero-premium plans being more likely to start coverage on January 1. This effect was even larger among lower-income households, who likely have greater difficulty making their first payment on time due to a lack of access to checking accounts. By offering an extended open enrollment period, states such as Colorado have allowed households who miss the January 1 payment deadline with an opportunity to become insured on February 1 rather than remaining uninsured for the entire year.

Extending the open enrollment period into January also makes signing up for coverage easier from a practical standpoint. Katherine Swartz and John Graves found that families often experience more financial insecurity and have less mental energy to devote to purchasing health insurance in the last two weeks of the calendar year, likely due to the holidays. Simply allowing families the opportunity to purchase insurance at a less demanding time of year could thus help to reduce the number of uninsured.

Extending OEP through January will allow people to catch errors and mistakes that they made in December which otherwise would have kept them from activating coverage for January 1, 2022. The OEP extension does have a trade-off. Some people will be paying premiums that were priced on the basis of twelve months of claims for an eleven month contract. They will experience a modest decrease in effective actuarial value.

I think there will be a second benefit in the form of people being able to get out of dominated defaults more easily. Currently, automatic re-enrollment is activated immediately after the open enrollment period is over. At this point, on Healthcare.gov, people who are automatically renewed will be very sticky to their plan even if they really don’t want it and realize that they don’t want it when they see the actual premium that they owe. An extended OEP allows for the default to create a moment of attention where people can first say “Oh Shit” as they currently may, and then, they may modify their choices.