The 2023 open enrollment period ended January 15, and if you’re like most brokers, you’re probably exhausted and ready for a break. That’s understandable – this was a record-breaking year. HHS reports that nearly 16 million people signed up for Marketplace coverage during the open enrollment period, a 13 percent increase over 2022. Actually, that report came with a few days left in the 2023 signup period, so the final numbers will likely be even higher.
With nine months to go until the next open enrollment period, it may seem a little early to start talking about 2024, but in reality, this is the perfect time. As things begin to slow down a little, we can all take a breath and begin strategizing about how to make next year even more successful.
2024 could be another record-breaking year
As part of that process, we can try to predict what demand will look like, and all indications are that more people than ever will be in need to individual health coverage, and most of these folks will qualify for a premium tax credit. Why? Three reasons:
- The enhanced tax credits will still be in effect. As part of President Biden’s COVID relief bill, the federal government increased the amount of financial assistance available to those who qualify and also eliminated the “subsidy cliff” that previously cut off eligibility at 400 percent of the Federal Poverty Level. Initially, these enhanced tax credits were set to expire at the end of 2022, but the Inflation Reduction Act extended them through the end of 2025. This means that many more people qualify for assistance than in previous years.
- A lot of people have lost job-based coverage. If you’ve been watching the news, then you’ve likely heard about all of the recent layoffs in the tech sector. Social media giants like Twitter and Facebook have laid off thousands of employees, and companies like Amazon, Microsoft, and Google have done the same. While many of these individuals will find other employment, there may not be enough jobs to go around. That means that there will likely be an increased need for individual coverage.
- We may be entering a recession. Again, if you’ve been watching the news, this is not new information. But we do need to consider how a recession might impact our industry. First, there could be even more layoffs; there’s no reason to believe the job losses will only be in the tech sector. Second, some companies might have to drop their group health plans. Obviously, this will be a tough decision for employers, but desperate times call for desperate measures. And third, prices will be going up, so many people who have been paying to cover their family members on their employer-sponsored plans may look for alternatives to help free up some money. With the end of the “family glitch,” which blocked many dependents from qualifying for a premium tax credit, we could see more people than ever shopping for individual coverage.
Rule changes will help consumers make quicker decisions, get better coverage
In addition to the increased demand for individual health plans in 2024, it may be easier for consumers to qualify for assistance and find plans that meet their needs. A recent JDSUPRA article details the proposed rule changes in the HHS Notice of Benefit and Payment Parameters for 2024. There are a lot, but here are the ones that will have the biggest impact on your clients:
- Easier to apply for a premium tax credit. In an effort “to reduce administrative barriers to enrollment while enhancing overall consumer choice,” the new rule would require both federally-facilitated and state-based marketplaces “to accept an applicant’s attestation of projected annual household income when certain tax return data is unavailable,” and “enrollees with income inconsistencies would be granted a 60-day extension in addition to the 90 days provided under the current rules” to provide any necessary documentation.
- Fewer options, which should reduce confusion. One of the challenges for brokers and their clients is sorting through the myriad of choices from the various carriers in the market to find a plan that’s a good fit. As the JDSPRU article explains, HHS “aims to mitigate plan choice overload that often leads to consumer confusion and frustration” so that “consumers can make more informed and focused enrollment decisions” by “limiting the number of non-standardized plan options that issuers can provide on Exchanges to two per product network type and metal level, per service area.” As an alternative to limiting the number of plans, “HHS proposed to reinstate the meaningful difference requirement, which was first introduced by the Obama administration in 2015, but was reversed by the Trump administration in 2019.” This requirement would only allow a carrier to offer plans that are “meaningfully different” from each other.
- Re-enrollment into silver plans. Another proposed rule would give Exchanges “the flexibility to switch consumers from a bronze plan to a silver plan” with a cost-sharing reduction if the member qualifies “as long as the silver premium net of the advanced premium tax credit (“APTC”) is less than or equal to the bronze premium.” This could free up some of the time that brokers spend making sure their renewing clients have the right health coverage. However, it is unclear whether many silver-level plans will be lower in cost than bronze-level premiums, so the practical impact of this rule change remains to be seen.
It’s important to keep in mind that these are just proposed rule changes at this point. They will be finalized later this year after a 30-day comment period.
Preparing now can increase your chance of success
The beginning of the year is a great time to reflect on the previous year and decide what we did well and what adjustments we could make to have better results in the future. As we look ahead, though, we also need to anticipate changes and factor those into our strategy. Based on what we know now, we should be excited about 2024: we could see increased demand and an easing of some of the barriers that have made it difficult to help our clients in the past.
By starting early and doing a little planning now, you will increase your chances of taking advantage of these changes and having your most successful year yet. And at AHCP, we’ll do everything we can to help make sure that happens.