'Get it while it's there': Consumers urged to sign up under Covered California's enrollment extension
The Trump administration is spending just $10 million to tell consumers in 35 states that it’s time for open enrollment under the Affordable Care Act – a 90 percent reduction from last year. California’s state-run marketplace, in contrast, is spending five times that much on advertising.
“Sadly, in those 35 states, they’ll have lower enrollment and higher premiums,” said Peter V. Lee, executive director of Covered California. “It makes it all the more important that we do our job and do it right. We need to make it clear that, while there will be higher premiums in the rest of the nation, ... it’s not because the Affordable Care Act stopped working, it’s because the federal government stepped in and prevented the law from working.”
As the federal government backed away from the Affordable Care Act, California increased its overall budget for marketing, advertising and sales by 11 percent to $111 million. It is spending $50 million on advertising alone to ensure consumers know that this year’s congressional attempts to repeal or replace the law failed and health coverage remains available.
On Wednesday, Lee wrapped up a six-day bus tour of California to publicize the start of open enrollment. The state also ran television ads during the World Series and commissioned 12 murals around the state, including one by David Garibaldi at La Familia Counseling Center in Sacramento.
The news coverage that the bus tour generates helps get the word out to thousands of Californians who are eligible for either financial subsidies or Medi-Cal, but don’t know they can get help, Lee said.
In the last year, Lee said, roughly 1.1 million people in the state qualified for subsidies to help pay for their health care. The majority of those people will see their premiums drop because Covered California proactively worked with insurers to ensure that they could collect federal funds already appropriated to offset costs for low-wage consumers.
In mid-October, after months of uncertainty, President Donald Trump announced that he would not pay so-called cost-sharing reductions that reimburse insurers for the deep discounts they provide on out-of-pocket costs for deductibles and co-pays for low-income people. The money is already appropriated, but a federal judge has ruled that no language in the Affordable Care Act authorizes its payment to insurers. However, the judge said, the law does mandate that the insurers must be paid.
In California, Lee and his team had insurers provide pricing with or without the cost-sharing reductions. They told insurers to add a surcharge to policies for those people who would have qualified for the federal subsidies. Those surcharges – rolled into premiums – would be covered by money already allocated by Congress to subsidize premium payments.
“California, from the beginning, has taken every step they can think of to make this work,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation in Washington, D.C. “In this most recent, unexpected snafu, when the president canceled payments to insurers for the cost-sharing subsidies, California had stepped in front of that and said, ‘Here’s how we want you to file your rates. Here’s where we want you to put this rate increase. This is how much you’re allowed to put on.’ California tried to make that uncertain situation as predictable as possible, so even if the marketplace melts down in Ohio, that’s not such a big deal for California directly.”
Pollitz said it’s critical for government to sink money into advertising the health coverage under the Affordable Care Act. In its research, Kaiser has found that most consumers don’t remember the dates when open enrollment starts or ends. In California, it began Nov. 1 and will end Jan. 31, just as it has in past years.
But in the 35 states where the U.S. government manages the health marketplaces, sign-ups are cutting off on Dec. 15. Pollitz said she and other experts worry that many people, amid the bustle of the holidays, will forget about open enrollment and discover in January that it’s too late for them to sign up.
Television advertising has proven to be the most effective in reaching the people who need it, even better than social media outlets such as Facebook and Twitter, Pollitz said. In last year’s open enrollment period, the Obama administration put $70 million to $80 million into just TV advertising, scheduling many of the ad spots to run in the days before the Jan. 31 deadline.
When Trump took office on Jan. 20 2016, he asked his team to cancel the television spots. For the first time in four years, Pollitz said, sign-ups for Obamacare plans leveled off. While that’s not a scientific evaluation, Pollitz said, it shows the impact that a change in advertising can have. Many people, she said, sign up at last minute.
This year, on Nov. 1, Covered California saw roughly 5,900 plan selections, about 25 percent higher than on the first day of open enrollment in 2016. The Washington Post, citing an unnamed administration official, said that more than 200,000 Americans signed up for plans on the first day that the federal exchange opened, double last year’s numbers. Covered California, Lee said, typically sees the biggest surge in enrollment in the first two weeks of December.
“One of the reasons enrollment numbers matter is that you want a mix of healthy and not-so-healthy people in your exchange because people who are healthy this year help to pay for people who are sick this year,” said Gerald F. Kominski, director of the UCLA Center for Health Policy Research. “The bottom line is the more people who are insured, the lower the overall cost to everybody, and so when the market starts fragmenting and only people who are chronically ill or people who think they’re going to have high (medical) spending, if they’re the only ones signing up for benefits, then that drives the cost up in the marketplace and makes it less affordable.”
The first days of enrollment, Lee said, often bring in the people who need coverage the most. It’s harder, he said, to get healthy people to log in and make choices. Yet those healthy people are the key to ensuring that premiums remain lower for everyone. On average, premiums for policies offered by Covered California rose by 12.5 percent this year, but nearly 90 percent of participants receive tax credits that will either lower their out-of-pocket costs or keep them about the same.
Lee said it has been able to offer such rates because its coverage group includes a good number of healthy consumers in the mix, many of whom come from the ranks of subsidized consumers. Among those who receive subsidies, 78 percent will either see no change in their 2018 premiums or will pay less than what they would have paid if there had been no surcharge.
Advertising will help to spread that news, Kominski said, especially for people who don’t get health insurance through an employer. This is also the time of year when people who do receive health insurance through an employer sign up for next year’s benefits.
“At the UC, it’s open enrollment season,” Kominski said, “and I’ve been getting emails reminding me that it’s time to sign up for benefits for next year. That includes more than just health care, but health care is the most important benefit that I have to be signed up for, and if I want to make a change, now is the time to do it.”