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The expiration of American Rescue Plan Act (ARPA) subsidies at the end of 2022 may result in 3 million members losing coverage. Reduced subsidies is a scary possibility that will come in the middle of Open Enrollment 2023 and Medicaid Unwinding.

To get ahead of this, brokers must start planning now to prevent their clients from being kept in the dark and losing coverage.

The ARPA Resulted in a Record Number of Individuals Enrolling in Coverage

Open Enrollment 2022 owes part of its success to the increased accessibility to zero- and low-premium plans on the Marketplace. The ARPA contributed to a record 14.5 million individuals enrolling in 2022 Marketplace coverage, a 21% increase compared to the previous year.

In addition to improving subsides for low-income individuals, the ARPA extended subsides for those higher up on the income level. The ARPA improves affordability and extended member access to plans by:

  • Lowering the premium contribution limit for households between 100-400% of the federal poverty level (FPL).
  • Offering no-premium coverage for households from 100-150% FPL.
  • Lowering the premium contribution limit to 8.5% and extending tax credits for the first time to households above 400% FPL.

But these benefits and enrollment gains are in jeopardy with the ARPA set to expire at the end of 2022.

Those With $0 Dollar Plans and Older Members in Rural Communities Are Most At-Risk

The transition from zero to low premium plans may result in millions of members losing coverage. Members that transitioned to plans that cost as low as $1 per month will need to establish payment channels. Adding hoops to jump through only limits access to coverage.

Experts project that 15% of those currently enrolled in the Marketplace would lose coverage without the increased tax credits. Most of these individuals that will become uninsured fall between 133% and 400% FPL.

The return of the subsidy cliff (where those above 400% of the FPL don’t receive any tax credits) will cause many to lose all their tax credits. Often overlooked due to relatively high-income levels, older individuals in rural areas are at significant risk of overpaying for coverage.

Brokers Combat Coverage Loss by Increasing Outreach Efforts

Brokers are the first line of defense for preventing catastrophic coverage losses. And it is never too early to communicate with at-risk clients and inform them of potential subsidy changes.

While some state base marketplaces (SBMs) will auto-enroll eligible clients once coverage changes, brokers can’t rely on states. The best step brokers can take is sending out notices early on to at-risk clients.

Investing in automation will save brokers resources in the long run. Personalized fields and an integrated client dashboard would help brokers increase messaging output with minimal effort. A Broker Portal allows brokers to compile and organize all their clients’ detailed information on a single interface, something useful in targeting at-risk demographics.

Detail possible affordability changes and guide clients to the next steps if they are no longer eligible for reasonably priced plans. While nothing is set in stone, states and health plans have already started designing notice templates for both scenarios.

In addition to selecting the right messaging, brokers must also have a multi-channel approach that makes the most of the technology available. Many of those at risk of losing coverage do not have access to all traditional means of communication. Think outside the box and adjust your outreach channels based on what performs best for each demographic.

Utilizing a Broker Portal like W3LL’s is a good first step to getting ahead. Follow W3LL for the latest news that impacts health plans and clients. Having trouble keeping up with all the new requirements? Let W3LL guide you through the process as you look to expand your client base through technological improvements and real connections.

Pete English

With nearly two decades in health insurance, Pete English’s diverse experience makes him uniquely qualified to help health plans and brokers leverage innovative technology in partnership with W3LL. From growing sales staff by 126% over 4 years at a large health plan, to building his own health insurance brokerage firm with over $7.2MM in annualized premium, Pete has done it all.

(631) 681-4898
PEnglish@w3ll.com

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