Covered California Sees Significant Decline in New Enrollment, Points to Removal of Individual Mandate Penalty

On Wednesday, Covered California released its open enrollment figures for 2019 coverage, finding that overall enrollment held steady with more than 1.5 million consumers selecting a health plan. There was a 7.5 percent increase in the number of existing consumers renewing their coverage, but a 23.7 percent decrease in the number of new consumers signing up for coverage for 2019. New enrollment numbers for 2019 came in at 295,980, compared to 388,344 in 2018. The total number of net plan selections for 2019 was 1,513,883 (1,217,903 renewed coverage, 295,980 new coverage). Compared to 2018, there were 7,641 fewer selections, which represents an overall decrease of 0.5 percent.

The 23.7 percent decrease in California was steeper than expected and is higher than the average 15.8 percent drop experienced by 39 states participating in the federally facilitated marketplace. Covered California conducted an analysis of the open enrollment plan selection and demographics compared to last year and found the reduction of new enrollment was relatively evenly spread across all demographics. Slightly larger drops in new enrollment were experienced among Bronze consumers, unsubsidized consumers, and populations in which English is not the preferred spoken language.

As a result of finding that the reduction in new coverage was evenly spread across consumers, Covered California Executive Director Peter Lee indicated that the removal of the individual mandate penalty appears to be a primary driver of the loss of new enrollees. Recall, Congress stripped the Affordable Care Act (ACA) individual health insurance coverage mandate penalty as part of its tax reform measure passed in December 2017; 2019 is the first year the penalty does not apply.

In addition to the individual mandate penalty, other potential factors contributing to the reduction in new enrollment may be continued challenges of health plan affordability and Covered California’s previous success in enrolling healthy consumers. More information on the 2019 enrollment figures from Covered California is available here; a more in-depth issue brief analyzing enrollment and potential impacts is available here.