In the 10 years since the Affordable Care Act became effective, it’s never been more popular than it is today.
Just this month, enrollment hit a record for the third consecutive year, reaching 21.3 million people, including more than 5 million new enrollees and 16.3 million who renewed, the federal Department of Health and Human Services announced on Jan. 24.
HHS cited two big reasons for the record enrollment. First, improvements the Biden administration made to the Act since 2021, and second, almost 16 million adults and children enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) have lost their coverage since last spring. At least 2 million of those people have signed up for Affordable Care Act health plans.
And there’s a third reason: Americans want the most comprehensive health insurance they can afford that protects them — at least in part— from high medical bills. Too often, consumers find health care costs unaffordable, forcing many to skip or delay care and go without food and other necessities — all of which makes their health worse, according to an October survey from The Commonwealth Fund. For many Americans, health insurance does not protect them from taking on medical debt, the report showed.
A much-improved ACA
In December, HHS Secretary Xavier Becerra explained how the department has improved the ACA marketplace to make it easier for consumers to find health plans that provide adequate coverage and help them avoid high out-of-pocket costs for deductibles, coinsurance and cost sharing.
Note that what patients paid in out-of-pocket costs in 2022 totaled $471.4 billion, accounting for 11% of all health care spending in the United States, according to a December report from the federal Centers for Medicare and Medicaid Services. That report showed patients’ share of their costs rose by 6.6% over what they paid in 2021. What that means is that individual Americans are paying almost $500 billion from their own wallets for health care.
When the landmark ACA became effective on Jan. 1, 2014, it did not offer the same level of income-tax subsidies that the law provides now. In the past three years, President Biden and the Democrats in Congress have enhanced the ACA by making coverage more affordable through increased income-tax subsidies that enrollees get when they sign up. Those improvements came in the American Rescue Plan Act of 2021 and the Inflation Reduction Act in 2022.
Under the act, 80% of consumers who signed up at healthcare.gov found health plans for this year costing $10 or less each month after subsidies, according to HHS. And HHS paid almost $100 million to hire more ACA navigators who help consumers find low-cost comprehensive health insurance, the agency added.
While Americans at all income levels can benefit from the ACA, the law may be most useful for middle- and lower-income families. When comparing enrollment for this year against enrollment in 2022, for example, some 4.2 million more individuals in households with an income less than 250% of the federal poverty level enrolled in 2024 coverage than enrolled in 2023, according to HHS. For a family of four, 250% of the federal poverty level is about $75,000 annually. Regardless of enrollees’ income, the ACA caps plan costs at 8.5% of one’s adjusted gross income — after income-tax subsidies, HHS added.
From Medicaid to the ACA
The ACA marketplaces have also helped millions of poor and disabled adults and children who lost their coverage from Medicaid or from the Children’s Health Insurance Program (CHIP). After the COVID public health emergency ended last year, all states reviewed Medicaid and CHIP members’ eligibility for renewal, as we reported in April.
Under those processes, many states simply disenrolled more than 16 million adults and children as of Jan. 30, 2024, according to the Medicaid Enrollment and Unwinding Tracker from KFF. Among states, disenrollment rates vary widely, ranging from 61% in Texas to 13% in Maine.
As of Dec. 31, CMS data showed that 2.4 million Americans previously enrolled in Medicaid or CHIP and who live in states that use healthcare.gov enrolled in ACA plans.
Journalists should note that even though open enrollment for the ACA ended in most states on Jan. 16, it continues through Jan. 31 in four states (California, Colorado, New Jersey and New York) and in Washington, D.C., according to an October CMS report. Also, enrollment continues for any adult eligible for Medicaid or child eligible for CHIP. Those people can enroll in coverage year-round during special enrollment periods, HHS said.
Adults and children no longer eligible for Medicaid or CHIP for any reason may be able to enroll in the ACA marketplace coverage, HHS added. Consumers who are eligible include people in households that earn incomes of less than 150% of the federal poverty level (about $22,000 for an individual and $45,000 a year for families of four), according to HHS. Consumers who have a change of life circumstance by getting married, having a child through birth or adoption, or losing their health coverage may also be eligible for a special enrollment, the agency added.
Additional resources
- “Another Year of Record ACA Marketplace Signups, Driven in Part by Medicaid Unwinding and Enhanced Subsidies” — KFF, Jan. 24.
- “Marketplace 2024 Open Enrollment Period Report: Final National” — This Jan. 14 CMS report shows ACA enrollment in each state and enrollment in the small business marketplaces.
- “Explore your health care options after Open Enrollment” — This page from HHS explains consumers’ options if they did not enroll as of Jan. 16.
