2020 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

District of Columbia takes my advice, reopens enrollment for those who didn't know about the mandate penalty

Back in early December, I noted that while I applauded both New Jersey and the District of Columbia for creating their own individual healthcare coverage responsibility requirements (aka, The Individual Mandate) in response to Congressional Republicans repealing the ACA's federal penalty, doing so also required making sure that residents of NJ/DC *knew* they had done so:

There's only one problem with this: The impact of the mandate penalty is completely psychological in nature. It only works (to the extent that it does at all) if people know that they'll be penalized financially for not complying with the mandate.

Remember, the point of the mandate is not to add $700+ to the tax burden of a bunch of people; the point of it is to encourage them (detractors would say "goad") into enrolling in an ACA-compliant policy. The more (presumably relatively healthy) people do so, the healthier the ACA market risk pool is. This expectation is the very thing which caused New Jersey insurance carriers to lower their 2019 premiums by 5.8% in the first place.

HOWEVER...what if no one (or hardly anyone) in New Jersey knows about the penalty still being in place?

More specifically, what if no one who's part of the target population for enrolling in the ACA individual market (either on or off-exchange) knows that the penalty is still around, having simply shifted from the federal treasury to the state?

If someone who would normally be convinced to go ahead and enroll for 2019 with the penalty in place decides not to do so because they think there won't be any penalty for skipping out, guess what? The penalty being there won't make a damned bit of difference, at least in terms of how it impacts the 2019 risk pool.

At the time, I was mostly focused on New Jersey. My contacts in the Garden State informed me that there didn't seem to be too much of an effort by the government to let people know about the reinstated financial penalty, beyond a notice posted on the state's enrollment portal website itself (which is nice, but is only read by people after they visit the website in the first place).

However, the same principle applies to the District of Columbia as well. DC's local mandate penalty wasn't made official until much later than New Jersey's (it wasn't officially signed by the DC mayor until September), and I had trouble finding any references to it even when I visited the DC Health Link website (there's no notice on the home page; you have to click the FAQ, then "Consumers", and then scroll halfway down the list to find the actual mandate penalty link).

As for Massachusetts, they simply dusted off their own pre-ACA mandate penalty from the Romneycare days...and they made sure to launch a full-blown education/awareness campaign to ensure that state residents knew about the coverage requirement simply having shifted back to the state version. Results? They blew away their previous enrollment record by over 12%, breaking 300,000 exchange enrollees for the first time, which kind of proves my point.

Well, now that DC's Open Enrollment Period has officially ended (they bumped the deadline out until Feb. 6th), it looks like the powers that be at the DC Health Benefit Exchange have come to the same conclusion:

Special Enrollment Opportunity Offered to Uninsured District Residents to Get Covered and Minimize Tax Penalty

Friday, February 15, 2019

Additional 60 days to enroll given to uninsured residents who learn of DC’s individual responsibility requirement when they file their 2018 DC taxes

Washington, DC - This week, the DC Health Benefit Exchange Authority (DCHBX) Executive Board adopted a unanimous recommendation from its Standing Advisory Board to allow a Special Enrollment Period (SEP) for District residents who may be subject to a District tax penalty because they did not have health insurance in 2019. A new District of Columbia law went into effect January 1, 2019 requiring residents to have health insurance, get an exemption or pay a penalty on their DC taxes. Some DC residents are learning about this individual responsibility requirement for the first time as they file their 2018 tax returns.

Uninsured District residents who learn of the individual responsibility requirement when filing their 2018 income taxes are now eligible for a 60-day Special Enrollment Period to enroll in health insurance through DC Health Link and minimize the impact of the tax penalty. If an uninsured resident contacts DC Health Link before they file their 2018 taxes, the 60-day SEP starts the day the individual contacts DC Health Link. If an uninsured resident contacts DC Health Link after they file, the SEP starts the date they filed their 2018 taxes. DC residents eligible for Medicaid are not subject to the tax penalty.

"As District residents prepare to file their taxes this year, some residents are just now learning that they may have to pay a local tax penalty for not having health coverage in 2019," said Diane C. Lewis, M.P.A., Chair of the DC Health Benefit Exchange Authority Executive Board. "We want to make sure that District residents who are uninsured and didn't know about DC's individual responsibility requirement are able to enroll in quality, affordable health insurance so they can minimize the impact of a tax penalty."

The tax penalty is based on the number of months an individual or family goes without health coverage. For someone who goes without coverage for a full year, the penalty is: $695 for each adult and $347.50 for each child, up to $2,085 per family or 2.5% of family income that is over the federal tax filing threshold, whichever is greater. More details about the tax penalty.

Uninsured District residents who do not enroll during this Special Enrollment Period will not be able to sign up for coverage until the 2020 Open Enrollment Period, which starts November 1, 2019, unless they experience a life event that permits them a special enrollment opportunity (e.g. getting married or moving into the District). These uninsured residents may be subject to a penalty when they file their 2019 District of Columbia income taxes. Residents who are eligible for Medicaid can enroll in coverage through DCHealthLink.com throughout the year and are exempt from the District’s new penalty.

It's important to note that there's ample precedent for this move. In 2015--the first year that the ACA's federal coverage requirement was actually enforced (for 2014 coverage)--HealthCare.Gov along with nearly all of the state-based exchanges did the exact same thing, creating a special one-time Special Enrollment Period for those who claimed (truthfully or not) that they didn't have any idea about the mandate penalty.

To be honest, this struck me as difficult to believe seeing how the individual mandate has always been the most controversial and inflamatory part of the ACA since it was first passed in 2009. It can be argued that the mandate was the single biggest contributing factor to Republicans taking over the U.S. House of Representatives in the Red Wave of 2010...it was one of the major rallying cries of the Tea Party, etc etc.

Regardless, HC.gov and many state exchanges--including DC Health Link--decided to give the public a one-time second chance to avoid the financial hit since it was the first time, etc.

In the end, around 214,000 people took advantage of the #TaxTime SEP nationally, increasing the 2015 enrollment numbers by roughly 1.8%. My best estimate for DC specifically was that perhaps 400 people or so took advantage of this particular SEP, but that was speculative.

How many people will enroll using this year's #TaxTime SEP? Hard to say. I would guess a similar number, but keep in mind that the mandate penalty is considerably larger today--in 2014 it was only $95/apiece or 1% of household income; in 2015 it was $325/apiece or 2% of income; for 2019, however, it's $695/apiece or 2.5% of household income. That higher penalty might have a more dramatic effect on enrollment...but who knows?

In any event, DC residents who missed the cut and didn't know about the local penalty now have sixty days to #GetCovered and avoid the financial hit.