Molina's financials suggest #ACA effectuation & retention are way up

Molina Healthcare

An article about Molina Healthcare's first-quarter financial report by Inside Health Policy reporter Amy Lotven caught my eye today:

Molina exchange business grew by 302,000 consumers to reach a total 620,000 enrollees in the first quarter, outpacing the company’s earlier 500,000 estimate, growth that CEO Joseph Zubretsky says was driven by strong product design and pricing, higher effectuation rates, lower attrition and the special open enrollment period.

Molina’s marketplace business had a Medical Loss Ratio of 77.3%, which was due to the higher-than-expected direct COVID-related costs as cases surged in many areas.

There's a lot packed into that first paragraph.

First, their ACA enrollment (which presumably includes off-exchange) for Q1 was 24% higher than expected, which is quite an eye-opener.

Second, keep in mind that this figure only runs through March 31st...but the COVID-19 SEP didn't kick into effect until February 15th. The thing is, normally you have to enroll by the 15th of the month in most states for your coverage to start the 1st of the following month; if that was the case here, those enrolling after 2/15 wouldn't have their coverage actually kick in until April 1st.

For that matter, only around 200,000 additional people enrolled across the 36 states hosted via HealthCare.Gov from 2/15 - 2/28, so even if they all were effectuated starting in March, Molina would have had to pick up a full 60% of the new enrollees to add 120K to their ACA market (ok, maybe 50% when you include the 14 missing states + DC), which I find hard to believe.

It's possible that they picked up a lot of people from the COVID SEP's "switching" allowance...but the American Rescue Plan's (ARP) expanded subsidies didn't kick in until April 1st in most states either; I doubt too many people were switching plans prior to that.

Having said that, the references to "higher effectuation rates" and "lower attrition" are the most interesting items.

ACA exchange effectuated enrollment as of February or March always runs somewhat lower than the official Open Enrollment Period (OEP) number. In 2017 it was 86.2% as of March; in 2018 it was 90% as of February; and in 2019 it was 92.4% as of February.

We're still in the middle of a pandemic, after all, which means people are a lot more likely to think twice about dropping their coverage unless they absolutely have to...and the enhanced unemployment benefits, waived APTC clawback rule and, of course, the expanded subsidies of the ARP make it even less likely that people will drop their ACA policies mid-year.

This is exactly what I was referring to yesterday when I estimated that ACA effectuated enrollment (and retention) is likely even higher yet as a percentage of the official OEP enrollment number. It's conceivable that it was as high as 95% of the 12.0 million OEP figure as of February (and perhaps 92% or higher in March?) even before the COVID SEP went into effect...and while they don't provide any specifics, Molina's statement lends support to that being the case.