Insurers are pressing the Administration to put burdensome new restrictions on special enrollment periods (SEPs) – times during which people who’ve experienced major life changes such as having a child, getting married, moving, or losing other coverage can enroll in marketplace coverage outside the regular open enrollment period.[1] That’s a bad idea.
Some insurers want the Administration to bar uninsured people from using certain SEPs. Insurers also want to restrict people with coverage from switching plans when they qualify for certain SEPs. Insurers claim that people with higher-than-average costs are taking advantage of SEPs to enroll only when they need health care, driving up insurers’ costs.
The reality is that too few eligible people are taking advantage of SEPs and that this low enrollment is likely a big reason why SEP enrollees tend to have higher costs. Those who are healthier are sitting out.[2]
Not everyone can enroll or choose the right plan during open enrollment. People’s situations change over the course of a year, and many of these changes warrant allowing them to enroll in coverage or change plans. SEPs are especially important because only marketplace enrollees can receive federal premium and cost-sharing subsidies to help make coverage affordable for low- and moderate-income people. (People who become eligible for premium tax credits during the year because their incomes change don’t get an SEP to newly enroll in a marketplace plan if they missed open enrollment.)