Texas’ ACA Marketplace enrollment continues to increase: We explore why

On Wednesday, Centers for Medicare & Medicaid Services released the most recent national snapshot of enrollment for the Affordable Care Act Marketplace through Jan. 7. The big takeaway? Texas’ enrollment in ACA Marketplace plans thus far is more than 2.32 million with a couple of days left to sign up. The ACA Open Enrollment Period expires, for most people, on Jan. 15. 

By comparison, last year’s total enrollment was 1.84 million. For a ballpark estimate on how many more people might sign up in the final week, last year’s final snapshot report showed about 1.71 million signups. There are some variations in how the data is reported that make a direct comparison difficult, but taking all of that into account, it’s a reasonable estimate that the final enrollment numbers in Texas will be between 2.37-2.52 million.  

Texas’ Enrollment in the ACA Marketplace
2020	2021	2022	2023 (est.)
1,116,293	1,291,972	1,840,947	2,450,000
Source: Centers for Medicare & Medicaid Services

Why is enrollment continuing to increase? 

We don’t know for sure, but there are a number of plausible theories:

1. Lower (net) prices

Net prices, after taking into account subsidies, are lower for many enrollees due to a combination of explicitly increased subsidies from the federal American Rescue Plan legislation, as well as an improved rating compliance that resulted in increased subsidies due to state legislation — SB 1296 — passed by Senator Nathan Johnson and Representative Tom Oliverson.

2. Increased eligibility

Federal rule changes recently addressed something that was known as the “family glitch,” resulting in more people becoming eligible for ACA subsidies. Under the ACA, you are not eligible for subsidies if you have access to an affordable plan through an employer. Prior to the rule change, affordability was measured based solely on the cost to the employee for an employee-only plan, even if the cost to add family members was more expensive. The rule change now measures affordability based on the cost to the individual, which can result in many more people qualifying for ACA subsidies, as many employer plans are much more expensive for family members than they are for the employee.

Note: Affordable in the context of the ACA has a specific technical meaning that is defined by law.

3. Increase in perceived need

Through the global pandemic, the past few years have highlighted health risks, bringing them top of mind for many. Concerns over being able to access vaccines and other COVID-related medical care, in addition to an increased likelihood of coming into contact with medical providers, may have resulted in many more individuals shifting focus and making obtaining health insurance a higher priority in their lives.

4. Changing workforce trends

This is one area where we don’t have thorough up-to-date data — yet. Looking at the change in enrollment from 2020 to 2023, we see an increase in enrollment of around 1.3 million people. What we don’t know yet is where all that enrollment has come from — that is, of the 1.3 million additional enrollees, how many of them were previously uninsured versus insured through work, for example. It’s possible that some of this increase is coming from a short-term increase in the pool of people interested in individual coverage as a result of pandemic shifts to the workforce, including individuals who decided to retire early or who lost jobs or switched jobs resulting in a loss of eligibility for employer coverage.

We may learn more about these factors, or potentially others, as we get more data. In particular, in the coming months, Centers for Medicare & Medicaid Services will release more granular, state-level data on who enrolled, and the American Community Survey will help provide additional insight into labor market trends. Check back with us for more insights and analysis throughout the year.