Abstract
- Issue: Automatic enrollment is receiving increased policy attention as a means of achieving universal coverage. Auto-enrollment also could have eliminated insurance gaps that occurred during the COVID-19 pandemic. However, it could face resistance from some Americans who would newly be expected to pay premiums. The approach also raises difficult design and implementation issues.
- Goal: Explore how two auto-enrollment strategies, one affecting all legal residents and another affecting a narrower low-income population, might work.
- Methods: Based on lessons learned from the Affordable Care Act and understanding of subsidized insurance programs, we explore design and implementation issues, such as how to deem enrollment, how to collect premiums, and which exemptions to permit. We also use the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate coverage and cost implications of each approach.
- Key Findings and Conclusions: Both the comprehensive and limited approach to auto-enrollment would require the development of new administrative systems and enhanced marketplace subsidies to improve coverage affordability. Each approach would operate more simply if accompanied by a public insurance option. We conclude that the administrative and financing challenges related to auto-enrollment can be addressed and that a balance between public costs and sufficient political support could be identified.
Introduction
The idea of using an administrative mechanism to automatically enroll people who do not actively enroll themselves in a private health insurance plan or a public coverage program is receiving increased attention recently as a way of covering Americans who remain uninsured. Depending on the design, an auto-enrollment policy can target either a narrow segment or a broad swath of the population. During the COVID-19 pandemic, when millions of people lost their jobs and their employer-based insurance, auto-enrollment strategies might have eliminated many coverage gaps.
Absent a single-payer health insurance system, a comprehensive version of auto-enrollment that is mandatory for most people who would otherwise be uninsured may be one of the most likely paths to near-universal coverage. But comprehensive auto-enrollment raises significant administrative and political challenges because it generally requires the payment of insurance premiums by at least some of the people who are auto-enrolled. Given that, policymakers might also consider a narrower version of auto-enrollment, such as one limited to people who are eligible to enroll without paying a premium.
This paper explores how these two auto-enrollment variants might work and estimates their impacts on coverage and federal government costs. The first option we present is a more comprehensive approach that would lead to universal coverage for legally present U.S. residents. The second option, a less comprehensive approach, would focus on auto-enrolling the country’s lowest-income residents who are eligible for comprehensive coverage without a premium contribution.