Affordable Care Act (ACA) Marketplace enrollment will reach a new record high of more than 21 million in 2024, nearly double the 11 million enrollees in 2020. This growth is largely due to the expanded subsidies provided under the American Recovery and Reinvestment Act (ARPA) in 2021 and renewed under the Inflation Reduction Act (IRA) in 2022. These expanded subsidies significantly reduced premium payments for all ACA marketplace participants, including providing 100 percent subsidies for the lowest-income participants, and allowed some middle-income people who had previously been denied coverage to become newly eligible for financial assistance.
While expanded subsidies under the ACA are available nationwide, some states are growing faster than others. Fifteen states have more than doubled the number of participants in the ACA Marketplace program since 2020 (Figure 2). One of these states is Texas, where the number of ACA program participants has more than tripled since 2020. At the same time, three states have decreased the number of Marketplace participants since 2020.
The five states with the fastest growth in Marketplace enrollment since 2020 - Texas (212%), Mississippi (190%), Georgia (181%), Tennessee (177%), and South Carolina (167%) - have some things in common: they all started with high levels of uninsured before expanded subsidies, did not expand Medicaid under the ACA, and use the Healthcare.gov platform for enrollment.
It is difficult to separate the impact of each of these factors (level of uninsured, Medicaid expansion, and enrollment platform) because they are correlated and closely related. Nevertheless, the data suggest that large numbers of uninsured people in these southern states with high rates of uninsurance wanted health insurance, and recently expanded subsidies have allowed them to afford that insurance. However, these subsidies are temporary and will expire at the end of 2025 unless Congress extends them.
Uninsured rate
When looking at the varying rates of growth in Marketplace enrollment across states in recent years, it is important to remember that states had different starting points before the expanded subsidies under ARPA and IRAs were implemented. Nonelderly uninsured rates in 2019 ranged from less than 5 percent in Massachusetts, the District of Columbia, and Hawaii to more than 15 percent in Mississippi, Georgia, Florida, and Oklahoma and more than 20 percent in Texas. Overall, states with higher uninsured rates in 2019 saw faster growth in ACA Marketplace enrollment between 2020 and 2024, while states with the lowest uninsured rates saw less growth or even some reduction in marketplace size. On average, states with uninsured seniors below 10 percent in 2019 saw a 31 percent growth in ACA Marketplace enrollment, while states with uninsured rates of 10 percent or more saw a 136 percent growth in ACA Marketplace enrollment between 2020 and 2024.
Medicaid Expansion
Another closely related factor that may explain why some states are experiencing faster growth in ACA markets is Medicaid expansion. On average, states not covered by the expansion have seen their ACA markets grow 152% since 2020, compared to 47% growth in states covered by the expansion.
Inflation Reduction Act subsidies reduce premiums for silver ACA Marketplace plans to $0 per month for people with incomes between 100% and 150% of the poverty level. Meanwhile, in states that have expanded Medicaid, people with incomes up to 138% of the poverty level are eligible for Medicaid and therefore ineligible to purchase ACA Marketplace plans. Thus, states with expanded Medicaid have relatively fewer people who would qualify for one of these "free" silver plans in the ACA Marketplaces. This may partly explain why the marketplaces are growing faster in some states not covered by the expanded program. (After North Carolina recently expanded Medicaid, there are now 10 states, mostly in the South, that have chosen not to expand the program.)
The elimination of pandemic-era Medicaid continuous enrollment policies, which resulted in millions of people losing Medicaid in 2023 while maintaining coverage during the pandemic, likely contributed to a more dramatic increase in Marketplace enrollment during the open enrollment period in 2024. As states eliminate continuous Medicaid enrollment policies, these ACA Marketplace plans with low deductibles and $0 premiums may ease the transition from Medicaid to the Marketplace, especially for people with incomes just above the poverty level in states not covered by the program expansion.
Enrollment platforms
Growth in ACA Marketplace enrollment in recent years also correlates with enrollment platforms. All 23 states with the fastest growth in ACA Marketplace enrollment between 2020 and 2024 are using the Healthcare.gov platform. States using Healthcare.gov had a weighted average growth in ACA Marketplace enrollment between 2020 and 2024 of 126%, compared to 22% growth in states using state enrollment sites. All 10 states that have not expanded Medicaid use the Healthcare.gov platform.
Another difference is that only Healthcare.gov states have the Enhanced Direct Enrollment program, which allows health insurers and insurance brokers to directly enroll and serve Marketplace members for up to a year without requiring the consumer to visit the Marketplace website (Healthcare.gov). In recent years, brokers have played an increasing role in assisting Marketplace consumers.
However, states using their own websites for enrollment also had different starting points in 2020 before the expanded subsidies are introduced in 2021. Some states' Marketplaces have already used state funds to provide additional subsidies for health insurance beyond those offered by the federal government. In addition, several states with their own Marketplaces have long embraced the ACA and have been devoting state resources to outreach and marketing efforts for a decade. In contrast, states that rely on Healthcare.gov significantly reduced outreach and marketing budgets under the Trump administration, and under the Biden administration, these investments were renewed in 2021.