Enrollment in ObamaCare plans is unlikely to increase next year as the Trump administration provides an escape hatch for people who say they have been priced out of coverage.
The repeal of the penalty for not having insurance and the administration’s expansion of cheaper, slimmed-down plans that don’t meet ObamaCare’s requirements could cause more people to leave the exchanges when the sign-up period starts Thursday, according to health experts. The administration will also fund fewer local groups this year that help people enroll.
“I think an increase in enrollment is probably unlikely, given both the policy changes that have been put in place and the operational changes like the cuts in funding,” said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms (CHIR) at Georgetown University’s Health Policy Institute. “But time will tell.”
Enrollment in the ObamaCare exchanges, which includes signups through healthcare.gov and state-based marketplaces, was little changed between 2017 and 2018.
About 11.8 million people signed up or were automatically re-enrolled in a plan during last year’s open enrollment period, a decrease of about 3 percent from 2017.
While the average premiums for ObamaCare’s most popular plan are expected to drop by 2 percent next year, it remains a “really expensive market,” said Chris Sloan, a director at Avalere Health, a Washington-based consulting firm.
“I think the best bet is enrollment is going to remain flat,” he said.
Changes this year ushered in by the Trump administration and GOP-led Congress will also make it easier for people to forgo ObamaCare plans, making it unlikely that enrollment numbers will go up.
A federal rule that took effect Oct. 1 allows insurers to sell short-term plans that last 12 months instead of the three-month coverage allowed under the Obama administration.
The new plans, which are not sold on the exchanges, are cheaper than ObamaCare plans because they cover fewer services, and can be denied to people who have pre-existing conditions.
But the cost might outweigh the shortcomings, especially for young, healthy adults who feel that they’re paying too much under ObamaCare for coverage they don’t need. The new plans can also be sold year-round, whereas ObamaCare sign-ups are limited to Nov. 1 through Dec. 15.
Next year will also be the first time ObamaCare’s individual mandate penalty is not in effect, meaning consumers won’t be penalized for not having health insurance.
“With the repeal of the individual mandate penalty, that makes these plans more attractive, because they don’t have to pay a penalty anymore and they can buy that cheaper coverage without having to pay a penalty on top of it,” said Cynthia Cox, a health insurance expert with the Kaiser Family Foundation.
Both of those changes have been promoted by the Trump administration as freeing consumers from ObamaCare.
“I want to be clear: Under President Trump, we’re not going to tolerate a system that forces anyone to pay 10 times more for insurance than they need to,” Health and Human Services Secretary Alex Azar said during a speech last month.
The vast majority of people buying ObamaCare plans receive federal subsidies and are likely to return to the exchanges for 2019. But those who make too much money to qualify for a subsidy are most likely to drop out of the exchanges; about 1.4 million people in the first quarter of 2018 purchased insurance through ObamaCare exchanges but didn’t receive a subsidy.
“As you move up the income scale and subsidies become less generous or not available, you could see those folks peel away and become uninsured, or if they’re healthy, shifting to one of those alternative options,” Corlette said.
Premiums for the most popular ObamaCare plan increased by about 34 percent from 2017 to 2018, largely due to insurers’ uncertainty over how the Trump administration would handle the health care law. While people who get subsidies are largely shielded from the premium increases, those who aren’t have to pay the full cost.
There’s also 2.5 million people buying insurance off the exchanges, where subsidies cannot be used. That segment of the individual market has “dramatically declined” in the last few years, Sloan said.
“It’s most likely that with the high premium increases, that trend continues, even if exchange enrollment is flat,” he said.
