President Donald Trump likes to say that Obamacare is dead, and he’s done a lot to try to make that a reality. But the Affordable Care Act’s health insurance exchanges and their customers keep refusing to agree.
For the 2018 open enrollment period on the exchange marketplaces, which ended Dec. 15 in most states, 11.8 million people signed up for private health insurance plans, according to government data compiled by the National Academy for State Health Policy and released Wednesday.
That’s down 4 percent from the 12.2 million who chose policies during the sign-up campaign for 2017.
“It’s not collapse. It’s incredible stability,” Peter Lee, executive director of Covered California, the state’s health insurance exchange, said during a conference call organized by the health policy academy on Wednesday.
Fewer enrollees is hardly ideal, and 2018 marks the second consecutive year in which sign-ups declined, after growing from 2014 through 2016. The 2017 and 2018 open enrollment periods were the first ones under the Trump administration.
The results among some of the state-run exchanges, over which the federal government has less influence, suggest the health insurance exchanges work better for consumers when the people in charge aren’t actively trying to make them worse.
Eleven states and the District of Columbia manage their own health insurance exchanges, and five other states handle many of the exchange’s functions even though their residents use the federal HealthCare.gov system to enroll instead of a state-run website.
In those states, enrollment rose 2 percent ― a modest gain, except when compared with the 5.3 percent decline in the remaining 34 states, where the Trump administration had almost total control this year.
And over the past two open enrollment periods, sign-ups in state-run exchanges, including those that use HealthCare.gov, increased 1.5 percent, compared with a 10.5 percent decrease in states with federally run exchanges.
While there’s a lot of variation among the states ― some state-run exchanges, like California, shrunk this year, while some federally run exchanges grew ― the underlying lesson appears to be that working to get people covered is more effective than making it harder for them.
The Trump administration began undermining health insurance exchange enrollment almost immediately after the inauguration last year by canceling advertising that President Barack Obama’s administration had planned for the end of the 2017 sign-up campaign, which began under Obama and closed out shortly after Trump took office.
For the 2018 enrollment period, the Trump administration went much further. The advertising budget saw a 90 percent decrease, and programs that fund counselors who help consumers shop for insurance were cut by 40 percent.
Trump cut of billions of dollars in repayments owed to health insurers serving the poorest Obamacare enrollees. Under the Affordable Care Act, insurance companies must provide “cost-sharing reductions” that shrink out-of-pocket costs like deductibles and copayments to the lowest-income customers. The federal government is supposed to reimburse them, but Trump stopped doing so last fall.
That led to huge premium hikes that were even bigger than they otherwise would’ve been. In a twist, this move wound up making better insurance more affordable for a lot of subsidized consumers, even as it massively raised prices for middle-class consumers who earn too much to qualify for financial assistance.
Those subsidies proved key to keeping enrollment so close to the levels seen in previous years because they meant millions of consumers could still afford coverage despite the net increase in premiums.
Among the senior officials who badmouthed the program and touted reasons for not signing up were Seema Verma, administrator of the Centers for Medicare and Medicaid Services: the agency in charge of the exchanges.
The Department of Health and Human Services even tapped into its exchange outreach budget to produce videos and other materials portraying the Affordable Care Act in a negative light as part of the Republican Party’s attempts to repeal the law.
In spite of introducing these challenges, the administration went through with an Obama-era proposal to halve the duration of the open enrollment period to six weeks.
Most of the state-run exchanges opted for later deadlines, including all the way until Jan. 31 on Covered California and New York State of Health. And instead of scaling back their consumer assistance and public education, they ramped it up ― partly in response to the Trump administration’s efforts to weaken the exchanges and suppress enrollment.
“2019 looks very troubling.”
- Peter Lee, executive director of Covered California
“Our ability to extend our open enrollment period, our ability to control our marketing and outreach budget, our ability and quickly and simply mitigate the impact of the defunding of CSRs ― cost-sharing reductions ― right before open enrollment started and our ability to serve our customers in their community led to a very successful open enrollment,” Zachary Sherman, the director of Rhode Island’s HealthSource RI, said during the conference call.
Trump and the GOP aren’t done changing the Affordable Care Act from the inside, though, and even states that operate their own health insurance exchanges may find it difficult to maintain stability next year.
“2019 looks very troubling,” Lee said.
Trump signed a tax bill in December that, starting next year, eliminates the fines people have to pay if they go without health coverage and don’t qualify for an exemption from the Affordable Care Act’s individual mandate.
This change in law is expected to result in fewer enrollees ― and particularly fewer healthy consumers who would be paying more in premiums they take out in medical expenses. This will raise rates and, though subsidized enrollees will be protected, those with higher incomes will have to pay full price or go without coverage.
The administration also published a regulation last month allowing more businesses to join together to form “association health plans.” This might save some small companies money, but it has the potential to draw even more healthy people from the exchanges, causing prices in those marketplaces to rise more.
And the administration is working on a separate initiative that would permit insurers to sell short-term insurance policies effective for up to a year, which would exclude those with preexisting conditions. This could further diminish the number of healthy customers in the exchange markets.
State officials have been pleading with Congress to take steps to shore up the health insurance exchanges, including creating a pool of “reinsurance” money to compensate insurers that wind up with higher-than-expected medical expenses. This would keep premiums down by shielding policyholders from the costs of their sickest and most expensive fellow customers.
Minnesota is one of a handful of states that received federal permission to create such a fund, although it’s for only two years, and saw positive results, as did Alaska.
“Our reinsurance program is just a Band-Aid,” Allison O’Toole, CEO of Minnesota’s MNSure exchange, said during the conference call. “We need and are advocating for a long-term reinsurance program that every state can participate in, and if Congress is serious about stabilizing markets across the country, they can look to Minnesota’s program as a proven solution.”
Congressional Democrats, along with a few Republicans, have been advocating for the reinsurance policy and other measures to stabilize the health insurance market to be added to a budget bill working its way through Congress. But a tentative spending deal announced Wednesday includes none of them.
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