Dec 14, 2018

Why this ACA enrollment season has been the worst

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Data: Centers for Medicare & Medicaid Services; Chart: Andrew Witherspoon/Axios

The Affordable Care Act is limping toward the end of what will likely be the worst enrollment season in its history. That's partly because of the Trump administration's policies, but there are also other reasons, and they may matter just as much.

Where it stands: The window to purchase ACA coverage for 2019 closes on Saturday. So far, the number of people signing up through HealthCare.gov, the main enrollment portal, is down about 12% from the same time last year — and last year was down slightly from the year before that.

Why now: The timing of this enrollment drop has caught some experts by surprise. Yes, the Trump administration has chipped away at the ACA, but a lot of that was baked into the system a year ago, when premiums skyrocketed. Premiums are actually lower, on average, this year, and many people have more plans to choose from.

Here’s why it’s happening:

Coverage is still really expensive. Yes, premiums went down this year for many plans. But they’ve been going up, sometimes by double digits, every year before that.

  • “If you’re not sick or you can’t predict your health care needs, and predict them to be high, there is not a ton of incentive to purchase insurance at that cost,” said Chris Sloan, a manager at the health care consulting firm Avalere.

Unemployment is low. The ACA’s markets are mostly designed to serve people who don’t get insurance through their jobs — and that pool shrinks when more people are working. This probably isn’t a huge effect, Sloan said, but it’s “in there.”

Trump certainly hasn’t helped, though some of the administration’s changes may not pack as much punch as you might think.

  • The Department of Health and Human Services has slashed the budget for advertising and enrollment outreach.
  • It has also expanded cheap, bare-bones “short-term” plans, which don’t have to cover pre-existing conditions. That may be siphoning some healthy people out of the ACA’s exchanges.
  • Nullifying the individual mandate once seemed like a death blow, but there’s a growing consensus among policy wonks that the mandate just wasn’t very effective.

The big picture: The market for ACA coverage has shrunk, but that shrunken version is stable.

  • Soaring premiums have likely pushed out the vast majority of people aren’t eligible for help paying their premiums, unless they’re truly desperate for coverage. People who do receive those subsidies are largely insulated from premium hikes, so the market still works just fine for them.
  • The ACA is largely relegated now to the poorest and/or sickest consumers. That slide didn’t start with Trump, but his administration has leaned into it.

Go deeper: The ACA is smaller, weaker and more liberal than Obama intended

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