VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA and Government >> ACA and States >> ACA Health Exchanges >> Enrollment (last updated 12.21.17)
- 1 Overview
- 2 Enrollment Projections
- 3 Enrollment Statistics
- 3.1 Monthly Enrollment Statistics
- 3.2 2017 Open Enrollment Period
- 3.3 2016 Open Enrollment Period
- 3.4 2015 Open Enrollment Period
- 3.5 2014 Open Enrollment Period
- 3.6 Enrollment Trends
- 4 Premium Payments
- 5 Risk Distribution
- 6 Number Previously Uninsured
- Actual average monthly paid Exchange enrollment grew from 5.5 million in 2014, to 9.3 m. in 2015, peaking at 10.0 m. in 2016 and then declining to 9.8 m. in 2017, with a further decline likely in 2018 to between 7.1 m and 8.0 m.
- Actual average monthly paid enrollment fell below CBO’s adjusted (July 2012) projections of enrollment by 39% in 2014, 33% in 2015, 56% in 2016, 61% in 2017 and between 69% and 73% in 2018 (these projections reflected the expected impact of the Supreme Court decision to make Medicaid expansion optional).
- Because Exchange enrollees had higher costs than expected (sicker and/or older), plans on the Exchange incurred losses in 2014 that averaged 12% of premiums even after accounting for taxpayer subsidies.
Congressional Budget Office
- CBO has continually revised downward its estimates of Exchange enrollment under the ACA. CBO usually updates its baseline projections 3 times a year. The spring baseline is the major update for ACA Exchanges.
- All figures are calendar year estimates; in projecting insurance coverage, CBO’s estimates are intended to reflect average annual paid enrollment [footnote b, Table 4]. Thus, it is best to interpret the uninsured figures as an average daily figure, as opposed to a count of the maximum number of individuals who are enrolled at the end of open enrollment.
- March 2015 figures show projected Exchange enrollment of 11 m. (2015), 21 m. (2016), 24 m. (2017 and 2018) and 23 m. (2019-2023) and 22 m. (2024 and 2025).
Accuracy of CBO Projections
CBO’s projections of Exchange enrollment and federal spending on Exchange subsidies generally exceeded reality in 2014, though these estimates tended to become closer to reality as the year the projection was made approached 2014. Consequently, its short-range projections (< 1 year) of subsidized enrollment have been much more accurate; it has overestimated total Exchange enrollment only because its estimates of non-subsidized Exchange enrollment were too high. Yet even in its most recent prediction for the year 2014, CBO overestimated Exchange subsidies by at least 25%. CBO also severely underestimated the extent to which insurer losses on the Exchanges would exceed insurer gains.
- CBO Assessment. CBO has assessed its own accuracy in a late 2015 presentation (11.13.15):
- CBO Eventually Accurately Predicted Subsidized Exchange Enrollment. Actual average monthly subsidized Exchange enrollment for 2014 was 5 million. This compares to CBO projections for 2014 of 7 m. (March 2010), 7 m. (June 2012), 6 m. (May 2013) and 5 m. (April 2014).
- CBO Overestimated Cost of Exchange Premium Tax Credits and Cost Sharing Subsidies. Actual federal Exchange subsidies in 2014 were under $12 billion. This compares to CBO projections for 2014 of 19 b. (March 2010), 30 b. (June 2012), 23 m. (May 2013) and 15 b. (April 2014). Thus, the most recent projection exceeds reality by at least 25%.
- Mercatus Assessment. A Mercatus Center report (11.19.15) provides a systematic comparison of actual Exchange performance relative to CBO projections, with the following conclusions:
- CBO Overestimated Total Exchange Enrollment. CBO’s original March 2010 projection of Exchange enrollment exceeded actual enrollment by 45% in 2014, 37% in 2015 and will exceed enrollment by 110% in 2016 assuming the administration hit their planned target of 10 million Exchange enrollees at the end of 2016 (calculated from figures here).
- CBO Overestimated Unsubsidized Enrollment. CBO’s estimates of subsidized enrollment have been reasonably accurate, but its March 2015 projection of unsubsidized Exchange enrollees was roughly double actual enrollment.
- Blase, Brain (11.19.15). Enrollees More Expensive Than CBO Projected. CBO projected that for the 2014 plan year profitable insurers would pay $1 billion for excess gains and unprofitable insurers would collect $1 billion for excess losses. Instead, insurers with excess profits owed about $360 million and insurers with large losses requested about $2.9 billion, implying that Exchange enrollees were much less healthy than CBO had expected.
- Commonwealth Fund (12.15.15). The CBO’s Crystal Ball: How Well Did It Forecast the Effects of the Affordable Care Act? This analysis finds that the CBO overestimated marketplace enrollment by 30 percent and marketplace costs by 28 percent, while it underestimated Medicaid enrollment by about 14 percent. Nonetheless, the CBO’s projections were closer to realized experience than were those of many other prominent forecasters. Moreover, had the CBO correctly anticipated income levels and health care prices in 2014, its estimate of marketplace enrollment would have been within 18 percent of actual experience.
- Blackman, Josh (3.12.17). The Accuracy of the CBO’s Obamacare Forecasts. “CBO vastly overestimated the number of Americans who would enroll on the exchanges and pay the individual mandate penalty. Each year, CBO revised their estimates lower and lower, and still never quite predicted how weak the enrollment would be. This post is not meant as a critique of CBO’s methodology, but rather a frank recognition that even the best experts cannot predict, with any accuracy, the impact of such a massive government program. Indeed, in June 2014, CBO threw in the towel on scoring Obamacare’s complete impacts.”
- Zinberg, Joel (3.16.17). The CBO’s Cloudy Crystal Ball. “[T]he CBO’s estimates are likely inaccurate because it has consistently overestimated the effectiveness of the ACA’s individual mandate and its associated penalties in motivating uninsured people to obtain insurance, and continues to do so in this report. In 2012 the CBO predicted that by 2017 an additional 28 million would gain health insurance. The actual figure is closer to 20 million. The CBO was even worse in estimating how people would gain or lose coverage. It forecast 25 million would gain coverage on the ACA exchanges and 10 million more would gain Medicaid coverage. Less than half as many people actually signed up on the exchanges and not all of them gained coverage — many were replacing non-exchange policies they lost after ACA passage. Conversely, the CBO Medicaid prediction was too low. Nearly three-quarters of the 20 million new health care enrollees last year came from additional Medicaid enrollment (14.3 million in 2016). The CBO also predicted 5 million would lose employer coverage but employer provided insurance stayed relatively stable.”
- Sullivan, Kip (3.21.17). Democrats Paid a Steep Price For Ignoring the CBO. Republicans Will Too. “I want to make three points here that I have not seen made elsewhere: (1) The criticism that both Democrats and Republicans make of the CBO consists almost exclusively of raw opinion, usually delivered in a huff, and almost never cites or discusses research; (2) The CBO may have been off in predicting how many people would enroll in Obamacare and Medicaid, but it was accurate in predicting the failure of the managed care fads written into the ACA to cut costs; and (3) Today, more than ever, America needs the CBO because the CBO adheres to the quaint principle that evidence should trump ideology. Democracy thrives on rational debate, not whining and dodging.”
Items are in chronological order.
- March 20, 2010. Just prior to passage of what would become the ACA, CBO estimated that the law would result in 8 million Exchange enrollees in 2014 (7 million subsidized), 13 million in 2015 (11 million subsidized) and 24 million by 2019, along with corresponding reductions of 2 million, 3 million, and 5 million respectively, in the non-group market [Table 4] .
- March 2011 Baseline. CBO subsequently projected 9 million Exchange enrollees in 2014, 13 million in 2015 and 24 million in 2019, with companion reductions in the non-group market of 3 million, 4 million and 6 million respectively [Table 3].
- March 2012 Baseline. CBO projected 8 million Exchange enrollees in 2014, 12 million in 2015 and 23 million by 2019, with non-group coverage declining by 1 million, 1 million and 3 million respectively [Table 3].
- July 24, 2012. Following the Supreme Court decision, CBO still projected 8 million would be covered through Exchanges in 2014 along with 1 million fewer in non-group market (Table 1) (7 million subsidized, growing to 12 million by 2015). No figures were reported for 2019 but by 2022, Exchange enrollment was projected to be 22 million, with 3 million fewer in non-group market.
- February 2013 Baseline. CBO projected 7 million would obtain Exchange coverage in 2014, 13 million in 2015 and 27 million in 2019; the non-group market would decline by 1 million, 2 million and 3 million in those years respectively [Table 1].
- May 2013 Baseline. CBO projected 7 million would obtain Exchange coverage in 2014 (6 million subsidized), 13 million in 2015 (11 million subsidized) and 25 million in 2019; the non-group market would decline by 2 million, 3 million and 5 million in those years respectively [Table 1].
- February 2014 Baseline. Following a chaotic initial enrollment, CBO projected only 6 million would obtain Exchange coverage in 2014, but still expected this to climb back to 13 million in 2015 and 25 million in 2019; the non-group market would decline by 2 million, 3 million and 5 million in those years respectively [Table 2].
- April 2014 Baseline. Although Exchange enrollment exceeded 7 million by March 31, 2014, CBO still projected average daily Exchange enrollment of only 6 million for 2014 (5 million subsidized), 13 million in 2015 (10 million subsidized) and 25 million in 2019; however it lowered the projected number losing non-group coverage to 1 million in 2014, 3 million in 2015 and 4 million in 2019 [Table 2].
- January 2015 Baseline. CBO projected average daily Exchange enrollment of 12 million for 2015, 21 million in 2016 and 25 million in 2019; the projected number losing non-group coverage was 3 million in 2015, 4 million in 2016 and 5 million in 2019 [Table B-2].
- March 2015 Baseline. CBO projected average daily Exchange enrollment of 11 million for 2015 (8 million subsidized), 21 million in 2016 and 23 million in 2019; the projected number losing non-group coverage was 3 million in 2015, 4 million in 2016 and 4 million in 2019 [Table 2].
- Budgetary and Economic Effects of Repealing the Affordable Care Act (6.19.15). CBO projected that repeal of the ACA would result in a decline in Exchange enrollment of 20 million in 2016 and 23 million in 2019; the projected number gaining non-group coverage would be 4 million in both years [Table 3]. These figures imply a gain in Exchange enrollment of 9 million between 2015 and 2016.
- The Budget and Economic Outlook: 2016 to 2026 (January 2016). “CBO and JCT now estimate that about 9.5 million people enrolled in coverage purchased through the exchanges, on average, during 2015 and that 8 million of those enrollees received subsidies.”
- The Budget and Economic Outlook: 2017 to 2027 (January, 2017). “Overall, including people who do not receive subsidies for their insurance, CBO and JCT expect that 10 million people per month, on average, will have insurance purchased through the marketplaces in 2017; that number is projected to grow to 13 million by 2027… From 2017 through 2027, under current law, the number of uninsured people under age 65 would remain around 27 million or 28 million.”
CMS Office of the Actuary
CMS has made a series of predictions about Exchange enrollment, starting in 2010. These figures were consistently higher than CBO projections made in a similar time-frame.
- April 22, 2010. CMS originally predicted 16.9m. Exchange members in 2014, rising to 18.6m. in 2015 and 31.6m. in 2019 (Table 2).
- National Health Expenditure Projections 2011-2021 (2011). CMS subsequently revised its estimates downward to 13.9m. in 2014, rising to 15.9m. in 2015 and 24.8m. by 2019 (Table 17).
- National Health Expenditure Projections 2011-2021 (2012). It further lowered its prediction to 12.3m. in 2014, rising to 14.4m. in 2015 and 23.6m. by 2019 (Table 17).
- National Health Expenditure Projections 2012-2022 (2013). By 2013, CMS no longer separately reported estimated enrollment in the Exchanges in its annual expenditure projections reports.
Administration Enrollment Targets
- 2014 Open Enrollment Period. In September 2013, the administration set monthly enrollment targets between October 1, 2013 and March 31, 2014, projecting that 7,066,000 would be enrolled by the time this first year enrollment period ended. The report included monthly targets for each state in the federally-run Exchanges as well as in the majority of state Exchanges for which targets had been publicly announced.
- 2015 Open Enrollment Period. On 11.26.14, DHHS Secretary Burwell said that the administration was sticking with its goal of 9.1 million people enrolled and paying premiums by the end of 2015 (officials reportedly expected the actual number to fall between 9 million and 9.9 million). This is a net increase of 2.4 million over the 6.7 million paid enrollments as of October 2014 (the latest known figure at the time the projection was confirmed).
- 2016 Open Enrollment Period. The Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services announced 10.15.15 that it was expecting only “9.4 to 11.4 million effectuated enrollees in the Marketplace at the end of 2016,” with the midpoint of the range being 10.4 million. That’s an increase of 1.3 million from 2015. On a conference call 10.15.15, Secretary Burwell announced “We believe 10 million is a strong and realistic goal” for enrollment; this implies a net increase of only 900,000.
Items are in reverse chronological order.
- Chris Conover (2017). Based on the first 18 days of sign-ups, Conover estimates that assuming the same pattern of enrollments as last year, there will be 8,846,937 total enrollments at end of OEP, but that average monthly paid enrollment for 2018 will be 7,075,759.
- Charles Gaba (2017). On Twitter, Gaba indicated he expected average monthly paid enrollments in 2017 to be 9.7 million (update #2). At ACASignups, Gaba projects total enrollment of 10.0 million by the end of the 2017-18 OEP. Assuming the same ratio of average monthly paid enrollment to end-of-OEP enrollment as in 2015 (80%), this would translate into 8.0 m. average monthly paid enrollment for 2018.
- Edmund Haislmaier (2017). “He testified that the growth of Obamacare enrollment is due primarily to Medicaid expansion, rather than private insurance. Haislmaier provided data confirming that the net growth of enrollment, from 2014 to 2015 under Obamacare, is only 14 million (not the reported 20 million), and that Medicaid is accountable for roughly 84 percent of that number. Haislmaier said it is reasonable to project that over a three-year period health insurance enrollment will have expanded by roughly 16.5 million individuals, of which 13.8 million are attributable to public coverage through Medicaid. ‘[Medicaid] has increased the number of people covered by individual market insurance, but a lot of that has been offset by a decline in employer provided insurance, and it has principally produced enrollment increases through an expansion of public programs particularly Medicaid, and particularly the states that adopted the ACA expansion to able bodied adults.’” (Heritage Foundation, 1.31.17)
- S&P Global (2016). Study Projects Flattening ObamaCare Sign-ups in 2017. “The analysis from Standard & Poor’s projects that between 11.7 million and 13.3 million people will sign up for ObamaCare in the enrollment period that begins Nov. 1. That is compared to 12.7 million who signed up last year. That means that two years of growth in the marketplace will turn into a ‘significant slowdown’ for 2017, the report says. Increasing enrollment could help ease insurer concerns about a group of enrollees, known as the risk pool, that is smaller and sicker than expected. But the S&P report notes that despite the expected flattening out in growth, it is not the end for the health insurance marketplaces, which started in 2013. ‘Despite our expectation of a slow-down in exchange enrollment, we don’t view this as ‘game over’ for the marketplace,’ the report states. ‘As we have said previously, we expect a five-year path to stability in the exchange business.’ S&P noted that larger premium increases this year could mean that some of the 15 percent of enrollees who have too high an income to qualify for financial assistance could drop off coverage.” (The Hill, 10.13.16)
- Charles Gaba (2015). Charles Gaba runs ACASignups.net, which has closely tracked Affordable Care Act (ACA) enrollment since its inception. In a post at Healthinsurance.org (10.15.15), he projected 14.7 million in gross plan selections at the end of the official enrollment period, of which 13.2 million would pay their first month’s premium; taking into account expected monthly attrition, net paid enrollment would be 12.2 million people by the end of the year 2016. However, on 12.30.15, he updated his prediction to 14.0 to 14.7 million (this is the figure that now appears on his continuously updated graph), implying a lower bound estimate of 11.6 million in paid enrollments by the end of 2016.
- How Accurate Are Gaba’s Projections? During the first OEP, Gaba made varying predictions that were 95 to 99.7% accurate; his final prediction was 97.25 to 100% accurate. On 11.14.14, before open enrollment began, he had predicted 12 million total would be enrolled at the end of the 2015 open enrollment period (of which only 10.6 million would be paid enrollments), but subsequently bumped this up to 12.5 million after a better-than-expected first month; this turned out to be 6.8% higher than the 11.7 million gross enrollments actually achieved. Gaba himself argues his prediction was anywhere from 2.5 to 6.8% off depending on how the counting is done.
- Robert Laszewski (2014). With the Department of Health and Human Services announcing in early March that plans that were supposed to be cancelled this year can now be renewed for another two years, “the health insurance plans participating in Obamacare are a very worried group right now,” according to health insurance industry consultant Robert Laszewski (3.6.14). Laszewski also is skeptical of the view that one third of Exchange eligible people will sign up each year, arguing there’s no reason to think Exchange coverage will look like an appreciably better deal in years 2 and 3. This latter skepticism appears to have been borne out, as mid-October 2014 paid enrollment was 6.7 million, while ASPE expects 9.1 million paid enrollments at the end of 2015, implying a net gain of only 2.4 million for the year. And the latest ASPE projection implies an additional gain of only 1.3 million in 2016 (10.4 million paid enrollments by the end of December 2016 vs. 9.1 million in late 2015).
Monthly Enrollment Statistics
ASPE’s Health Insurance Marketplace Enrollment Reports are the “official” counts of enrollment, which have been issued on a monthly basis, providing the most detailed available data on enrollment by state, demographics,with sub-totals for state-run and federally-facilitated Exchanges. In reverse chronological order:
- 2017-18 Open Enrollment Period
- Duration: 11.1.17 through 12.15.17 (45 days) on the federal Exchange. Residents of four states — FL, SC, GA and AL — can still enroll in coverage through the end of the year due to fallout from natural disasters. And residents of parts of three other states — TX, LA and MI — are eligible to enroll through Dec. 31 because of hurricane damage. Residents of ME who were affected by severe windstorms may also qualify to sign up beyond Dec. 15.
- Total Enrollment at End of OEP. Not yet released.
- Weekly Enrollment Snapshot: Week Seven. 8,822,329 enrolled as of 12.15.17.
- Weekly Enrollment Snapshot: Week Six. 4,678,361 enrolled as of 12.9.17.
- Weekly Enrollment Snapshot: Week Five. 3,604,440 enrolled as of 12.2.17.
- Weekly Enrollment Snapshot: Week Four. 2,781,260 enrolled as of 11.25.17.
- Weekly Enrollment Snapshot: Week Three. 2,277,079 enrolled as of 11.18.17.
- Weekly Enrollment Snapshot: Week Two. 1,478,250 enrolled as of 11.11.17.
- Weekly Enrollment Snapshot: Week One. 601,462 enrolled as of 11.11.4. in 39 states using HealthCare.gov platform; results for states using state-based exchanges will not be reported until March 2018.
- Federal Health Insurance Exchange 2018 Open Enrollment
- 2016-17 Open Enrollment Period
- Duration: 11.1.16 through 1.31.17 (3 months=92 days) on the federal Exchange.
- Average Monthly Paid Enrollment. First Half of 2017 Average Effectuated Enrollment Report. 10,142,056 for first half of 2017.
- Total Enrollment at End of OEP. Health Insurance Marketplaces 2017 Open Enrollment Period Final Enrollment Report: November 1, 2016 – January 31, 2017. Total enrollment at end of open enrollment period: 12,216,003.
- Enrollment Snapshot (2.3.17).
- 2015-16 Open Enrollment Period
- Duration: 11.1.15 through 1.31.16 (3 months=92 days) on the federal Exchange.
- Average Monthly Paid Enrollment. Using DHHS enrollment reports, Charles Gaba at ACASignups estimates average monthly paid enrollments for CY2016 totaled 10,007,113.
- March 31, 2016 Effectuated Enrollment Snapshot. Total paid enrollments on 3.31.16=11,081,330 (87.3% of the 12.7 m. enrolled at end of OEP).
- Total Enrollment at End of OEP. Health Insurance Marketplace Open Enrollment Snapshot – Week 13. Total enrollment at end of open enrollment period: 12.7 million.
- January Enrollment Report (For the period: November 1 – December 26, 2015)
- Health Insurance Marketplace Open Enrollment Snapshot – Week 9
- Health Insurance Marketplace Open Enrollment Snapshot – Week 8
- Health Insurance Marketplace Open Enrollment Snapshot – Week 7
- Health Insurance Marketplace Open Enrollment Snapshot – Week 6
- Health Insurance Marketplace Open Enrollment Snapshot – Week 5
- Health Insurance Marketplace Open Enrollment Snapshot – Week 4
- Health Insurance Marketplace Open Enrollment Snapshot – Week 3
- Health Insurance Marketplace Open Enrollment Snapshot – Week 2
- Health Insurance Marketplace Open Enrollment Snapshot – Week 1
- 2014-15 Open Enrollment Period
- Duration: 11.15.14 through 2.15.15 (3 months=92 days) on the federal Exchange. A Special Enrollment Period (SEP) through 2.22.15 was established to allow those “in line” on 2-15 to complete enrollments.
- Average Monthly Paid Enrollment. Using DHHS enrollment reports, Charles Gaba at ACASignups estimates average monthly paid enrollments for CY2015 totaled 9,348,093.
- 2015 Special Enrollment Period Report – February 23 – June 30, 2015
- March 31, 2015 Effectuated Enrollment Snapshot (profile of paid enrollments). Total paid enrollments on 3.31.15=10,187,197 (87.2% of the 11.7 m. enrolled at end of OEP).
- Total Enrollment at End of OEP. March Enrollment Report (For the period: November 15, 2014 – February 15, 2015). Total enrollment at end of open enrollment period (including SEP through 2.22.15): 11,688,074.
- 2013-14 Open Enrollment Period
- Duration: originally set at 10.1.13 through 3.31.14 (6 months=185 days) on the federal Exchange, but Special Enrollment Period (SEP) through 4.19.14 was established to allow those “in line” on 3-31 to complete enrollments.
- Average Monthly Paid Enrollment. Using DHHS enrollment reports, Charles Gaba at ACASignups estimates average monthly paid enrollments for CY2014 totaled 5,460,328.
- Total Enrollment at End of OEP. April Enrollment Report (For the period: October 2, 2013-March 31, 2014–Including Additional Special Enrollment Period Activity Reported through 4-19-14) ). Total enrollment at end of open enrollment period (including SEP through 4.19.14): 8,019,763.
- March Enrollment Report (For the period: October 1, 2013-March 1, 2014).
- February Enrollment Report (For the period: October 1, 2013 – February 1, 2014).
- January Enrollment Report (For the period: October 1, 2013 – December 28, 2013).
- December Enrollment Report (For the period: October 1 – November 30, 2013).
- November Enrollment Report (For the period: October 1 – November 2, 2013).
- Kaiser Family Foundation. State Marketplace Statistics. This tabulation provides the most recently reported statistics, by state, on a) Total Number of Completed Applications; b) Total Number of Individuals Determined Eligible to Enroll in a Marketplace Plan; c) Number of Individuals Eligible to Enroll in a Marketplace Plan with Financial Assistance; d) Determined or Assessed Eligible for Medicaid/CHIP by the Marketplace; e) Number of Individuals who have Selected a Marketplace Plan.
- Kaiser Family Foundation. Marketplace Enrollment as a Share of the Marketplace Eligible Population. Updated monthly from ASPE marketplace enrollment reports, this table (or map) lists by state, the number enrolled in the ACA Exchanges, the estimated number eligible for Exchange coverage and enrollment as a percentage of eligibles.
- ACASignups.net. This is a site run by Charles Gaba that synthesizes official government reports on Exchange enrollment into continuously-updated weekly reports but also provides several things not available on other sites: a) a calculation of average monthly paid (effectuated) enrollment that can be readily compared to CBO projections of the same number; b) projections of enrollment (shown on graphs); c) a graphical display of weekly enrollments (total and paid) for each open enrollment period (2014, 2015, 2016); and d) a state-level graph comparing actual enrollment against enrollment targets (2015).
- Calendar 2014 Estimates. Average monthly paid enrollments were 5,460,328; over the year, 9,610,000 million selected an Exchange plan, while 8,45,800 paid at least one month’s premium.
- Calendar 2015 Estimates. Average monthly paid enrollments were 9,668,487; over the year, 13,850,000 million selected an Exchange plan, while 12,645,000 paid at least one month’s premium.
- Calendar 2016 Estimates. (as of October, 2016). Average monthly paid enrollments were 10.4 million: 12,639,435 selected an Exchange plan, while 11,249,097 paid at least one month’s premium.
2017 Open Enrollment Period
ACA Enrollment Falls to 10.3 Million. “The number of people who enrolled in Affordable Care Act coverage for 2017 and paid their premiums — rather than just signing up — is 10.3 million, the Centers for Medicare and Medicaid Services announced today. That’s down from the 12.2 million people who had signed up for health care plans during the ACA’s last open-enrollment period, meaning 1.9 million people didn’t follow through by paying their premiums.
Why it happened: A separate CMS survey found that nearly half of all people who canceled their coverage before paying their premiums said they were worried about the cost.
Why it matters: It’s likely to add to the debate about how successful the ACA actually is — and whether the Trump administration hurt enrollment by pulling some of the advertising at the end. There’s always a drop off when some ACA customers don’t pay their premiums, but this year’s total is significantly lower than last year’s, when 11.1 million people enrolled and paid their premiums. (Axios, 6.12.17)
2016 Open Enrollment Period
- Kaiser Family Foundation (3.4.16): Why is Enrollment Lower than Projected?
- “The availability of employer coverage has not declined. People with access to affordable employer coverage are not eligible for marketplace premium subsidies, so there was an expectation that some employers might drop coverage to allow their employees to take advantage of those subsidies. CBO projected a decline in employer coverage relative to what would have happened in the absence of the ACA of 1 million people in 2015 and 6 million in 2016. So far, there are no signs of such a decline due to the ACA.
- Many people are still buying their own insurance outside of the marketplaces. There are three types of individual coverage outside of the marketplaces: ACA-compliant plans, “Grandfathered” plans, and “Transitional” plans.
- Affordability remains a challenge. A recent Kaiser poll found that the overwhelming reason why people who are uninsured say they are uncovered is cost – 46% of uninsured, non-elderly adults say they tried to get coverage but found that it was too expensive.”
- Medicaid Expansion is Shrinking Insurance Exchange Pools. “[G]lobal legal firm Dentons maintains that Medicaid and CHIP, covering about 68 million Americans in 2016, are edging out exchange enrollment. ‘Medicaid and the Children’s Health Insurance Program (CHIP) cover 17 million more people in 2016 than projected, while private insurance through the non-group market, including exchanges… covers 10 million fewer people. Millions of young, healthy people are enrolled in Medicaid and CHIP, rather than in private insurance offered through the exchanges.’… The Medicaid-private coverage contrast is expected to be more pronounced in expansion states than in non-expansion states. In the latter, Americans earning from 100 percent to 138 percent of the FPL are entitled to exchange policies at very little expense, while in expansion states, they are automatically enrolled in Medicaid…. ‘Some of the people who would become eligible for Medicaid through those expansions would have otherwise been eligible to enroll in subsidized coverage through the marketplaces.’ CBO expects that ‘as more people become eligible for Medicaid coverage, enrollment in coverage through the marketplaces will decline.’” (National Psychologist, May/June 2016)
- According to McClatchy DC (6.30.16), “The number of people enrolled in coverage through President Barack Obama’s health care law this year decreased to 11.1 million by the end of March, down from 12.7 million by the January deadline. The Obama administration released new enrollment numbers Thursday that showed the number of people who signed up by January 31 exceeded those who were covered in the spring. A dropoff in enrollment has happened before, and is partially caused by people who sign up for coverage by the deadline but then lose it because they do not pay their premiums. People have also lost coverage because of issues due to citizenship or immigration paperwork.”
- Washington Post. Health-care Exchange Sign-ups Fall Far Short of Forecasts.(8.27.16) “Enrollment in the insurance exchanges for President Obama’s signature health-care law is at less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses. As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation. Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.”
2015 Open Enrollment Period
- Auto-enrollment. According to NY Times (11.27.14), “People who already have marketplace coverage and take no action by Dec. 15 will be automatically enrolled in their existing plan or one like it effective Jan. 1. They can, if they choose, make a different selection by Feb. 15.
- Week One Enrollment. According to NY Times (11.27.14), “from Nov. 15 to 21, the administration said, 1,032,129 applications were submitted to the federal exchange, and 462,125 people chose plans offered for sale in the federal marketplace… Of those selecting plans, 48 percent — about 222,000 people — are new to the federal marketplace or have had coverage that had been terminated for various reasons, such as failing to pay premiums. The other 52 percent — about 240,000 people — had coverage this year and signed up for insurance in 2015 with the same insurer or a different one… More than three times as many people selected health plans in one week this month as in all of October and November of last year.”
- Regular Reporting. According to NY Times (11.27.14), “Ms. Burwell said she planned to provide weekly snapshots of enrollment data, as well as monthly reports with more comprehensive information. That would be a noteworthy change from the practice of her predecessor, Kathleen Sebelius, who did not provide current data and issued only monthly tabulations.”
- Tracking the ACA’s Second-Round Progress. Reports on ACA enrollment in federal- and state-established exchanges as of December 9, 2014. (American Health Line)
- DHHS, ASPE. Health Insurance Marketplace Enrollment Report. These are the “official” counts of enrollment, which have been issued on a monthly basis, providing the most detailed available data on enrollment by state, demographics,with sub-totals for state-run and federally-facilitated Exchanges.
- January Enrollment Report (For the period: November 15 – January 16). More than 9.5 million had selected or been automatically re-enrolled by the end of this period.
- December Enrollment Report (For the period: November 15 – December 15). “Preliminary national plan selection data available to date show that as of December 15th, more than 4.0 million Americans had selected new coverage or been reenrolled in 2015 health insurance coverage through the Marketplace for coverage beginning January 1st (see Appendix Table B1). In detail:
- 3.4 million people have selected 2015 Marketplace plans in the 37 states that are using the HealthCare.gov platform in 2015 as of December 15th, including plan selections by new consumers and consumers who are actively reenrolling in Marketplace coverage (excluding automatic reenrollees) ; and
- Over 600,000 people have selected 2015 Marketplace plans in the 14 states (including DC) that are using their own Marketplace platforms in 2015, based on data that generally run through December 13th. Depending on the state, these data may reflect new consumers only, or both new consumers and consumers reenrolling in Marketplace coverage (including, in some states, automatic reenrollees).”
- CMS: On June 30, 2015, about 9.9 million consumers had effectuated Health Insurance Marketplace coverage – which means those individuals paid their premiums and had an active policy at the end of June.1 These numbers are consistent with HHS’s effectuated enrollment target of 9.1 million for the end of 2015. Of the approximately 9.9 million consumers nationwide with effectuated Marketplace enrollments at the end of June 2015, about 84 percent, or more than 8.3 million consumers, were receiving an advanced premium tax credit (APTC).
2014 Open Enrollment Period
Administrative Data, Entire Enrollment Period
- In April 2014, CBO had projected 5 million subsidized enrollees on the Exchanges for 2014. The actual average annual number of subsidized Exchange members in 2014 was 5 million.
- “As of August 15, 2014, 7.3 million Americans were enrolled in Marketplace coverage and had paid their premiums. This number represents a snapshot of a point in time, not the cumulative enrollment data from October 2013 through August 2014.” (CMMS, 10.14.14)
- “The health department acknowledged Nov. 20 that it had double-counted about 393,000 people in dental plans when it announced that 7.3 million Americans were enrolled in August. Enrollment was revised downward as a result, to 6.9 million in August and 6.7 million in October.”
2017 Open Enrollment Period
- Obamacare Enrollment Slows In Final Days As Republicans Debate Repeal. “A snapshot of Healthcare.gov enrollment numbers released Friday reveal that sign-ups in the final days of enrollment are down in 2017, when compared to the similar period of 2016. Between January 15 and 31, less than 400,000 people signed up for plans on the healthcare.gov website used by 39 states, the Centers for Medicare & Medicaid Services said. Nearly 700,000 people signed up in the last two weeks of enrollment last year, according to the Washington Examiner. Altogether, 9.2 million people signed up for healthcare.gov individual insurance plans in the most recent open enrollment period, a decrease of 400,000, according to Bloomberg. The CMS noted in its announcement that enrollees faced premiums that had increased on average by 25 percent increase since last year, as well as an 28 percent decline in the number of issuers participating.” (Talking Points Memo, 2.3.17)
2016 Open Enrollment Period
- Obamacare Enrollment Dropped Off 25% Over the Course of 2015. “New figures released Friday by the Centers for Medicare and Medicaid Services (CMS) show that the number of people who dropped their Obamacare plans during 2015 was greater than anticipated. The Hill reports on the actual numbers versus the enrollment target by the Obama administration… Following the latest open enrollment period there were 12.7 million people enrolled in the program. If that total were to experience a similar 25% decline over 2016, there would be approximately 9.5 million enrollees remaining at the end of the year. That would be less than the 10 million HHS Secretary Burwell predicted last year.” (Sexton, John, 3.11.16)
2015 Open Enrollment Period
- Now the Hard Part: The Rate of Health Care Enrollment Seems Set to Slow. “Over all, state and federal exchanges look fairly similar in the percentage of eligible people they have enrolled — on average, 43 percent of eligible people in the states in the federal system picked health plans, compared with 38 percent in the state-run marketplaces — but the 2015 increases look much, much smaller for the state marketplaces… Mr. Kingsdale said that states should be aiming to sign up 65 to 75 percent of eligible residents. ‘If we end up running out of gas before 50 percent, that’s very disappointing.’… ‘The low-hanging fruit have already been gotten,’ said Heather Howard, the director of the State Health Reform Assistance Network at Princeton University, who advises states on exchange formation. ‘They are where the federal marketplace is going to be in a couple of years.’” (The New York Times, 3.23.15)
- Obamacare Bear Market: The CO-Ops Collapse and Enrollment Falls as People Stop Paying. “By liberal and media acclamation, ObamaCare is a glorious success, the political opposition is fading and the entitlement state has gained another permanent annex. The reality, for anyone who cares to look, is different and suggests that ObamaCare is far more vulnerable than this conventional wisdom. As Exhibit A, note that participation on the federal and state insurance exchanges is badly trailing the original projections and declining over time. About 11.7 million people joined ObamaCare during the open sign-up period last year. But enrollment this summer slipped 15% to 9.9 million with ‘effectuated’ coverage, meaning enrollees who were up to date on their nominal share of the premium after subsidies.” (The Wall Street Journal, 10.14.15)
- The Slow-Motion Implosion of Obamacare. “Supporters credit ObamaCare with helping nine million uninsured Americans find coverage in 2014. But a new paper from the Heritage Foundation, however, suggests that nearly all of the increase came from adding nearly nine million people to the Medicaid rolls. In other words, ObamaCare expanded coverage in 2014 to the extent that it gave people free or nearly free insurance. That goal could have been accomplished without the Affordable Care Act. To justify its existence, ObamaCare must make affordable private insurance available to a broad cross-section of uninsured Americans who are ineligible for Medicaid. But with fewer people buying insurance through the exchanges, the economics aren’t holding up.” (Wall Street Journal, 11.1.15)
- See Nonprofit Consumer Operated and Oriented Plan Organizations (CO-OPS) for a description of the nonprofit plans designed to compete against private insurers on the ACA exchanges.
2014 Open Enrollment Period
As of March 31, 2014 (inclusive of Special Enrollment Period (SEP) activity through April 19, 2014):
- Total Enrollments. 8,019,763 had enrolled in the Exchanges –13% above the enrollment target of 7.066 million. The New York Times reported (5.6.14): “the health insurance industry said the total of eight million people who signed up included “many duplicate enrollments” for consumers who tried to enroll more than once because of problems on the website.” According to Mark Pratt, a senior vice president of America’s Health Insurance Plans, “It may be a matter of months before insurers know how many people activated their coverage by paying their share of premiums.”
- Enrollments Compared to Targets. As of March 31 (inclusive of SEP activity), SBMs had reached 82% of their target enrollment, compared to 138% in FFMs and 142% in partnership Exchanges (see MarketplaceEnrollment 5-12-14). All told, 31 states had exceeded their targets, but 7 states were at least 50% below their target enrollment. However, part of this is because more aggressive targets were set for the SBMs, so it was inherently more difficult to reach these target levels.
- Enrollments Compared to Exchange-Eligible Population. As of March 31 (inclusive of SEP activity), enrollments are 28% of total potential Exchange enrollments, but these figures vary from 26% in FFMs and partnership Exchanges to 32% in SBMs (see MarketplaceEnrollment 5-12-14). This affirms that SBMs had set more aggressive target enrollments for themselves (i.e., first year enrollments as a percentage of potential Exchange enrollment were about twice as high in SBMs compared to FFMs).
- Net Paid Enrollments. By early March, DHHS reported enrollments of 4 million, but industry expert Robert Laszewski suggests the actual number drops to 3 million when individuals who haven’t kept up with paying premiums are included (about 20 percent never paid the first month’s premiums, and an additional 2 to 5 percent haven’t paid the second month’s premium). See Premium Payments for more detailed and updated discussion of payment status as of May 2014.
Because insurers no longer are permitted to use medical underwriting, there was no way of knowing, as the ACA launched, what share of Exchange enrollees would be healthy or at high risk. Thus, age was used early on as a crude proxy for judging whether the Exchanges would enroll a skewed distribution of health risks.
- Age Distribution of Enrollments. As of April 19, 2014, 28% of those enrolled in the Exchanges were age 18-34 (this percentage was the same in state-run and federally-run Exchanges). The administration originally had expected roughly 40% of Exchange enrollment to fall into age 18-34 group, based on Census data showing that 19,040,000 (39.7%) of the nation’s 47,951,000 uninsured fall into that age group (Table C-3). Conversely, the share of enrollees age 55-64 (30%, from Table 3) is nearly triple this age group’s share of the uninsured (11.2%).
- Age Distribution of Paid Enrollments. As of April 15, 2014, data reported to House Energy and Commerce Committee from all 160 insurers participating on the federal exchanges (34 states) show that 25% of paid enrollments are age 18-24 (ranging from a low of 16% in West Virginia to a high of 31% in Utah), while 29% are age 55-64 (ranging from a low of 19% in Utah to a high of 44% in West Virginia). Thus, even though younger people are far more likely than older people to be delinquent on their payments, paid enrollments appeared not to have skewed much older than gross enrollment figures.
Adverse Selection Death Spiral
Role of Federal Subsidies
Because of various provisions to protect insurers against a bad selection of risks (risk corridors, risk adjustment, re-insurance), the likelihood of an “adverse selection death spiral” after the first year was low. However, risk corridors originally were expected to be budget neutral, with “winners” compensating “losers” (plans with too many bad risks). This logic no longer works when there is a market-wide skewing of enrollments since every plan is likely to have too few young/healthy subscribers to counterbalance older/sicker plan members. Consequently, it appears that the various funds may run a deficit measured in billions of dollars in 2014, which is raising concerns in Congress over insurance company “bailouts.” Should Congress insist that these funds remain deficit neutral, carriers will be forced to seek higher premiums to avoid losing money. The individual mandate would serve as a brake on a death spiral happening as rapidly as it did in Washington state during the 1990’s.
Single Risk Pool
To increase stability and comparability in health plan rating, the Affordable Care Act requires a single risk pool in each state, encompassing both plans that were purchased inside of the ACA Exchanges and Affordable Care Act-compliant plans that were purchased outside of the ACA Exchanges. Risk-adjustment occurs across all plans in each state’s single risk pool. As of mid-April, 2014, 8 million had signed up on the Exchanges and CBO estimated in April that an average daily 5 million people would purchase off-Exchange plans in 2014. Much less is known about risk characteristics of the off-Exchange enrollments. However, according to National Journal, E-Health reports that 45% of its off-Exchange applicants from October through December were ages 18 to 34. In contrast, Blue Cross Blue Shield says they do not have information on the age or health status of the off-exchange enrollees, or on how many were new customers.
Analysis Suggestive of Adverse Selection
- Industry expert Robert Laszewski reported (3.5.14) that only about 15% of 17.2 million estimated by Kaiser to be eligible for subsidized Exchange coverage had actually signed up (2.5 million, which equals the subsidy-eligible share (82%) of 3 million paid sign-ups by early March). He further argues “even if the administration gets 20%, or 25%, or 30% of the eligible group signed-up by March 31, that is nowhere near enough to create a sustainable pool. The long-time underwriting rule calls for at least 70% of an eligible group to participate in order to get enough healthy people to pay for the sick who will always show up first for coverage.”
- Reportedly, there were 8 million gross enrollments in the Exchanges as of mid-April, 2014, although figures from insurers in federally-managed Exchanges show that only 67% had paid.
- Using the 67% figure implies 5.36 million paid sign-ups. If 82% are subsidy-eligible, this implies 4.4 million or 26% of the target population.
- Obamacare Insurance Holders are Sicker, Older, Kaiser Survey Shows. “Individuals who purchased health insurance set up under U.S. President Barack Obama’s healthcare reform law rate their personal health as worse than people who bought individual plans elsewhere, a Kaiser Family Foundation survey found. The survey, conducted after enrollment in Obamacare plans closed in April and released on Thursday, is the first comprehensive study addressing the health of those who have purchased this new insurance, created by the Affordable Care Act… Kaiser found the 55-to-64 age group was the largest among members of ACA-compliant plans sold both on and off the exchanges.” (Reuters, 6.19.14)
- Obamacare Insurers Are Suffering. That Won’t End Well. “Stephen Helmsley, the CEO of UnitedHealth, expressed concerns that the exchanges were seeing adverse selection anyway. Not just that the Obamacare insurance pool is sicker and more expensive than expected, which we already knew. But that the pool is experiencing adverse selection over the course of the year, as healthy people stop paying their premiums, and sicker people buy in. According to Helmsley, the people who bought insurance from them through the exchange, but outside of the open enrollment period, are averaging about 20 percent more expensive than the rest of the pool.” McArdle, Megan. (Bloomberg View, 11.19.15)
- Rising Rates Pose Challenge to Health Law. “Higher-cost premiums for 2016 threaten the appeal of the program for the healthy customers it needs. Insurers have raised premiums steeply for the most popular plans at the same time they have boosted out-of-pocket costs such as deductibles, copays and coinsurance in many of their offerings. The companies attribute the moves in part to the high cost of some customers they are gaining under the law, which doesn’t allow them to bar clients with existing health conditions. The result is that many people can’t avoid paying more for insurance in 2016 simply by shopping around—and those who try risk landing in a plan with fewer doctors and skimpier coverage. These dual realities threaten to undercut the law’s popularity with the customers it relies on the most: relatively healthy people. Their participation is vital to offset the costs of sicker people who can buy coverage at equal prices for the first time under the law; if the healthier ones pull out, that would put additional upward pressure on premium prices.” (Wall Street Journal, 11.18.15)
- ObamaCare Open Enrollment Whimpers to a Close, as Exchanges Continue Their Slow Death Spiral. “Another Obama Open Enrollment period has closed, and of course you know that if the results were good, there’d be parades, dancing in the streets, happy enrollees brought to the White House, etc. None of that. What actually happened: Exchange enrollment remained more or less flat and the exchanges are still not actuarially sound…If there were more people in the risk pool at three or four times the FPL, the insurance companies would be more likely to make a profit. But that’s not happening. Ergo, actuarial death spiral (absent more subsidies, of course).” (Naked Capitalism, 2.23.16)
- Obamacare’s Insurance Exchanges Are Self-Destructing––and That is Why Obamacare Needs to Be Fixed in 2017. “What Kaiser’s Ms. Cox doesn’t understand about this block is that it never gained altitude in the first place in order to come spiraling down! So, I guess she is technically right to say this isn’t a death spiral… I can tell you that I have talked to a number of health plans that are telling me that when the big rate increases became effective on January 1, 2017, their off-exchange net enrollment shrunk between 15% and 35%. The carriers are also telling me that their off exchange medical loss ratios are just as bad as the on-exchange business. And, the Aetna CEO certainly knew about the medical loss ratio on his off-exchange block when he made his comments. We won’t know if 2017’s big off-exchange cancellations are part of a death spiral in this half of Obamacare until we see a few years of data and can look back at the complete picture. But this does have all of the classic characteristics of a spiral––big rate increases pushing the people who don’t need heath insurance this year off the program leaving the sick people who do need it in a program where those quitting now can be guaranteed of coming back next January if they get sick.” (Health Care Policy and Marketplace Review, 2.28.17)
- Is the ObamaCare Death Spiral Underway? “This explains why the Centers for Medicare & Medicaid Services last week reported that as of ‘December 31, 2015, about 8.8 million consumers had effectuated Health Insurance Marketplace coverage,’ which The Hill notes is ‘3.5 percent below the administration’s target’ of 9.1 million and ‘a drop of almost 25 percent compared to the 11.7 million people who were signed up at the beginning of 2015.’ There’s no question that participation is bad, but even the government’s ‘target’ rate is deceiving. Why? Because paltry enrollment since ObamaCare’s inception has forced the feds to set the bar much lower. And moving the goal posts is what this administration does best… The fact is, it was the authors of ObamaCare who had egregiously unrealistic expectations.” (The Patriot Post, 3.15.16)
- Now We Are Six: How Badly Obamacare Is Performing In Its 6th Year. “CBO significantly overestimated insurer profitability and thus expected generally healthier ACA plan enrollees than enrolled. Insurers with excess profits owed about $360 million and insurers with large losses requested about $2.9 billion. Using this data, I estimate that insurers’ losses on ACA plans in 2014, even with an $8 billion subsidy to cover the majority of the costs of their high expense enrollees, equaled about 12% of premiums. Standard and Poor’s projects that risk corridors will also run a significant deficit for the 2015 plan year. Obamacare is not only failing to cover 9 million Americans who were promised coverage, but those who are getting coverage now cost 18% more than had been expected just 12 months ago. But if those being covered are sicker, then it is pretty clear that insurers will have to raise premiums to cover this higher cost, which in turn is going to discourage at least some current enrollees from sticking with Obamacare in the future. But those most likely to drop coverage will be those in the best health, so with each passing year, we can expect this tilt towards an unhealthy population to simply get amplified. We can only hope that a future president has the good sense to sign a repeal-and-replace plan before this process reaches the ‘death-spiral’ threshold.” Conover, Christopher J. (Forbes, 3.30.16)
- Obamacare Enrollment YR 3 Summary — Increase In Mandate Penalty Has Not Improved Risk Pool. “The big story is how little has changed from 2015 to 2016. The number of 2016 exchange enrollees is up only slightly from last year, and the make-up of the risk pool—as proxied by income and age of enrollees—is virtually identical. This is generally very bad news for insurers who made steep losses selling exchange plans in 2015 and 2016. It also shows that the conventional wisdom about how the large increase in the individual mandate tax penalty would induce additional younger and healthier people to enroll seems wrong. Rather, the evidence increasingly shows that the vast majority of people purchasing exchange plans are those with expensive health conditions or those with income below 200 percent of the federal poverty level (FPL)—about $23,760 of income for a single person… Simply put, it now appears that there is a significant risk that the ACA, without major change, may lead to the destruction of the individual market for health insurance.” Blase, Brian. (Forbes, 3.16.16)
- ACA Individual Market is a De-facto “High Risk” Insurance Pool. “The post-ACA newly insured, in the individual market, have greater health expenses (higher risks) than the pre-ACA non-group market. The high risk members of the pre-ACA 35 state run ‘high risk pools’ were also moved to the small individual market. The ACA redistributed these higher risks exclusively to the non-group market; none of this risk was redistributed to the large group, small group or Medicare markets. This has turned the nongroup market into a de facto ‘high risk’ insurance pool, resulting in high premium costs, deductibles, and limited coverage networks – and a poor economic value to much of the market… This leads to increasing rates and market drop-outs, which leads to higher rates for a shrinking risk pool, leading to more drop-outs – the ‘death spiral’ of the ACA. Fairness and equity demand all stakeholders share these risks. It is arbitrary that 100% of the newly insured risks be burdened exclusively on the individual members of the non-group market.” Mitchell, Edward. (June 2016)
- ACA Enrollees Twice As Expensive As Other Individual Market Enrollees. “Rather than stabilizing in 2016 as many experts predicted, the Affordable Care Act (ACA) is leading to large premium hikes and less choice and competition in the individual insurance market as plans prove unattractive to relatively young, healthy, and middle-class people… Insurers’ loss ratio in the individual QHP market was about a third higher than the loss ratio in each of the other three markets. The higher loss ratio was driven by much higher average medical claims for the individual QHP market, and indicates that insurers did not enroll enough younger and healthier consumers to create a balanced risk pool in 2014. Comparing results across markets suggests that the ACA’s rules and price controls may be incompatible with a well-functioning individual market. Large premium increases both in 2016 and 2017 will further reduce the attractiveness of individual market QHPs to younger and healthier enrollees, particularly individuals who do not qualify for large subsidies. Without significant revision to the ACA that makes insurance more attractive to younger and healthier people and that significantly reduces the incentive for people to wait until they are sick to purchase coverage, the individual market looks increasingly likely to morph into a highly subsidized high risk pool.” (Mercatus Center, 6.28.16)
- Eight Possible Fates for the Obamacare Exchanges. “For people who want better-than-Medicaid service, the plans are a lot more pricey — and because those people use a lot of care, the plans keep getting more expensive. This comes on top of news last month that the prices of the lowest-cost silver plans — which tend to be the most popular options on the exchanges — would be going up by a lot more this year than they did last year. If the insurance companies keep getting more bearish on these markets, then we can expect big hikes next year as well. Where are these markets going? We can sketch out a few possible futures… If prices don’t stabilize soon, at some point — maybe 2018 — we have to concede that what we’re seeing is not an initial mispricing, but a market where consumer behavior is evolving in tandem with pricing, so that the latter can’t catch up to the former. That’s a very different problem, and one that could end in something like a death spiral in the unsubsidized portion of the market. Or a new law to patch up a system that doesn’t work right.” McArdle, Megan. (Bloomberg View, 8.3.16)
- ObamaCare Death Spiral Update. “From Day One, defenders of the Affordable Care Act pooh-poohed the ‘death spiral’ predictions that sober analysts, being realistic about the law’s incentives, voiced. Yet the outcome was always implicit in the program’s design. The death spiral would have been a non-birth spiral if ObamaCare hadn’t originally offered direct, temporary subsidies to insurers to offset their losses. ObamaCare wouldn’t be with us today if insurers weren’t hanging on in quiet expectation that Washington somehow will come up with more funding to keep the jalopy going. Indeed, even as Aetna, one of ObamaCare’s biggest cheerleaders, was throwing in the towel this week on plans to expand its ObamaCare exchange business, its chief, Mark Bertolini, was full of ideas for how taxpayer money could be used to make the business profitable. There are rational ways to subsidize health insurance for the needy (and stop subsidizing the non-needy). There are rational ways to compensate insurers for taking on the uninsurable, i.e., those with pre-existing conditions. All this could have been done without loosing perverse and uncontainable incentives of the sort that already make U.S. health care so problematic. Alas, non-Rube Goldberg is not Congress’s métier.” Jenkins, Holman W. (Wall Street Journal, 8.5.16)
- Is It Time To Acknowledge That Obamacare Is Collapsing? “People joked for a while about how insurers were pulling out of Obamacare markets so fast we might end up with areas in which there were no insurers at all. It’s no joke anymore: with Aetna’s massive withdrawal yesterday from the Affordable Care Act marketplace, Pinal County, Arizona, the third most populated county in that state, currently has no insurers selling policies on the Exchange. The issue isn’t so much whether people will be subject to the individual mandate tax of up to 2.5% of their income when there are no policies available… The issue is that Pinal County, although a bit of an outlier for now, is a harbinger for fundamental problems with the ACA now manifesting themselves with greater clarity across the country. When an insurer covering over 7% of those in the Exchanges and previously hoping to expand instead drops out, we better look at what is going on. Chandler, Seth. (Forbes, 8.16.16)
- The Unstable Economics in Obama’s Health Law. “The problem isn’t technical or temporary; it’s intrinsic to how the law was written. By incentivizing insurers to misprice risk, the law has created an unstable dynamic. Total enrollment this year will be barely half the 22 million the Congressional Budget Office projected just three years ago. Premiums, meanwhile, are set to skyrocket, which will further hamper enrollment. It isn’t clear how this can be fixed.” Ip, Greg. (Wall Street Journal, 8.17.16)
- The Return of the Obamacare Death Spiral. “This slow exodus of insurers from the health law’s marketplaces represents a serious threat to the continued stability and existence of its exchanges. Obamacare is perched on the edge of a death spiral. The fundamental problem is simple: Insurers are losing money. Earlier this year, Aetna said it expected to lose about $300 million on the plans. UnitedHealth estimated losses on exchange plans in the range of $650 million. This is not a problem that is limited to big, profit-seeking insurance companies: The majority of the non-profit co-op plans created under the law have failed, citing an inability to pay claims using premium revenues. This is simple business math. For insurers to operate on the exchanges, they have to bring in sufficient revenue to cover their claims. Some of them might be willing to accept losses up front on the promise of returns over time. But the losses can’t go on forever. And what the insurers who have left the program have made clear is that they believe that, absent changes, the losses will go on forever.” Suderman, Peter. (Reason, 8.17.16)
- Obamacare is Unsustainable — The Backbone Could Collapse, Expert Warns. “If politicians don’t fix the Affordable Care Act, then the vulnerable Blue Cross and local HMO plans — which serve as the backbone of Obamacare — must exit, said Robert Laszewski, the President of Health Policy and Strategy Associates. ‘What the politicians need to do is to understand they have got about a year to fix this,’ he said in an interview with CNBC’s ‘Closing Bell.’ Republicans do not want to fix the existing flaws for Obamacare, Laszewski said. Instead, they want to repeal and replace it. He added that Democrats are now stating that they would rather go to a single-payer insurance plan or a public option within a government-run plan. Thus, the political system remains fragmented. Laszewski added that regardless of the outcome of the 2016 presidential election, the Republicans won’t have enough votes to repeal or replace Obamacare. Likewise, Democrats won’t have the votes to pass a public or single-payer option.” (CNBC, 8.17.16)
- ObamaCare And The Increasing Politicization of Health Care. “The ACA has led to significant consolidation among providers through the health care market and is producing a severe adverse selection spiral in many states’ individual health insurance markets. Despite substantial subsidies—well in excess of $10 billion thus far beyond what the law allows—many insurance companies, faced with massive losses, have either collapsed or are exiting the exchanges. Now, exchange participation decisions are reportedly being made contingent upon DOJ decisions with respect to corporate mergers. What a mess! Now more than ever, we need to depoliticize health care and create transparent marketplaces where insurers heed the wishes of customers rather than government officials.” Blase, Brian. (Forbes, 8.18.16)
- Ailing Obama Health Care Act May Have to Change to Survive. “Mr. Obama’s signature domestic achievement will almost certainly have to change to survive. The two parties agree that for too many people, health plans in the individual insurance market are still too expensive and inaccessible. ‘Employer markets are fairly stable, but the individual insurance market does not feel stable at all,’ said Janet S. Trautwein, the chief executive of the National Association of Health Underwriters, which represents more than 100,000 agents and brokers who specialize in health insurance. ‘In many states, the individual market is in a shambles.’” (New York Times, 10.13.16)
- New Numbers Confirm Obamacare Is Collapsing. Clancy, Dean (2.3.17).
Enrollment: Down. During the 2017 open enrollment period, the number of people signing up for coverage through healthcare.gov dropped for the first time. Sign-ups fell by 400,000.
2017 9.2 million people enrolled
2016 9.6 million people enrolled
2015 8.8 million people enrolled
2014 4.2 million people enrolled
Note: The above figures are not cumulative.
Insurance Choices: Down. Meanwhile, consumers’ choices are shrinking. The number of insurers offering policies in the federal exchange dropped again this year, continuing a multi-year trend.
2017 167 insurers in the federal exchange
2016 237 insurers in the federal exchange
2015 252 insurers in the federal exchange
Over the past two years the number of insurers in the federal exchange has declined by 28 percent. In the individual market the percentage of enrollees with only one or two issuer options has shot up dramatically:
2017 21 percent of enrollees only had one issuer option
2016 2 percent of enrollees only had one issuer option
And don’t forget the 17 so-called CO-OPs that have failed due to insolvency, so far, out of 23, total.
Premiums: Up. Average premiums in the federal exchange increased 25 percent in 2016, compared to only 8 percent the year before.
2016 25 percent increase in premiums
2015 8 percent increase in premiums
Nationally premiums in the individual market have doubled since 2013. Defenders of the ACA will undoubtedly try to dismiss these numbers as a temporary blip or nothing to worry about, or perhaps even try to blame them on President Trump, who has been in office for 14 days. But the warning signs are obvious. Let down the life boats. This ship is sinking.”
- Aetna CEO: Obamacare in “Death Spiral.” “Aetna Inc. Chief Executive Officer Mark Bertolini escalated his criticism of the Affordable Care Act, saying Obamacare’s markets are nearing failure as premiums climb and healthier individuals drop out. ‘It is in a death spiral,’ Bertolini said in a video interview with the Wall Street Journal that aired Wednesday on the newspaper’s website. He predicted that more insurers will drop out of the market for 2018, following Humana Inc.’s decision to quit Obamacare entirely for next year. Aetna, too, is mulling whether to further reduce its presence in the markets set up by the ACA. The company cut its footprint to four states for this year, from 15, after losing about $450 million on sales of ACA plans last year.” (Bloomberg, 2.15.17)
- One of Maryland’s Biggest Obamacare Insurers Wants to Hike Rates 50 Percent Next Year. “The head of the largest insurer in the Mid-Atlantic region warned Thursday that the Affordable Care Act marketplaces were in the early stages of a death spiral, a statement that came as the company announced its request for massive, double-digit premium increases for next year. Projecting that by year’s end the company will have lost a total of $600 million since it started selling plans in the marketplaces four years ago, CareFirst Blue Cross Blue Shield is requesting a greater than 50 percent rate increase in Maryland, a 35 percent increase in northern Virginia and a 29 percent increase in D.C. ‘What we’re seeing is greater sickness levels. The pool of beneficiaries is becoming sicker, in part because healthier people are not coming in at the same level we hoped.’” (Washington Post, 5.4.17)
- Obamacare Premiums Rise as Insurers Fret Over Law’s Shaky Future. “An analysis of Blue Cross and Blue Shield plans by S&P Global Ratings showed that insurers’ results were generally improving and the market stabilizing in the law’s third year. That analysis, however, didn’t include Anthem Inc., which sells insurance under the Blue Cross and Blue Shield brand in 14 states. In Virginia, where it has 165,000 customers in the individual market, Anthem is raising rates about 38 percent. In Connecticut, the insurer has 35,000 customers and is raising rates 34 percent.” (Bloomberg Politics, 5.9.17)
- Millions Who Buy Health Insurance Brace for Double-digit Increases. “‘We’re caught in the middle-class loophole of no help,’ said Thornton, a hairdresser from Newark, Delaware. She said she’s currently paying about $740 a month in premiums, and expects her monthly bill next year to be around $1,000, a 35 percent increase… About 17.6 million people buy individual health insurance policies, and half of them get no subsidies under the law, according to estimates by the nonpartisan Kaiser Family Foundation. The number of unsubsidized customers with ACA plans outside the health insurance marketplaces dropped by 20 percent this year, after the big premium increases. ‘The unsubsidized part of the market outside the exchanges has shrunk noticeably as premiums have increased,’ said Kaiser’s Larry Levitt. ‘It’s likely that the people dropping out of the market are healthier overall. So the pool has potentially deteriorated.’” (CBS News, 9.4.17)
Analysis Suggesting Market Stability
- On-off Exchange Analysis Dispels Adverse Selection Fears. “Health insurance carriers have not poached healthier customers from the exchanges for plans sold outside the exchanges, which some feared would lead to adverse selection in the public exchange market, concludes a recent issue brief by the Commonwealth Fund. The research, in fact, shows that most of their off-exchange sales involve generous benefits that appeal to sicker populations.” (Employee Benefit Advisor, 9.24.15)
- CMS Report Cites Flat Per-Enrollee Costs In ACA Marketplaces. “CMS contends that alternative explanations of the low growth in costs are less persuasive than the growth and improvement in the risk pool hypothesis. It cites studies that show that cost-sharing as indicated by actuarial value and network breadth remained roughly constant from 2014 to 2015… The bottom line of the CMS report, however, is that the risk pool in fact improved from 2014 to 2015 and there is every reason to believe that it should continue to improve for the future. This should in turn mean that the premium increases being requested for 2017 are not indicative of the future, and that in fact the individual market may be stabilizing and may continue to stabilize as it continues to grow.” Jost, Timothy. (Health Affairs, 8.11.16)
- The Affordable Care Act is Not in Crisis — But It Could Be Better. “Aetna’s withdrawal from Affordable Care Act markets has sparked the latest round of dire predictions about the law’s survival. Yet time and time again the ACA has proved durable,insuring 20 million Americans with improvements each year. This time will be no different. Contrary to popular perception, the ‘risk pool’ — the balance of healthy and sick enrollees — has been stable. Indeed, it was broadened as total enrollment increased by 66 percent in 2015, and per enrollee costs declined 0.1 percent between 2014 and 2015. While data is not yet available for 2016, and results vary by state, this indicates that the Affordable Care Act is not facing a crisis.” (Center for American Progress, 8.22.16)
- Ailing Obama Health Care Act May Have to Change to Survive. “Dr. John W. Rowe, who was the chief executive of Aetna from 2000 to 2006 and the president of Mount Sinai Medical Center in New York before that, predicted that ‘the insurance market will stabilize in two or three years.’ ‘We are not in a death spiral,’ Dr. Rowe said. ‘If this were a patient, I would say that he’s not in intensive care, but he’s still in the hospital and requires careful monitoring.’” (New York Times, 10.13.16)
- The Top White House Economist Says an Obamacare Death Spiral is “Absolutely Impossible.” “New double-digit Obamacare rate hikes have fueled speculations that the health care law could enter a ‘death spiral’: healthy people might leave the market, leaving only the sick behind and driving premiums ever higher. But the White House’s top economist says that a death spiral isn’t just unlikely — he argues that it is actually “impossible” for the Obamacare markets to fall apart in this way. ‘I think it is absolutely impossible for these markets to enter a death spiral,’ Jason Furman, chairman of the White House’s Council of Economic Advisors, told Vox in an interview. ‘It is frankly crazy that people are leaping to the death spiral conversation.’ Furman argues that the double-digit premium increase is a one-time course correction — and one that won’t scare off healthy customers, given how many receive subsidies from the government to make their health insurance cheaper. ‘There is no incentive for healthy people to leave the market,’ Furman argued of those who receive the insurance subsidies.” (Vox, 10.31.16)
- Health Insurers Will Do Better with Obamacare Results in 2016 — and Even Better Next Year, New Projection Says. “An analysis out Thursday says that health insurers are expected in 2016 ‘to start reversing’ financial losses on their Obamacare business after ‘hitting bottom’ in 2015. And 2017 ‘will likely see continued improvement’ for those insurers selling individual health plans, ‘with more insurers getting close to breakeven or better,’ according to the report by Standard & Poor’s Global Ratings. The report also says big price increases for Obamacare plans in 2017 were likely a ‘one-time pricing correction.’ And S&P said that while it expects insurers to ask for premium hikes for 2018, it also believes that ‘the average level of increase requested will be well below the 2017 hike’ of 25 percent for a key type of Obamacare plans. But ‘what will happen in 2018 and beyond is somewhat uncertain at this time,’ the report says… ‘Although most insurers will still report an underwriting loss for 2016, the losses will be smaller than in 2015.’ The report attributed the expected improved results to changes in the design of networks of health providers covered by plans.” (CNBC, 12.22.16)
- Understanding Recent Developments in the Individual Health Insurance Market. “Continued growth in Marketplace sign-ups for 2017 and a range of other evidence show that premium increases are not having substantial adverse effects on either individual market enrollment or the risk pool—rebutting claims that the individual market faces a ‘death spiral.’… There is significant potential for the level of competition in the individual market to increase in the years to come. With premiums returning to a sustainable level, incumbent insurers are likely to become less likely to exit markets and more likely to expand their participation into additional areas. Sustainable pricing will also create attractive opportunities for insurers to re-enter markets they may have left and for new insurers to enter markets for the first time.” (Obama White House Council of Economic Advisors, January 2017)
- In its scoring of the proposed American Health Care Act, CBO (3.13.17) projected a stable individual market under the ACA, as well as the proposal. “In CBO and JCT’s assessment, however, the nongroup market would probably be stable in most areas under either current law or the legislation… Under current law, most subsidized enrollees purchasing health insurance coverage in the nongroup market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference. The subsidies to purchase coverage combined with the penalties paid by uninsured people stemming from the individual mandate are anticipated to cause sufficient demand for insurance by people with low health care expenditures for the market to be stable.”
- The Little Death Spiral That Couldn’t. “For better or for worse, it is nearly impossible for the ACA’s insurance exchanges to implode to the extent that its detractors have long predicted. To understand why, it is important to understand how the subsidies and regulations in the ACA work… Even without a true death spiral, the ACA would continue to experience serious problems. Insurers that offer plans with more expensive provider networks will likely continue to exit the exchanges, and some low-population markets will be left with very few or even zero options. For the subset of non-subsidized individuals on the exchanges, price increases will be felt acutely and their presence in the market could diminish further. But will this reality really sell as a ‘death spiral?’ It is hard to imagine so, as millions of people will continue to use the exchanges.” (Real Clear Health, 3.21.17)
- No ‘Death Spiral’: Insurers May Soon Profit From Obamacare Plans, Analysis Finds. “The analysis, by Standard & Poor’s, looked at the performance of many Blue Cross plans in nearly three dozen states since President Barack Obama’s health care law took effect three years ago. It shows the insurers significantly reduced their losses last year, are likely to break even this year and that most could profit — albeit some in the single-digits — in 2018. The insurers cover more than five million people in the individual market… The ‘market is not in a death spiral,’ they said… it is ‘still in critical care. It still needs time to improve.’… Although it took longer than expected, the insurers appear to be starting to understand how the new individual market works, said Deep Banerjee, an S.&P. credit analyst who helped write the report… Caroline Pearson, a senior executive at Avalere Health, predicted that more insurers would decide there was no real future for the market, given the political environment.” (New York Times, 4.7.17)
- The U.S. ACA Individual Market Showed Progress In 2016, But Still Needs Time To Mature. “Our analysis of 2016 results and the market enrollment so far in 2017 shows that the ACA individual market is not in a ‘death spiral.’ But it isn’t on a stable footing either… The sharp rise in premium rates in 2017 didn’t lead to a significant drop in enrollment, and perhaps a potential ’death spiral.’ This is because of the stabilizing effect of ACA’s income-based advanced premium tax credit (APTC). As per the Center for Medicare and Medicaid Services (CMS), the gross average monthly premiums (before APTC) for APTC-eligible enrollees increased more than 20% in 2017. But CMS noted that there was almost no year-over-year change in the net average premiums (post APTC). Over 80% of the enrollees on healthcare.gov received an APTC linked to the actual price or market premium; so as premiums went up, so did their subsidies. This effectively hedged them against the sharp premium increase. There was a decline of 5% in 2017 enrollment when compared to 2016 open enrollment, but it could have been far worse if not for the APTC and CSR subsidies… If the market continues unaffected, with a few fixes rather than an overhaul, we expect 2018, or Year 5 of the ACA individual market, to be one of gradual improvement with more insurers reporting positive (albeit low single-digit) margins.” (Standard and Poor’s, 4.7.17)