The federal totals may undermine the argument that sign-ups would tumble after Congress included a revocation of the tax penalty for the individual mandate in the tax bill that was signed into law this week.

Dec. 22—Plan selections during the abbreviated 2018 open enrollment for the federal insurance marketplaces reached 8.8 million, only 4 percent short of 2017 totals.

The number was just short of the 9.2 million plan selections during open enrollment for 2017 and far surpassed several government and advocate projections.

“Great job to the @CMSGov team for the work you did to make this the smoothest experience for consumers to date,” Seema Verma, administrator for the Centers for Medicare & Medicaid Services (CMS), said in a tweet that revealed the number of plan selections. “We take pride in providing great customer service.”

The total plan selections included an unprecedented late surge of 4,143,968 people choosing coverage in the last four days of open enrollment, according to a release.

The total number of individual-insurance market sign-ups will climb because the 8.8 million did not include totals from state-run marketplace—and open enrollment continues in 10 of those states, where 2017 plan selections topped 3 million. Some state-based exchanges have extended the sign-up period to as late as Jan. 30. Additionally, it is unclear how enrollment has been outside of the government-run marketplaces, where about 5 million have selected plans in recent years.

The federal marketplace results came during an open-enrollment period that was half as long as last year’s and followed CMS cuts in advertising funding and in outreach through so-called navigators.

The results shocked critics of the Trump administration who roundly expected Affordable Care Act (ACA) marketplace sign-ups to plummet.

“I confess to being very surprised that ACA marketplace enrollment is down only slightly,” Larry Levitt, senior vice president of the left-leaning Kaiser Family Foundation, said in a tweet. “That didn't seem possible with a 90 percent reduction in outreach, an enrollment period cut in half, and a constant refrain that the program is dead.”

The total was millions more than previously estimated by the left-leaning Center for American Progress, which projectedthat plan selections would only reach 72 percent of the 2017 total, or 6.6 million.

Similarly, Charles Gaba, a blogger and high-profile ACA advocate who tracks enrollment at ACASignups.net, estimatedthat only 7.5 million would select plans on the federal exchange.

Even S&P Global appeared overly pessimistic in its projection that between 10.6 million and 11.4 million people—on the federal and state-run exchanges combined—would select plans by the end of the enrollment period.

Others were less surprised that nearly as many would select plans in half the time as last year’s open enrollment.

“If you give me two months to do something, I might well take two months to do it; if you give me one month, I might well get it done in a month,” said Robert Graboyes, senior research fellow at the Mercatus Center at George Mason University. “I suspect for a lot of those people, if they wanted insurance policies, they had a shorter period of time to get it and they got it. Perhaps I should be more shocked, but I am not.”

The federal totals appeared to undermine the argument that sign-ups would be affected by a clause in the recent tax overhaul that eliminates the tax penalty for the individual mandate. Although the bill was signed into law only this week, the clause was being publicized during the open-enrollment period.

Critics claimed enrollees would assume the mandate penalty elimination was effective in 2018 and not sign up for coverage. The mandate penalty is not eliminated until 2019.

“Whether you are talking about the impact of advertising or you’re talking about the impact of the mandate, it is all around the question of healthy people for whom this is an option and I don’t see the mandate pushing them there and I don’t see the advertising pulling them there,” Ed Haislmaier, a healthcare policy adviser at the right-leaning Heritage Foundation, said in an interview.

Affordable Plans

The unexpected enrollment totals followed the emergence of unusually low-cost plans in the 2018 marketplaces.

For instance, the share of subsidy-eligible enrollees with access to a bronze-level plan with a net monthly premium of $10 or less increased from 25 percent in 2017 to 50 percent in 2018, according to an analysis by McKinsey & Co.

“People do respond to incentives. Lower-cost plans are likely a much better incentive to sign up than more outreach or advertising,” Graboyes said in an interview.

The increasing affordability—at least among the 80 percent of marketplace shoppers who were eligible for subsidies—may have been due to the Trump administration’s decision to end cost-sharing reduction (CSR) payments. Those payments covered some or all of the out-of-pocket costs of marketplace enrollees whose income is at or below 250 percent of the federal poverty level.

The nonpartisan Congressional Budget Office (CBO) projectedin August that the decision to end CSR payments would, counterintuitively, result in lower premiums and more-generous plans. The absence of CSR payments thus would increase individual-insurance enrollees by 4 million by 2023, according to CBO.

Outreach Impact

The 2018 plan selections followed the Trump administration’s decision to slash spending on advertising for raising awareness of open enrollment from $100 million to $10 million.

Verma defended that decision as she touted the sign-up totals.

“This year CMS took a more cost effective outreach approach, spending just over $1 per enrollee on outreach and education for Exchange coverage compared to nearly $11 per enrollee last year,” Verma said in a tweet.

Kev Coleman, head of research and data for HealthPocket, an insurance-shopping site, noted that total 2017 open-enrollment plan selections fell by 500,000 from the previous year, despite the $100 million spend by the Obama administration.

“While we don’t have direct-response marketing data for Healthcare.gov, it appears that this year's decrease in advertising and outreach did not have a major effect upon exchange enrollment since the decrease in enrollment is similar to what was observed between the 2017 and 2016 plan years,” Coleman said in an interview.  

Stabilization Outlook

The announcement of the federal marketplace totals came as Congress this week dropped plans to pass two bipartisan ACA-marketplace stabilization bills before the end of the year.

The so-called Alexander-Murray legislation would fund CSR payments for low-income enrollees in ACA marketplace plans and give states flexibility on the coverage provisions that insurers must include in their individual-market plans. It was backed by 12 Democrat and 12 Republican sponsors. The so-called Collins-Nelson bill would create a $5 billion risk-pool stabilization mechanism.

“In the world Congress is operating in, because it is in-line with last year’s [plan selections], members will feel less of a sense of urgency about these so-called market stabilization bills,” Haislmaier said.

Both bills were supported by President Donald Trump and Senate Majority Leader Mitch McConnell, said two sponsoring senators of the bills. ACA advocates said the bills were critical to reverse Trump’s actions and preserve the ACA marketplaces.

“There’s a lot of bluster on both sides about the ACA either dying a natural death or being killed, but the real story appears considerably less dramatic,” Graboyes said. “The law has been somewhat troubled throughout its existence, and little in that has changed.”

A Dec. 9 analysis by Oliver Wyman concluded that enactment of both bills “would result in another 700,000 people with coverage in the individual market and premiums that were more than 20 percent lower than if the individual mandate were repealed and the package of provisions was not implemented.”

Instead of bolstering or undermining the case for those stabilization bills, the new plan selection totals are less than needed and indicated a need for a reset, said Coleman.

“The current enrollment number is more indicative of a need for more-innovative approaches to healthcare reform than it is a justification for increased funding to stabilize the exchange market,” Coleman said. 


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Friday, December 22, 2017