Industry watchers are eyeing possible federal legislation, state waivers, and federal rules that could affect competition in 2019.
Feb. 7—Nationwide plan selections in government-run individual-insurance marketplaces reached 11.8 million during open enrollment for 2018, according to outside analysts.
The National Academy for State Health Policy (NASHP) and acasignups.net both concluded that selections of federal and state-run marketplace plans under the Affordable Care Act (ACA) reached 97 percent of the total in 2017, when 12.2 million chose coverage.
The sign-ups came during a federal marketplace open-enrollment period that was half as long as last year’s and that followed CMS cuts in funding for advertising and for outreach through so-called navigators. The number of plan selections did not fall to the extent that many ACA advocates had predicted.
For instance, Covered California and Get America Covered had estimated that the lack of advertising alone could result in 1 million or 2 million fewer marketplace sign-ups, and acasignups.net expected a maximum of 10 million plan selections.
“Those concerns over moving to a different policy of how to enroll people were overblown, but that largely flat enrollment shows that the marketplaces/exchanges remain popular only for those receiving large subsidies,” said Josh Archambault, a senior fellow at the Foundation for Government Accountability.
The 16 states, along with Washington, D.C., that operate their own marketplace—although some of them used the federal government’s enrollment platform—had an aggregate plan selection increase of 0.2 percent compared with 2017. The 34 states that use the federal marketplace had a 5.3 percent decline in selections, according to the NASHP data.
The difference in enrollment between the state-based and federally facilitated marketplaces (FFMs) is a trend that continued from last year. From 2016 to 2018, enrollment in federal marketplace states declined by 10.5 percent, while enrollment in state-based marketplaces increased by 1.5 percent, according to NASHP.
NASHP blamed the federal marketplace declines on “national uncertainty, shortened enrollment periods in most states, dramatic reductions on marketing for FFM states, premium increases, and confusion over the availability of marketplace coverage in 2018.” Marketplace leaders in states with improved enrollments credited local efforts.
“We worked hard to communicate the message in every corner of our state that we had affordable health insurance available despite the market uncertainty,” Heather Korbulic, executive director of Nevada Health Link, said in the NASHP release.
Even in state-run marketplaces, however, enrollment growth did not occur across the board. Two of the most enthusiastic ACA states, Maryland and California, both had fewer 2018 plan selections. The 2.26 percent decline in California may be the most surprising since the state spent $111 million on advertising and outreach during open enrollment, according to published reports.
“In its last year, the Obama administration doubled its spending on outreach and got less enrollment; now it looks like California has done the same thing,” said Ed Haislmaier, a healthcare policy adviser at the conservative-leaning Heritage Foundation.
Archambault and Haislmaier said the basically flat growth in the number of plan selections indicates that the market has reached an equilibrium, where it is largely composed of subsidized enrollees. NASHP noted that many subsidized enrollees paid less for their plan in 2018 than in 2017.
“Subsidized consumers are insulated from premium increases because as the cost of their coverage rises, so does the amount of assistance they receive,” NASHP noted. “In 2018, the increase in financial assistance was often greater than the change in their plan’s premiums.”
The net reduction in premiums for subsidized enrollees stemmed from adjustments that insurers made when the Trump Administration ended cost-sharing reduction payments.
However, unsubsidized consumers were more likely to be affected by higher premium rates, and NASHP said that was a possible reason why some enrollees sought coverage outside of ACA marketplaces. No national plan selection figures were available for off-exchange individual-insurance plans.
NASHP said state marketplaces and state insurance departments are bracing for higher premiums in 2019 because the individual mandate will be eliminated that year, healthcare costs are rising, and association health plans (AHPs) and short-term insurance plans are spreading.
Ten state marketplace executive directors have written to Senate leaders asking them to fund a federal reinsurance program for high-risk, high-cost enrollees.
Sen. Joe Manchin (D-W.Va.) this week told rural hospital leaders at a Washington, D.C., conference that he expects the bipartisan Collins-Nelson bill, which would provide $4.5 billion in federal reinsurance funding over two years, to get a vote in the Senate. However, he does not expect Senate Majority Leader Mitch McConnell (R-Ken.) to allow a vote on the Alexander-Murray bipartisan bill, which would provide cost-sharing reduction subsidies and allow more state marketplace flexibility.
One significant development was the Jan. 4 release of a proposed rule by the U.S. Department of Labor that would significantly alter the regulation of AHPs.
Haislmaier doubted that the expected increase in AHPs would significantly affect marketplace enrollment because the core customers for such plans would be those seeking insurance just to have financial security, and such enrollees already are fleeing the ACA marketplaces.
Anticipated rules from the U.S. Department of Health and Human Services are expected to expand Section 1332 state insurance waivers under the ACA, but the law’s restrictions will likely limit the waivers to reinsurance initiatives, Archambault said.
Insurers also are watching for broader state actions, such as plans in Idaho to move many of the sickest marketplace enrollees into Medicaid and allow working-poor residents to buy subsidized health insurance on the marketplace. Subsidies for marketplace enrollees in non-Medicaid expansion states are limited by the ACA to those earning at least 100 percent of the federal poverty level.
“It will be very interesting to see how this plays out,” Archambault said in reference to Idaho.
Practical questions on the initiative include its impacts on premiums and what the new plans would look like under the state’s guardrails, Archambault said.
Another question is whether Idaho is able to move forward with plans to allow its marketplace to sell non-ACA-compliant plans, he said.
Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare