Why Obamacare enrollment is down
More than halfway through the sign-up period for Obamacare health plans, fewer people have enrolled in coverage than during the same stretch last year. Enrollment through the federal website Healthcare.gov, which manages insurance marketplaces in 39 states, is down 11 percent compared to 2017, according to government figures released Thursday.
Many people are watching this year’s enrollment closely for clues to its durability. While it is too soon to draw any firm conclusions, there are several reasons sign-ups could be lower.
The final numbers for the federal marketplace should come out before the end of the year. Here are some of the forces that may be influencing people’s decisions.
The mandate is gone
As part of its massive tax overhaul, Congress eliminated Obamacare’s individual mandate, the tax penalty for people who refused to get health insurance, beginning this year. That means people who were nudged into coverage by the threat of paying a fine may be sitting out this year.
But it’s hard to know how many people are dropping out because the penalty disappeared. Awareness of the change appears to be low, and enrollment is also down in New Jersey, one of the states that adopted its own individual mandate.
There are new options outside the ACA marketplace
The Trump administration also loosened restrictions about buying plans that don’t meet the standards set by Obamacare. Starting this enrollment season, people can buy coverage that is skimpier, but often much less expensive.
Rising premiums have priced some people who do not qualify for subsidies out of the Obamacare market, and there is some early evidence that more people who would have to pay full price for a plan are buying the short-term plans instead. (But those plans aren’t available to people with pre-existing conditions.) Those shoppers tend not to be in the Obamacare market anyway.
People are signing up for Medicaid instead
The state with the biggest enrollment decline is Virginia. In that case, the drop can be explained by the state’s recent expansion of its Medicaid program, an option the Affordable Care Act encourages by committing the federal government to pay at least 90 percent of the expansion costs. By expanding Medicaid, Virginia made free government insurance available to low-income residents who had previously been buying coverage in the marketplace. Now, many appear to be switching to that.
Other states that have also expanded Medicaid have shown similar patterns of declining enrollment in the number of people signing up for Obamacare. But at the same time, they showed overall reductions in their number of uninsured residents, which is the ultimate goal of the law.
For some people, the plans are less affordable
Prices always matter, and the prices people pay for Obamacare plans can be very different from the sticker price.
Last year, the sticker price for plans increased substantially. But for customers who qualified for subsidies, the prices they paid themselves actually went down. Many were delighted to find they did not have to pay anything for coverage.
This year, the sticker price of plans has declined slightly in many parts of the country. But for those people who get subsidies, typically about 85 percent of the market, prices may be going up a little in those places — and people may not be able to find a free plan this year.
People don’t know they need to sign up
To get coverage, people need to know that the open enrollment period is happening now. Last year, the Trump administration slashed funding for advertising and other forms of marketing by 90 percent, and those funds weren’t restored this year.
Research suggests that advertising does influence enrollment, and some experts say that the effects of lower outreach may compound over time, as fewer and fewer people in need of health insurance remember how the Obamacare market works.
There is also less media and grassroots publicity. Last year, when the price of coverage spiked and there was intense debate over whether to repeal Obamacare, the marketplace was the focus of intense news coverage. This year, with flatter premiums and a raucous midterm election, there has been less media attention on the enrollment period.