The canary in the open enrollment coal mine
Sign-ups for individual health plans during this year’s shortened open-enrollment season are running well below last year’s pace. The number of uninsured children is rising. The share of Americans without health coverage will undoubtedly tick up next year for the first time in nearly a decade.
This dubious achievement arrives just as the U.S. economy is nearing full employment. This shouldn’t be happening.
Employers that offer health insurance are raising wages and bolstering benefits to attract workers. People working at jobs without benefits or in the gig economy are seeing rising incomes, which should make individually purchased plans more affordable.
It clearly took a lot of work by the Trump administration and the current Congress to undermine the exchanges where individual policies are sold. The administration removed insurance price stabilizers, ended cost-sharing subsidies for patients and slashed the budgets for the navigators who help people sign up. It also expanded the availability of “short-term” skimpy plans, which offer reassurance as long as their purchasers don’t get sick.
The outgoing Congress did its part by essentially ending the individual mandate. Some experts predicted this would have little impact and dismissed the Congressional Budget Office warning that 4 million fewer people would sign up on the exchanges for 2019 because of the zeroed-out tax penalty.
It turns out the CBO may have overestimated, but directionally was spoton. If the current sign-up rate holds through the end of open enrollment on Dec. 15, more than 2 million fewer people will choose plans on the exchanges for 2019, about a 17% decline from 2018.
This will almost entirely offset the increase in employer-based coverage that one would expect from an improving economy. The latest Census Bureau survey showed employers added 2.5 million covered lives in 2017, a year when employment gains were comparable to the past year.
Next year’s uninsured problem will be exacerbated by continuing efforts in some states to add work requirements to their expanded Medicaid programs. Arkansas, which was first to implement the new requirements, saw 12,000 people dropped from its rolls in the past three months.
It could get much worse. In a letter sent last month to HHS Secretary Alex Azar, the Medicaid and CHIP Payment and Access Commission noted over 90% of Arkansas beneficiaries failed to meet cumbersome reporting rules— even if they were working.
CMS Administrator Seema Verma promised to review the results. But at the same time, she vowed to continue the administration’s push for work requirements. “We remain steadfast in our belief that this policy is important for the program,” she said.
It’s poor timing for ideological rigidity. If the economy slows next year, which many economists predict, the last thing you want to do is create higher hurdles for low-income people needing Medicaid.
It’s not too late for healthcare providers and insurers to undo some of the damage. To bolster sign-ups on the exchanges in the last few weeks of open enrollment, they can run media ads and press local TV and radio stations to run public service announcements. They can give emergency grants or assign personnel to local navigator groups, which saw 90% of their government funding evaporate.
But the die for next year is mostly cast. Hospital and physician practice finance officers need to begin preparing now for the coming fiscal realities. They are already seeing their uncollectable bills rise due to growth of high-deductible plans. They should expect another upward lurch in uncompensated care next year.
As margins shrink, it is inevitable that activity in the healthcare hiring hall, which has been going great guns since the end of the last recession, will slow sharply. You’d think the Trump administration would understand that’s not what it wants going into a two-year battle to win re-election. ●