Insurance Marketplace Sign-Ups Lag After Year of Changes

Fewer people are enrolling than last year, according to CMS

Overall health insurance enrollment on the federal exchange is down roughly 11 percent compared to this point last year. Above, Isabel Diaz Tinoco and Jose Luis Tinoco weigh different plans at the Mall of the Americas in Miami last year. (Joe Raedle/Getty Images file photo)
Overall health insurance enrollment on the federal exchange is down roughly 11 percent compared to this point last year. Above, Isabel Diaz Tinoco and Jose Luis Tinoco weigh different plans at the Mall of the Americas in Miami last year. (Joe Raedle/Getty Images file photo)
Posted December 10, 2018 at 5:00am

Enrollment in the insurance plans offered under the 2010 health care law appears to be lagging heading into the final stretch of the sign-up period.

Overall enrollment is down roughly 11 percent compared to this point last year, suggesting the final federal exchange numbers may end up lower than last year.

The Centers for Medicare and Medicaid Services said Thursday that 773,250 people signed up for plans during the fifth open enrollment week, bringing the total number of people who selected plans on the federal exchange ahead of the 2019 plan year to 3,198,163.

To be sure, that’s an increase in the number of people who selected plans compared to the fourth week of this year’s enrollment, when 500,437 people chose a plan.

Still, since open enrollment began Nov. 1, the weekly enrollment numbers released by CMS have shown fewer people enrolling than last year, when 11.8 million people signed up for plans on the exchanges set up by the 2010 law. Sign-ups typically pick up during the final stretch of the sign-up period, which lasts six weeks for the second year in a row.

Enrollment in most states ends Dec. 15, though it runs into January in a handful of states.

A combination of factors may be leading to a decrease in sign-ups this year, including federal policy changes, less federal spending on advertising and outreach, and a lower unemployment rate that could mean more people are obtaining insurance through their employers, said Karen Pollitz, a Kaiser Family Foundation senior fellow.

Although people who previously signed up for coverage will be re-enrolled at the end of the sign-up period, she said the roughly 18 percent drop in new customers choosing plans this year is “troublesome.”

“New consumers are important because this is a market that churns. It’s a residual market, so as people develop a new need to buy insurance on its own, it’s important they know this is available,” she said. “That’s where the administration’s decision to cut marketing and cut funding for in-person assistance and outreach is probably felt most profoundly.”

Josh Peck, a co-founder of Get America Covered, which supports the health care law, projected in an analysis Thursday that total enrollment through HealthCare.gov would fall by 800,000 people.

“While the pace of both renewal and new enrollment will increase significantly in the final days, it’s unlikely at this point that federal enrollment will be in a position to exceed or even match last year’s enrollment totals,” he wrote.

Groups that assist consumers, known as navigators, say the budget cuts are stinging. The Trump administration decreased that funding for the first time in 2017, but groups say they are still feeling the crunch this year — particularly because there is less free media than last year, when the federal government was weighing plans to overhaul the Democrats’ health care law.

Hillary Barter, the health care navigator coordinator at Western Maine Community Action, said the group reduced its size this year and provided less in-person assistance.

“There has been some inevitable decrease in capacity, but we are doing the best that we can with what we have,” she said.

New federal policies

Earlier this year, the Trump administration finalized rules to lengthen the duration of short-term insurance plans, which don’t have to comply with all of the health care law’s regulations, such as covering certain benefits. That caused proponents of the health law to raise concerns that consumers could shift from the exchanges in favor of the more affordable but less comprehensive health plans.

Democrats deride the plans as junk insurance. But the Trump administration defended the policy, saying it would provide additional options for uninsured people who may not qualify for the premium tax credits that help people afford more comprehensive marketplace plans.

While it’s too soon to say for certain how the expansion of short-term plans are affecting marketplace enrollment, a report released last week by the online insurance sales company eHealth showed that throughout the first 25 days of open enrollment, 70 percent of its customers who had a choice between short-term plans and unsubsidized marketplace plans selected the short-term option. That’s up from 56 percent in the prior year.

Sean Malia, senior director of carrier relations at eHealth, said most of its short-term plan consumers are generally younger and seeking coverage just for themselves rather than for their families.

“You’re giving them more flexibility,” Malia said of the administration’s policy.

The leaders of different navigator groups say that most of the consumers they help, typically people who qualify for subsidies, don’t buy short-term plans.

“Of all the consumers we’ve met with, none have dropped their marketplace insurance in order to join a short-term plan,” said Brian Burton, the executive director and CEO of Southwest Louisiana Area Health Education Center.

Similarly, representatives for navigator groups say people are still interested in purchasing health insurance even after Republicans effectively killed the so-called individual mandate, as part of a tax overhaul last year by ending the penalty for not having coverage.

New Jersey was the only state to enact its own state-level coverage requirement after Republicans ended the penalty, but enrollment there has also been sluggish compared to last year. Massachusetts also has a state-level requirement, which was enacted before the 2010 law.

“That’s a message that’s difficult to lift in a single state when the rest of the country is marching in a different direction,” said Robin Stockton, the senior program director at the Center for Family Services, the only organization in the state to receive navigator funding this year.

Automatic enrollment

One possibility in which enrollment could pick up before the numbers are finalized comes if current consumers are re-enrolled in their plans for 2019.

An enrollee can be automatically re-enrolled in a plan unless he or she opts for another choice during open enrollment. Since fewer insurers plan to leave markets next year, consumers may remain on their plans rather than shop around, said Burton, who runs the Louisiana navigator program.

Some enrollees may have received letters from Blue Cross and Blue Shield of Louisiana informing them that their premiums are actually set to decrease next year, he said, which could lead consumers to skip comparison shopping.

That could be problematic for subsidized customers, since their monthly premiums could actually be between $15 and $55 more expensive because the size of their tax credit subsidies would also decrease with the lower premiums. But they may not know that until after the sign-up period ends next week. Then it’s too late to switch.

The letter’s wording was confusing, he said, and didn’t warn people that if they get subsidies, their premiums may not fall. “A lot of consumers are just going to roll over their plan and let it auto-enroll,” he said. “They’re going to see their monthly premium costs are going to rise, but they’re not going to see that until after the 15th of December.”

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