Fewer People Are Buying Obamacare Plans as Trump Pushes Other Options

(Bloomberg) -- The market for Obamacare plans is shrinking but not collapsing, two years after President Donald Trump said not repealing the program would “destroy American health care forever.”

More than halfway through the 45-day enrollment period, fewer people have selected plans for 2019 on healthcare.gov than in the same period a year ago, new government data show. The website handles enrollment in Affordable Care Act plans for 39 states.

The decline in signups follows an effort by the Trump administration to promote cheaper coverage with fewer consumer protections, which critics called an attempt to undermine Obamacare. Congress also lifted the individual-mandate penalty for going without health insurance -- a fee of 2.5 percent of income that was intended to discourage healthy people from waiting until they got sick to purchase coverage. That change takes effect in 2019.

The number of people signing up for ACA plans is “surprisingly robust, given all the headwinds,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, a research group.

Signups between Nov. 1 and Nov. 24 totaled 2.4 million, about 13 percent less than during a similar period last year, according to data released Wednesday by the Centers for Medicare and Medicaid Services.

Healthcare.gov enrollment closes on Dec. 15. At that point, participants who didn’t actively shop for new coverage will be automatically re-enrolled. It’s hard to gauge how much the market may be changing until those final numbers are released.

Bloomberg Law: Lower Obamacare premiums could hurt those who get subsidies

Premiums, after jumping for several years, are on average stable for next year. And while some states scrambled to find insurers in rural areas where no companies wanted to sell coverage last year, every spot on the map had at least one option for 2019.

About 80 percent of those buying coverage on healthcare.gov and state marketplaces are eligible for subsidies because they make less than $48,000 a year for an individual, or $100,000 for a family of four. That insulates them from price increases.

The remaining 20 percent on the exchanges, as well as millions who shop for similar plans outside of those official market websites, pay the full premium. Those prices strain many household budgets, causing some people to seek cheaper alternatives or drop coverage entirely.

The data released Wednesday count only purchases on healthcare.gov, not people who bought coverage off the exchanges. That market could be changing more dramatically, because buyers pay the full price.

Insurance companies expected some people to leave the market in 2019, and set premiums accordingly.

“Insurers are making a lot of money this year in this market,” Levitt said.

A year ago, with some insurers exiting the ACA markets, many people were forced to log on to choose new plans because their old plans were no longer offered. That circumstance has all but vanished this year, according to eHealth Inc., an online insurance broker.

“Carriers are starting to get more comfortable with this marketplace,” said Paul Rooney, vice president of carrier relations at eHealth.

Less Dire

The preliminary drop in enrollment is not as dire as some predicted, given the Trump administration’s opposition to the ACA. The nonpartisan Congressional Budget Office last year projected that repealing the individual mandate would increase the number of people without health insurance by 4 million in 2019, a projection that rises to 13 million by 2027.

The administration has promoted cheaper forms of insurance that don’t have to meet the same requirements as the ACA, including coverage of pre-existing conditions. Those include short-term health plans and association health plans.

Short-term plans that can limit benefits and charge higher prices to sick people have been projected to attract 1.4 million people in 2019, according to CMS actuaries, shrinking the ACA markets as healthy people seek less expensive policies.

Fewer than one-third of respondents knew that the individual mandate penalty was gone, according to a new Kaiser Family Foundation poll. Only one quarter of adults who were uninsured or purchased individual market coverage knew the enrollment deadline. About 1 in 5 said they would buy a short-term health plan if they had the chance.

A number of other factors may be influencing the ACA marketplace this year. Most Americans under age 65 get coverage from an employer, and the labor market continues to improve, adding 2.5 million jobs in the past year.

While the federal open enrollment period ends Dec. 15, some states that run their own marketplaces allow people to sign up later on. Californians have through Jan. 15 to sign up, while in New York state the enrollment period lasts through Jan. 31.

©2018 Bloomberg L.P.