Projected 2018 Marketplace Enrollment in the Absence of ACA Sabotage

The Healthcare.gov website is seen on a computer screen, October 18, 2017, in Washington.

The Affordable Care Act (ACA) marketplaces’ fifth open enrollment period, during which people can sign up for health insurance coverage for 2018, begins November 1 and ends in most states on December 15. Last open enrollment season, 12.2 million people nationwide selected individual market plans through the marketplaces. The evidence suggests that in the absence of the Trump administration’s sabotage, enrollment in the marketplaces would have been on track to remain stable in 2018.

The Center for American Progress estimates that under good-faith management of the marketplaces and the open enrollment process, 2018 marketplace enrollment would hold steady at about 12.2 million plan selections.

Unfortunately, the Trump administration’s repeated actions to destabilize insurance markets, repeal the ACA, and undermine open enrollment threaten this progress and seem likely to depress enrollment in 2018.

The marketplaces had been growing and stabilizing

Before President Donald Trump took office, the marketplaces were on track for continued growth. Marketplace stability had been improving. Financial data showed that while some companies’ marketplace products were ultimately not profitable, as happens in any competitive market, the market as a whole had stabilized. Standard & Poor’s and other analysts attributed the relatively high 2017 premium increases to a one-time market correction, and data through this year show signs of improved insurer performance and increased market stability.

Even as late as this past spring, Standard & Poor’s concluded that absent significant changes, the ACA marketplaces would see “gradual improvement” and increased profitability among insurers this year.

CAP’s enrollment projection

Had Trump not sabotaged the ACA and had the U.S. Department of Health and Human Services (HHS) maintained its support of the marketplaces, the circumstances for this open enrollment period would be similar to the previous year’s. Consumers would have had access to the same resources for enrollment assistance and would have been exposed to similar levels of advertising. The number of potential new customers, both uninsured and in off-marketplace plans, has not changed dramatically. And independent analysts estimate that insurers’ 2018 premium rate increases would have been lower than those in 2017.

CAP developed an estimate of potential 2018 enrollment by using data from 2016 and 2017 and by adopting the framework that HHS used for its prior marketplace projections. We began our analysis by reviewing what happened during the most recent open enrollment period. In every year, the marketplaces experience net attrition over the course of the year. By the end of 2016, there were 9.1 million people enrolled in marketplace coverage, or just 72 percent of the 12.7 million plan selections made during the 2016 open enrollment period. During open enrollment for 2017 coverage, 8.4 million, or 92 percent, of these 9.1 million people re-enrolled. The number of enrollees new to the marketplaces in the 2017 open enrollment period was 3.8 million, or roughly 24 percent of the addressable market, which consisted of an estimated 10.7 million uninsured and 5.1 million people with off-marketplace coverage and with incomes at or above the level for subsidy eligibility. If the Trump administration had made continued, good-faith efforts to enforce the ACA and carry out open enrollment this year, we could expect the rates of annual attrition, new enrollment, and re-enrollment to be similar to last year’s.

Going into the 2018 open enrollment period, we estimate that the consumer base for re-enrollment will consist of 72 percent of 2017’s 12.2 million plan selections, or 8.7 million people. The size of the addressable market for new enrollment has changed only slightly. Insurance consultancy Mark Farrah reports that the total size of the overall nongroup market is about the same as what HHS estimated last year at this time. The number of uninsured people remains near its all-time low, though recent polling results from Gallup indicate that the uninsured rate has ticked up about 12 percent since last year at this time. Therefore, for the 2018 marketplace-eligible addressable market, CAP reused the HHS estimate of 5.1 million people with off-marketplace coverage but raised the number of uninsured people eligible for financial assistance by 12 percent, from 10.7 million to 12 million people.

In the absence of sabotage, CAP projects that a total of 12.2 million people would have selected plans for 2018, consisting of about 8.1 million re-enrollees and 4.1 million new enrollees. This projection is based on HHS and state-based marketplaces, as they did last year, achieving an overall re-enrollment rate of 92 percent and capturing 24 percent of the addressable market. In other words, we would expect that the marketplaces would have reached steady-state enrollment level, where new enrollees churn into the market but there is no net increase in enrollment.

Unfortunately, the Trump administration’s refusal to implement the current law in good faith threatens to undermine this year’s open enrollment. Other analyses have concluded that individual elements of President Trump’s ACA sabotage campaign will have negative effects on the order of 1 million fewer enrollments. The Congressional Budget Office projected that halting cost-sharing reduction funding would result in 1 million fewer people in the marketplaces relative to baseline and, in a separate analysis, that repeal of the mandate would lower nongroup coverage by 1 million people. Separate analyses by Covered California and Get America Covered estimated that this year’s lack of advertising alone could result in 1 million or 2 million fewer enrollments in the marketplaces. Authoritative blogger Charles Gaba, who has tracked marketplace enrollment for the past four years, expects the final tally for 2018 plan selections to be a mere 9.5 million to 10 million.

Furthermore, CAP believes that 12.2 million is possibly a conservative estimate for enrollment in the absence of sabotage because 2017 open enrollment, the starting point for our analysis, overlapped with Trump administration actions to undermine the ACA. Within days of taking office, the Trump administration cut off HealthCare.gov advertising and signaled that it intended to repeal the ACA. Midway through last year’s open enrollment period, enrollment was surpassing the previous year’s levels, but after the administration pulled advertising in the critical final week before the deadline, final enrollment ended up decreasing relative to the prior year.

HHS is making it harder to learn about open enrollment

The Trump administration’s sabotage has already taken a toll. Months of uncertainty over the ACA’s potential repeal and Trump’s repeated threats to withhold cost-sharing reduction payments have boosted 2018 premium rate increases into double digits for many parts of the country. Trump’s recent decision to cancel the cost-sharing assistance payments to insurers will result in 2018 premiums being about 20 percent higher than they would have been otherwise. To date, 20 of the 28 states that have posted final rates so far have said that Trump’s sabotage has led to premium increases.

Rather than supporting and promoting open enrollment so that more people can find coverage, Trump’s HHS is actively taking steps to undermine it. HHS projected marketplace growth ahead of each of the past four years of the marketplaces but has not announced any projection for 2018 open enrollment. The department cut the duration of the open enrollment period in half and plans to take the HealthCare.gov website offline for at least a half-day each week, far more than in recent years. Eight states and the District of Columbia are offering extended open enrollment periods ending in late December or January.

HHS slashed the marketplace advertising budget by 90 percent, despite the fact that experience from past open enrollments shows that outreach and television advertising are effective in getting people covered and improving the risk pool. Marketing is still needed: 2 in 5 uninsured adults have not heard about the marketplaces. Of uninsured adults who have heard of the marketplaces, more than half did not shop because they thought they would not be able to afford coverage.

In addition, HHS cut funding to navigator groups that provide valuable in-person assistance to consumers in need of coverage. People who receive in-person assistance are more likely to enroll in coverage, and Latinos and lower-income individuals are more likely to use in-person assistance for enrollment. In response to the funding cuts, the vast majority of navigator groups said that they were likely to lay off staff, reduce marketing spending, and carry out fewer outreach activities.

Fortunately, despite President Trump’s desire to see the ACA “implode,” the financial assistance for low-to middle-income consumers available exclusively through the marketplaces will help ensure that consumers still have affordable options. The ACA’s premium tax credits, which 8.7 million enrollees currently receive, were designed to keep coverage affordable regardless of how high rates might rise. Moreover, it appears that 2018 plans will be available in every U.S. county.

Open enrollment will be an uphill battle

As CAP’s estimates demonstrate, marketplace enrollment should be on track to remain steady in 2018—but the Trump administration’s sabotage has created new obstacles. Luckily for Americans who need coverage, local nonprofits and national groups such as Get America Covered have stepped in to fill the gaps left by the federal government’s neglect of open enrollment promotion. Yet while these private efforts and possible congressional intervention can counteract Trump’s sabotage efforts, they cannot fully make up for the wealth of information that only the government has for outreach, as well as the planning and funding that HHS dedicated to the program in past years.

The consequences of Trump’s failure to manage open enrollment in good faith are not just numbers on a spreadsheet. For Americans who would have otherwise been informed about marketplace coverage options, it will be the difference between having affordable health care and being uninsured in 2018.

Emily R. Gee is the health economist of Health Policy at the Center for American Progress. Thomas Huelskoetter is the policy analyst of Health Policy at the Center.