How Trump’s Policies Have Hurt ACA Marketplace Enrollment

Radiologists prepare to take an X-ray image in a COVID-19 patient's room in the intensive care unit of MedStar St. Mary's Hospital in Leonardtown, Maryland, April 14, 2020.

Since the first day of his administration, President Donald Trump has repeatedly tried to repeal the Affordable Care Act (ACA), even though it provides crucial consumer protections for health coverage and has led to nearly 20 million more Americans gaining insurance since it was signed into law in 2010. While the ACA remains in place, three years of Trump’s policies have taken a toll on enrollment in the ACA’s health insurance marketplaces. According to new data published by the federal Centers for Medicare & Medicaid Services (CMS), 11.4 million people signed up for 2020 coverage—a decline of 1.27 million people (10 percent) since 2016.

While the ACA’s reforms created marketplaces for people buying insurance directly from insurers in every state, individual states can choose to operate their own marketplace enrollment platforms, allowing them a greater degree of control over outreach efforts and enrollment rules. Comparing enrollment trends among such state-based marketplaces (SBMs) against those in states that instead use the federal government’s enrollment platform—known as the federally facilitated marketplace (FFM)—provides a picture of how enrollment may have fared in the absence of the Trump administration’s sabotage from 2017 to 2020. The Center for American Progress estimates that at least 1.26 million more people would be enrolled in marketplace coverage today if not for the Trump administration’s attacks on the ACA, and total enrollment would have at least held steady near its 2016 level instead of falling.

The novel coronavirus pandemic highlights the importance of comprehensive insurance coverage. To date, a dozen states have reopened enrollment to the uninsured because of the COVID-19 pandemic, recognizing both the importance of comprehensive insurance coverage for COVID-19 testing and treatment as well as for helping to mitigate the financial strain caused by the pandemic, seen most clearly in millions of people becoming unemployed. Despite calls from more than 200 organizations to create a nationwide enrollment opportunity in this time of crisis, the Trump administration has so far refused to reopen marketplace enrollment.

Trump’s attacks on the marketplace

The CMS report on 2020 enrollment shows that the marketplaces remain an important source of coverage and financial assistance for millions of low-income and middle-class Americans. Nationwide, 87 percent of people enrolled in marketplace coverage benefit from financial help toward premiums; 52 percent benefit from reduced deductibles and other cost-sharing; and at least 90 percent live in a household with an income that is 400 percent of the federal poverty level or less.

Nevertheless, the Trump administration has taken numerous actions to discourage enrollment in the marketplaces, from seeking the full repeal of the ACA to meddling with financial assistance rules. While the enrollment period for 2017 coverage was still open when President Barack Obama’s term ended, the Trump administration took actions to undermine the ACA within days of taking office, including canceling television ads for the marketplace outreach campaign. By one estimate, Trump’s actions resulted in 500,000 fewer people enrolling in coverage for 2017.

Since then, the Trump administration has continued to make administrative changes designed to erode enrollment since early 2017. Some of these changes have a greater effect on the marketplaces in states that use the federally run platform than those using an SBM. For example, his decision to slash the outreach and enrollment assistance budget for the HealthCare.gov portal by 90 percent hurt states that depend on the federal government for outreach most severely, but those cuts also included national advertising that would have reached all states. Starting in fall 2017, the CMS also halved the duration of the open enrollment period, reducing the time consumers have to enroll annually from three months to 45 days for states reliant on the HealthCare.gov portal, while many states kept in place their longer open enrollment periods. Other Trump-backed changes, such as supporting the 2017 tax bill that zeroed out the individual mandate penalty and loosening regulation of short-term junk plans, applied nationwide.

One of the most disruptive changes to the marketplace stemmed from President Trump’s decision to stop reimbursing insurance companies for their expenses related to complying with the ACA’s financial assistance to low-income enrollees to lower deductibles, copayments, and other cost-sharing. Insurance companies and state regulators attempted to mitigate the potential upheaval to the market by increasing premiums for silver plans to cover the cost of the cost-sharing subsidies. Because financial assistance is pegged to silver plan premiums, federal subsidies absorbed the premium hike for subsidized enrollees, thereby holding harmless enrollees in benchmark silver plans and making many other plans’ net premiums lower than ever before. The net result of the unexpected policy change was an increase in subsidized enrollment and a substantial decrease in enrollment among unsubsidized consumers, who faced the full premium increase.

To varying degrees, states have responded by implementing policies to mitigate the damage of the Trump administration’s actions. For example, several states have enacted their own individual mandates, and others have reinstated rules on short-term plans.

Divergent trends in enrollment

Marketplace enrollment data reflect President Trump’s attacks on the ACA. Individual enrollment through the health insurance marketplaces grew most rapidly in the program’s first few years, under the Obama administration, with 8 million people enrolling for 2014, 11.7 million for 2015, and 12.7 million for 2016, the final full year of the Obama administration. Nationwide marketplace enrollment has fallen each year of the Trump administration, dropping by nearly 466,000 (-3.7 percent) for 2017; by 466,000 (-3.8 percent) for 2018; 306,000 (2.9 percent) for 2019; and 35,000 (-0.3 percent) for 2020.

For the 2020 open enrollment period, 12 states plus the District of Columbia operated a fully state-based marketplace* (SBM), allowing them to maintain control over their own outreach budgets, branding, and other features such as plan design standards and the length of their open enrollment period. For example, Massachusetts requires that all plans offer one of the state-approved standard plan design options, and California is among those whose enrollment window extends beyond the federal deadline.

In terms of enrollment growth, the SBMs have dramatically outperformed states using the federal platform since 2016. While FFM enrollment has dropped for each of the past four years, collective enrollment among the SBMs has either remained flat or increased. Trump’s attacks on the ACA have affected all states, but FFM states have been disproportionately hurt in large part because SBMs have been more proactive in stabilizing their markets and responding to federal changes with state-level policy. Because of this, the gap between the SBM and FFM enrollment trends can be used to quantify part of the effect of Trump’s policies.

To estimate the level of marketplace enrollment for the 2020 open enrollment period if FFM states had operated in an environment similar to those of SBMs, the authors started with 2016 enrollment levels, then trended them forward for all states by the rate at which SBM enrollment grew. The 2016 levels were adjusted to exclude the effect of enrollment declines among low-income individuals due to the ACA’s Medicaid expansion, a policy that allows people otherwise eligible for marketplace subsidies to receive more generous coverage through Medicaid instead. Since the 2016 open enrollment period ended, seven states—Alaska, Idaho, Louisiana, Maine, Montana, Utah, and Virginia—have expanded Medicaid. For the two states that switched from an SBM to using the federal platform (Kentucky) or vice versa (Nevada), the authors categorized the states for 2016 and 2020 according to their current status.

After adjusting for these factors, the authors estimate that at least 1.26 million more people would have signed up during the 2020 open enrollment period if states using the federal platform (10.7 percent enrollment decrease from 2016 to 2020 after adjusting for Medicaid expansion) had kept pace with the SBMs (2.9 percent enrollment increase from 2016 to 2020). In 2020, enrollment in the FFM states would have ended up roughly 15.3 percent higher, and nationwide marketplace enrollment would have been at least 12.7 million instead of 11.4 million.

This estimate is conservative in the sense that it captures only the differential trend between SBMs and FFM states; it does not estimate how much higher enrollment would have been in the absence of the Trump-era policies that have negatively affected enrollment in all states. Without national changes such as repeal of the mandate, the public charge rule and its chilling effects, cuts to nationwide outreach to the uninsured, and uncertainty about the future of the ACA amid a Trump-backed lawsuit to repeal it, 2020 enrollment would likely have been higher in both SBM and FFM states.

Many states have opened special marketplace enrollment periods due to the coronavirus pandemic

While Congress has passed legislation to make COVID-19 testing free and reduce the cost of treatment for patients, millions of Americans are uninsured and, without comprehensive coverage, may remain hesitant to seek timely testing and treatment—which is crucial to managing spread of the disease. Of those who were uninsured as of 2018, roughly 9.2 million had incomes that would make them eligible for marketplace financial assistance. However, outside the annual open enrollment period, consumers cannot typically sign up for marketplace coverage unless they qualify for a special enrollment period (SEP) due to an event such as the birth of a child, moving to a new state, or losing job-based insurance coverage.

A dozen states have broadened access to coverage for the pandemic by declaring SEPs for their marketplaces. Crucially, these SEPs are available to the uninsured and do not require a qualifying event for eligibility. (Eligible individuals can already enroll in Medicaid and the Children’s Health Insurance Program (CHIP) year round.) At the federal level, however, the Trump administration has declined to create an SEP for the COVID-19 pandemic, even though the CMS previously made SEPs available for Medicare during natural disasters, including the 2017 hurricane season, and extended marketplace open enrollment after an earthquake in Alaska and a windstorm in Maine. Without a CMS-designated SEP for the marketplace, states that are part of the FFM will be unable to waive the enrollment rules that are blocking many of the current uninsured from obtaining coverage.

While losing employer-based coverage has qualified many residents of HealthCare.gov states for a traditional SEP, the documentation requirements imposed by the Trump administration have made this process cumbersome even in normal circumstances. This problem is likely to become many times worse given the surge in unemployment during the pandemic. A nationwide SEP would eliminate barriers to insurance not only for the previously uninsured but also for those who recently lost job-based coverage and are struggling to cope with paperwork and other life disruptions during the pandemic.

In any case, by visiting HealthCare.gov, uninsured Americans can check their eligibility for coverage options—including marketplace enrollment and subsidies and eligibility for Medicaid or CHIP—based on their life situation and current policy in their state.

Conclusion

President Trump’s relentless attacks on the Affordable Care Act have depressed enrollment in the health insurance marketplace. Fewer people with marketplace coverage not only means fewer people with health coverage but also fewer people with financial security, timely access to care, and peace of mind—which are all the more important during the COVID-19 pandemic. The steady growth in state-based marketplace enrollment since 2016 proves that people do value comprehensive coverage and that outreach to the uninsured remains important.

There is no good reason for the Trump administration’s stubborn refusal to create an SEP for marketplace enrollment during the pandemic—a simple, common-sense step that would help people immediately and doesn’t require congressional action. During this health crisis and period of widespread job losses and financial strain for American families, comprehensive and affordable coverage is more important than ever.

Charles Gaba is a health care analyst and the founder and editor of ACASignups.net. Emily Gee is the health economist for Health Policy at the Center for American Progress.

*Authors’ note: As of 2020, Arkansas, Kentucky, New Jersey, New Mexico, Oregon, and Pennsylvania are state-based marketplaces on the federal platform; they operate their own exchanges but use the HealthCare.gov portal and are thus closely bound to CMS policies.

Appendix: Methodology

Data for this analysis come from the CMS open enrollment period (OEP) public use files for plan years 2016 and 2020. For 2016, the SBM enrollment data come from the addendum to the U.S. Department of Health and Human Services’ final 2016 open enrollment report. The files contain information on the number of people who selected marketplace plans in each state as well as each state’s status as an SBM or part of the FFM.

For simplicity, this analysis treated Kentucky, which shifted from an SBM to the federal platform, as part of the FFM and Nevada, which became an SBM starting for 2020 enrollment, as an SBM. Switching the states’ status or excluding them from the analysis instead has a minimal effect on the estimated increase in FFM enrollment results because Kentucky and Nevada had similar enrollment levels in 2016 and experienced similarly sized enrollment declines of just more than 10,000 between 2016 and 2020.

Baseline 2016 enrollment was adjusted for the seven states—Alaska, Idaho, Louisiana, Maine, Montana, Utah, and Virginia—that implemented the ACA Medicaid expansion since then. When a state implements the expansion, marketplace enrollees with incomes that are 100 percent to 138 percent of the federal poverty level (FPL) generally become ineligible for marketplace subsidies and switch to Medicaid instead. The enrollment shift does not happen immediately. For example, Louisiana expanded Medicaid midyear, and Maine’s expansion was delayed for legal reasons and eventually made effective retroactively to an earlier date. As a result, the counterfactual effect on exchange enrollment is difficult to approximate.

For purposes of this analysis, the authors adjusted 2016 enrollment downward in each of the seven states with recent Medicaid expansions, estimating that 2016 OEP enrollment would have been roughly 360,000 lower if those states’ Medicaid expansion had already been in full effect that year. The CMS provided enrollment numbers by income category in its 2016 enrollment report; the authors assume that 90 percent of the enrollees with incomes at less than 150 percent of the FPL were Medicaid-expansion eligible.

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