ACA Enrollment Remains Strong, Despite Significant Headwinds

Enrollment in the Affordable Care Act’s (ACA) federally run health insurance marketplace remained strong for 2019, new data show, indicating that the marketplace continues to offer affordable, qualify coverage that meets people’s needs. Overall, 8.5 million people enrolled in coverage compared to 8.8 million in 2018. But the number of new enrollees — as opposed to returning enrollees — fell 15 percent from last year, a troubling sign that Trump Administration and congressional actions are taking a toll and may hurt the marketplace and health coverage more over time.

Some of the challenges that may have dampened enrollment include:

• Sharp cuts to outreach and enrollment assistance. The Administration’s cuts made it less likely that consumers would learn about available coverage and financial assistance. Outreach and marketing to the public was reduced to only $10 million in 2017 and 2018, a 90 percent cut since 2016, despite evidence that advertising yields enrollment gains, especially among new consumers. Similarly, the Administration cut funding for navigator programs that provide in-person enrollment assistance by more than 80 percent since 2016, leaving only $10 million to spread across 34 states.
• Repeal of the individual mandate penalty. As part of the 2017 tax bill, the President and Congress repealed the ACA’s financial penalty for individuals who did not have coverage. While some questioned the mandate’s effectiveness, rigorous analyses show that it meaningfully increased enrollment. The individual mandate was intended to keep healthy people in the marketplace, spreading costs across healthy and less-healthy enrollees and keeping premiums down. Without the additional nudge to enroll, it’s not surprising that some people sat out this open enrollment period or enrolled in cheaper (but substandard) plans instead.
• An expansion of substandard health plans, especially so-called “short-term” plans. The Administration’s rule changes now let insurers offer “short-term” plans for up to one year and renew or extend them even longer. But these plans don’t have to meet the ACA’s requirement to cover essential health benefits, such as maternity care and mental health and substance use treatment; can impose dollar limits on the benefits they’ll cover; and can exclude coverage related to a person’s pre-existing conditions. That means that these plans can offer lower premiums to healthier consumers, enticing them away from comprehensive coverage. That likely prompted some consumers to select these plans, as did confusion created by the aggressive marketing efforts of some of the companies offering short-term plans.
• Far shorter open enrollment period. Open enrollment used to run from November 1 through January 31, but the Administration cut the enrollment period in half. That gives consumers less time to learn about coverage options, and it also limits open enrollment to a time of year when lower-income families experience high financial stress.

Adding to the confusion, the day before open enrollment ended, a federal judge in Texas issued an opinion striking down the ACA. The Administration has affirmed that the ACA remains the law of the land pending appeal, and even some of the ACA’s most committed opponents predict that a higher court will overturn the decision. Nonetheless, it may well have discouraged some consumers from enrolling.