Marketplace Sign-Up Rate Is Strong Despite a Tumultuous Year, But Will It Last?
Despite uncertainty created by Congress’ repeated attempts to repeal the Affordable Care Act (ACA) and the Trump Administration’s efforts to undermine the health insurance marketplaces, 11.8 million people signed up for marketplace coverage for 2018, close to the 12.2 million sign-ups for 2017. A number of factors likely helped keep enrollment steady, but looming challenges — including repeal of the ACA’s individual mandate and additional harmful actions by the Administration — will require even greater effort by states and independent groups that contribute to marketplace outreach and enrollment to sustain coverage gains.
Enrollment Strong Despite Multiple Threats and Challenges
While marketplace enrollment for 2018 is strong, the significant headwinds that confronted this open enrollment period almost certainly reduced sign-ups compared to what would otherwise have occurred. While marketplace enrollment for 2018 is strong, the significant headwinds that confronted this open enrollment period almost certainly reduced sign-ups compared to what would otherwise have occurred. Challenges included:
Severe cuts to outreach. The Administration slashed outreach funding by 90 percent, and the Centers for Medicare & Medicaid Services (CMS) and the rest of the Administration also reduced their outreach efforts in less quantifiable ways. For example, Department of Health and Human Services (HHS) staff ended participation in local enrollment events.
Outreach remains critically important to enrollment. As of the fall of 2017, 35 percent of uninsured adults were unaware of the ACA marketplaces. An earlier survey found that nearly half of uninsured adults were unaware of marketplace financial assistance, even though most would likely qualify. Marketing is effective at closing these information gaps, studies by HHS, Covered California, and outside researchers have found. Based on these studies, Covered California’s and HealthCare.gov’s former chief marketing officers each estimated that the Administration’s outreach cuts would reduce 2018 enrollment by about 1 million consumers.
Reduced access to consumer assistance. About two months before the start of open enrollment, CMS announced it would cut funding to navigator programs that conduct outreach and provide impartial one-on-one assistance to consumers to facilitate enrollment in coverage. It cut navigator groups’ funding overall by about 40 percent below 2017 levels, but for some groups the cut was even more severe. And with just two months’ notice of the cuts, navigator groups were left with little time to secure alternative funding. Some groups laid off staff because they didn’t know if they would have a gap in funding while they awaited new funding.
Sticker price premium increases and last-minute changes. Many insurers raised premiums substantially for 2018 due to concerns that the Administration would fail to enforce, or would work with Congress to repeal, the ACA’s individual mandate, along with their broader uncertainty about the ACA’s future and how the Administration would administer it. On top of that, the Administration’s decision to stop making cost-sharing reduction (CSR) payments — announced October 12, 2017, just weeks before the start of open enrollment — led insurers to increase premiums substantially more.
The large majority of marketplace consumers qualify for subsidies that shield them from sticker price premium increases, and, as discussed below, most states addressed CSR-related premium increases in ways that allowed most unsubsidized consumers to avoid these costs as well. Nonetheless, premiums for unsubsidized consumers in HealthCare.gov states increased an average of 28 percent in 2018 — substantially more than the premium increases of roughly 10 percent or lower that outside experts predicted would have occurred absent policy changes and uncertainty. The higher premium increases likely had a direct effect in depressing enrollment among people not eligible for subsidies, and media reports of high premium increases may have discouraged some consumers from even shopping for coverage.
Shortened open enrollment period. The Trump Administration cut the open enrollment period in half, ending it on December 15 instead of January 31, leaving consumers in the 39 states using the HealthCare.gov eligibility and enrollment platform only 45 days to sign up. The shortened period meant that consumers had to complete the enrollment process during the hectic holiday season, a time when researchers have found that low-income families face especially high financial stress. Less time meant less opportunity to conduct outreach to inform consumers about the opportunity to enroll and for consumers to complete the application process and select plans. Most states running their own marketplaces extended open enrollment, giving consumers additional time; across states, longer open enrollment periods correlated with stronger sign-ups.
Consumer uncertainty about the ACA’s future. Shortly after President Trump’s inauguration, he issued an executive order directing federal agencies to use their administrative powers to begin dismantling the ACA “to the maximum extent permitted by law.” The subsequent administrative actions, coupled with the nine-month congressional effort to repeal the ACA, left some consumers confused about the availability of ACA marketplace coverage. In one October 2017 survey, 39 percent of voters said that the ACA had already been fully or partially repealed; that belief was even more prevalent among young people. Among uninsured adults who were aware of the marketplaces but not planning to shop for coverage for 2018, 23 percent said a reason was that they had heard the ACA would be repealed. That’s consistent with anecdotal reports from leaders of consumer assistance efforts in Florida, Illinois, and South Carolina, who said that many consumers were confused about the survival of the ACA marketplaces, with some believing coverage was no longer available, others thinking subsidies were no longer accessible, and some thinking the penalty for being uninsured was no longer in effect.
Forces Contributing to Strong 2018 Enrollment
A number of factors helped offset these challenges and keep enrollment near 2017 levels — some of them unintended consequences of efforts to undermine the ACA. Positive developments included:
More affordable premiums resulting from ending cost-sharing reduction payments. Through the spring and summer of 2017, President Trump repeatedly discussed ending CSR payments as a way to undermine the ACA marketplaces. But cutting off these payments ended up making coverage more affordable for many consumers.
Under the ACA, insurers are required to provide reduced cost sharing (lower deductibles, co-pays, and coinsurance) to lower-income consumers who enroll in silver tier marketplace plans; CSR payments are then supposed to compensate insurers for providing this reduced cost sharing. When the Administration halted these payments, insurers in most states defrayed their costs by charging higher silver plan premiums. Because the ACA premium tax credit subsidies are based on sticker price premiums for silver plans, when the cost of the silver level plans increased, so did the size of the premium tax credits. As a result, consumers eligible for tax credits were not only insulated from the increased cost of silver-level plans, they could also use the increased tax credits to purchase higher-deductible bronze plans or lower-deductible gold plans for lower net premiums than in previous years. For example, some consumers were able to buy bronze plans at no monthly cost to themselves after factoring in premium tax credits, or they were able to buy gold-level plans for less than they would have paid for a silver-level plan in 2017.
In the end, net premiums for the more than 80 percent of HealthCare.gov consumers receiving tax credits fell an average of 16 percent for 2018, after remaining roughly constant for the previous several years. Most unsubsidized consumers were also able to avoid CSR-related premium increases by purchasing non-silver plans.
Outside groups stepped in to partially fill gaps. New groups joined this year’s enrollment drive to help fill the gap left by the Administration’s decision to drastically cut outreach funding. For example, the Obama Administration’s ACA outreach leaders created a new organization, Get America Covered, to raise awareness about marketplace coverage. The group created an open enrollment tool kit and materials to promote enrollment through social media, and it helped promote enrollment through local and national news media, among other things. Some local groups also reported engaging new partners that provided them with in-kind supports including help with social media and producing public service announcements, as well as monetary contributions. To mitigate the harm of the shortened period, some consumer assistance and outreach groups like Covering Florida placed calls well ahead of open enrollment to prior enrollees and consumers who had expressed interest in the past but didn’t enroll to make appointments to review their coverage options and help them enroll.
Media coverage raised awareness about marketplace enrollment. There was significantly more media coverage of open enrollment during 2017 than during 2016, a Covered California study found, likely due in part to press interest in the Administration’s efforts to undermine the ACA. For example, press coverage using the terms “enrollment period” and “deadline” more than doubled between fall 2016 and fall 2017. Consistent with these findings, outreach and consumer groups also believe that they benefited from an increased media focus on open enrollment this year. For example, many consumer assister leaders shared that they were more successful in getting media coverage of their open enrollment events and other efforts this year compared to past years.
New Challenges for 2019 Marketplace Enrollment
While 2018 marketplace enrollment remains strong, the 2019 open enrollment period will present major additional challenges.
Repeal of penalty for being uninsured. As part of the 2017 tax law, Congress and the President eliminated the ACA’s penalty for individuals who are uninsured. A key purpose of the ACA’s individual mandate was to strengthen incentives for healthy people to sign up for coverage, broadening the individual market risk pool and thereby lowering costs for other consumers. Repeal of the mandate will directly and indirectly affect enrollment: directly, because of the reduced incentive to enroll, and indirectly, because sticker price premiums will increase as fewer healthy people sign up and average claims costs rise. The Congressional Budget Office projects that mandate repeal will increase individual market premiums by 10 percent and will reduce individual market enrollment by 3 million people in 2019 with larger enrollment reductions in subsequent years. While some have questioned whether repeal of the mandate will significantly reduce coverage, research on the enrollment impact of Massachusetts’ pre-ACA individual mandate supports CBO’s analysis.
Expansion of the availability of “skimpy” plans. The Administration has proposed a rule that, if finalized, would expand the availability of short-term health plans that are not required to meet ACA standards. For example, these plans can deny coverage or charge higher premiums based on pre-existing conditions, and they can exclude essential health benefits such as maternity care, mental health treatment, or prescription drugs. Under current rules, these plans must last less than three months, but the Administration is proposing to allow them to last up to nearly one year.
The lower monthly cost resulting from reduced benefits and medical underwriting may draw healthier consumers away from ACA plans in favor of plans that appear to be a better deal. However, if consumers later get sick or injured, they may find themselves unable to afford needed medical services. Meanwhile, the departure of healthier consumers from the ACA-compliant individual market increases premiums and ultimately reduces choices for those who wish to maintain comprehensive coverage. Taking into account both the direct effects of making short-term plans more widely available and the impact on premiums for comprehensive coverage, the Urban Institute projects that the short-term plans rule would reduce enrollment in comprehensive individual market coverage by 19 percent in states that have not acted to block the expansion of short-term plans.
Additional threats to outreach and consumer assistance. The Administration recently issued a new rule that will further limit access to consumer assistance to help people enroll in marketplace coverage. The new rule would let marketplaces have just one navigator group serve the entire state, allow navigators to not have a physical presence in the state they are paid to serve, and eliminate the requirement that navigator groups be consumer-focused nonprofit organizations. Under these rules, CMS could designate just one entity to serve as a navigator for an entire state or multiple states. It’s difficult to imagine how an entity with no physical presence in a state could effectively meet consumers’ needs.
Adding barriers to coverage for marketplace consumers. The same new rule includes provisions that will make it harder for eligible consumers to maintain marketplace coverage. For example, under the new rule, the marketplace will require consumers to verify their income if their attested income is above the poverty line but the data sources accessed by the marketplace, such as prior tax return data, suggest that their income is below the poverty line. People with incomes below the poverty line are not eligible for marketplace premium tax credits, because the ACA was drafted under the assumption that they would be eligible for Medicaid. (In states that have not taken up the ACA’s expansion of Medicaid, many instead fall into the “coverage gap,” eligible for neither Medicaid nor premium tax credits.) But the new verification requirements are likely to limit enrollment by low-income consumers who are eligible for tax credits. These consumers’ incomes often fluctuate from year to year, so data sources such as prior-year tax returns may be out of date and inaccurate. These consumers may also struggle to get the needed documentation — for example, from multiple employers, or from a combination of employers and self-employment work — to certify their projected income.
Immigration rules being considered could result in marketplace-eligible people remaining uninsured. The Department of Homeland Security reportedly plans to propose a rule that would significantly alter longstanding policy on when an immigrant’s use of public benefits, including ACA premium tax credits, can affect his or her ability to become a lawful permanent resident (that is, get a green card) or for his or her family member to be admitted to the United States. Based on a leaked draft, this “public charge” rule could cause many ACA subsidy-eligible immigrants and their citizen family members to forgo coverage due to the potential risk to their immigration status and their chances of reuniting with their family. Moreover, because the rules are complex and confusing, even people who may have little to fear from the new rule, such as refugees and asylees who aren’t subject to public charge rules, may decide that maintaining their health coverage is too risky.
States and Outside Groups Can Take Steps to Sustain Coverage Gains in 2019 and Beyond
With new challenges emerging, the outcome of the 2019 open enrollment period will depend in significant part on whether states take steps to protect their markets and their consumers and whether outside groups continue efforts to ensure that people have the opportunity to enroll in comprehensive coverage. States can:
- Protect their markets from the proposed expansion of short-term and other substandard plans. States have broad authority to protect their markets and consumers by blocking expansion of these plans, as Maryland recently did on a bipartisan basis.
- Make coverage more affordable for consumers. States can make coverage more affordable by instituting state reinsurance programs or providing supplemental tax credits that fill in gaps or offer more generous assistance than the federal premium tax credits.
- Respond to the Administration’s decision to stop CSR payments in ways that protect and benefit consumers. In response to the Administration’s ending of CSR payments to insurers, most states required insurers to limit cost increases to silver-level plans, since consumers are only eligible for cost-sharing reductions if they enroll in a silver-level plan. As discussed above, that approach can reduce costs for subsidized consumers and protect unsubsidized consumers from CSR-related premium increases. States that did not take this approach for 2018 should do so for 2019, as Colorado recently announced it will do.
- Restore an individual mandate. With the federal mandate penalty repealed, states can put in place their own individual mandates to help keep their individual market affordable, as New Jersey and a number of other states are considering.
- Maintain or restore a longer open enrollment period. States that run their own marketplaces should extend the open enrollment period beyond the shortened period for states that use the HealthCare.gov eligibility and enrollment platform. Ten states did so for 2018 and, as noted above, states with longer enrollment periods on average saw stronger sign-ups.
Conduct outreach and consumer application assistance to promote enrollment across Medicaid, the Children’s Health Insurance Program (CHIP), and the subsidized marketplace. Together these programs provide a continuum of coverage to people without affordable employer-based coverage. Combined outreach for all of these programs is often the best way to reach low- and moderate-income people, who may not know which program they are eligible for until they apply. Specific steps states should consider include:
- Ensuring that all health insurance affordability programs provide a “no wrong door” pathway to coverage. The ACA requires streamlined and coordinated application processes among all health insurance affordability programs so that no matter which application or renewal a consumer completes, she is referred to the program for which she eligible. But some consumers continue to fall through the cracks or are frequently sent back and forth between programs. States can often avoid this problem by modifying their eligibility systems or policies. For example, they can modify their eligibility determinations to ensure that consumers whose incomes fluctuate— for example a person working lots of extra hours during the holiday season — will not be turned away from Medicaid if her annual income would make her eligible for Medicaid and not subsidized marketplace coverage.
- Helping consumers maintain continuous coverage. State Medicaid and CHIP agencies can adopt 12 months of continued eligibility policies so that once a consumer is determined eligible for these programs, they remain eligible unless a significant change occurs, such as moving outside of the state. Continued eligibility helps avoid consumers having gaps in coverage or being sent back and forth between programs such as Medicaid and the marketplace due to small income fluctuations during a year.
- Maximizing the use of Medicaid and CHIP federal funding to support outreach. States can receive federal matching funds under Medicaid and CHIP to support outreach to promote enrollment across health coverage programs, including through the marketplace, and they have significant flexibility on funding sources that can be used for the state’s share of Medicaid or CHIP spending on outreach. States and stakeholders can unite in developing comprehensive outreach and enrollment assistance strategies that leverage these funds to the greatest extent possible under the law.
- Using data-driven, fast-track strategies to target outreach and simplify enrollment. Under Medicaid and CHIP, states have a few options to use data that are collected and verified by public benefit programs and/or state tax systems to identify eligible but unenrolled individuals, reach out to them, and simplify their eligibility determination to enroll them in coverage. States have used one such option, the Express Lane Eligibility option, to enroll and renew coverage for children participating in other benefit programs. In addition to exploring the use of these options in Medicaid and CHIP, states may be able to identify similar approaches to target outreach and simplify enrollment for marketplace coverage — for example, using state tax system data or data available from other state programs.
During the 2018 coverage year, many outside groups and states stepped up their efforts to support marketplace enrollment. In the coming year even more will be needed to address new challenges. Partnerships will need to be strengthened or started, an aggressive media strategy to promote open enrollment will be even more important, and more investment will be needed to conduct outreach and to support consumer groups that provide application and enrollment assistance.
 Sarah Kliff, “Trump is slashing Obamacare’s advertising budget by 90%,” Vox, August 31, 2017, https://www.vox.com/2017/8/31/16236280/trump-obamacare-outreach-ads.
 Kate Nocera and Paul McLeod, “The Trump Administration Is Pulling Out Of Obamacare Enrollment Events,” BuzzFeed, September 27, 2017, https://www.buzzfeed.com/katenocera/the-trump-administration-wont-support-state-obamacare?utm_term=.svkKLJxMp#.xn40jBQ74.
 Sara R. Collins et al., “Americans’ Views on Health Insurance at the End of a Turbulent Year,” Commonwealth Fund, March 2018, http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2018/mar/collins_views_hlt_insurance_turbulent_year_aca_tracking_survey.pdf.
 Shelby Gonzales, “Trump Administration Slashing Funding for Marketplace Enrollment Assistance and Outreach,” Center on Budget and Policy Priorities, September 1, 2017, https://www.cbpp.org/blog/trump-administration-slashing-funding-for-marketplace-enrollment-assistance-and-outreach.
 Jonathan Cohn, “Trump Administration Says Obamacare Ads Don’t Work, but Federal Study Says They Do,” Huffington Post, September 20, 2017, https://www.huffingtonpost.com/entry/obamacare-ads-trump-health-human-services_us_59c1dc7de4b0186c2206bdd3; Peter V. Lee et al., “Marketing Matters: Lessons from California to Promote Stability and Lower Costs in National and State Individual Insurance Markets,” Covered California, September 2017, http://hbex.coveredca.com/data-research/library/CoveredCA_Marketing_Matters_9-17.pdf; Pinar Karaca-Mandic et al., “The Volume of TV Advertisements During the ACA’s First Open Enrollment Period Was Associated with Increased Insurance Coverage,” Health Affairs, April 2017, http://www.healthaffairs.org/doi/10.1377/hlthaff.2016.1440.
 Joshua Peck, “Trump’s ad cuts will cost a minimum of 1.1 million Obamacare enrollments,” Get America Covered, October 23, 2017, https://medium.com/get-america-covered/trumps-ad-cuts-will-cost-a-minimum-of-1-1-million-obamacare-enrollments-9334f35c1626 and Lee, op. cit.
 Lori Lodes, “Snapshot: Trump Administration’s cuts to navigator funding,” Get America Covered, September 29, 2017. https://medium.com/get-america-covered/snapshot-trump-administrations-cuts-to-navigator-funding-9d278d571920.
 While there is no comprehensive survey of rate increases due to concerns about individual mandate enforcement, CareFirst, a major insurer in Maryland, Virginia, and Washington D.C., requested additional rate increases of 15 percent due to concerns about the individual mandate (https://www.vox.com/2017/5/8/15563448/trump-insurance-premiums-2018), and Pennsylvania’s insurance commissioner reported in June that insurers would request additional rate increases averaging 14.5 percent if concerns about mandate non-enforcement or repeal were not addressed (http://www.media.pa.gov/Pages/Insurance-Details.aspx?newsid=248). Insurers in a number of other states, including Alabama, Arizona, Indiana, Iowa, Louisiana, Oregon, and elsewhere, attributed a portion of their rate increases to concerns about mandate enforcement or to broader policy uncertainty.
 Matthew Fiedler, “Taking Stock of Insurer Financial Performance in the Individual Health Insurance Market Through 2017,” USC-Brookings Schaeffer Initiative for Health Policy, October 27, 2017, https://www.brookings.edu/wp-content/uploads/2017/10/individualmarketprofitability.pdf and Kurt Giesa, “Analysis: Market Uncertainty Driving ACA Rate Increases,” Oliver Wyman, June 14, 2017, http://health.oliverwyman.com/transform-care/2017/06/analysis_market_unc.html.
 Katherine Swartz and John Graves, “Shifting the Open Enrollment Period for ACA Marketplaces Could Increase Enrollment and Improve Plan Choices,” Health Affairs, July 2014, http://www.healthaffairs.org/doi/10.1377/hlthaff.2014.0007#.
 Joshua Peck, “Why Marketing Matters for Healthcare.gov,” Get America Covered, February 2018, https://medium.com/get-america-covered/why-marketing-matters-for-healthcare-gov-46d19534a287.
 “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” Executive Order 13765 of January 20, 2017, https://www.federalregister.gov/documents/2017/01/24/2017-01799/minimizing-the-economic-burden-of-the-patient-protection-and-affordable-care-act-pending-repeal.
 Morning Consult, National Tracking Poll #171011, October 19-23, 2017, https://morningconsult.com/wp-content/uploads/2017/10/171011_crosstabs_POLITICO_v1_AP-2.pdf.
 Collins, op. cit.
 For a further explanation of how non-payment of CSRs made coverage more affordable, see Aviva Aron-Dine, “Individual Market Stabilization Proposals Should Avoid Raising Costs for Consumers,” Center on Budget and Policy Priorities, March 9, 2018, https://www.cbpp.org/research/health/individual-market-stabilization-proposals-should-avoid-raising-costs-for-consumers.
 Jeanne Lambrew, “No ‘ObamaCare Implosion’ from Trump Payment Freeze,” Century Foundation, April 19, 2018, https://tcf.org/content/commentary/no-obamacare-implosion-trump-payment-freeze/.
 Peter V. Lee, “Executive Director’s Report,” Covered California, January 18, 2018, http://board.coveredca.com/meetings/2018/01-18/PPT-Board_ED_Report-Jan_2018-3.pdf.
 Congressional Budget Office, “Repealing the Individual Health Insurance Mandate: An Updated Estimate,” November 2017.
 Amitabh Chandra, Ph.D., Jonathan Gruber, Ph.D., and Robin McKnight, Ph.D., “The Importance of the Individual Mandate — Evidence from Massachusetts,” The New England Journal of Medicine, No. 364:293-295, January 27, 2011.
 Sarah Lueck, “Trump Proposal Expanding Short-Term Health Plans Would Harm Consumers,” Center on Budget and Policy Priorities, February 20, 2018, https://www.cbpp.org/blog/trump-proposal-expanding-short-term-health-plans-would-harm-consumers.
 Sarah Lueck, “Health Care Executive Order Would Destabilize Insurance Markets, Weaken Coverage,” Center on Budget and Policy Priorities, November 29, 2017, https://www.cbpp.org/research/health/health-care-executive-order-would-destabilize-insurance-markets-weaken-coverage.
 Linda J. Blumberg, Matthew Buettgens, and Robin Wang, “The Potential Impact of Short-Term Limited Duration Policies on Insurance Coverage, Premiums, and Federal Spending,” Urban Institute, February 2018, https://www.urban.org/sites/default/files/publication/96781/2001727_0.pdf.
 Sarah Lueck, Tara Straw, and Shelby Gonzales, “Health Care Rule Changes Will Harm Consumers,” Center on Budget and Policy Priorities, April 12, 2018, https://www.cbpp.org/research/health/health-care-rule-changes-will-harm-consumers.
 Nick Miroff, “Trump proposal would penalize immigrants who use tax credits and other benefits,” Washington Post, March 28, 2018.
Ariel Cohen “Hogan signs ACA stabilization bill, seeks 1332 waiver approval before rate filing deadline,” Inside Health Policy, April 9, 2018.
 Jeanne Lambrew et al., “Recommended Actions for States to Protect Their Health Insurance Markets,” Health Affairs blog, January 22, 2018, https://www.healthaffairs.org/do/10.1377/hblog20180117.926755/full/.
 Sara Hansard, “Colorado Moving to Protect Unsubsidized Obamacare Enrollees,” Bloomberg Law, March 23, 2018, https://www.bna.com/colorado-moving-protect-n57982090427/.
 Stephanie Armour, “States look at establishing their own health insurance mandates,” Wall Street Journal, February 4, 2018, https://www.wsj.com/articles/states-look-at-establishing-their-own-health-insurance-mandates-1517659200.