Premium changes, Medicaid expansion driving ACA enrollment drop

Premium changes and Medicaid expansion are among factors driving declining enrollment in Affordable Care Act insurance plans as sign-up period draws to a close. Image by Gordon Johnson/Pixabay

Dec. 14 (UPI) — As open enrollment for 2020 healthcare coverage under the Affordable Care Act closes on Sunday, one question has cast a long shadow over the law and the current signup period: Why have fewer Americans used the federal insurance exchange this year than in years past?

According to the most recent figures released by the U.S. Centers for Medicare and Medicaid, through Saturday, nearly 3.9 million people have applied for 2020 coverage using the healthcare.gov website. Through the same period last year, more than 4.1 million people had done so.

Coleman Drake, an assistant professor of health policy and management at the University of Pittsburgh who has studied the ACA, said several factors are contributing to the 5 percent drop.

“There are three primary reasons enrollment is down this year: increased premiums for marketplace enrollees that receive subsidies, more states expanding Medicaid and the Trump administration’s expansion of non-Affordable Care Act compliant plans,” Drake told UPI.

Specifically, he noted, those who receive subsidies to offset the costs of coverage under the ACA, also known as Obamacare, will have higher out-of-pocket costs in 2020 because there are fewer “zero-dollar post-subsidy premium plans” available across the country. Drake said there were 1,484 counties in which such plans were available for 2019, but for next year that figure dropped to 1,140.

“This is due to a complex interaction of increased competition in the marketplaces in 2020, the original subsidy structure of the ACA and the Trump administration’s discontinuation of cost-sharing reduction subsidy payments,” he said.

Drake and his colleagues wrote about the impact of these changes in an analysis published last month.

“While premiums are down for those that do not receive subsidies, this is a smaller proportion of the market,” he added.

Changes in Medicaid eligibility have also had an effect on ACA enrollment. As allowed under the law, several states have effectively expanded the number of people eligible for the program by increasing the upper limit on annual income for those who can enroll to 138 percent of the Federal Poverty Level — or about $35,300 for a household of four.

As a result, more people are signing up for Medicaid, rather than plans in the ACA marketplaces, Drake said.

Finally, the Trump administration has increased the availability of short-term, limited-duration plans, as well as other similar products. Sometimes called “catastrophic coverage,” these plans typically cover emergency room visits and little else and come with lower premiums.

“Enrollees earning too much to qualify for a subsidy may find these plans attractive due to their relatively lower premiums,” Drake said. “However, they typically do not offer that financial protection that one associates with having health insurance.”

Although some opponents of the law in Washington and elsewhere have been quick to suggest that the declining enrollment numbers are a sign that the law’s popularity has started to wane, the most recent polling numbers suggest otherwise. A survey conducted by the Kaiser Family Foundation, released in late November, revealed that more than 50 percent of all U.S. adults have a favorable view of the law, while 40 percent have an unfavorable view.

The ACA remains very popular among lower-income Americans — the very group the law was meant to assist — with nearly 60 percent of those with annual incomes less than $40,000 viewing the law favorably.

“The federal government does not appear to be interested in expanding health insurance enrollment through the marketplaces,” Drake noted. “However, if they were, reducing out-of-pocket premiums for lower income eligible Marketplace enrollees and restoring funding for enrollment outreach would be great places to start.”

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