Actions Have Consequences: The 2018 ACA Open Enrollment

By: Carolyn Long Engelhard, MPA

Open Enrollment ImageToday marks the beginning of the fifth enrollment period for the availability of health coverage under the Affordable Care Act (ACA).  For the first time since the passage of President Obama’s signature legislation in 2010, this year’s open enrollment period will be administered under a Republican administration that holds little love for the law.  After a tortured summer of unsuccessfully trying to repeal the ACA in Congress, President Trump and officials at Health and Human Services (HSS) are now moving to a “Plan B” strategy of using administrative strategies to weaken the legislation.  These tactics include shortening the enrollment period in half to 45 days, eliminating almost all funding for health plan marketing and consumer outreach, defunding cost-sharing reductions for low-income enrollees, and pursuing executive orders that hold the promise of destabilizing insurance risk pools and reducing insurer participation.  These actions have consequences.  Whether individuals plan to renew insurance plans from last year or join the ACA market anew, this year’s enrollment experience will offer many new challenges.  These include:

A greater sense of confusion about the status of the ACA.

According to the Kaiser Family Foundation, only 59% of uninsured people between 18 and 64 are aware that the penalty for not having insurance is still in effect.  Eighteen percent of the uninsured think the penalty no longer exists and 23 percent are unsure.  This confusion, stirred up by political attacks on the viability of the ACA, suggests that enrollment will be lower than last year.  The fact that the Trump Administration plans to spend 90% less on advertising and outreach this open enrollment season only accentuates the possibility of fewer sign-ups.

Widely variable insurance premium rates.

Health insurers factored in premium increases from 7 percent to 38 percent in ACA plans to compensate for the loss of cost-sharing reduction payments from the federal government.  Benchmark “silver” plans on the ACA market will rise 34 percent on average.  How individual consumers are affected by the premium increases depends on the size and amount of the premium surcharges states used to offset the loss.  The 84 percent of ACA enrollees who receive tax credits to defray the cost of insurance will not see substantial spikes in their premiums in 2018, but the 7 million middle- and upper-income people purchasing non-group insurance who are ineligible for subsidies will experience double-digit increases.  These increases will come as an unwelcome surprise to many former enrollees and almost certainly will suppress the number of Americans who receive coverage.

Assignment to a health plan by default.

In past years, nearly 25 percent of people (2.8 million in 2017) who enrolled in ACA plans used the auto-renewal function to remain in the plan they chose the year before.  However, many health insurers plan to exit the ACA market after the 2017 year because of the continued uncertainty surrounding the fate of the ACA and the discontinuation of cost-sharing transfers to insurers.  As a result, auto-renewal mechanisms may end up placing consumers in different plans.  In the past, enrollees could count on having time to review the auto-renewal assignments and make changes to uphold preferred provider networks or drug formularies.  However, since the open enrollment period for 2018 has been shorted by half, enrollees may not have time to choose an alternate plan if they do not like the auto-renewal substitution.

All of these changes suggest a very rocky roll-out for ACA insurance coverage next year and foreshadow a decline in enrollment.  Those who cannot afford stiff premium increases will join and add to the ranks of the 30 million uninsured.  As more Americans confront the emotional anxiety of losing coverage to affordable health care, those who serve them – safety net providers like UVA – also will struggle to meet the demands of increasing levels of uncompensated care.  This is particularly true in states like Virginia, who opted not to expand their Medicaid program under the ACA, and for those states with large populations of low- to middle-income folks.  In those states, there will be fewer plans available for individual coverage and much higher premiums in the ones that are.  Ironically, these are the states that delivered landslide victories to the president.  Now, it appears, they may be the ones to suffer most by his actions.