The Affordable Care Act is on its last legs. At least, that’s the sense you get from reading this week’s headlines. NPR reports “Obamacare Sign-Ups Lag as Trump Slashes Funds for Enrollment Help,” while Politico solemnly concedes that “Trump may finally be undermining Obamacare.”
With two weeks left of this year’s open enrollment, it might seem that the Trump administration, through a combination of budget cuts and regulatory attacks, has dealt a final blow to the ACA, leaving millions of people uninsured, or at least unaware of their options.
There’s only one problem with this scenario — it’s false. Though it’s true that fewer people are enrolling in Obamacare plans, attributing this drop to “sabotage” from the administration is inaccurate. People are turning away from the exchanges now that there are other more affordable options to choose from.
Each year during open enrollment, the Centers for Medicare and Medicaid Services releases weekly “snapshots,” making it easy to compare enrollment year to year. In 2017, almost 2.8 million people had signed up for plans on the HealthCare.gov site by week four of open enrollment. This year, just more than 2.4 million have enrolled—356,347 fewer than last year, to be exact. First-time enrollees number 588,131, down from 718,285 last year.
Obamacare supporters are quick to blame the Trump administration for this decrease in enrollment. Specifically, they claim that the drop in enrollments can be explained by cuts the administration has made to its funding for “navigators,” individuals and groups that help people sign up for exchange plans.
Yet a closer look at the numbers makes claims of sabotage seem a bit exaggerated. CMS has received 569,216 fewer calls about open enrollment compared to this time last year. That’s not a huge difference, especially when you consider the possibility that after five years people are starting to get the hang of open enrollment. As the years go on, we should hope that more people become able to navigate the exchanges without help from a federally funded navigator.
Nonetheless, it’s still unlikely that this year’s lower enrollment numbers can be entirely tied to a decrease in outreach funding. Rather, it is likely the result of a few different factors working together.
First, just as the drop in phone calls may point to increased familiarity with the process, a decrease in new sign-ups may point to the fact that more and more people are renewing their coverage each year.
With that in mind, we ought to pay as much attention to renewal numbers as we do new sign-ups. At this point last year, 2,062,975 people had renewed their coverage, compared to 1,836,782 people this year. That’s a difference of 226,193 people—not much, in the grand scheme of things.
Moreover, this year’s drop in renewals is likely due in part to the availability of alternatives, like short-term insurance plans, which were put back on the table after years of being sidelined by the Obama administration. These plans, which last up to a year, are exempt from the ACA’s coverage mandates, and can be priced in proportion to an enrollee’s medical risk. While still providing generous coverage, these plans tend to be cheaper — a lot cheaper.
In Pennsylvania, for instance, a state that has seen one of the biggest drops in enrollment (25 percent since last year) a reasonably healthy 27-year-old male living in Philadelphia could pay $503.62 for a benchmark Silver Plan with a $2,700 deductible, or pay $159.57 a month for a short-term plan with a $2,500 deductible. That’s a savings of about $344 a month, or $4,128 a year — a sizable amount at any income level. If he lived in Richmond, Va., he’d save $3,852 a year.
Finally, there is the possibility that some people have chosen not to get insurance for the coming year. Though the elimination of the penalty for failing to enroll in Medicaid or purchase ACA-compliant plans may have increased the number of uninsured, it’s still too early to tell whether the number of individuals who have dropped ACA coverage exceeds the number that signed up for short-term plans.
Not long ago Obamacare fanatics claimed that expanding alternatives to the ACA constituted “sabotage” because it would raise premiums on the exchanges. As soon as it became clear that premiums would only rise 6 percent, the slowest increase since the ACA passed, they pointed to enrollment numbers, not premium increases, as proof of sabotage.
Fewer people are going to sign up for Obamacare this year, that much is clear. Instead of lamenting these numbers and pointing fingers at those who disagree with them, supporters of the ACA should remember the original goal of the law (hint: it's in the name), and recommit themselves to supporting affordable insurance for everyone, no matter what it’s called.
– Tim Rice (@timrice1) is deputy director of health policy at the Manhattan Institute.
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