CMS reported that the number of people selecting plans for the 2019 exchange open enrollment period was down 3% from last year (11.4 vs. 11.8 million). Additionally, from 2018 to 2019, selection of silver plans was down (65% to 61%), while selection of bronze plans was up (28% to 30%). The average premium decreased 1%, and the age distribution of people on the exchanges remained skewed older (people aged 55 – 64 are the largest enrollment group 28%).
Notably, the elimination of the individual mandate penalty in 2019 did not have as big of an impact as predicted. In 2017, the Congressional Budget Office estimated 3 million fewer enrollees in the exchanges by 2019.
Meanwhile, a recent change in the Administration’s position on the legal status of the ACA as unconstitutional in the wake of a December federal district court decision in Texas has given the House Democratic leadership an opportunity to pivot attention away from Medicare for All to bolstering the ACA. Acting first, House Energy and Commerce Democrats passed 6 bills without Republican support to stabilize the exchanges by:
- Providing $10 billion for state reinsurance programs to reduce premiums and cost sharing to be funded out of the U.S. Treasury;
- Providing $200 million for states to establish their own exchanges;
- Providing $100 million for health care navigators for the exchanges;
- Restoring $100 million in funding for exchange outreach and education; and
- Preventing enforcement of federal rules on short-term limited duration insurance and state innovation waivers that could loosen restrictions on guaranteed issue and renewal.
Impact on Employers and Employees
While the Administration’s actions bring about a measure of uncertainty regarding the future of the ACA, employers and employees utilizing the exchanges should expect a somewhat stabilized trend for enrollment and premium growth.
However, to reduce premiums, grow enrollment and encourage broader insurer participation, exchanges must attract younger and healthier people and give insurers more flexibility in implementing coverage that encourages value-based plan designs. In addition, plans must ensure that provider networks are high performing.
Providing federal funding for state reinsurance programs could reduce exchange premiums and cost sharing without taxing employers and employees. It’s unclear what would happen in states with existing programs, especially those that tax employers.
For 2020, exchange premiums and enrollment trends are likely to be similar to those in 2019, unless Congress passes exchange stabilization legislation. Without federal funding, more states could seek to implement reinsurance programs opting for new taxes on employer plans.
The legal battle over the ACA could reach the U.S. Supreme Court again.