PoliticsCarlos Barria/Reuters Donald Trump and Barack Obama
- Open enrollment for health insurance via the federal Healthcare.gov and state-based marketplaces opens on Wednesday.
- The open enrollment is the first under President Donald Trump, who has made big changes to the Affordable Care Act since taking office.
- Most analysts believe these changes will suppress enrollment, but for some the differences could lead to cheaper premiums.
Wednesday marks the start of the fifth open-enrollment for the Affordable Care Act, or Obamacare. It's the law's first under President Donald Trump, and it comes in perhaps the most bizarre year yet for the health insurance exchanges.
Despite efforts to repeal and replace the law, the ACA remains intact and the Internal Revenue Service will still enforce the individual mandate that requires people to have insurance or pay a fine.
Over the next six weeks, millions of people will reenroll - or enroll for the first time - via Healthcare.gov and state exchanges for their Obamacare plans. How many enrollees sign up could be fodder for either side of the aisle. If it's lower, Trump will likely point to it as an example of how the law is failing - and Democrats will point to it as an example of how the president has sought to undermine the law.
Upheaval
Obamacare insurance markets have undergone a transformation over the past year due to significant changes from the Department of Health and Human Services under the Trump administration.
Peter Lee, the executive director of California's state-run Obamacare marketplace Covered California, told Business Insider that Trump's changes are substantial enough that he should now own its future.
"This is now on President Trump," Lee told Business Insider. "The healthcare market is not about President Obama anymore. They are the responsibility of this president, and they have to be owned by this president."
The two most obvious changes for open enrollment: a shortened length of time to enroll and a massive decrease in advertising to encourage people to sign up.
A Trump administration rule shortened the length of the open-enrollment period from three months to just six weeks, from November 1 through December 15. Some state run exchanges in California, Colorado, and Minnesota will run longer.
The reduced length will allow all plans sold on the federal exchanges to kick in at the start of 2018, but will also likely lower the number of people who enroll.
Another major change is how much money the administration is set to spend on advertising to drive enrollment. The budget for advertising via online ads, TV ads, etc., was cut to just $10 million from roughly $100 million.
This is particularly worrying, Lee said, because there has been a strong correlation between ad spending and enrollment.
"The return on investment for marketing is five- to sevenfold, and it pays off in lower premiums for everybody," Lee said. "The biggest winners are not people who get subsidies, but it lowers the premiums for people who do not get subsidies."
Additionally, many navigator programs - which hire people to help prospective enrollees choose plans - have seen their budgets slashed by HHS. The cuts forced staff layoffs and decreased consumer reach.
Even little changes, like the timing of maintenance for the Healthcare.gov website, appear to be designed to complicate the open enrollment period. The sum oif these changes could be enough to do serious damage to the ACA, according to Larry Levitt, a senior vice president at The Kaiser Family Foundation, a nonpartisan health policy think tank.
"No one of the Trump administration's actions is crippling to the ACA's marketplace, but the cumulative effect could be quite damaging," Levitt told Business Insider a few weeks before the start of open enrollment.
The changes will also likely lead to lower enrollment in the exchanges this year. A Standard and Poor's study estimated that 10.6 million to 11.4 million Americans would likely enroll in plans on the exchanges this year, down from 12.2 million selections during last year's enrollment period, a 7% to 13% drop.
"Our forecast took into account multiple factors, including the expectation of reduced active outreach at the federal level, a reduced broker presence in the individual market, shorter enrollment periods, and higher non-subsidized premiums," the analysis said.
Cheaper for many, but not for all
While enrollment will likely be depressed, most people that do find plans could find that they're cheaper than ever.
It won't seem so based on raw premiums. According to a report from HHS released prior to open enrollment, the average premiums for a benchmark silver plan will be up 37% in 2018 - the biggest year-over-year increase ever.
But premium subsides from the federal government will help to offset premiums for more people than ever. According to the HHS report, 80% of people qualified for the federal insurance exchanges will be able to find a plan that will cost $75 a month of less after subsidies are applied.
There remains, however, serious strain on those people who do not receive subsides and will bear the brunt of the increased premiums. For these people, the open-enrollment period will likely be a trade off between a cheaper, less generous plan and a much more expensive plan to maintain the same level of coverage.
For many of those without subsidies, experts say plans may be cheaper off the exchanges through an insurance broker.
Quirks in the system
In an odd quirk starting next year, many of Obamacare's top-of-the line plans are set to be less expensive for people than the middle silver level plans.
Obamacare plans come in four levels- bronze, silver, gold, platinum - with each successive level covering more types of care and offering lower out-of-pocket costs with a higher premium.
A New York Times analysis found that changes in premium subsidies and Trump's decision to end cost-sharing reduction payments would result in the lowest-cost gold plan costing less than or close to then the lowest-cost silver plan on one-sixth of the counties where people use Healthcare.gov to sign up for insurance.
In fact, three states - Hawaii, Wyoming, and New Mexico - will have cheaper gold plans in every single county.