2016 marketplace enrollment comes in at 12.7M, downward readjustment likely

At the end of the 2016 annual enrollment period 12.7 million people have signed up for health care coverage in the marketplaces, up from 11.7 million in 2015 and 8 million in 2014, according to a March 2016 Kaiser Family foundation (KFF) issue brief. KFF cautions, however, that the actual 2016 enrollment will be lower because as in prior years some enrollees will not pay their premiums, some will have their coverage terminated because of inconsistencies on their applications, and some will drop out as they get jobs offering health insurance benefits.

The KFF issue brief also determined that 2016 enrollment in the marketplaces is lower than the 15 million enrollees the Congressional Budget Office projected because (1) the availability of employer coverage has not declined, (2) many people are still buying their own insurance outside of the marketplaces, and (3) marketplace plan affordability remains a challenge.

Employer coverage stable

The brief cites a Kaiser-HRET Employer Health Benefits Survey, showing 57 percent of employers offering health benefits in 2015, which is statistically insignificant from the 55 percent offering benefits in 2014.

Purchases outside the marketplaces

KFF also discusses three types of individual coverage outside of the marketplaces and the reasons for them:

  • “Grandfathered” plans. These are plans that were purchased prior to the enactment of the Patient Protection and Affordable Care Act (ACA) (L. 111-148) in March 2010. They can exist forever under pre-ACA insurance rules.
  • “Transitional” plans. These plans include coverage that was purchased after the enactment of the ACA but before the beginning of the first open enrollment period in October 2013. The Obama Administration has issued guidance permitting these plans until December 31, 2017. However, because discretion has been granted to states and individual insurers, transitional plans have not been allowed to continue in all cases.
  • Private ACA-compliant plans. These plans exist because for people not eligible for premium subsidies there is little advantage to buying through the marketplace. Insurers and brokers may also prefer the application process outside of the marketplaces when enrolling people not eligible for premium subsidies.

Affordability

With regards to marketplace affordability being a factor in lower than expected enrollment, the brief cites a recent Kaiser poll which determined that the overwhelming reason why people are uninsured is cost. For example, the poll found that 46 percent of uninsured, non-elderly adults say they tried to get coverage but found that it was too expensive.

Conclusion

The brief concludes by surmising that marketplace enrollment could increase if larger numbers of employers drop health benefits for their workers, the buying experience in the marketplaces continues to improve, and the pool of purchasers grows as transitional policies get terminated over the next year and a half.

It further speculates, however, that enrollment could actually shrink if more states expand Medicaid, pulling low-income people (those with incomes between 100 and 138 percent of the federal poverty level) out of the marketplace, and if existing marketplace enrollees drop coverage if premiums continue to be unaffordable or the cost-sharing is too high.