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Spike in Obamacare sign-ups this year unlikely, say experts

October 31, 2018

Obamacare is polling better and the premiums are no longer soaring, but experts don’t forecast a sign-up boom when the new enrollment season kicks off Thursday.

After years of premium spikes, Obamacare plans remain out of reach for too many Americans, and the GOP’s move to cancel the tax penalty for people who refuse to sign up has removed the pressure on them, giving them excuses to stay on the sidelines, analysts said.

Those who do go shopping for plans on the exchanges, though, will find the law is healthier than it has been in some time, with not only stabilized rates but more choices. That should keep the exchanges from collapsing, though it’s not likely that the population of users grows.

“We’re really at the point where we have the group we have,” said Chris Sloan, a director at Avalere Health, a D.C.-based consultancy. “It is a market that’s mainly low-income, subsidized individuals, and it has become increasingly so over the years.”

Roughly 10 million people got insurance through the exchanges in 2018.

The Health and Human Services Department isn’t guessing how many people will pick plans for 2019, but said enrollment might increase in areas where rates are finally going down, after insurers overpriced in 2018 and Mr. Trump tightened up the sign-up process.

The deadline for sign-ups ranges from Dec. 15 in states that use the federal HealthCare.gov portal to Jan. 31 in places like New York and D.C. that run their own markets.

Nationwide, average premiums across all plans are expected to rise by single-digit percentages, while average rates for midtier “benchmark” plans will be 1.5 percent lower on Healthcare.gov in 2019 than in this year a first-ever decrease.

While that may entice some unsubsidized people back into the markets, it could leave other customers worse off, since subsidies rise and fall with the benchmark premium in a given rating area.

For instance, a person who purchases a gold-tier plan might not see a change in his rates even as the benchmark plans in the county get cheaper.

“You could have some people caught unaware their premium’s not going down and their subsidy is,” Mr. Sloan said. “We’re just watching that dynamic. It’s something we haven’t experienced before.”

Another wild card is Mr. Trump’s decision to let employees in like-minded trades buy “association” plans that don’t cover the full suite of benefits that Obamacare covers. He’s also letting individuals hold skimpy “short-term” insurance for a full year instead of three months and renew them for two more, giving customers priced out of the exchanges an alternative option.

“I expect that some people not eligible for subsidies will sign up [in the exchanges], but some may leave for association health plans or short term plans, or simply go uninsured because the penalty is now gone,” said Timothy Jost, a professor at Washington and Lee University.

Democrats said Mr. Trump’s changes amount to “sabotage” of Obamacare, saying he’s chased people out of the marketplace.

The administration says it’s trying to help people who refused to sign up because the markets’ prices were already too high under the Obama administration.

Mr. Trump’s also slashed funding for TV ads and in-person sign-up help, causing some advocates to fear that customers will miss out on much-needed benefits.

Some blue states are stepping into the breach.

In New Jersey, Gov. Phil Murphy launched a campaign this week to boost sign-ups, including telling them they face an additional state tax if they don’t have health care coverage.

While the federal mandate was erased in the GOP’s tax cut law, New Jersey enacted its own tax-related prod to encourage people to get health insurance.

“New Jerseyans are counting on us to do what the federal government won’t,” said Mr. Murphy, a Democrat.

Massachusetts enforced an individual mandate before Obamacare came along, and the exchange will remind residents this fall that it’s still in place.

The District of Columbia approved its own mandate penalty this year, though low-income people will qualify for an automatic exemption on their tax returns.

Mila Kofman, executive director of the D.C. health exchange, the city will hold an enrollment kickoff rally near city hall on Thursday before sending a fleet of sign-up vans into neighborhoods, hoping to identify the uninsured during the sign-up season.

“Generally, younger people enroll later,” Ms. Kofman said. “And we want to keep our risk pool with enough young people, because that makes coverage more affordable for everyone.”