It's Still Failing: Terrible 2017 Enrollment Numbers Have More Insurers Eyeing Obamacare Exit

Posted: Feb 06, 2017 10:30 AM

When President Trump and Congressional Republicans make the case that Obamacare must be uprooted and replaced, they often note that the law is already falling apart and harming people. They're right. Despite some recent polling reflecting less than half the country's 'status quo bias' against another round of healthcare upheaval, surveys continue to show that more families are being hurt than helped by the still-unpopular law. A large majority favors replacing Obamacare. To that end, now that the latest (and perhaps last?) open enrollment period has concluded, we are getting a look at some of the figures. They are weak. As in recent years, Obamacare's exchanges have failed to attract the numbers of sign-ups that the government had projected. Via John Sexton:

The pace of Obamacare sign-ups slowed in the final days of open enrollment last month, as the Trump administration repeatedly blasted the law and pulled ads reminding procrastinators of the January 31 deadline. Some 9.2 million consumers selected a plan on the federal exchange,, which handles enrollment for 39 states. That's down from 9.6 million a year ago. Only 376,000 people signed up in the last two weeks of enrollment, compared to nearly 700,000 who picked plans in the final week a year ago. The final figure, which will include data from the District of Columbia and 11 states that run their own exchanges, won't be available until March. Some 13.8 million people were expected to sign up during open enrollment, Obama administration officials said in October. Enrollment in Obamacare this year will prove a critical indicator of the program's value to Americans. Insurers are closely watching the figures, which will play a big role in whether they decide to remain in the market in 2018 and what premiums they will charge.

Sexton notes that the nonpartisan Congressional Budget Office predicted last year that 15 million Americans would enroll in Obamacare plans through the various marketplaces in 2017 (down from an initial expectation of approximately 21 million when the law first passed. The Obama administration's Department of Health and Human Services lowered their 2017 expectations to 13.8 million. But the federal exchange totals are hundreds of thousands of consumers off-pace from last year, which was already sufficiently lackluster as to trigger an exodus of several major insurers.  Sexton's post quotes Charles Gaba, a pro-Obamacare tracker of ACA signups, who estimated that to stay on track with the HHS projections, the federal exchange would need to tally roughly 10.6 million enrollees. The actual number was just 9.2 million.  Gaba writes that he now expects the final total to fall seven figures short of the HHS estimate.  Adds Sexton, "there is always a drop off between the number of people who sign up and the number who actually maintain their insurance throughout the year. So expect the actual number of people enrolled by the end of this year to be 10-15% below whatever finally tally is announced next month."  Combine these new data points with the Obama administration's own devastating October report on rising costs and falling access, and the "it's working!" crowd's spin is sputtering badly.  Providers have been backing away from Obamacare for the last few years, and Bloomberg reports that it looks like that trend will continue:

Aetna Inc. Chief Executive Officer Mark Bertolini warned Tuesday that the company won’t sell Obamacare plans again in states where it has pulled out, and may continue shrinking its participation, “given the unclear nature of where regulation’s headed.” On Wednesday, Anthem Inc. said its ACA business is stabilizing, but it’s carefully watching Washington while developing 2018 plans. “We will make the right decisions to protect the business,” CEO Joseph Swedish told Wall Street analysts in a conference call. “If we can’t see stability going into 2018, with respect to either pricing, product, or the overall rules of engagement, then we will begin making some very conscious decisions with respect to extracting ourselves.”

More instability results in fewer healthy customers to pay the freight, leading to even higher costs (driving more healthy consumers away), and leaving those who remain with fewer options, as more insurers disentangle themselves from this mess. Thus, the downward spiral continues. Obamacare is failing; it makes its own case for replacement. Matt wrote last week that some Republicans were considering major "fixes" to the law, as opposed to repealing and supplanting it. House Speaker Paul Ryan knocked down that approach on Sunday:

House Speaker Paul Ryan resisted the notion that Republicans are trying to condition the public to the idea of "repairing" the Affordable Care Act, rather than using those other two "r" words: "Repeal and replace." "If you're going to repair the American health care system, and fix its problems, you have to repeal Obamacare and replace it with something better: Patient-centered health care," Ryan told Chuck Todd in an interview that aired Sunday on NBC's "Meet The Press." "And that is how you repair this health care system." "Somewhere along the line there was confusion that we were going to take the Obamacare architecture and, you know, tinker at the margins and repair it," Ryan continued. "You can't. It is a collapsing law."

Multiple Republicans have put forward replacement plans, but the party has yet to rally around a single proposal. That must soon change. Ramesh Ponnuru offers his recommendation on how best to proceed, taking into consideration the political challenges inherent in any push to unravel a complex, far-reaching octopus of a federal program.  After listing six important realities that must be acknowledged, Ponnuru outlines the best -- if still imperfect -- solution, preemptively responding to likely conservative criticism ("Obamacare lite") of this outcome:

A better Republican strategy would be designed around Ryan’s stated goal. It would begin with the understanding that Obamacare’s worst features are its overregulation of health insurance and its centralization of regulation in Washington, D.C...This alternative would face some criticism from both left and right. Some on the right would call it “Obamacare lite,” since it would involve the use of tax credits to help people buy health insurance. But a replacement of Obamacare along these lines would eliminate its federal definition of essential benefits, its age bands, its employer and individual mandate, its Medicare rationing board, and its federally subsidized exchanges. It would end the federal government’s chief regulatory role, which was Obamacare’s main innovation. And this replacement, unlike Obamacare, would be neutral with respect to whether people chose comprehensive or catastrophic coverage. The result would be a market that was in important respects freer not only than what we have now but than what we had before Obamacare.

The whole piece is worth a read, especially among the members of Congress who will be determining the future of healthcare policy in the months to come.  Conservatives should be under no illusions that this process will be a simple, political cake walk.  Democrats broke the system with their terrible, party-line scheme, so they're desperate to pin future blame on the GOP.  Nevertheless, Republicans shouldn't let the media and Democrats dissuade them from taking on this needed challenge.