You’ve heard of healthcare.gov, right? I’m sure you know it crashed or was incredibly sluggish during its first week of operation. Or that there was some controversy over the company contracted to build the site. But did you know that healthcare.gov is the home of the ACA’s Exchanges, also known as the health insurance Marketplace?
The Marketplaces were set up by the ACA to create organized, competitive markets for purchasing health insurance. Prior to the creation of the Marketplace, individuals needing health insurance would have to contact insurance companies directly and would receive limited transparency on cost and benefits.
In contrast, the Marketplace allows individuals, families, and small businesses to: (1) compare health insurance plans for benefits and cost; (2) determine eligibility for tax credits for private coverage or Medicaid/CHIP; and (3) enroll in a health insurance plan. Some states have chosen to operate their own Marketplace (CA, CO, CT, DC, ID, MD, MA, MN, MS, NM, NY, RI, UT, VT, WA). In all remaining states and territories, the federal government facilitates the Marketplace.With limited exceptions, enrollment in a Marketplace plan is only possible during an Open Enrollment period. Outside of the Open Enrollment period, individuals and families are only able to choose a health plan on the Marketplace if they have a special circumstance, such as moving or losing coverage due to a change in employment. After the first Open Enrollment period in 2014, 8.0 million people signed up for coverage using the Marketplace.
For 2018 coverage, Open Enrollment began November 1, 2017 and ended December 15, 2017. Analysts projected that enrollment would decline due to a much shorter Open Enrollment period than previous years; limited outreach and advertising to eligible individuals; and the looming threat of ACA repeal. Well, the analysts were right. Only 11.8 million people signed up for 2018 coverage, which is a decrease from 12.2 million in 2017 and 12.7 million in 2016.
So, what challenges are facing the Marketplaces going forward? Even with the political uncertainty over the last year, the Marketplace has been rather stable and resilient. However, the repeal of the individual mandate penalty has the potential to encourage fewer young and healthy individuals from enrolling in health insurance. This can result in a less diverse risk pool, which will drive up costs. Taking into account the shorted enrollment period, limited outreach and other federal decisions to undermine the ACA, one analysis predicts premium increases of 35 to 94 percent within the next three years. According to this analysis, the repeal of the tax penalty alone could result in premium increases between 7 and 15 percent this year, and as much as 10 percent the next two years.
There are currently two bipartisan bills in front of Congress aimed at lowering the cost of premiums on the Marketplace, but they are caught in partisan politicking. There is a chance these bills will included in a $1.3 trillion must pass spending bill, but nothing is certain at this moment.