Battered but Still on the Books, the ACA Starts a New Round of Open Enrollment

Some consumers will see their health premiums soar. For others, insurance could cost next to nothing.

Confused? You’re not alone. Today is the first day of open enrollment for 2018 under the Affordable Care Act (ACA), an event that was not part of President Donald Trump’s plan when he took office in January.

Whether consumers use HealthCare.gov or a state exchange, this year’s enrollment cycle—the first year of Obamacare without Barack Obama—promises to be different. A last-minute move by Trump has caused the average silver plan premium to rise 37%—up from 24% last year—but that doesn’t tell the whole story. The arcane math of the ACA affects individual consumers in ways the current president likely didn’t anticipate.

A big change: the enrollment cycle has been cut in half and most consumers have until December 15 to pick a plan. The Trump administration made this change to stop people from waiting until they were sick to enroll. But critics say that coupled with other changes—including a lack of marketing—it will reduce enrollment from the high mark of 12 million.

For nearly everyone who buys coverage on the exchanges, the next 6 weeks could be challenging, thanks to a late scramble from insurers to respond to the loss of cost-sharing reductions (CSRs). Under the law, this feature of the ACA helped insurers afford the lower prices they charged for those with the lowest incomes under the law.

Trump spent much of 2017 threatening to end the CSRs, while declaring the ACA a failure and calling for Congress to repeal it. He finally canceled CSRs on October 12 and took aim at insurers, tweeting, “Massive subsidy payments to their pet insurance companies has stopped.”

The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!

— Donald J. Trump (@realDonaldTrump) October 13, 2017

The ACA requires those whose incomes qualify them for premium tax credits to get subsidized rates, CSRs or not. Amid uncertainty and with few options, regulators in some states had allowed insurers to build a CSR loss into 2018 rates, and to load the premium increase onto the benchmark silver tier, causing the cost of these plans to soar.

Under the ACA, subsidies are set as a percentage of the value of a second-lowest cost silver plan. Thus, if premiums rose to cover those lost payments, the subsidies went up right along with them. So, consumers at the bottom get a big break. But those middle-income Americans earning 400% of the poverty level—who don’t qualify for tax credits—got hammered.

Meanwhile, cost increases are much smaller for bronze, gold, or platinum plans (where those still exist). Some consumers who shop carefully may find a gold plan that costs less than a silver plan but covers more.

The question is: will low-income consumers know these opportunities exist?

The advocacy group Get America Covered worries many will not. Led by former HealthCare.gov marketing officer Josh Peck, the group calculates that the Trump administration’s tactics, including cutting outreach funds from $100 million to $10 million and pulling back on “navigators,” who work with consumers to select appropriate plans, could lead to the loss of 1.1 million enrollments. Insurers know the higher rates won’t help, and some are advertising how much of the CSR loss means to the increase.

Customers are in for a surprise in states that didn’t plan ahead for the CSR cancellation. On October 25, for example, Maryland regulators approved rate increases for CareFirst and Kaiser Permanente, less than a week before the start of open enrollment. Increases will be as high as 76%, according to a press release from the Maryland Insurance Administration.

The first order of business for the insurers still offering coverage, either on HealthCare.gov or state exchanges, may be to convince consumers that the ACA is still the law of the land. Insurers are stepping up—they’re adding staff, working with community groups, and holding outreach and education sessions. As CMS pulls back funds for navigators, insurers are adding helpers, or working with insurance agents who can perform this task.

“This is a very important market segment for us with just under 1 million current ACA members,” Paul Kluding, senior director of public relations for Florida Blue wrote in an e-mail. The insurer is offering 12 new off-marketplace plans this year, “so those who do not qualify for subsidies will still have affordable options,” he said.

The insurer runs 20 Florida Blue Centers across the state that offer enrollment services, health coaching, and other services, and will play a crucial role in reaching consumers in all 67 counties.

“Over the years we have learned that a grassroots approach is the best way to reach this audience, so we are participating in more than 1000 events across the state, going to county fairs, churches, community events,” Kluding said. Florida Blue will add 700 seasonal and temporary workers, he said.

In New Jersey, Horizon Blue Cross Blue Shield (BCBSNJ) is taking a similar approach.

“We are putting unprecedented resources into this effort through community-based outreach, expanding our footprint in malls throughout the state, hosting regular grassroots education events and making agents available in person, on the phone or online to help people choose the plan that is right for them and see if they qualify for federal tax credits that have helped nearly 80% of the people who get health insurance through the individual market,” said Michael J. Considine, Horizon BCBSNJ vice president of consumer, small group and mid-size market units.

Horizon’s tactics include expanded digital outreach, paid advertising and social media, and 15 mobile vans to offer educational and on-the-spot enrollment services. Horizon also has specific outreach services for New Jersey’s Spanish-speaking community, which has been an area of growth for the insurer.

Pennsylvania was among the states where regulators required insurers to plan for a loss of CSRs in rates. As a result, Lisa Hartman, associate vice president of marketing at Geisinger, said the health plan will be contacting about 10,000 current customers to explain how a gold plan could offer richer benefits at a lower cost than their current silver plan.

It’s a challenging task to explain how it all works, and Geisinger had to wait until these customers received a renewal letter for their current silver plan that is required by CMS. “We know most people don’t understand what the CSR is," Hartman said. “We want to let them know there’s other options that might be better for them."

A rule proposed late last week suggests the Trump administration takes a different view of the navigator role, and sees it as a service that can be taken on by an insurance agent. Specifically, the proposed CMS rule calls for eliminating requirements that a navigator in each exchange be a community or consumer group. “The requirement that one navigator grantee in each exchange must be a community and consumer-focused nonprofit group may unnecessarily limit an exchange’s ability to award grants to the strongest applicant,” the rule states.

Until this year, the chief difference among the states was whether they had expanded Medicaid. But now, whether a state has its own exchange will matter, as some that run their own are extending open enrollment well beyond December 15. Minnesota will sign up enrollees through January 14; Washington will go until January 15, and the deadline for California and New York is January 31. Besides extending the enrollment period, several state exchanges are also spending money on advertising to make up for CMS’ lack of outreach.