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

Mary Caffrey
Whether consumers use or a state exchange, this year’s enrollment cycle—the first year of Obamacare without Barack Obama—promises to be different. Some consumers will see premiums soar, while others will pay next to nothing,
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 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 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 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.

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