Why Marketplace Enrollment Rates Are Lower Than Initially Estimated

There are a number of reasons why enrollment in the Affordable Care Act's health insurance plans is lower than initially estimated, according to a new report.

In assessing the marketplace enrollment of the Affordable Care Act (ACA), researchers examine why rates are lower than those originally predicted by the Congressional Budget Office (CBO) and establish what may be a more accurate vision of growth in the future.

At the end of the third open enrollment period under the ACA, 12.7 million individuals had signed up for coverage from health insurance marketplaces, and this number is presumed to settle to just over 10 million by the end of 2016. Although similar to projections from HHS, this estimate falls short of the projections from CBO, which has nearly halved its estimates from 21 million to 13 million.

The authors have several hypotheses as to why enrollment is lower than originally calculated. Firstly, CBO thought that employer coverage would decline so that employees would be allowed to take advantage of certain subsidies. As this decline has not manifested, it’s possible that the ACA incentives for employers to maintain benefits is greater than first supposed.

Secondly, many adults continue to buy insurance outside of the marketplace, including ACA-compliant plans, “grandfathered” plans, and “transitional” plans. This number is expected to drop, however. Thirdly, many consider affordability a challenge. The team speculated if this is a result of lack of awareness of financial help.

In order to more precisely predict the future rate of enrollment, the researchers suggest looking at the experiences of top-performing states. If all states improved to at least the average of the top 10 states, 16.3 million would sign up with an ending estimate of 14.7 million. This appears to be a more reasonable ceiling for the next couple of years.

Enrollment growth is important for a variety of reasons: to fulfill the ACA’s goal of less uninsured adults, to stabilize premiums by creating a healthier pool of applicants, and to attract more insurers, which is central for a successful marketplace.