Obamacare open enrollment begins with new lower rates and same legal uncertainty

GS: Obamacare enrollment Miami 
An insurance agent from Sunshine Life and Health Advisors, speaks with a customer as she shops for insurance under the Affordable Care Act at a store setup in the Mall of Americas in Miami, Florida. Getty Images

The sixth year of Obamacare open enrollment began Friday, and Americans shopping for 2020 health plans will find premiums edging lower for the second straight year, down 4% on average.

They’ll also find more insurers to choose from in many markets.

The Trump administration is taking a victory lap for bringing stability to the Obamacare marketplaces, even as it supports a federal lawsuit pending in the 5th U.S. Circuit Court of Appeals that could overturn the Affordable Care Act.

“Under our administration, premiums are lower, there are more choices, we have 90% satisfaction rate at our call center for open enrollment,” declared Seema Verma, administrator of the Centers for Medicare and Medicaid, during a House hearing on open enrollment last week. “It only happened under our tenure.”  

Lower premiums, higher out-of-pocket expenses

According to CMS, the average premium for a 27-year-old who buys a benchmark silver plan will be $388 a month in 2020 before subsidies, down from the current $406. In half a dozen states on the federally run Healthcare.gov marketplaces, including Nebraska, North Dakota and Montana, premiums will be down 10% or more next year.

The number of insurers offering plans on Healthcare.gov will rise from 155 this year to 175. It’s the second straight year of expansion, though overall insurer participation on the exchanges is down 26% from 2016.

“We’re seeing a little bit of growth. Insurance companies are finally making a profit on Obamacare — which was predicted. It just took longer for it to sort itself out,” said Scott Flanders, CEO of eHealth, the online health insurance brokerage.

While premiums are edging lower, eHealth notes that exchange plan out-of-pocket costs are moving higher for 2020. The firm calculates that the average deductible for a mid-tier individual silver plan is going up 6%, from $4,050 to $4,292, while family plan deductibles are set to rise an average of 5% to $15,551 from $14,873.

Those are the rates for enrollees who don’t receive subsidies, but nearly 90% of current Obamacare enrollees receive premium tax credits, and those with low incomes also qualify for subsidies to help with out-of-pocket costs. CMS estimates that subsidies will result in lower deductibles in 2020 for low-income enrollees.

More people may qualify for tax credits

Critics say the administration has not done enough to get the message out to people who could qualify for financial assistance.

“At the same time that they attempted to take credit for a reduction in the prices … in that same breath, they sort of broadcasted this idea that … the premiums are unaffordable,” said Josh Peck, co-founder of Obamacare advocacy group Get America Covered. “That’s precisely the opposite message that helps people go and see what they qualify for.”

Next year, more Americans may qualify for premium assistance because income limits are going up. Individuals earning up to $49,490 could qualify for tax credits in 2020, up from $45,490 this year. For a family of four, the income limit rises to $103,000, from $94,200 this year.

ACA ruling uncertainty

Just as Americans begin to shop for new plans, a federal appeals court could cast uncertainty over the fate of the Affordable Care Act itself. The 5th Circuit is expected to issue a decision any day now on a lower court ruling that overturned the ACA, in a case known as Texas vs. the United States.

If the appeals court upholds the ruling finding the law unconstitutional, analysts expect that the court will issue a stay allowing open enrollment and 2020 coverage to continue because the decision will almost certainly be appealed to the Supreme Court.

Yet ACA advocates worry that headlines about the case could cause confusion and dissuade people from signing up on the exchanges.

“We ask people if you found out that the ACA was unconstitutional, would that make more or less likely to enroll,” said Peck. “And we saw a very significant portion of people say it would make them less likely to enroll.”

Open enrollment deadline varies

Another factor in enrollment numbers may be the length of open enrollment itself. The deadline for signing up on Healthcare.gov states is Dec. 15, which this year falls on a Sunday. Most state-run exchanges have longer enrollment periods, with deadlines that extend into early next year in some cases.

Over the last three years, during the Trump administration’s tenure, some of the sharpest declines in enrollment have been on the federally run Healthcare.gov exchanges. Federal exchange enrollment dropped 13% from 9.6 million in 2016 to 8.4 million people this year, according to CMS data. Over the same time, collective enrollment on the state-run marketplaces has remained steady at 3 million.

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