The number of Americans who signed up for health insurance on Obamacare's federal marketplace fell this year compared with last, according to a new report from the Department of Health and Human Services. In total, shoppers selected 9.2 million plans on healthcare.gov during the open-enrollment period that ended Tuesday, compared with 9.6 million the previous year.
This is very bad news for the Affordable Care Act and is certain to fuel Republican claims that the law is collapsing in on itself.
Now, this is not the final tally for Obamacare enrollment. Last year, some 3.1 million additional customers bought plans on the state-based exchanges. We won't see the equivalent figures for this cycle until March, according to the Centers for Medicare and Medicaid Services.* Nonetheless, it's enough to conclude that total sign-ups will probably end up down.
Practically, that means insurers may end up losing more money than they expected this year, thanks to a thinner, possibly sicker customer base. That, in turn, could lead to higher premiums in 2018, or persuade more carriers to drop out of the market entirely. Insurance providers need to decide whether they will participate in the next open-enrollment period within the next couple of months, when they'll be required to file notices with state insurance regulators. Many were already concerned about whether the Trump administration would continue funding key pieces of the law; the enrollment drop could compound those issues.
Politically, this is also a gift to Republicans like House Speaker Paul Ryan, who has long claimed that Obamacare had entered the unraveling cycle of rising premiums and falling enrollment known as a death spiral. It was easy to dismiss his rhetoric because, despite the 22 percent average price increases on this year's individual market, enrollment was on pace to rise overall as recently as late December. Now it's down.
Liberals will argue that Republicans and the Trump administration sabotaged enrollment. (Sample headline from blogger Charles Gaba: “Congrats, Trumpublicans: Your ACA sabotage efforts 'worked' beautifully.”)* And, frankly, even though it can't be proven beyond all doubt, that's my suspicion about what happened. Talk of repeal may have dissuaded some customers from signing up. The Trump administration also quashed millions of dollars of last-minute advertising during the final week of open enrollment, though it backed off a plan to also end outreach efforts like reminder emails and automated phone calls. Between the news about the ACA's impending doom and the weakened recruiting drive, it's entirely possible that Trump may have undercut the markets.
So Democrats will have their talking point. Republicans will have theirs. And the individual health insurance markets will be a little closer to peril.
*Correction, Feb. 3, 2017: This post originally misidentified the Centers for Medicare and Medicaid Services as the Center for Medicaid and Medicare Services. It also misspelled Charles Gaba’s last name.