Five Things to Expect During Open Enrollment 2019
As Open Enrollment (OE) 2019 for the individual health-insurance market draws nearer, the all-too-familiar cries of “death spiral” from the right and “ACA sabotage” from the left may give way to something altogether different: optimism.
Health insurance carriers performed relatively well during OE ‘18, which is drawing more insurers to the market for the coming year. The Centers for Medicare and Medicaid Services has improved the user experience with a new, streamlined way for individuals to shop for and enroll in coverage. This added consumer focus, combined with much lower overall rate increases than in previous years indicates that we may be at a turning point for the ACA’s individual market.
With that in mind, here are five things you can expect to see during the coming 2019 enrollment period, which starts November 1.
1. Silver-plan loading will keep premiums low for millions. When President Trump discontinued cost sharing reduction (CSR) payments to insurers last year in an effort to destabilize the individual market, insurers responded by “silver-plan loading.” It’s a complicated strategy, but the net result was that most subsidized consumers were able to get better coverage at lower rates than in previous years, thanks to how subsidies are applied based on a person’s income in comparison to plan premium costs.
In essence, in trying to kill the individual market, President Trump may have made it more appealing for both consumers and insurers.
The long-term sustainability of such a strategy is still unclear. However, the HHS has indicated it will not prevent silver-plan loading this year, meaning it’s very likely that subsidy-eligible individuals will get quality coverage at affordable rates without health plans having to take a loss.
2. Non-subsidy-eligible individuals still need relief. As good as silver-plan loading has proven to be to those receiving subsidies, those ineligible for subsidies have still seen skyrocketing premiums over the past several years.
As a result, a large number of them have dropped coverage, and the Trump administration hopes that short-term, limited-duration plans will enable them to find cheaper coverage — even if it’s not as good as ACA-compliant plans.
Bottom line: It’s going to be another rough year for unsubsidized individuals.
3. Individual mandate repeal, short-term plans will have minimal impact. Charles Gaba, widely recognized as the go-to expert on plan rates and enrollment statistics, argues that most states would have experienced lower premium rates year-over-year for 2019 if not for the individual mandate repeal and the re-expansion of short-term plans — and that the market has otherwise stabilized.
Yet even with the rate increases, these actions by Congress and the president will have minimal impact, at least in 2019, on the individual market. That’s because the vast majority of individuals are paying very reasonable rates for individual coverage after their ACA subsidy is applied. If this were not the case, there would be more incentive to look toward alternatives like short-term plans or — for the self-employed and those employed by small businesses — association health plans.
If those options end up costing more, then fewer people will opt for them. Likewise, the individual mandate wasn’t a great motivator for getting individuals to buy coverage. As such, its removal probably won’t lead to a mass exodus from coverage — and those who need coverage will still get it.
4. Other referrers, such as employers and brokers, may increase. While the ACA’s exchanges are expressly for those not eligible for coverage through their employer, nearly 60 percent of U.S. workers are hourly, with a sizeable percentage of those hourly workers being part-time or variable — i.e. eligible for ACA coverage. Employers seeking an edge in a very competitive labor market may see benefit in guiding their part-time workforces to ACA-subsidized coverage.
And they may have more brokers ready to help those workers.
While brokers have steered clear of the individual market over concerns of its low commission rates and instability, they may see the stabilization as an opportunity to do a volume business while helping individuals find coverage. There are also indications that a more competitive individual market means that carrier incentives to brokers may rise this year. If so, brokers could drive more business to the individual market and help increase overall enrollments.
5. Health-care consumerism will continue to grow in importance. With indications of more plans from more insurers in many regions across the U.S., combined with more referrers driving enrollments, it will be more important than ever for individuals to be able to shop with confidence — to be smart health-care consumers. To do so, it is crucial that they have access to decision-support tools, side-by-side comparisons, and streamlined shopping and enrollment processes.
Enhanced direct enrollment enables individuals to enroll more smoothly from whichever site they choose to enroll, whether Healthcare.gov or a sanctioned private marketplace. It’s a technical update with potentially major ramifications for customer ease-of-use — fewer steps, less confusion, and increased understanding of the process.
That confidence is what we hope will be the greatest outcome of this year’s open enrollment, and all open enrollments that follow.
George Kalogeropoulos is the CEO and co-founder of private health insurance marketplace HealthSherpa. Shandon Fowler is the owner and principal of Four8 Insights, which is a benefits and health-care consulting company. Fowler is a paid consultant to HealthSherpa.