WASHINGTON — Congress may be moving to repeal "Obamacare," but millions of people are still signing up. The administration said Tuesday that 11.5 million enrolled nationwide through Dec. 24, ahead of last year's pace.
Administration officials said about 290,000 more people have signed up than at the same time last year, evidence that the Affordable Care Act is on sound footing despite rising premiums, dwindling choice and healthy people holding back from getting coverage.
Separately, the IRS said Tuesday that the average fine for those who remained uninsured more than doubled for the 2015 tax year, rising to $470. The law requires virtually all Americans to have coverage or risk fines.
While acknowledging what they call "headwinds," Obama administration officials said the latest sign-up numbers refute claims by GOP leaders that the health care law is in a "death spiral" and about to collapse because of its own problems. Among the Republicans making such claims are President-elect Donald Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.
"This market is not merely stable; it is on track for growth," said Aviva Aron-Dine, a senior adviser at the Department of Health and Human Services. "Today we can officially pronounce these death spiral claims false."
On Capitol Hill, Ryan showed no signs of changing his tune. He cast the GOP repeal drive as a rescue mission. "We are in the middle of a rescue mission to save the families who are getting caught up in the death spiral that has become Obamacare," he told reporters.
An outside analyst looking at the numbers said it's conceivable that the health law's markets could stabilize this year without any action by lawmakers. Larry Levitt of the nonpartisan Kaiser Family Foundation said sharp premium increases for 2017 do not seem to have driven away droves of customers. About 8 in 10 receive subsidies that are designed to increase if the cost of insurance goes up.
"With sign-ups holding steady there are absolutely no signs of a market collapse," said Levitt. "The higher premiums insurers are charging in 2017 suggest that more insurers will likely be turning a profit on marketplace business this year."
One major caveat: The administration report provided no information on people buying individual policies outside of HealthCare.gov and state-run insurance markets. An estimated 5 million to 9 million customers outside the government marketplaces get no subsidies and may bear the full brunt of premium increases.
The health law expanded coverage through a combination of taxpayer-subsidized private insurance and a state option to expand Medicaid for low-income people. Experts say it's largely responsible for reducing the nation's uninsured rate to a historic low of about 9 percent.
The administration has set a goal of 13.8 million people signed up by the time open enrollment ends on Jan. 31. Officials believe a strong finish will bolster the case for preserving President Barack Obama's signature domestic policy achievement.
With the final deadline less than three weeks away, the administration is planning advertising and grassroots outreach to millions of people who qualify for subsidized coverage under the law, but remain uninsured. The IRS is also involved, sending reminder letters to people who paid tax penalties for being uninsured that they can avoid future fines by signing up.
Data released Tuesday by the IRS for the 2016 tax filing season showed that the average fine jumped, although the number of taxpayers penalized went down. Under the law, the dollar amount of penalties for being uninsured increases with time. It's meant as a stiff nudge to get healthy people into the insurance pool.
The IRS said the average fine rose to about $470 for tax year 2015, compared with an average penalty of about $210 for tax year 2014. About 6.5 million households paid the penalty, which remains the most unpopular feature of the health law. For tax year 2016, the basic fine is $695, and it's scheduled to increase thereafter for inflation.
Republicans have promised to repeal the so-called individual mandate to carry insurance and the fines that enforce it, which are deducted from taxpayers' anticipated refunds. But if the GOP wants to preserve guaranteed coverage for people with pre-existing medical problems, Republicans will have to find other ways to compel healthy people into the insurance pool to help keep premiums in check.
|© The Associated Press FILE - In this Oct. 24, 2016 file photo, the HealthCare.gov 2017 web site home page as seen in Washington. The Obama administration says 11.5 million people have enrolled for coverage under the president's health care…|
Obamacare Sign-ups Holding Steady, Despite Predictions of Implosion
Republicans who insist on quick repeal of Obamacare say it’s necessary because the program is imploding.
But signs of implosion are difficult to find in new enrollment figures that the Department of Health and Human Services released on Tuesday.
As of the end of 2016, HHS reported, 11.5 million people had signed up for private insurance using the federally run marketplace, HealthCare.gov, or one of the versions that a dozen states run on their own, like Covered California.
The figure represents a very slight increase from sign-ups at the end of 2015, which means enrollment isn’t growing substantially (as advocates had hoped) but also that it’s not shrinking (as critics had predicted).
More people will sign up before open enrollment, which began on Nov. 15, ends on Jan. 31 ― although history suggests the incremental increase will be modest.
Robust enrollment is an essential ingredient for the success of the Affordable Care Act, which has led to a historic decline in the number of uninsured Americans but has also been plagued by insurer financial losses and sharply rising premiums in some parts of the country.
As a general rule, insurance companies need large groups of enrollees, with plenty of healthy people paying premiums, to cover the very large bills from the small numbers of beneficiaries with serious medical needs. Many carriers have struggled to do that and, in 2017, they hiked premiums substantially to start balancing their books.
The danger of increasing premiums in this way ― for the insurers and, eventually, for the health care law as a whole ― is that even more young and healthy people end up turning down coverage as it gets more expensive. The worst-case scenario is a so-called death spiral in which insurers are left charging super-high prices that only people with very serious medical conditions are willing to pay.
To hear Obamacare’s critics tell it, this process is already well underway. “This law is in what the actuaries call a ‘death spiral,’” House Speaker Paul Ryan (R-Wis.) said last week.
But many experts have said the market problems, while real, may be temporary ― and that key elements of the law, including subsidies that discount the price of insurance for lower- and many middle-income purchasers, are enough to keep a true death spiral from happening.
The steady enrollment figures would seem to back up the less alarmist interpretation. So would the figures for young people specifically. According to HHS, the proportion of signups from people between the ages of 18 and 34 was 26 percent in December ― exactly what it was as of December 2015.
“It seems to me that enrollment holding steady amidst tremendous uncertainty about the future of the law and big premium increases is a positive sign,” Larry Levitt, senior vice president at the Henry J. Kaiser Family Foundation, told The Huffington Post. “There is no evidence of a market collapse or insurance death spiral.”
This doesn’t mean the law is in perfect health. It’s possible that this year’s premium increases represent a one-time market correction. It’s also possible they don’t, in which case rising premiums could cause enrollment to decline significantly in certain parts of the country.
Nor does it mean the public is happy with Obamacare. Even before this year’s premium increases, polls found more people disapproved of the law than approved of it. Complaints about premiums, deductibles and networks are common, particularly among higher-income consumers who get only a little financial assistance, or none at all ― and frequently buy coverage directly from insurers rather than through the marketplaces.
Those feelings help explain why the biggest cloud hanging over Obamacare right now isn’t actuarial. It’s political, with Republican leaders pledging to repeal the law even before they have settled upon a replacement.
The HHS report offers a glimpse into what repeal could mean. More than 80 percent of the people buying coverage through HealthCare.gov or state-managed marketplaces get financial assistance, and the average value of that assistance is $386 a month, which works out to $4,632 a year.
Most of these people would not be able to pay for a comprehensive policy without those subsidies. And although Republican proposals for an Obamacare alternative envision new forms of assistance, in ways that will clearly benefit some consumers, they also envision less assistance overall.
That is one reason why the likely result of replacing Obamacare with any GOP plan would be fewer people covered, bigger medical bills for people with illnesses, or a combination of those factors.
Obamacare remains popular, with 11.5 million sign ups so far
Even as Congress has begun the process to repeal Obamacare, Americans continue to seek coverage through its insurance exchanges.
More than 11.5 million people have signed up for coverage through the federal marketplace, healthcare.gov, and the 12 state-based exchanges, as of Dec. 24, according to federal data released Tuesday. That's 286,000 more than the comparable time a year ago.
The number of people opting for Obamacare is under more scrutiny than usual this year, since President-elect Trump and Congressional Republicans have vowed to repeal it soon after he takes office on Jan. 20. Initial efforts, however, are already running into resistance, with some GOP members wanting to wait until a replacement plan is ready before voting to repeal.
Though the Trump administration takes control late next week, current Health & Human Services officials laid out a plan to further boost sign ups through Jan. 31, which marks the end of open enrollment. The agency is airing television and radio ads, sending targeted emails to potential customers and reaching out via YouTube and other social media channels -- continuing outreach efforts that have been underway during this enrollment season.
The Internal Revenue Service is also contacting those who paid a penalty for remaining uninsured. The agency recently announced that about 6.5 million Americans had to pay the penalty, typically $330, in 2015. That's less than the roughly 8 million who were penalized in 2014.
High on the list of targets is younger Americans, who typically are healthier and have lower health care expenses. However, they still make up only 26% of those signing up on the federal exchange to date, the same as last year.
It's unclear whether the marketing efforts will continue under Trump, who has vowed to repeal President Obama's signature health reform law.
Still, Obama and his officials continue to make a case for Obamacare.
"In access, quality and affordability, the Affordable Care Act has helped us make real progress for families across the nation," said Health Secretary Sylvia Burwell on Monday.
The Obama administration expects a total of 13.8 million people to sign up for plans by the end of the enrollment period, which began Nov. 1. However, it's common for people to drop their policies during the course of the year because they find coverage elsewhere, either through a job or a spouse. So, an average of 11.4 million people are expected to be in Obamacare policies during 2017.
Consumers aren't officially enrolled until they pay their first month's premium.
Even before the election, there were concerns that prospective enrollees would be deterred by price hikes -- the average premium for the benchmark silver plan soared 22% for 2017 -- and the fact that some insurers had pulled out of the exchanges.
Most enrollees, however, are shielded from those increases by federal subsidies. Some 82% of people who have signed up for 2017 plans are eligible for subsidies, according to Health & Human Services Department officials. The average subsidy for those enrolling on the federal exchange is $4,600 a year.
Consumers are also shopping around for coverage. Some 56% of returning customers actively selected plan, up from 51% a year ago. Those who opt not to shop are automatically re-enrolled in their existing policy.