Obamacare enrollees turn out to be more aggressive shoppers than many experts had predicted.
Last week, with the scheduled end of open enrollment for 2015, the Obama administration announced that nearly 9 million people had signed up for private insurance through HealthCare.gov, the website that the federal government operates on behalf of 37 states. On Tuesday, the administration released some details on who these people are -- and how their insurance choices this year compare to what they chose last year.
Of the 4.2 million people who were returning customers, about half let themselves be automatically re-enrolled with the same plan. The rest came back to HealthCare.gov and contemplated their options, with roughly equal numbers selecting new plans or sticking with what they had before.
In the end, about 29 percent of the returning customers -- 1.2 million people -- found new Obamacare insurance this year.
That might not sound like such a large number. But by insurance standards, it is. Among those who said they expected the number to be lower was Andrew Slavitt, who is principal deputy administrator for the Centers for Medicare and Medicaid Services and is about to become the acting administrator.
“This is a much more active consumer than anybody expected,” Slavitt told The Wall Street Journal's Louise Radnofsky, whose story first reported those numbers. “We wanted to create maximum choice while we had maximum protection.”
While it’s impossible to know (at least from these data) exactly why people switched plans, price was likely a big factor. With new insurers entering the market and others adjusting premiums based on their data from last year’s business, lots of Obamacare consumers had opportunities to save money. But many had to change policies in order to realize those savings. In some cases, those who stuck with the same plans were subject to significantly higher costs because -- under the formula the government uses to calculate Obamacare’s tax credits -- the level of available financial assistance declines when cheaper plans become available in a particular location. (The Huffington Post’s Jeffrey Young explained all this last year, if you want the details.)
Quality of coverage may also have played into decisions. Many Obamacare plans have strictly limited networks of doctors or high out-of-pocket costs. Some consumers switching plans may have been seeking access to more providers or more protection from those co-payments and deductibles -- although, again, there’s no way to know right now. It’s equally possible, for example, that some people were happy to make do with even more restricted networks if it meant they could save more money on premiums next year.
Fewer people may change plans in future years, health care experts noted, once insurers develop a better sense of how to price competitively and once consumers become better acquainted with their options. “That mixing should settle down once these markets reach an equilibrium -- probably within the next couple of years,” Linda Blumberg, senior fellow at the Urban Institute, told The Huffington Post. “But it’s definitely the consequence of an actively competitive dynamic.”
One number that didn’t seem to surprise many experts was the more than 4 million people, or about half the total using the federally run website, who were using it for the first time. The “non-group” insurance market -- that is, the market for people buying coverage on their own, rather than through an employer -- has always been fluid. People gain or lose jobs at large companies that provide benefits. They get married and divorced, changing their access to plans through spouses, or their incomes fluctuate, making them eligible or ineligible for Medicaid. Some people will continue to buy their own insurance, year after year, but that number tends to be lower than the number who keep employer plans -- or stay on a program like Medicare -- for long periods of time.
Of course, the majority of HealthCare.gov customers, old and new, could lose their insurance altogether later this year, if the Supreme Court rules in favor of a challenge to the federal government’s authority to distribute Obamacare's financial assistance in states that rely on the federally run site. Oral arguments in that case, King v. Burwell, will take place next Wednesday.