Obamacare Sign-ups Holding Steady, Despite Predictions of Implosion

GOP has cited supposed "death spiral" as pretext for quick repeal.

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.

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