It should be old news by now — another open enrollment season for health insurance is on its way. But each year seems to bring a whole new set of problems, and this one is no exception.
Nov. 1 marks the fourth time in which the exchanges will open for business to mark the start of another enrollment season under the Affordable Care Act (ACA). In some ways, this next enrollment period should be a little easier than those of previous years.
For one thing, many of the technological problems that plagued the first enrollment seasons have been ironed out over the years.
Those who sell health insurance have the benefit of three years of experience negotiating the ins and outs of the system. And 11 million Americans already have purchased coverage on the exchanges since the ACA took effect, according to the U.S. Department of Health and Human Services (HHS).
But an estimated 24 million working-age adults still are uninsured, according to a Commonwealth Fund report. Of this group, 88 percent is made up of racial or ethnic minorities, young adults under age 35, those who are low-income but live in states where Medicaid was not expanded, and those who work for small businesses that do not provide health coverage.
The Obama administration is spending its waning days making one last push to get people covered. An ad campaign will target young adults who were hit with tax penalties for the first time this year for failing to have coverage.
But while the push is on to make the uninsured aware of the upcoming enrollment season, insurers are bailing out of the exchange business. Among the top names to exit the ACA marketplace, Humana said it would scale back its exchange business, selling products on 11 state exchanges instead of the 15 states in which it did business last year; UnitedHealthcare announced it is retreating from all but three of the states in which it did business on the exchanges; and Aetna said it would do business in exchanges in 242 counties, down from the 778 counties last year. In addition, 16 of the 23 health insurance co-ops that were established under the ACA have shut their doors. The reasons? Higher-than-expected claims from policyholders who were older and sicker than anticipated.
Those who sell health insurance are dealing with their own challenges in trying to serve clients while seeing their commission income dwindle to almost nothing.
But enough looking back at the ACA for now. What’s on the horizon as we enter a new enrollment year?
Reduced competition in the marketplace.
Between the exit of some big names from the marketplace and the demise of most of the co-ops, many consumers will have little to choose from when they attempt to shop for individual coverage.
One in four counties in the U.S. could have only one insurer in the marketplace when open enrollment begins, according to Kaiser Family Foundation research. Arizona and the Southeastern states will be especially hard-hit by the lack of competition, Kaiser reported.
Premiums going up.
Higher premiums dominated the health insurance news all summer. A Kaiser Family Foundation analysis indicated that costs for the most common plans are increasing faster in 2017 than in previous years in 16 cities. The cost of the second-lowest silver plan will increase by about 9 percent, compared with 2 percent in 2016.
And it’s not only the individual marketplace seeing these increases. An Arthur J. Gallagher & Co. survey of U.S. employers reports that 54 percent are paying at least 5 percent more for employee medical insurance this year, with nearly one in four suffering from increases of at least 10 percent.
Saying good-bye to grandmother.
So-called grandmothered health plans will be terminated on Dec. 31, 2017, under the ACA requirements. These “transitional” plans are not fully ACA-compliant and were purchased between 2010 and 2013 — between the time the ACA was signed into law and the time the exchanges opened for business.
HHS is allowing grandmothered plans to continue to renew up until Oct. 1, 2017, but with a termination date no later than Dec. 31, 2017. The termination date of grandmothered plans will align with the open enrollment period for 2018 coverage. So instead of having grandmothered plans terminate at their first renewal date after Oct. 1, 2016, grandmothered plans will be eligible for renewal again until Oct. 1, 2017. But they must terminate by the end of 2017, regardless of their renewal date.
A few adjustments.
The Obama administration proposed a series of fixes and adjustments to the ACA in late August. The draft regulation is 300 pages long, but here are some highlights.
The administration proposes updating the health insurance marketplace's premium stabilization system — which includes the risk adjustment, reinsurance and risk corridor systems. The rule would make the risk adjustment formula more accurate by using prescription drug data as a source of information about enrollees’ health. The proposal also would add protection for insurers that have high-cost enrollees, with costs above $2 million for a single enrollee shared among insurers.
The proposal would change the current five-year ban on companies returning to the health law's markets after they have left.
The rule includes an attempt to make it easier for consumers to compare competing insurance plans, as well as a new method for calculating premiums for children, geared to avoiding large increases after a child turns 21.
Limits would be put on "special enrollment periods" during which people can get coverage outside of the usual sign-up season.
The future of these proposed changes could depend on the outcome of the presidential election. A win for Republican candidate Donald Trump could mean the proposal is dead before it can take effect. Trump has vowed to repeal and replace the health care law. Meanwhile, a victory for Democratic candidate Hillary Clinton could mean moving forward with the changes, as Clinton has committed to building on the current health care law and addressing its challenges.