Last year, as insurance prices rose by an average of just over 20 percent around the country, people who qualified for Obamacare subsidies hung onto their insurance. But the increases appear to have been too much to bear for many customers who earned too much to qualify for financial help.
According to a new government report, about a million people appear to have been priced out of the market for health insurance last year.
The report is the first comprehensive look by the Department of Health and Human Services at people who buy their own insurance but dont qualify for federal subsidies under Obamacare. Individuals who earn more than around $48,000 have to pay full price for their health plans; that group has faced a second round of big premium increases in 2018 and is looking at a third round of them in some parts of the country next year.
The report does not provide enough information to be sure precisely how much of the difference is a result of increased prices. For complicated reasons, some people who paid full price in 2016 became eligible for subsidies in 2017, making a simple comparison of before and after numbers a little misleading.
The Trump administration also reduced advertising for the insurance signup period and made it harder for people to sign up for insurance later in the year, two factors that could have also depressed insurance enrollment. Its also possible that some who stopped buying their own insurance did so because they got a new job with health care benefits.
But its reasonable to think that most of the attrition can be attributed to the spike in prices, as the Trump administration concludes.
The Affordable Care Act of 2010 set up a system where people could buy insurance on online marketplaces. People below the income threshold could qualify for subsidies if insurance in their area became too costly. People above the income threshold could buy insurance in the marketplace, or they could buy a different set of plans directly from an insurance company or through a broker.
The Obama administration frequently published information about enrollment in the official marketplaces, where more than 80 percent of customers qualified for subsidies each year. But researchers had been relying on informal estimates from the insurance industry about enrollment from those who bought coverage directly. The new report provides more official numbers on those who bought insurance themselves. It shows that signups among people who didnt use a subsidy fell by 1.3 million people between 2016 and 2017, the most recent year with full data. ... But the administration has taken actions that are likely to raise prices still higher for comprehensive health insurance, making the markets even less stable. Besides slashing its budget for Obamacare advertising and enrollment assistance last year, the administration eliminated payments to insurance companies meant to help offset the cost of covering their lowest-income customers.
It has enacted additional policies, going into effect by next year, that could weaken the Obamacare markets. In January, people who fail to obtain health insurance will no longer need to pay a fine. The administration recently released a rule allowing more self-employed Americans to buy so-called association health plans, which are not subject to as many rules as Obamacare plans. ... Taken together, the new plans and the repeal of the fine will tend to draw healthier customers out of the markets, raising prices for those who remain. According to the Congressional Budget Office, the combined policies will raise insurance prices by more than 10 percent.