Total (ACA) exchange enrollment in 2016 is less than half of initial projections and the cost per enrollee is significantly more expensive than expected

See Survey Reveals Growing Discontent among ACA Enrollees by Brian Blase of Mercatus.

"Last month, the Kaiser Family Foundation released the results of its 2016 survey of 671 people who purchased individual market plans compliant with the new mandates and rules established by the Affordable Care Act (ACA). As many insurers announce large premium hikes for next year and others announce they are withdrawing from the market, the survey reveals that enrollees are increasingly unhappy with their coverage. Given that these enrollees are one of the primary groups that the ACA is supposed to be helping, their declining satisfaction is particularly concerning and suggests a change of direction in federal policy is warranted.

Growing Unhappiness with ACA Coverage  

After incurring large losses selling ACA plans in 2014 and 2015, insurers significantly raised premiums and deductibles for 2016 policies and reduced the number of doctors and hospitals covered by plans. As the following table shows, these changes are correlated with growing dissatisfaction among ACA plan enrollees. Between 2015 and 2016, the percentage of enrollees rating their coverage as “not so good” or “poor” increased from 20% to 31%.

Enrollees were also asked to rate the value of the insurance for what they paid for it. In 2016, 45% of enrollees rated their insurance as a “good” or “excellent” value, down from 55% of enrollees in 2015. The fact that more people say their coverage provides “poor” or “only fair” value—even though a large majority of people with ACA coverage receive subsidies to reduce their share of the premium—reflects poorly on all the numerous requirements placed on individual market coverage by the ACA.

As I discussed in a piece last week, people who have high deductible policies are much less satisfied with their ACA plans than people with low deductible policies, which likely means that increasing deductibles are at least partly responsible for the growing dissatisfaction of ACA enrollees with their plans. Enrollees feel less financially protected with their coverage; 45% of 2016 ACA plan enrollees feel vulnerable to high medical bills, up from 38% of enrollees in 2015.

Plan Switchers Less Satisfied with New Coverage

As a result of the ACA, churn—people replacing plans each year—in the individual market has increased significantly. According to the Department of Health and Human Services, 43% of returning HealthCare.gov customers selected a new plan in 2016. Much of the churn has occurred as some insurers have stopped offering coverage (only 11 of 23 co-ops survived the first two years of the law), as well as ACA plan enrollees being relatively price sensitive and selecting lower priced plans.

The following table shows how ACA plan switchers compare their 2015 and 2016 ACA plans: 176 of the 671 survey respondents with ACA plans reported that they had ACA plans in both 2015 and 2016 and switched plans between the two years.

 

Overall, plan switchers are less happy with their current coverage than they were with their coverage last year. Individuals who switched plans are twice as likely to feel less financially protected with their new plan than more financially protected. Of plan switchers, 37% reported that their 2016 plan offers worse value than their 2015 plan compared to 27% who reported that their plan offers better value. Nearly twice as many people reported that their 2016 plan covers fewer doctors and hospitals than their 2015 plan as reported that their 2016 plan covered more doctors and hospitals than their 2015 plan.

New Direction Needed

As we approach the midway point of the third year of the enactment of the key tenants of the ACA, it is clear that the law has produced adverse selection in the individual insurance market. Total exchange enrollment in 2016 is less than half of initial projections and the cost per enrollee is significantly more expensive than expected. The ACA made tens of millions of relatively young and healthy people worse off by reducing their choice of insurance and raising both their premiums and their taxes to finance its new spending.

Kaiser’s survey of ACA plan enrollees shows that many people who were thought to be key beneficiaries of the law are not satisfied with their coverage. Moreover, enrollees’ satisfaction with their plans significantly decreased over the past year as nearly 10% more enrollees viewed their coverage as an “only fair” or “poor” value than viewed their coverage as a “good” or “excellent” value. The growing dissatisfaction among ACA plan enrollees just adds to the reasons why Washington should make large scale changes to the ACA."