How many people will sign up during Open Enrollment this year?


On November 10, 2016, at 4:30 in the morning, I was still in a bit of a dazed state trying to absorb the reality that a racist, misogynistic, xenophobic con-artist sexual predator moron was about to become the next President of the United States. We were 9 days into the 2017 Open Enrollment Period, and I realized that there was absolutely no way of knowing what sort of impact the election results might end up having on how many people would sign up for coverage.

My original, pre-OE4 projection was that it would come in anywhere between 13.5 - 14.0 million people, but I quickly realized that I'd have to drastically alter my thinking. How drastically? Well, I actually posted the following to give an idea of how deep into the unknown we were:

It quickly developed, however, that things weren't quite that drastic. Not only did millions of current enrollees renew their policies (or switch to a different one), but millions of new enrollees joined in as well after all. In the end, the damage wasn't as bad as I had feared...which isn't to say that my concerns were completely unfounded:

Ever since November 9th I've been concerned that Trump winning the election might have a severe negative impact on the 2017 Open Enrollment Period numbers, but I had no way of knowing how much or little that might be. For awhile it didn't seem to be having much impact at all; enrollments were coasting along slightly ahead of 2016. As we drew nearer to him actually taking office, however--and especially once the new, GOP-controlled Congress started passing actual (preliminary) legislation to start the ACA repeal process--I accepted the prospect of enrollment being flat vs. last year.

And then, in the final days of the in a one-two punch, Trump actively sabotaged the ACA by first signing an executive order instructing the HHS Dept. to do everything possible to impede the implementation of the law...followed by attempting to kill off the advertising blitz for HealthCare.Gov over the final, critical 5 days of the enrollment period. In the end, enrollment via the federal exchange (HealthCare.Gov) came in several percent LOWER than last year.

In the end, the official QHP selection tally for 2017 was 12.2 million...down around 500,000 from 2016's 12.7 million. Not nearly as bad as I feared but certainly not good either.

As I explained, the connection between the last-minute ad cut-off and the 500K enrollment drop was pretty easy to prove by comparing how the state-based exchanges performed vs. HealthCare.Gov, since the SBEs have their own branding, marketing budget, outreach budget and so forth. Sure enough, enrollment in the SBEs was actually a couple percent higher year over year:

As it happens, this very chart was used today by Joshua Peck, former Chief Marketing Officer for HealthCare.Gov under the Obama Administration in a Medium piece in which he explains that based on a detailed analysis of the impact of marketing/advertising on enrollment, he expects Trump's August announcement that OE5 advertising is being slashed by 90% and outreach by 40% to result in at least 1.1 million fewer people signing up this fall than last year:

When it comes to estimating the impact of outreach, I am not pulling a number out of the air. The administration falsely asserted that “they had not done any studies of the efficacy of enrollment advertising”. This is absurd. The Department of Health and Human Services closely measured the impact of outreach during previous Open Enrollments so we have a clear understanding of how effective advertising is at driving enrollment. Internal HHS reports, written about by the Huffington Post, documented a two-year study of the causal relationship between outreach and enrollment.

Surprise: advertising works!

It's important to note, however, that Mr. Peck specifically clarifies that his 1.1 million projection doesn’t account for consumer confusion about repeal efforts, the Executive Order or the end of payments of Cost Sharing Reductions. It's based purely on the 90% advertising cut.

Assuming this year's 12.2 million is the baseline, knocking 1.1 million off that number via advertising sabotage brings expected 2018 enrollment down to around 11.1 million.

How about those other factors?

Cutting off CSR reimbursement payments is causing all sorts of confusion; most subsidized enrollees shouldn't be impacted (and in fact, millions should actually benefit from the fallout) , but the most obvious/measurable negative impact will be to unsubsidized enrollees.

According to the official OE4 report from CMS, 12,216,003 people selected Qualified Health Plans (QHPs) during the 2017 Open Enrollment Period. Of those, 10,100,108 qualified for Advance Premium Tax Credit (APTC) assistance, leaving 2,115,895 unsubsidized enrollees.

That's about 2.1 million people who (assuming their income doesn't drop, etc.) will have to pay full price for their policies next year. Many are already grumbling about the cost of the policies this year, and as far as I can figure, full-price rates would be going up around 12% more on average next year without the CSR/mandate enforcement factor. Needless to say, the 30% average unsubsidized rate hike with those two factors added to the mix is almost certainly going to scare off a huge chunk of unsubsidized enrollees. Many will probably drop their exchange coverage altogether, choosing instead to pay the mandate penalty while going without any coverage at all (or suddenly finding their religion and joining a Christian Healthcare Ministry).

In fact, even the emergency "Silver Switcharoo" model being pushed by at least 14 states specifically relies on encouraging unsubsidized Silver enrollees (around 230,000 of them in the states using this strategy, by my estimate) to switch to a special off-exchange only Silver plan.

Obviously there's no way of knowing exactly how many of these folks will do any of these things, but I'm gonna spitball it and figure that perhaps 3/4 of them...or around 1.5 million...are likely to drop out of exchange policies one way or the other. Some of this may overlap with Peck's 1.1 million figure, of course.

If so, that would bring the total down to perhaps 9.6 million people...a good 95% of whom will likely be subsidized (vs. the 83% or so which has been typical until now).

On the other hand, as noted above, thanks to the weirdness of how the APTC and CSR subsidies interact with each other, subsidized enrollees will get a much better deal in many states. This means that, according to the Urban Institute analysis of this very scenario a year and a half ago...

The number of uninsured individuals falls about 400,000 as some tax credit eligible–individuals with incomes over 200 percent of FPL take advantage of the new ability to purchase higher-tier (gold) policies with their federal assistance. This change is smaller than the 700,000 tax credit eligible– individuals who newly enroll in Marketplace coverage, because some of these new enrollees switched from employer coverage or had nongroup coverage but newly became eligible for tax credits.

Yep, the Urban Institute projects that around 700,000 other people (below the 400% FPL line) will likely sign up due to the beefed-up tax credits available.

I have no better data to go with on that, so sure, why not: Now we're back up to around 10.3 million total, give or take.

How about all the other confusion? Millions of people think the ACA itself has been repealed already. Millions don't know whether the mandate penalty will be enforced or not (the IRS just clarified that yes, it will be enforced...but as I've explained before, that doesn't really matter as long as enough people think it won't be.

In addition, millions have no idea when Open Enrollment starts this year (it's November 1st)...and I guarantee that millions more have no idea that the time window has been cut in half (it ends on December 15th in most states). It's actually even shorter than that, really, since is being taken offline for a total of 72 hours in the middle of Open Enrollment...3 full days, dropping the enrollment time down to 42 days total.

Oh, yeah...and on top of everything else, thanks to the 12/15 cut-off at HealthCare.Gov, millions of people who allow themselves to be passively auto-renewed will be stuck with that result with no option to change their minds later..because the auto-renewals are being put through as of 12/16 or so, immediately after Open Enrollment ends. This is the same day usually enters auto-renewals...but there's usualy a good month and a half left for those folks to jump back online and change their minds if they want to. Technically speaking, this last item shouldn't actually reduce the number of people signed up for 2018 policies...but it's likely to piss off quite a few of them who weren't paying attention.

There's a whole mess of other factors at play as well...on the one hand, no more states have expanded Medicaid or launched a BHP program this year, nor have any more states switched from SBE to status (as Kentucky did last fall)...but some carriers like Health Alliance Plan here in Michigan, Wellmark in Iowa and both Aetna and Humana in multiple states have all dropped out of the exchange and/or the individual market altogether, which means lots of current enrollees who'll have to shop around.

In short, I honestly have no idea how many people will sign up this go-around. If you put a gun to my head and demanded my best guesstimate, I'd say probably around 9.5-10 million, but don't hold me to it.

Basically, it's gonna be messy, to put it mildly.