People sit with an insurance advisor as they sign up for the Affordable Care Act in 2015.
More people can get an Obamacare plan for free in 2018 or for less than they paid for it this year — but fewer people are expected to buy Obamacare plans next year.
That head-scratching scenario came into focus Monday with three analyses released in advance of Wednesday’s start of open enrollment in Obamacare health insurance.
The first, from the Kaiser Family Foundation, said that “in many case, lower-income consumers” who get federal subsidies that reduce their Obamacare premiums “will pay less for premiums in 2018 than in 2017.”
The other two reports estimated that Obamacare enrollment will drop by anywhere from 800,000 to 1.6 million customers this sign-up season than had enrolled by the close of open enrollment for 2017.
Kaiser’s analysis, which found better deals for many customers in 2018, may seem counterintuitive because Obamacare prices are, as a rule, rising sharply next year.
And the biggest price increases are being seen among so-called silver plans, which are purchased by more than 70 percent of Obamacare customers.
The U.S. Health and Human Services Department on Monday said the average price of a “benchmark” Obamacare plan for a 27-year-old is rising by 37 percent in 2018.
But most Obamacare customers qualify for federal tax credits that let them buy plans at a discount — often a steep discount.
And because the value of those tax credits rise with the price of the benchmark plan — which is the second-lowest-cost silver plan in their geographic region — many customers will be getting bigger subsidies this year than they have in the past.
Those bigger subsidies will in many cases allow subsidized customers to find plans that will cost them less than what they pay now — or even free plans.
Kaiser on Monday published an interactive map illustrating that fact.
A 40-year-old Obamacare customer with an income of $25,000 or less could, in huge swathes of the United States, find a “bronze” Obamacare plan whose cost is fully covered by the tax credit that person receives. In other words, the customer would personally have to pay nothing for their bronze plan.
Bronze plans, as a rule, have lower retail prices than silver plans, and have higher out-of-pocket costs when customers use health services or buy prescription drugs.
Kaiser also published another map showing how subsidy-eligible customers in large parts of United States can find “gold plans” that are either less expensive than silver plans, or less than $100 per month more expensive than silver plans.
Gold plans as a rule have higher retail prices than silver plans — but cover more of their customers’ health costs.
A gold plan that costs less than a silver plan for a subsidized customer would offer that customer a way to avoid the premium hikes that nonsubsidized customers are getting hit with this year.
And for a subsidized customer with higher health needs, a gold plan that costs marginally more in premiums could make more financial sense than signing up for a silver plan with higher out-of-pocket health costs.
Kaiser’s report on the premium changes said that “the peculiar effect” those changes have on plans for subsidized and unsubsidized customers “makes it important that customers shop around and carefully consider their options.”
But Obamacare experts believe that a significant number of Obamacare customers, potential and current, will not bother to sign up, much less shop around for a better deal.
In its analysis Monday, Standard & Poor’s Global Ratings estimated that only 10.6 million to 11.4 million people would sign up for Obamacare plans during open enrollment this season. That would represent a drop-off of about 7 percent to 13 percent from the 12.2 million who enrolled for this year’s sign-up season.
S&P said there will be decreases in sign-ups among nonsubsidized Obamacare customers in the face of higher premiums. S&P also said there will be a drop in the number of new enrollees.
And finally, there will be fewer sign-ups because the Trump administration is scaling back the budget for outreach to encourage enrollment, the firm said.
“Insurance remains a product that is sold rather than bought, and this is especially the case when trying to gain wider acceptance for health insurance among individuals who consider themselves young and invincible,” S&P said in its report.
In a separate report, the Center for American Progress, a left-leaning think tank, estimated that 1 million fewer people would enroll in Obamacare plans this year.
CAP’s report said that 12.2 million people — the same number as 2017 — would have likely signed up for 2018 plans “in the absences of ACA sabotage” by the Trump administration.
“The Trump administration’s repeated actions to destabilize insurance markets, repeal the ACA, and undermine open enrollment threaten this progress and seem likely to depress enrollment in 2018,” wrote Emily Gee and Thomas Huelskoetter in CAP’s report.
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