In the Mel Brooks comedy, "The Producers," the characters set out to make a Broadway flop, only to see it become a smashing success. What if something similar is happening with Obamacare's first open enrollment period under President Trump?
To be clear, the idea of Republican "sabotage" of Obamacare has been exaggerated. Even when President Barack Obama was in office and willing to do everything in his power (or even take actions that were illegal) to prop up his signature healthcare law, the program's health exchanges were running into problems. Too few young and healthy people were signing up to offset the costs of covering older and sicker individuals, insurers were losing billions of dollars and reacting by raising premiums, slashing coverage, or exiting the market altogether. These problems did not arise because of Trump. In fact, these problems are part of the reason we ended up with Trump and a Republican-controlled Congress.
That having been said, it is true that Trump has, on several occasions, talked about letting Obamacare "implode." He's said the law is dead. And whereas Obama did everything in his power to promote and advance his law, Trump has in many cases done the opposite. His administration has slashed the ad and outreach budget, cut the open enrollment period in half from three months to six weeks, and refused to continue Obama's illegal payments to insurance companies known as cost-sharing reduction subsidies. All of these actions and others, taken together, led most healthcare analysts to assume that enrollment would be down this year, perhaps significantly.
But then something funny happened. On Thursday, the Centers for Medicare and Medicaid Services released data on the first four days of open enrollment, and they smashed expectations. More than 600,000 signed up in that short time for coverage through the federal healthcare.gov website, a seemingly much faster pace than last year. Now, many caveats should be applied. It's merely four days, which isn't much of a sample size. With the open enrollment period being half as long, the daily average would have to be double just to sign up the same number of people as a year ago. All of the fundamentals that led experts to project lower enrollment this year still hold, especially given that premiums are skyrocketing for those who don't qualify for subsidies. But while the smart money may still point to a lower enrollment number, the early numbers should at least have everybody exploring the possibility of an increase in enrollment under Trump. We should be asking: If "The Producers" effect plays out, what would it look like?
One direct way in which Trump actions branded "sabotage" by Democrats could end up playing out differently is when it comes to CSR payments. On the surface, Trump's decision not to fund them would mean higher premiums and lower enrollment. However, insurers and state regulators have worked together to try and counteract this move, relying on Obamacare's other funding streams that are still flowing. Because Obamacare's core subsidies to help individuals purchase insurance are tied to the cost of silver plans, insurers have substantially hiked premiums on that category. This, in turn, means the government pays out more subsidies. Meanwhile, insurers have kept down premiums on bronze and gold plans. So, the increased subsidies could be used to offset the premium increases on silver plans, or they could be applied to the cheaper bronze plans, making them free or near free. Those who do not qualify for subsidies may find that bronze or gold plans did not go up by as much. Sure, there are unsubsidized consumers who may be priced out of enrolling. But there is the low hanging fruit of people who qualify for subsidies but have not enrolled in previous years. The prospect of a free bronze plan could be an attractive option for those who qualify for subsidies.
Beyond some of the tangible effects of changes, there may be some intangible differences in the current political environment that one could see giving a lift to open enrollment. The months-long debate over repealing Obamacare, which was handled poorly by Republicans, ended up increasing the popularity of the law. Each drive for repeal was another opportunity for the law's supporters to educate the public about some of the law's benefits that could be available to them, such as subsidies to purchase insurance. There's been a lot of talk about Trump's decision to slash ad spending, but it's unproven that such spending effectively boosted enrollment. However, it's possible that the repeal effort was, in effect, months of earned media for Obamacare.
Another possible intangible effect is the "resistance" to Trump. It's possible that signing up for Obamacare becomes the latest symbol of defiance against an administration that's particularly unpopular under younger Americans. People may be more eager to sign up and urge their friends and family to sign up, in conversations and on social media. This sort of organic effort could prove more powerful than canned ads from the Department of Health and Human Services.
To be clear, I'm not necessarily saying this is the most likely scenario. I could easily see enrollment go down, especially with premiums as high as they are. But, healthcare, just like politics, often has a way of confounding the experts. So it's worth entertaining alternate possibilities.