More than half of health insurers do not expect the zeroing out of Obamacare’s fine on the uninsured will have much impact on enrollment in the exchanges, according to a new survey.
The zeroing out of the fine, known as the “individual mandate” fine, goes into effect in 2019 as part of the tax law President Trump signed into law late last year. Whether the mandate had an impact on compelling people to buy health insurance who would otherwise choose to go uninsured has been an central point of debate as Republicans have sought to chip away at Obamacare.
The survey, conducted by eHealth, provides additional insight into the issue. It shows that 54 percent of insurers feel fine’s undoing will have little impact on enrollment and that 73 percent concluded it would not impact their strategy.
This view deviates from forecasts by the Congressional Budget Office estimating that without a fine, 5 million fewer people would be enrolled in the exchanges, and other estimates from actuaries at the Centers for Medicare and Medicaid Services estimating the number would fall by 2 million.
The exchanges, which were created under Obamacare, allow certain people who do not have health insurance through work or through a government program to purchase private health insurance that the federal government helps them buy. Every year, insurers decide whether they will participate in the program and submit proposals to states in how much they want to charge in premiums.
Even without the fine, however, insurers appear not to have lost confidence in doing business in Obamacare, the poll suggests.
The poll’s findings reveal that 93 percent of insurers plan to expand into new markets and 36 percent are offering different types of plans, moves that will result in customers having more options for coverage. And confidence appears to be increasing: The percentage of those who said they would expand was twice as high as when insurers were asked the question by eHealth in March.
Furthermore, half of insurers expect to have more modest increases compared to the previous years, of between 5 and 10 percent, while a quarter plan to reduce premiums. Another quarter will keep rates the same.
One of the reasons for this shift is that insurers overshot their rate proposals when they applied to sell plans for this year. This has resulted in more profits but also means that when they apply in states, they have to provide evidence to officials about the math behind their rates.
Still, it’s an outcome that deviates from expert predictions made by government workers, outside health firms, and Democrats, who said the repeal of the individual mandate would lead to premium increases and to insurers fleeing the exchanges, leaving consumers without options.
The projections from CBO, which had estimated the uninsured would rise by 13 million without the mandate, became a central line of attack from Democrats and pro-Obamacare activists, and helped give centrist Republicans cold feet about unraveling the law.
But insurers are facing other unknown factors. For instance, the Trump administration is allowing people to buy coverage that does not comply with Obamacare’s rules by offering fewer benefits at a lower cost.
And just because insurers have a better outcome doesn’t mean consumers will be satisfied with plans and prices. Outside groups have raised concerns in particular about people who do not qualify for government help under Obamacare, making premiums more expensive to them, and who have pre-existing illnesses such as cancer or diabetes which necessitates the more robust coverage Obamacare offers.
