California sees 24% dive in new ObamaCare plan enrollments

• New enrollments in California’s Affordable Care Act marketplace dropped 23.7% for 2019, down to 295,980 from 388,344 last year. Officials are pinning the blame on loss of the federal tax penalty for people without health insurance. The plunge came despite a statewide bus tour to promote getting coverage ahead of the Jan. 15 deadline for 2019 open enrollment in the state, one of about a dozen states to run its own exchange.
• CMS Administrator Seema Verma, however, pushed back again the explanation given by the state-run exchange, known as Covered California. On Twitter, she noted the state’s $100 million advertising spend didn’t seem to help its numbers and pointed to slow enrollment in New Jersey, which has enacted its own mandate. “Mandates aren’t the answer, and advertising isn’t the answer,” she wrote. “Americans need more choices and more affordable healthcare options.”
• Overall enrollment was on par with 2018, with 1.5 million plan selections, according to an early analysis released Wednesday. The steady enrollment was driven largely by renewals, which increased 7.5% year over year to 1,217,903 for 2019, officials said.

The decline in new sign-ups was worse than anticipated and greater than the average 15.8% drop in the 39 states served by the federal marketplace, Healthcare.gov. Covered California officials attributed the difference to steady declines in enrollment in those states over the past four years.

The number of new enrollees in the federal marketplace plunged 49% from 4 million in 2016 to 2.1 million in 2019, in part because of the Trump Administration’s decision to drastically scale back public awareness campaigns ahead of the open enrollment season.

In addition to the penalty’s impact, the analysis found fewer new enrollees who selected bronze plans, the lowest premium option in Covered California. The number of new bronze plans fell 30.5% from 143,000 to 100,000. Among unsubsidized enrollees, the drop was even steeper — down 38.1%.

Enrollment in populations where English is not the preferred spoken language also declined, particularly among Mandarin speakers (28%), Spanish speakers (29%) and Korean speakers (46%).

Other demographics did not seem to affect coverage.

“With the reduction being evenly spread across demographics, the primary driver of the loss of new enrollees appears to be removal of the individual mandate penalty,” Peter Lee, executive director of Covered California, said in a statement.

Lee added that the decline in new enrollments “affirms the leadership Gov. Gavin Newsom has taken to propose an individual mandate and enhanced subsidies aimed at making coverage more affordable for Californians.”

The results reflect several actions last year likely to undermine enrollment in the ACA exchanges. First and foremost was Congress’ elimination of the individual mandate penalty. The other is the administration’s promotion of short-term and association health plans.

Still, the ACA exchanges are showing signs of stabilizing this year, with more payers in the exchanges and light premium increases, according to an Urban Institute report funded by the Robert Wood Johnson Foundation. The smaller premium increases are likely due to payers scaling back after over-adjusting for uncertainty in the 2018 plan year, according to the report.

Meanwhile, insurers continue to look for ways to limit risk, such as HMOs and narrow provider networks, which limit patient choice but give payers more control of costs.

https://www.healthcaredive.com/news/california-sees-24-dive-in-new-aca-plan-enrollments/547294/