Five Things To Watch in Round Three of the ACA’s Open Enrollment

The start of the Affordable Care Act’s third open enrollment period is just around the corner, and the stakes — unlike the enrollment projections — are no lower than they’ve been since round one two years ago.

Republicans are mounting new attacks on the law, and those blows have a greater chance of landing if a Republican ends up in the White House. Meanwhile, the current White House and congressional leaders reached a budget deal just this week that includes a measure to eliminate an ACA mandate requiring large companies to automatically enroll employees in health plans unless the workers opt out. And key provisions under the ACA meant to save consumers money and protect insurers from financial losses appear to be struggling.

Whether the factors are internal provisions of the law itself or external attacks, the health care landscape and the implications of enrolling in coverage under the ACA are changing. Here are five things to keep an eye on during the third enrollment period, which starts Nov. 1 and ends Jan. 31.

1. Lowball Enrollment Goals

HHS’ projections are getting smaller with each enrollment period. And they’ve consistently been below Congressional Budget Office estimates.

This year, the Obama administration expects about 10 million U.S. residents will be enrolled in ACA coverage by the end of 2016 — less than half of CBO’s 20 million-enrollee prediction. Last year, HHS said it expected between 9.1 million and 9.9 million U.S. residents to enroll in coverage during the second round; CBO predicted 11 million enrollees.

Politico‘s Rachana Pradhan writes that the lowball estimate “reflects the White House’s acknowledgment that [this] sign-up season … will be one of the most challenging so far.” Lower targets also improve HHS’ chances of beating expectations, Pradhan notes, adding, “Political blow-back is of particular concern this year since the … close of open enrollment coincides with the first presidential primaries.”

That said, the pool of uninsured individuals and potential future enrollees is getting smaller with each enrollment period.

2. The Uncertain Future of ACA Co-Ops

The ACA’s not-for-profit cooperative health plans have been dropping like flies in recent weeks.

The co-ops were created to offer lower prices and generate competition with larger insurers. But they’ve been hurt by an ACA provision that was meant to protect low-earning insurers from major losses.

CMS said the risk corridors program will provide just 12.6% — or about $362 million — of the $2.87 billion in payments that insurers had requested for 2014.

That low payout seems to have set up several co-ops for failure. In October alone, four co-ops announced their impending closure, citing lower-than-expected federal aid. In all, nine of the original 23 not-for-profit plans have shuttered. And more are in financial turmoil, Amy Goldstein writes for the Washington Post.

The closures leave “hundreds of thousands of consumers scrambling to find new health insurance coverage,” Stephanie Armour writes in the Wall Street Journal. And Republicans, who say the federal government is unlikely to recoup the hundreds of millions of dollars in startup loans, “are seizing on the failures, repeating the call for repeal” of the ACA.

3. The ‘Stick’ of the Individual Mandate

The penalty for being uninsured is getting higher, and HHS hopes to emphasize that to spur some enrollment growth.

According to Pradhan, that is “a sharp difference from the first two sign-up periods when it was barely mentioned.”

This year, the penalty is $695 or 2.5% of an individual’s income, whichever is higher. Last year, the penalty was $325 or 2% of income, and before that, it was $95 or 1%.

At the same time, while forgoing coverage can be expensive for consumers, enforcement of the penalty “is lacking,” Bill Bischoff writes for MarketWatch. According to Bischoff, the government can only collect the penalty from federal income tax refunds. That could create a loophole for consumers who are “not owed a refund for 2016 or a later year,” he writes.

4. Subsidy Eligibility

Instead of focusing on the financial consequences of being uninsured, some states — like California — have chosen to highlight the availability of financial assistance, Chad Terhune writes for the Los Angeles Times.

A recent Kaiser Family Foundation analysis found that 7.1 million of the 32.3 million uninsured U.S. residents are eligible for federal subsidies to help them purchase coverage. About 41% of such individuals live in California, Florida, Georgia and Texas.

The problem is that many consumers are confused about their eligibility, according to KFF. For example, in California, 36% of uninsured residents are unaware of the subsidies altogether.

Covered California is making changes to its website and marketing to better promote the subsidies and potential savings, Terhune writes. About 750,000 uninsured Californians are eligible for subsidies.

5. The Functionality of HealthCare.gov

HealthCare.gov has been refreshed, and 38 states are relying on it to market coverage to their residents — one more than in the last two enrollment periods.

After the first enrollment period’s disastrous rollout, the fate of the federal insurance exchange was a little unclear. Even earlier this year — before the Supreme Court ruled that subsidies are legal outside of state-based exchanges — some states using the federal exchange had given some thought to switching to state-based exchanges to guarantee the protection of their residents’ subsidized health insurance. But many opted against that, and Hawaii — which previously had its own — decided to switch from a state-administrated marketplace to the federal exchange.

The updated website includes a slew of new features, such as an out-of-pocket cost calculator, and acting CMS Administrator Andy Slavitt says, “The consumer experience this year will be easier and faster.”

Jayne O’Donnell writes for USA Today that the “site needs to be far easier to use and understand” because “HHS is trying to convince the hardest-to-reach consumers to buy insurance.”

In the Public Eye

This year’s open enrollment outcome will determine what and whom HHS will target in future years, as well as help set measures on which to judge future enrollment successes and failures. Considering what’s at stake, the third enrollment period is likely to be closely scrutinized by both political parties.

Republicans could use any slip-ups during the next three months as political fodder in their campaigns against the ACA. Meanwhile, President Obama — who has stoutly defended the law as a success — and other Democratic supporters hope to leave the landmark legislation on steadier footing before he leaves office.

Around the nation

Here’s a look at other stories making news on the road to reform.

Premiums set. HHS data shows that premiums for silver-level health plans sold through the federal exchange for 2016 will increase by an average of 7.5%, Stephanie Armour writes for the Wall Street Journal.

Another ACA Challenge. The Pacific Legal Foundation has asked the Supreme Court to hear a case challenging the constitutionality of the Affordable Care Act based, alleging that the law violates the Constitution’s origination clause, Mark Sherman writes for the AP/Washington Times.

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