Obama Administration Projects Slim Gain for Health-Law Enrollment in 2016

Federal officials set target of 10 million paid-up enrollees by end of 2016

By Louise Radnofsky and Stephanie Armour
Oct. 15, 2015 11:23 a.m. ET

WASHINGTON—The Obama administration issued a surprisingly modest goal for 2016 coverage under the health law, in an acknowledgment that the law's reach may have extended almost as far as it can.

The third sign-up period for plans under the law starts Nov. 1, and expectations for significant progress in enrolling the remaining uninsured had been high. Instead, Health and Human Services Secretary Sylvia Mathews Burwell said Thursday she had set a target of 10 million people to have paid-up coverage through HealthCare.gov and state exchanges by the end of 2016.

That is a slim increase from the 9.9 million people who had enrolled and paid their premiums as of June, and only a modest gain from the 9.1 million who are projected to still have coverage at the end of 2015, as people switch to other insurance or drop coverage.

The projection represents a significant plateauing of growth after the exchanges had signed up and retained 6.3 million people at the end 2014.

This third open-enrollment season had widely been expected to make the greatest gains after the first go-round was marred by technology problems, and the second unfolded as a major challenge to the law loomed in the Supreme Court. The new season also carries a big incentive for consumers to buy insurance: to avoid the heftiest financial penalty yet on their taxes for going without coverage.

The nonpartisan Congressional Budget Office had estimated that at least 20 million people would buy policies under the law for 2016 coverage.

Ms. Burwell said the administration's new goal reflected officials' realization that most people who have been unwilling to buy coverage during the law's first years are unlikely to budge from that position.

“We believe 10 million is a strong and realistic goal,� Ms. Burwell. “We know our audiences will be harder to reach, and we're going to work smarter to reach them.�
Health and Human Services Secretary Sylvia Mathews Burwell released new estimates for health-care enrollees Thursday. ENLARGE
Health and Human Services Secretary Sylvia Mathews Burwell released new estimates for health-care enrollees Thursday. Photo: Yuri Gripas/Reuters

Some 10.5 million Americans currently are uninsured but could qualify for coverage through the exchanges, the administration has estimated.

Federal officials said they hope to sign up one in four of those people this time around, and that figuring out how to persuade the remaining three in four will be a longer process. Many of the remaining uninsured cite hard-to-address objections, saying that even if premiums are heavily subsidized they don't fit into their tight budgets.

Thursday's announcement drew criticism from Republican opponents of the law.

“Millions of Americans aren't signing up for Obamacare because they realize it increases their costs and doesn't help them access the care they need,� said House Speaker John Boehner (R., Ohio) in an email. “This major enrollment failure is another sign that the president's health care law is broken. Americans deserve better.�

The administration's projection assumes a sizable number of consumers would drop coverage through the health law when they gain coverage through an employer or government program such as Medicare. The target also tries to take into account consumers who will lose their plans because they can't prove their income or legal residency, or fail to keep up with premiums.

“We're going to see people come and go,� Ms. Burwell said.

Some conservative analysts suggested that premiums could further rise if insurers were surprised by a lower-than-expected sale of plans through the exchanges. Senate Finance Committee Chairman Orrin Hatch (R., Utah) echoed that sentiment. “Low enrollment numbers could spur even more price increases on the exchanges in the future,� he said Thursday.

Supporters of the law tamped down that concern. Linda Blumberg, a senior fellow at the left-leaning Urban Institute think tank, said the 2016 target represented a cautious assessment but one that was largely in keeping with her group's projections.

“Nothing here's worrying me about long-term stability,� said Ms. Blumberg. “Is the administration being cautious? They are, but that doesn't bother me.�

Federal officials said their enrollment estimates differ from the Congressional Budget Office's in part because that office had predicted more people would lack coverage through their jobs—and turn to HealthCare.gov—than is the case. The officials also said the stronger economy left fewer people uninsured and eligible for subsidized coverage through the sites than the CBO had forecast.

The sign-up target doesn't include the poorest Americans, whom the law aims to enroll in the federal-state Medicaid program. To date, 29 states have used federal funds under the law to extend Medicaid eligibility to most residents below the poverty line, and the program has swelled by at least 11 million since they have done so. Only a few more states are actively considering participating.

There are around three million people in the 21 states that haven't expanded Medicaid whose incomes are too low to qualify for subsidized coverage through the exchanges.

The law's penalties for forgoing insurance rise to their maximum in 2016—starting at $695 for an individual or 2.5% of income, whichever is higher. Millions of Americans are exempt from the fine, but it is still expected to get more attention in sign-up messages in the enrollment period, which runs through Jan. 31, 2016.

Enrollment activists have said they learned as early as 2014 that the fine was driving many people to sign up, even if the Obama administration was reluctant to talk about the politically unpopular penalty. Since then, major tax preparers, in particular, have been telling clients about the requirement to get coverage or pay a penalty.

“We have a responsibility to make sure that consumers understand their options,� said Lori Lodes, communications director for the Centers for Medicare and Medicaid Services, the federal agency overseeing implementation of the law. “We need to make sure that we are very clear and explicit about that $695 penalty.�

The health law's boosters will have other tasks to juggle in the next three months. In many parts of the country, the largest insurers are implementing big increases in premiums, leaving enrollees to decide whether to stay in their plan or shop around. Several insurance startups called co-ops are shutting down, causing additional turbulence.

Several of the health law's champions pointed Thursday to its achievement in bringing the uninsured rate to a historic low, including White House press secretary Josh Earnest and House Democratic leader Nancy Pelosi of California.

Still, Mr. Earnest noted that the remaining uninsured Americans had essentially expressed “some disinterest in having health care.�