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CMS NEWS
FOR IMMEDIATE RELEASE
July 2, 2018
Contact: CMS Media Relations
(202) 690-6145 | CMS
Media Inquiries
Centers for Medicare and
Medicaid Services Releases Reports on the Performance of the Exchanges and
Individual Health Insurance Market
Reports show individual market erosion and increasing taxpayer
liability
Today, the Centers for Medicare and Medicaid Services (CMS) released
three reports that provide important information on the current condition
of the Federal and State-based Exchanges and state individual health
insurance markets. Taken together, these reports show that state markets
are increasingly failing to cover people who do not qualify for federal
subsidies even as the Exchanges remain relatively stable. Steps taken by
CMS in 2017, as the reports show, improved the performance of the Exchanges
and began addressing market stability issues. However, serious
problems persist. Rising premiums have left unsubsidized people with poor
health coverage options and dramatically increased the federal cost of
premium subsidies.
“As the Trump Administration took office, there were warning signs that
we were dealing with a crisis in the individual health insurance market and
Obamacare was failing its consumers. These reports show that the high price
plans on the individual market are unaffordable and forcing unsubsidized
middle class consumers to drop coverage,” said CMS Administrator Seema
Verma. Additionally, these reports represent the current state of the
market, as well as confirm our Agency’s efforts to stabilize the market.
The three reports released today include the Early
2018 Effectuated Enrollment Snapshot, Exchange
Trends Report, and new for this year, Trends
in Subsidized and Unsubsidized Enrollment. The reports include
data on effectuated Exchange enrollment for 2017 and 2018, overall trends
on the operational and programmatic performance of the Exchange, and trends
in subsidized and unsubsidized individual market enrollment from 2014 to
2017. These data provide a number of insights on how well state individual
health insurance markets and Exchanges are serving the American consumer.
Serious problems in the individual health insurance market
emerged in 2016.
·
The
subsidized and unsubsidized enrollment report shows enrollment began to
decline in some states between 2015 and 2016, and in particular among the
unsubsidized portion of the market. Over that period, 23 states experienced
a decline in unsubsidized enrollment, with 10 states experiencing
double-digit declines.
·
For
plan year 2017, for which enrollment began in November 2016, the report
shows an alarming 20 percent drop in the number of people nationwide who
enrolled in the individual health insurance market without federal premium
subsidies. By comparison, subsidized enrollment dropped by just 3 percent,
or 223,000 people.
·
This
enrollment drop occurred at the same time average monthly premiums spiked
by 21 percent.
·
The
unsubsidized portion of some state individual markets have clearly entered
a death spiral, with unsubsidized enrollment dropping by more than a third
in 14 states, including an astonishing 73 percent decline in Arizona.
·
These
dramatic drops in enrollment occurred under the insurance rules and rates
established under the previous Administration.
Immediate actions taken by CMS improved the performance of the
Federal platform Exchanges and began addressing market stability issues.
·
CMS
took immediate steps in 2017 to address market stability issues and to
improve the performance of the Exchanges using the Federal platform in
order to mitigate the deterioration of the individual health insurance
market for consumers. The Exchange trends report shows a number of these
initiatives are already improving the Federal platform Exchanges.
·
The
Exchange Call Center reported an all-time high customer satisfaction rate
of 90 percent.
·
CMS
increased efforts to leverage the capabilities of the private sector by
expanding the role of health insurance agents and brokers who supported
3,660,668 health plan enrollments, 42 percent of plan year 2018 open
enrollments on Federal platform Exchanges. In contrast, Navigators enrolled
less than 1 percent of total enrollees.
·
CMS
also added new changes to Special Enrollment Periods (SEPs) to improve the
risk pool by requiring people to verify their eligibility for an SEP.
As a result, the volume of exceptional circumstance SEPs granted by CMS
declined by 56 percent for plan year 2017.
·
Consumer
requests for SEPs continued to be served at a high level. Average response
times for SEP verifications were one to three days and 90 percent of SEP
applicants were able to satisfy SEP verification and begin coverage.
With enhancements to the Federal platform, enrollment through the
Federal and State-based Exchanges remained steady into 2018.
·
Effectuated
enrollment is when a person has selected or is automatically reenrolled in
a plan and paid the first month’s premium, if applicable. The effectuated
enrollment report shows that enrollment through the Exchanges remained
steady for subsidized people moving into plan year 2018. In February 2018,
10.6 million individuals had effectuated their coverage through the
Exchanges. This is approximately 3 percent higher than the 10.3 million
people who had effectuated their coverage at the same time last year.
·
Those
who enroll through the Exchanges increasingly rely on federal subsidies.
The report shows 87 percent of enrollees rely on Advance Premium Tax
Credits up from 84 percent for plan year 2017.
·
People
who made a plan selection during open enrollment were more likely to have
effectuated coverage in 2018. Nine percent of people failed to follow
through with effectuating their coverage in 2018, compared to 15 percent in
2017.
Rising premiums dramatically increase the federal cost of
subsidies and leave unsubsidized people with few if any coverage options.
·
The
effectuated enrollment report also shows that average monthly premiums for
coverage purchased through Exchanges rose another 27 percent in 2018 on top
of the 21 percent increase consumers experienced in 2017.
·
This
premium increase resulted in an even sharper increase in the average
federal premium subsidy, which jumped by 39 percent in 2018, rising from
$373 in 2017 to $520 in 2018.
·
This
increase in average premiums subsidy, as well as higher enrollment, will
likely increase federal spending on premium subsidies by more than $17
billion in 2018.
·
Coverage
options for the unsubsidized portion of the market were already bad in 2017
when 20 percent dropped coverage. Another 27 percent increase in premiums
leaves unsubsidized people with few if any coverage options and likely
resulted in another substantial decline in unsubsidized coverage for
2018.
It is clear that many Americans are being priced out of the health
insurance market, especially for employed people who earn too much to
qualify for tax credits and have no access to employer-sponsored coverage.
This underscores the need for CMS to continue efforts to stabilize the
market and provide all consumers—including those who do not qualify for
large premium subsidies—with more affordable health coverage options.
CMS will continue to build on the significant steps already taken by the
Administration to promote healthcare choice and competition and decrease
costs. Americans should not be forced to choose between coverage they
cannot afford and no coverage at all.
To see the reports, click the links below:
Early 2018 Effectuated Enrollment Snapshot:
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/2018-07-02-Trends-Report-1.pdf
Trends in Subsidized and Unsubsidized Enrollment:
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/2018-07-02-Trends-Report-2.pdf
Exchange Trends Report:
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/2018-07-02-Trends-Report-3.pdf
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