Marketplace enrollment benchmarks “unrealistic” suggests KFF study

A brief by the Kaiser Family Foundation (KFF) looking at marketplace enrollment suggests that the Congressional Budget Office (CBO)’s enrollment projections are unrealistic. CBO benchmarks have been used to measure the success of exchanges. KFF revisits that data to analyze marketplace trends after the third open enrollment.

The CBO prediction for Plan Year 2016 was originally 21 million but was lowered to 13 million in January 2016 based on 2015 data and new forecasts.

Figure 2, below shows actual enrollment data between 2014 and 2016 compared to enrollment in a hypothetical category. The hypothetical category imagines enrollment numbers if all states demonstrated rates comparable to the current top ten states. As illustrated below, even if all states were performing as well as the current top ten, goals would fall significantly short of the 21 million enrollment forecast.

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The top ten states used for the hypothetical category are as follows:

top 10

Source/ Kaiser Family Foundation

KFF estimates that about 46 percent of the exchange’s potential market is signed-up nationally. In those top performing states, an estimated 59 percent of the potential market has signed-up, suggesting that enrollment volume in these top performers may soon plateau.

Plateauing or lower than expected enrollment could have noticeable impact to the budgets of exchanges, particularly SBMs. Some of the reasons KFF cites for lower than expected enrollment include:

  • The CBO incorrectly predicted that some employers would stop offering coverage. However, that has not happened and the people who were signed up for coverage with their employers in 2014, are still going through their employers for health insurance.
  • Many people are still buying their own insurance outside of the marketplaces. KFF estimates this to be 57 percent of the individual market. There are three types of individual coverage outside of the marketplaces: ACA-compliant plans, “Grandfathered” plans, “Transitional” plans.
  • A recent Kaiser poll found that 46 percent of uninsured responded that they were uninsured because coverage was too expensive. As shown in Figure 1 below, people below 150 percent of the poverty level and 300-400 percent of the poverty level showed the lowest gains in coverage.

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