November is here, and in most U.S. states that means the start of open enrollment, the sign-up period for obtaining insurance via the Affordable Care Act’s exchanges. It also means an election where health care took center stage. One thing that’s likely to be strengthened, rather than put in existential peril for once, is this key part of former President Barack Obama’s signature law.
Enrollment is likely to decline modestly for the third year in a row after a GOP tax bill zeroed out the individual mandate, eliminating the financial penalty for those who didn’t sign up for insurance. But if you look beyond the headline numbers, the individual market is increasingly stable, and may only become more so under a friendlier Congress.
The market has survived years of Republican hostility. In addition to supporting an attempt at repeal, the Trump administration has slashed funding for supporting programs, helped kill the mandate and is promoting skimpier, short-term plans that could siphon healthy people from the market.
But the ACA’s price-linked subsidies for Americans with low incomes have helped keep it alive. Even when insurers hike premiums, many can still afford insurance. Politically, the law’s protections for pre-existing conditions have become so popular that they helped derail GOP efforts to repeal and replace the law. There’s a reason why many Democrats ran on health care. And while Obamacare still faces a legal threat from a Trump-backed lawsuit put forward by a number of red states, it has survived worse in the past.
According to the Centers for Medicare and Medicaid Services, premiums for a popular set of plans went down in 17 states. If not for loosened rules around short-term insurance and the end of the mandate, premiums would likely be even lower.
Molina Healthcare Inc., an insurer with a heavy presence in the individual market that bled money last year, recently announced third-quarter earnings results that trounced analysts’ expectations. It’s not alone in its success: This is set to be the most profitable year for insurers in the program since 2011, which is driving many of them to expand into new markets. That’s a major contrast from previous years marked by losses, huge premium hikes and insurers fleeing the market.
Stable doesn’t mean healthy. There are now two very different individual markets. In one, participants are protected by scaling subsidies. In the other, people who make a bit too much money are exposed to years of compounded premium hikes. This places a cap on enrollment and has priced many out of the market.
But Democrats taking back the House can only help.
Freed of the question of whether it will continue to exist, the individual market is finally getting closer to finding a bottom and possibly even finding a way to thrive. n
Max Nisen is a Bloomberg Opinion columnist.