The Congressional Budget Office (CBO) recently lowered the health care enrollment projections for 2016 by almost 40 percent.
James Capretta, senior fellow at the American Enterprise Institute (AEI), said this reduction can be explained by previous projections that were unrealistically high.
“CBO lowered its forecast for 2016 enrollment to reflect reality,” Capretta told Patient Daily. “It has been clear for some time that exchange enrollment is not on the upward trajectory CBO assumed it would be on when the law was enacted.”
Capretta explained that there a number of contributing factors.
“For one, the plans on the exchanges look attractive only to the enrollees with the highest federal premium credits,” he said. “Those with higher income, and thus less subsidization, see the plans as expensive and low-value. Second, some people may be avoiding the exchange by finding their way into employer-provided coverage instead.”
Capretta believes many of the insurance companies under the Affordable Care Act (ACA) initially underpriced themselves. To recoup losses, premiums have to go up. And raising prices will make enrollment that much less desirable for patients who don’t qualify for subsidies and those who feel they don’t need it.
Capretta explained that the ACA still hasn’t reached a balance between those who currently need insurance, due to immediate health issues, and those who are healthy and need it less. Until there is a balance, companies will either leave the network or raise prices.
“The challenge for the ACA is to reach a critical mass of enrollment where the risk pool is stable,” Capretta said. “At the moment, it would appear the risk pool is still tilted too heavily toward higher users of health services, which is why many insurers are losing money by offering plans on the exchanges.”
