CMS Proclaims a ‘Death Spiral’ for Unsubsidized Obamacare Policyholders

Though the actual number of open enrollment Obamacare policyholders who paid their premiums the first month rose over 2017 by 3 percent — standing at 10.6 million people for 2018 — those seeking policies who didn’t qualify for subsidies fell by as much as one-third in many states, the Centers for Medicare and Medicaid Services (CMS) said in three reports released this week.

cms-proclaims-obamacare-death-spiral“These reports show that the high price plans on the individual market are unaffordable and forcing unsubsidized middle class consumers to drop coverage,” CMS Administrator Seema Verma said in a statement.

The reports note that Affordable Care Act (ACA) exchange-based premiums rose 21 percent between 2016 and 2017, and as a consequence average monthly enrollment dropped by 10 percent. For those who didn’t qualify for a federal subsidy — known as the Advanced Premium Tax Credit (APTC) — enrollment fell by 20 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,” the agency said.

One of the reports, “The Exchanges Trends Report,” further notes: “Among all currently uninsured participants, the primary reason provided for not having health insurance continues to be that they are unable to afford it because it is too expensive (54 percent). Similar to previous results, about 15 percent of uninsured consumers indicated the reason they do not have insurance is because they are unemployed.”


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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