New Data on Sign-ups Through the ACA’s Marketplaces Should Lay “Death Spiral” Claims to Rest

Editor’s Note: This analysis is part of USC-Brookings Schaeffer Initiative on Health Policy, which is a partnership between Economic Studies at Brookings and the USC Schaeffer Center for Health Policy & Economics. The Initiative aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings.

The Centers for Medicare and Medicaid Services (CMS) recently published final data on the number of people who used to sign up for health insurance coverage through the Affordable Care Act’s (ACA) Marketplaces during the 2017 open enrollment period. These data support two important conclusions about the state of the Marketplaces and their near-term future.

First, comparing enrollment changes across states implies that Marketplace premium increases had little if any impact on Marketplace sign-ups, providing strong evidence against claims that these increases would send the individual market into a “death spiral.” Although there was a small decline in Marketplace sign-ups relative to 2016 open enrollment, it appears to reflect factors other than higher premiums, possibly including uncertainty caused by the ongoing legislative debate over the ACA and the new Administration’s decision to curtail outreach activities.