The Future of ACA: Addressing Enrollment Challenges and Policy Reforms
Brian Blase, Ph.D., currently serves as President of the Paragon Health Institute. He has an extensive background in health policy, having served as Special Assistant to the President for Economic Policy at the National Economic Council from 2017-2019. Post-White House, he founded Blase Policy Strategies and now leads as CEO.
Recent data from the Centers for Medicare and Medicaid Services (CMS) indicate stable Affordable Care Act (ACA) exchange enrollment, despite a 26 percent rise in gross premiums and the end of COVID-19-era subsidy boosts. Federal exchange states enrolled 15.6 million individuals, a 3.7 percent drop from the previous year. State-based exchanges, while still reporting, exhibit stability, with California showing a 3 percent enrollment increase.
The stability in enrollment amid rising costs can be attributed to automatic re-enrollment processes and inflated subsidies focused toward zero-premium bronze and gold plans. Silver loading—an approach that elevates premiums for silver plans, thereby increasing subsidy levels—facilitates this trend.
Enrollment Trends and Challenges
In 2024, 35 percent of exchange enrollees filed no medical claims, a rise from pre-COVID subsidy levels. Automatic re-enrollment processes reinforce this, turning eligibility oversights into taxpayer burdens. The "phantom enrollees" phenomenon, involving consumers unaware of their coverage, persists, with automatic re-enrollment securing carrier subsidies without bona fide eligibility or coverage use.
The lack of subsidy reconciliation compounds these issues, with the Government Accountability Office noting a $21 billion shortfall for 2023 among federal exchange participants. The practice of silver loading, a response to halted cost-sharing reduction payments, further inflates premium subsidies, skewing consumer choices towards bronze and gold plans and decoupling subsidies from actual market costs.
Policy Recommendations for a Sustainable ACA Market
To rectify these challenges, experts propose measures to restore ACA market integrity: discontinuing COVID-era subsidy enhancements, mandating consumer premium contributions, halting silver loading, and enacting penalties for insurers holding zero-claim or non-paying enrollees. These steps aim to re-align the ACA market with its original purpose and mitigate excess subsidization impacts on healthcare expenses.
The current automatic re-enrollment practices and inflated subsidies highlight the necessity for substantial policy reform. Adjustments in these areas could ensure that the ACA system accurately reflects authentic consumer demands and affordability, promoting accountability and fiscal sustainability within the program.