Lower ACA Enrollment Forecast in 2018

S&P blames the decreased enrollment on multiple factors, including reduced outreach at the federal level, a reduced broker presence in the individual market, shorter enrollment periods, and higher non-subsidized premiums.

Affordable Care Act exchanges are projected to sign up between 10.6 million to 11.4 million people during the upcoming fifth enrollment period, according to S&P Global Ratings.

"This is about 7%-13% lower than the 12.2 million that signed up during the 2017 open enrollment season," said S&P credit analyst Deep Banerjee. "We expect that most individuals who maintained ACA insurance for full-year 2017 will re-enroll (for 2018), though fewer new enrollees will enter the marketplace."

People who bought insurance on an exchange last year and paid their premiums for full-year 2017 are highly likely to re-enroll for 2018. In addition, more than 80% of this population likely receive an advanced premium tax credit, which will offset the impact of the 2018 premium increases, S&P said.

"As for new enrollees, we are forecasting fewer people signing up in 2018 than during previous open enrollments," Banerjee said.

The S&P forecast blamed the enrollment drop on multiple factors, including reduced active outreach at the federal level, a reduced broker presence in the individual market, shorter enrollment periods, and higher nonsubsidized premiums.

During the first three years of the exchange, about a quarter of the people who signed up later dropped their coverage during the year. For 2018, S&P is forecasting a similar trend. Effectuated enrollment will be between 8.3 million and nine million as of year-end 2018, which is flat to 8% lower than S&P's estimate for 2017 effectuated enrollment of nine million.

As for the exchange population beyond 2018, S&P expects enrollment again to jump at the beginning of the year and then gradually decline as the year proceeds. But the amount of decline throughout the year will decrease as the market settles in at a sustainable size.