FiveThirtyEight has TrumpBeat, a weekly feature on the latest policy developments in Washington and beyond. President Trump and other Republicans have said repeatedly that they have to repeal and replace the Affordable Care Act is that the law is failing: Healthy people are abandoning the insurance marketplaces set up by the law, driving up costs and leading yet more people to drop insurance — a so-called “death spiral.” Many health insurance experts, however, have argued that those fears are overblown, and they recently got support from an unlikely source: the Trump administration itself.
The Centers for Medicare and Medicaid Services, which is part of the Department of Health and Human Services, released a report about a wonky aspect of the Affordable Care Act related to insurance payments. Tucked away in the report, however, was evidence that the health insurance marketplaces set up by Obamacare were relatively stable in 2016. Contrary to the “death-spiral” narrative, the CMS report found that the mix of healthy and sick people buying insurance on the Obamacare marketplaces in 2016 was surprisingly similar to those who enrolled in 2015.
The report looked, in part, at so-called risk-adjustment payments, which are part of the ACA’s system for encouraging insurers to enroll high-cost patients. This system is meant to prevent insurers from cherry-picking the healthiest people on the market by collecting money from plans with healthier enrollees to distribute to plans that have people with higher health care costs.
To determine the mix of healthy and sick enrollees for risk-adjustment payments, the federal government assigns risk scores to people based on their age, sex and health diagnosis and then averages the scores for a plan. What CMS found was that those averages were relatively stable in 2016. Despite expectations that in the face of rising premiums, healthier enrollees would be less inclined to enroll last year, that doesn’t appear to have been the case.