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Why the Obama administration thinks Obamacare enrollment will go up in 2017

Obama smile

The Obama administration expects Obamacare enrollment to grow by about a million people next year, bringing more stability to the marketplaces after a tumultuous year.

The administration estimates that the health law marketplaces will have, on average, 11.4 million sign-ups over the course of 2017 — an increase from the 10.5 million enrollees in 2016.

“The marketplace is strong and will continue to be strong because it’s offering people a product that people want and need,” Health and Human Services Secretary Sylvia Matthews Burwell said in a Wednesday speech. “We know it won’t be easy, but we’re confident that Americans will choose to enroll when they discover the quality options available to them.”

The administration is attempting to improve the shopping experience for consumers — making it easier to sign up for insurance on a mobile device, for example, or to compare different plans.

Part of the rise in sign-ups, somewhat surprisingly, might actually be the result of steeply rising premiums — which sounds weird, so let’s walk through it.

Right now, millions of Americans buy their own coverage outside of the Obamacare marketplaces. They might go to their local insurance broker, or straight to the insurance company they like. This means they don’t get the Obamacare subsidies that are available to low- and middle-income Americans; those are only available through the government website.

The Obama administration has previously estimated that there are lots of these people — 2.5 million people, to be exact — who would qualify for a subsidy if they stopped buying their plan on their own and moved onto the Obamacare marketplace.

Now, premiums are expected to rise steeply in 2017, in part due to some insurers leaving the individual market and reducing competition. So an administration official projected that these spiking premiums might push these people to reconsider the marketplace, where they can get subsidies. And that would increase Obamacare enrollment.

The marketplaces still remain a smaller part of the health care law than initially projected. Back when Obamacare launched, the Congressional Budget Office estimated that the marketplaces would have 24 million enrollees in 2017. To read more about that, and the struggle of the Obamacare marketplaces, I recommend this longer piece I wrote over the summer.

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