WASHINGTON — A record 16.3 million Americans have signed up for health insurance plans through the Affordable Care Act’s marketplaces during this year’s open enrollment period, beating last year’s sign-ups by 13 percent, the Biden administration said on Wednesday.
The growing enrollment follows the passage of legislation during the coronavirus pandemic to increase federal subsidies for people buying the plans — substantially lowering prices for nearly every American who buys their own insurance. Around 3.6 million people selected plans in the Obamacare marketplaces who did not receive coverage through them last year. Last year’s total had been the highest in the law’s history.
President Biden cheered the development in a statement, saying, “Today, we received further proof that our efforts are delivering record-breaking results.”
The Biden administration has taken other steps to encourage enrollment in the plans, including increasing advertising and enrollment assistance and providing a longer window for sign-ups than during President Donald J. Trump’s administration. But it appears the money is mattering more than anything else.
“The No. 1 reason the Affordable Care Act has worked — and is now working better — is it is affordable,” said Peter V. Lee, a senior scholar at Stanford University who ran California’s marketplace for a decade. “Affordability is the biggest thing.”
Health Care in the United States
There was ample evidence during Obamacare’s earlier years that the price of health plans remained a major barrier for Americans. People qualified for subsidies on a sliding scale according to their income, and under the original formula, the remaining premiums proved a barrier for many low-income households.
For a family of four earning more than around $110,000, there was no federal assistance available at all, saddling many with extremely high insurance prices. The cheapest plans also often came with high deductibles and a limited selection of doctors.
Frustrations with the cost of coverage helped fuel a political backlash to the Affordable Care Act that culminated with an effort by Mr. Trump and congressional Republicans to repeal the law in 2017. But Republican lawmakers were unable to agree on a program to replace the law that could win majority support in the Senate.
Under the new policies enacted during the pandemic, which were renewed through 2025 in the climate, tax and health care bill passed last year, subsidies increased at every level of income.
Americans earning less than 150 percent of the federal poverty level — around $42,000 for a family of four — are eligible for free health plans that come with low deductibles and co-payments. Before the change, many such people could get free plans on the Obamacare marketplaces, but only with very high deductibles. This year, there were particularly large increases in sign-ups in Texas, Florida, Georgia and North Carolina — states with large low-income populations that have not expanded Medicaid, suggesting the new subsidies are driving the change.
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“It speaks to the power of free, but also free plans that are actually attractive,” said Cynthia Cox, who directs the Kaiser Family Foundation’s program on the Affordable Care Act. The foundation has been tracking the millions of low-income Americans who were eligible for coverage under the law but remained uninsured. Last year, that number fell substantially, and Ms. Cox said it would most likely fall again once new data on the uninsured rate is published.
Americans with incomes higher than four times the poverty level became eligible for subsidies for the first time as a result of the pandemic stimulus bill that Mr. Biden signed into law in 2021. Though this higher-earning group, often made up of the self-employed and early retirees, represented a relatively small share of the nation’s uninsured population, there is evidence that they represent a growing share of those covered by Obamacare plans.
The strong enrollment and improved political stability of the Affordable Care Act have helped make the marketplaces a more attractive place for insurance companies to do business. Several years ago, many insurers pulled out of the markets, but since Republicans tried and failed to repeal the Affordable Care Act in 2017, the plans have largely come back. More than 90 percent of people who signed up for this year had a choice among at least three insurance companies, according to the Centers for Medicare and Medicaid Services.
“That really has become an important and much more stable market,” said Matt Eyles, the president and chief executive of AHIP, the insurance industry’s largest trade group.
Last year, the Biden administration eliminated a longstanding barrier to subsidies for the family members of Americans who get insurance at work for themselves but not for their relatives. The change was estimated to affect more than five million Americans, a vast majority of whom were already insured through other means.
But while some of the enrollment in Affordable Care Act plans may reflect people shifting from other types of coverage, it appears that many of the new enrollees had no insurance before. The uninsured rate declined last year amid increased Obamacare enrollment, though a pandemic policy that requires extended Medicaid coverage by states probably also played a significant role.
The end of that policy is coming, and Mr. Lee said the robust sign-ups and the Biden administration’s stewardship of the marketplaces made him confident that many of the people who would lose coverage when their Medicaid plans expire would be able to transition into marketplace plans later this year, a shift that could increase enrollment even further.
The numbers announced on Wednesday are not final. Some states that run their own marketplaces are continuing to let consumers sign up for plans for this year. Some people also drop their insurance after initially signing up, so it will take a few months for final enrollment numbers to become clear.
Reed Abelson contributed reporting.