U.S. Health Law Faces Critical Year Obama administration aims to sign more healthy people this fall

WASHINGTON—Significant spikes in premiums, insurer dropouts and persistently low enrollment numbers are combining to make this fall’s sign-up period a crossroads for the Obama administration’s signature health law.

Federal officials characterize the turbulence as temporary. At the same time, the administration is making a push in its final months to shore up the law by trying to sign up healthy people who are critical to the law’s sustainability but have so far rejected insurance. That push will take place against a backdrop of elections that will shape the law’s future.

Since the main parts of the law went into effect in late 2013, the uninsured rate has dropped to historic lows, a fact confirmed by fresh figures from the Centers for Disease Control and Prevention on Wednesday. Millions of Americans have coverage through a government program such as Medicaid, or subsidized private coverage through a site such as HealthCare.gov sold, for the first time, without exclusions based on pre-existing conditions.

But that doesn’t translate directly into success for the individual health insurance market. Indeed, without better enrollment in private coverage for 2017, premiums will likely rise further and the insurers in the program will find participation even less appealing. Their proposals for increased rates across the country already reflect the assumption that the law’s offerings are most attractive to people who are sick and likely to incur large medical claims. Premium increases and limited choice of health plans can themselves impede sign-ups from all but the most desperate, creating a vicious circle sometimes referred to by health-insurance experts more ominously as a “death spiral.”...