Not So Fast -- How Many Have Paid? How Many Were Previously Insured? | Citizens Against Government Waste

Not So Fast -- How Many Have Paid? How Many Were Previously Insured?

The WasteWatcher

ACA Total Blows Past 7 Million!” “Obamacare Comeback?” “More Than Seven Million Have Enrolled Under the Affordable Care Act, Whitehouse says!” blare numerous April 1, 2014 newspaper headlines.  The president gave a speech in the White House Rose Garden stating, “Last night, the first open-enrollment period under this law came to an end.  And despite several lost weeks out of the gate because of problems with the website, 7.1 million Americans have now signed up for private insurance plans through these marketplaces …7.1” and then declared that “the debate over repealing this law is over.  The Affordable Care Act is here to stay.”

With all the hoopla, high-fives, and fist bumps going on in “I love Obamacare land,” one would think that the previously 50.7 million uninsured Americans now have health insurance.   But even if the seven million-plus figure is an accurate portrayal of the newly insured, and one shouldn't believe it is, then one could argue the healthcare reform law has not performed very well.  After all, 7 million is only 14 percent 50.7 million and a good chunk of the enrollees the president is touting about had insurance prior to Obamcare.  Let's not forget, the main reason Obamacare was signed into law in the first place was to provide access to affordable health insurance coverage to millions of uninsured Americans who supposedly were clamoring for coverage.

One has to be circumspect when the administration states seven million have signed up for Obamacare.  What it means a person has entered an Obamacare online exchange and filled out an application form.  It does not mean all seven million have health insurance.

Before any definitive proclamations are made about Obamacare’s success, the first thing that needs to be discovered is how many people have paid for their first month’s premium.  Until that occurs, a person does not have health insurance.  The Obama administration has been asked for that figure several times but has stated it does not know the figure.  That is unlikely true because according to news reports the insurance companies have told them.

The second question that must be answered is who had health insurance in 2013, received noticed their policy was being cancelled because it did not meet Obamacare’s mandates, such as providing the ten essential benefits whether wanted or not, and had to scramble to purchase a new health policy.

Some results of a yet-to-be-released Rand Survey Research Group were shared with Noam  Levey, a reporter at the L.A. Times, who wrote about the findings and concluded about 9.5 previously uninsured Americans had gained coverage.  According to Levey, “Rand has been polling 3,300 Americans monthly about their insurance choices since last fall.  Researchers found that the share of adults ages 18 to 64 without health insurance has declined from 20.9% last fall to 16.6% as of March 22.”  Levey also reported that:

  • at least 6 million have signed up for coverage in the exchanges, of which one-third were previously uninsured;
  • that while a February McKinsey & Company survey found approximately 27 percent of new enrollees were previously uninsured, the Rand study suggests that amount had increased in March;
  • that 4.5 million people have signed up for Medicaid;
  • and that 3 million young adults have gained coverage on their parents’ health insurance plan; and
  • fewer than 1 million people that had insurance in 2013 are now uninsured.

Avik Roy at Forbes Apothecary disputes some of the L.A. Times’s conclusions.  Roy notes that in the aforementioned McKinsey survey, it was found that of those who had enrolled in an exchange and had been previously uninsured, only 53 percent had paid for their premium.  However, those that had prior coverage, lost it and enrolled in the exchange, 86 percent had paid for their premium.  Using that data, Roy believes that only about one-fourth of the Rand numbers were previously uninsured.

Roy also points out that the Congressional Budget Office had predicted that nearly all of the enrollees in the Obamacare exchanges would be the previously uninsured.  Based on the numbers gleaned from the various surveys this certainly is not the case.

The bottom line is researchers and policy wonks will have to wait for the Rand study to be officially released so its methodology and data can be analyzed before any conclusion are made about the newly insured under Obamacare.

In his blog, “A Slacking Figure” in the American Spectator, David Hogberg slams the claim that more than 3 million young adults have gotten coverage under their parents’ insurance plan.  He says the 3.1 million figure comes from a June 2012 Department of Health and Human Services report and is based on a faulty analysis.  More important, the administration hasn’t updated the report.  Hogberg thinks he knows why the administration hasn’t revised the claim in over 21 months.  Using more recent data, Hogberg calculated the number of insured young adults has fallen by 2.1 percent, or approximately 600,000.  That means the number of young adults on their parents’ plan is at about 2.2 million, not 3.1 million.

On Wednesday, April 2, the National Journal reported that Blue Cross Blue Shield Association says 15 to 20 percent of their potential enrollees are not paying their first months’ premiums.  The “Blues” are a big player in the Obamcare market and extrapolating that number means the real enrollment number would fall from 7.1 million to approximately 5.7 to 6 million.  I am not going to take too much of a leap and bet the vast majority of the non-payers were previously uninsured.

Soon pre-Obamacare Medicaid and Medicaid expansion enrollment numbers will be forthcoming from the states.  Medicaid provides coverage to children, pregnant women, parents, seniors and individuals with disabilities and is a shared social welfare program between the federal government and the states.  Obamacare allowed states to expand the Medicaid program for all low-income Americans up to 138 percent of the federal poverty level.  If a state chooses to expand Medicaid, and 26 states and the District of Columbia have done so, the federal government will pay 100 percent for the expansion enrollment numbers until 2016, gradually dropping the reimbursement rate to 90 percent in 2020 and beyond.  Pre-Obamacare Medicaid enrollment numbers will receive anywhere from the statutory limit of a 50 percent to 83 percent reimbursement from the federal government.  As these numbers are calculated, it will be easy to decipher how many people are in regular Medicaid and how many joined via Medicaid expansion.

Interestingly, it is expected even the states that did not expand Medicaid will see growth in the program at an average of five percent.  For example, South Carolina is expecting a 16 percent jump by 2015.  All of the news about Obamacare and the requirement to getting health insurance has raised the awareness of the Medicaid program.  People who always were eligible to be in Medicaid are apparently now signing up for the government-run program for the first time.

This is not a good thing for the states or the patients.  CAGW has written before about how Medicaid does not provide good healthcare.  Many doctors refuse to take Medicaid patients because of its bureaucratic morass and low reimbursement rates. Currently, the program consumes about 25 percent of most states' budgets and its growing.

The organizations that have the numbers on what is happening with respect to Obamacare enrollment are the insurers.  On March 13, 2014, the House Energy and Commerce Committee sent a letter to every insurer that is participating in the federal Obamacare exchange to provide enrollment data such as whether or not the enrollees were previously insured, their ages, and if they have paid their premium.  CAGW has been told these figures are being provided and will eventually be released.

Another figure that needs to be monitored during the year is how many people continue to pay their premium.   Many of the Obamacare plans, especially in the Bronze category, have large deductibles of about $6000 and out-of-pocket costs that must be paid before the insurance kicks in.  It is very likely that many individuals, especially those that did not have healthcare insurance prior to January 1, 2014, and are either receiving a small subsidy or none at all, may decide the monthly premium is not worth the cost.

The Obama administration has not wanted to talk about the real enrollment numbers but eventually the numbers will be known.  The American people will then decide if Obamacare was worth the headaches and huge cost.  The debate is far from over.

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