In February, the Obama administration announced 11.4 million people had signed up for Obamacare in the second open-enrollment period, leading President Barack Obama to say, “The Affordable Care Act (ACA) is working. It’s working a little better than we expected.”
The 11.4 million people who signed up is more than the number who will ultimately pay for their coverage and complete the enrollment. Even after the stragglers complete the sign-up process, it is more likely the paid-for number will be about 10.5 million, based on a number of conversations I have had with carriers.
Even if it is assumed the total ends up with as high as 11 million people, would that exceed expectations, as Obama suggests?
Significant Growth Expectations
The Congressional Budget Office (CBO) projected in May 2013 there would be an average of 13 million people in the ACA insurance exchanges by 2015.
The administration started out with eight million at the end of the first open-enrollment period, but that number dropped to 6.7 million by the end of 2014. A similar attrition would take an 11 million enrollment figure to about nine million by the end of 2015. The administration’s own 2015 estimate is for 9.1 million.
Perhaps most importantly, the CBO’s original enrollment projection for 2016 was for 22 million people to be in the Obamacare insurance exchanges.
Do you think the administration will match the original expectation of 22 million enrollments during 2016? They enrolled 6.7 million by the end of 2014, and will likely have about nine million at the end of 2015 if this year plays out like 2014.
Do these numbers seem reasonable: 6.7 million enrolled in 2014, nine million enrolled in 2015, and 22 million enrolled in 2016? Hardly.
Low Enrollment Likely
Why do these poor predictions matter? Because the American people were told they must suffer through all of the trouble associated with the ACA in order to reduce the number of uninsured, and that simply isn’t happening.
The CBO projected there would still be 31 million people uninsured in 2016. For every million people the administration misses from the enrollment expectation, there will be another one million people still uninsured.
These figures also are important politically: Low-enrollment figures will mean less political support for those who supported the ACA.
There are important financial considerations as well: Only about half of the subsidy-eligible people appear to have so far signed up, bringing into question the rates health plans will have to charge when the underwriting subsidies end in 2017.
Back-End Problems Persist
The unmet expectations for Obamacare extend beyond enrollment numbers.
The Obama administration spent $2.2 billion on developing and fixing Healthcare.gov. Seventeen months after its original launch, and five years after the law passed, the back-end, where subsidy payments to insurers are calculated and paid, still has not been completed. There are now about seven million people receiving health insurance premium subsidies in the federally run exchanges, But HealthCare.gov can’t pay the insurance companies. Insurers are still getting paid through a workaround that involves them manually filling out worksheets for seven million people. There is no formal date for when this will be fixed.
HealthCare.gov also can’t reconcile cost-sharing subsidies the lowest-income people get from Obamacare, such as lower deductibles and co-pays. This lack of an automated enrollment process not only causes lots of headaches but also makes the enrollment numbers the administration is reporting awfully soft. One carrier told me it ended up with only half of the net January enrollments HealthCare.gov originally reported to them.
Obamacare seems to have met Obama’s expectations, but has it met yours?
Robert Laszewski ([email protected]) is a nationally recognized health insurance expert. This column is based on a post published on Laszewski’s blog, Health Care Policy and Marketplace Review. The article is reprinted with permission.
